<PAGE>
As filed with the Securities and Exchange Commission on January 29, 1999
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. 60
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 LISA M. BUONO
400 Bellevue Parkway Bellevue Park Corporate Center
Wilmington, Delaware 19809 400 Bellevue Parkway
(Address of Principal Executive Offices) Wilmington, Delaware 19809
Registrant's Telephone Number: (302) 791-3329 (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)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on (January 31, 1999) 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.
Title of Securities Being Registered: Shares of Common Stock.
================================================================================
<PAGE>
TEMPFUND
AN INVESTMENT PORTFOLIO OFFERED BY
TEMPORARY INVESTMENT FUND, INC.
PROSPECTUS
January 31, 1999
Bellevue Park Corporate Center For purchase and redemption orders only call:
400 Bellevue Parkway 800-441-7450 (in Delaware: 302-791-5350). For
Wilmington, DE 19809 yield information call: 800-821-6006
(TempFund Shares code: 34; TempFund Dollar
Shares code: 20). For other information call:
800-821-7432 or visit our web site at
www.pif.com.
INVESTMENT ADVISER
BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
FUND'S SHARES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE>
Table of Contents ______________________________________________________________
<TABLE>
<CAPTION>
Page
----
<S> <C>
RISK/RETURN SUMMARY........................................................ 3
Investment Goal.......................................................... 3
Investment Policies...................................................... 3
Principal Risks of Investing............................................. 3
Who May Want to Invest in the Fund....................................... 3
Performance Information.................................................. 4
Fees and Expenses........................................................ 6
INVESTMENT STRATEGIES AND RISK DISCLOSURE.................................. 7
MANAGEMENT OF THE FUND..................................................... 10
SHAREHOLDER INFORMATION.................................................... 11
Price of Fund Shares..................................................... 11
Purchase of Shares....................................................... 11
Redemption of Shares..................................................... 12
Distribution and Shareholder Service Plans............................... 13
Dividends and Distributions.............................................. 14
Taxes.................................................................... 14
FINANCIAL HIGHLIGHTS....................................................... 15
</TABLE>
2
<PAGE>
Risk/Return Summary ____________________________________________________________
Investment The Fund seeks current income with liquidity and stability
Goal: of principal.
Investment The Fund invests in a broad range of money market
Policies: instruments, including government, bank, and commercial
obligations and repurchase agreements relating to such
obligations.
Principal Risks Although the Fund invests in money market instruments which
of Investing: the investment adviser, BlackRock Institutional Management
Corporation ("BIMC," or the "Adviser") believes present
minimal credit risks at the time of purchase, there is a
risk that an issuer may not be able to make principal and
interest payments when due. While the Fund seeks to maintain
a constant net asset value of $1.00 per share, the Fund is
also subject to risks related to changes in prevailing
interest rates, since generally, a fixed-income security
will increase in value when interest rates fall and decrease
in value when interest rates rise.
An investment in the Fund is not a deposit in PNC Bank,
N.A. and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money
by investing in the Fund.
Who May Want to The Fund is designed for institutional investors seeking
Invest in the current income and stability of principal. The Fund is
Fund: particularly suitable for banks, corporations and other
financial institutions that seek investment of short-term
funds for their own accounts or for the accounts of their
customers.
3
<PAGE>
Performance Information
The Bar Chart and the Table below indicate the risks of investing in the Fund
by showing how the performance of the Fund has varied from year to year. The
Table shows how the Fund's average annual return for one, five and ten years
compares to that of a selected market index. The Bar Chart and the Table assume
reinvestment of dividends and distributions. The Fund's past performance does
not necessarily indicate how it will perform in the future.
TempFund vs. IBC Financial Data's First Tier Institutional
[BAR GRAPH APPEARS HERE]
Provident Ist. Funds: IBC's First
TempFund Inst. Tier Institutional
1989 9.39 9.20
1990 8.27 8.10
1991 6.24 6.09
1992 3.89 3.72
1993 3.12 3.00
1994 4.19 4.07
1995 5.99 5.79
1996 5.42 5.22
1997 5.60 5.39
1998 5.52 5.33
During the ten-year period shown in the bar chart, the highest quarterly
return was 9.89% (for the quarter ended June 30, 1989) and the lowest quarterly
return was 3.08% (for the quarter ended June 30, 1993).
4
<PAGE>
The Fund's Average Annual Total Return for Periods Ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 5 10
Year Years Years
----- ----- -----
<S> <C> <C> <C>
TempFund Shares............................................ 5.52% 5.24% 5.70%
TempFund Dollar Shares..................................... 5.27% 4.99% 5.45%
IBC's Money Fund Report: First Tier Institutions--Only
Money Fund Average*....................................... 5.33% 5.16% 5.67%
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
7 Day Yield as of
December 31, 1998
-----------------
<S> <C>
TempFund Shares............................................ 5.01%
TempFund Dollar Shares..................................... 4.76%
IBC's Money Fund Report: First Tier Institutions--Only
Money Fund Average*....................................... 4.87%
- -------------------------------------------------------------------------------
</TABLE>
Administration Shares, Plus Shares, Cash Reserve Shares and Cash Management
Shares have not yet commenced operations, therefore no performance information
has been provided for these classes.
Current Yield: You may obtain the Fund's current 7-day yield by calling 1-800-
821-7432 or by visiting its web site at www.pif.com.
- -------
* IBC's Money Fund Report: First Tier Institutions--Only Money Fund Average is
comprised of money funds investing in first tier eligible money market
instruments.
5
<PAGE>
Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
- ---------------------------------------------------------------------------------------------
<CAPTION>
TempFund
--------
TempFund TempFund
TempFund TempFund TempFund Cash Cash
TempFund Administration Dollar Plus Reserve Management
Shares Shares Shares Shares Shares Shares
-------- -------------- -------- ----------- ----------- -----------
(estimated) (estimated) (estimated) (estimated)
<S> <C> <C> <C> <C> <C> <C>
Management Fees......... .11% .11% .11% .11% .11% .11%
Distribution (12b-1)
Fees................... -- -- -- .25% -- --
Other Expenses.......... .12% .22% .37% .12% .52% .62%
Administration Fees..... .11% .11% .11% .11% .11% .11%
Shareholder Servicing
Fees................... -- -- .25% -- .25% .25%
Miscellaneous........... .01% .11% .01% .01% .16% .26%
- ---------------------------------------------------------------------------------------------
Total Annual Fund
Operating Expenses(1).. .23% .33% .48% .48% .63% .73%
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Total Annual Fund Operating Expenses for TempFund Shares and TempFund
Dollar Shares for the fiscal year ended September 30, 1998, with fee
waivers, were .18% and .43%, respectively, of the Fund's average net
assets. Total Annual Fund Operating Expenses for TempFund Administration
Shares, TempFund Plus Shares, TempFund Cash Reserve Shares and TempFund
Cash Management Shares for the fiscal year ended September 30, 1998, with
fee waivers, would have been .28% (estimated), .43% (estimated), .58%
(estimated) and .68% (estimated), respectively, of the Fund's average net
assets. The Adviser and PFPC Inc., the Fund's co-administrator, 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 Adviser and PFPC expect to continue such fee waivers, but can
terminate the waivers upon 120 days prior written notice to the Fund.
EXAMPLE
- --------------------------------------------------------------------------------
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
TempFund
--------
TempFund TempFund
TempFund TempFund Cash Cash
Administration TempFund Plus Reserve Management
TempFund Shares Dollar Shares Shares Shares
Shares (estimated) Shares (estimated) (estimated) (estimated)
-------- -------------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
One Year................ $ 24 $ 34 $ 49 $ 49 $ 64 $ 75
Three Years............. $ 74 $106 $154 $154 $202 $233
Five Years.............. $130 $185 $269 $269 $351 $406
Ten Years............... $293 $418 $604 $604 $786 $906
- ---------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
Investment
Strategies and
Risk Disclosure ________________________________________________________________
The Fund is a money market fund. The investment objective of
the Fund is to seek current income and stability of
principal. The Fund's investment objective may be changed by
the Board of Directors without shareholder approval. The
Fund invests in a broad range of money market instruments,
including government, bank, and commercial obligations and
repurchase agreements relating to such obligations.
The Fund invests in securities maturing within 13 months
or less from the date of purchase, with certain exceptions.
For example, certain government securities held by the Fund
may have remaining maturities exceeding 13 months if such
securities provide for adjustments in their interest rates
not less frequently than every 13 months. The securities
purchased by the Fund are also subject to the quality,
diversification, and other requirements of Rule 2a-7 under
the Investment Company Act of 1940, as amended, and other
rules of the Securities and Exchange Commission. Pursuant to
Rule 2a-7, the Fund will generally limit its purchases of
any one issuer's securities (other than U.S. Government
obligations, repurchase agreements collateralized by such
securities and securities subject to certain guarantees or
otherwise providing a right to demand payment) 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; provided that the Fund
may not invest more than 25% of its total assets in the
securities of more than one issuer in accordance with the
foregoing at any one time.
The Fund will only purchase securities that present
minimal credit risk as determined by the Adviser pursuant to
guidelines approved by the Board of Directors of Temporary
Investment Fund, Inc. Securities purchased by the Fund (or
the issuers of such securities) will be First Tier Eligible
Securities which are rated at the time of purchase in the
highest rating category by either Standard & Poor's Ratings
Group or Moody's Investors Services, Inc., and will be rated
in the highest rating category by any other nationally
recognized statistical rating organization ( a "NRSRO") that
rates such security (or its issuer).
- --------------------------------------------------------------------------------
Investments The Fund's investments may include the following:
U.S. Government The Fund may purchase obligations issued or guaranteed by
Obligations the U.S. Government or its agencies and instrumentalities
and related custodial receipts.
7
<PAGE>
Bank Obligations The Fund may purchase obligations of issuers in the banking
industry, such as bank holding company obligations,
certificates of deposit, bankers' acceptances and bank notes
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 domestic commercial and
savings banks in amounts not in excess of 5% of the Fund's
assets.
Commercial Paper 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.
Asset-Backed The Fund may invest in asset-backed securities which are
Obligations backed by mortgages, installment sales contracts, credit
card receivables or other assets.
Investment The Fund may invest in securities issued by other open-end
Company investment companies that invest in the type of obligations
Securities in which the Fund may invest and that determine their net
asset value per share based upon the amortized cost or penny
rounding method. Investments in the securities of other
investment companies will cause the Fund (and, indirectly
the Fund's shareholders) to bear proportionately the costs
incurred in connection with the other investment companies'
operations.
Municipal The Fund may, when deemed appropriate by the Adviser in
Obligations 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.
Variable and The Fund may purchase variable or floating rate notes, which
Floating Rate are instruments that provide for adjustments in the interest
Instruments rate on certain reset dates or whenever a specified interest
rate index changes, respectively.
Repurchase The Fund may enter into repurchase agreements.
Agreements
Reverse The Fund may enter into reverse repurchase agreements. The
Repurchase Fund is permitted to invest up to one-third of its total
Agreements and assets in reverse repurchase agreements. The Fund may also
Securities lend its securities with a value of up to one-third of its
Lending total assets (including the value of the collateral for the
loan) to qualified brokers, dealers, banks and other
financial institutions for the purpose of realizing
additional net investment income through the receipt of
interest on the loan. Investments in reverse repurchase
agreements and securities lending transactions will be
aggregated for purposes of this investment limitation.
8
<PAGE>
When-Issued and The Fund may purchase securities on a "when-issued" or
Delayed "delayed settlement" basis. The Fund expects that
Settlement commitments to purchase when-issued or delayed settlement
Transactions 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 or delayed settlement
securities for speculative purposes but only in furtherance
of its investment objective.
Illiquid The Fund will not invest more than 10% of the value of its
Securities 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.
Other Types of This Prospectus describes the Fund's principal investment
Investments strategies, and the particular types of securities in which
the Fund principally invests. The Fund may, from time to
time, make other types of investments and pursue other
investment strategies in support of its overall investment
goal. Any other types of investments will comply with the
Fund's quality and maturity guidelines. These supplemental
investment strategies are described in detail in the
Statement of Additional Information, which is referred to on
the back cover of this Prospectus.
Risk Factors The principal risks of investing in the Fund are also
described above in the Risk/Return Summary. The following
supplements that description.
Interest Rate Generally, a fixed-income security will increase in value
Risk when interest rates fall and decrease in value when interest
rates rise. As a result, if interest rates were to change
rapidly, there is a risk that the change in market value of
the Fund's assets may not enable the Fund to maintain a
stable net asset value of $1.00 per share.
Credit Risk The risk that an issuer will be unable to make principal and
interest payments when due is known as "credit risk." U.S.
Government securities are generally considered to be the
safest type of investment in terms of credit risk, with
municipal obligations and corporate debt securities
presenting somewhat higher credit risk. Credit quality
ratings published by an NRSRO are widely accepted measures
of credit risk. The lower a security is rated by an NRSRO,
the more credit risk it is considered to represent.
Other Risks Certain investment strategies employed by the Fund may
involve additional investment risk. Liquidity risk involves
certain securities which may be difficult or impossible to
sell at the time and the price that the Fund would like.
Reverse repurchase agreements, securities lending
transactions and when-issued or delayed
9
<PAGE>
delivery transactions may involve leverage risk. Leverage
risk is associated with securities or practices that
multiply small market movements into larger changes in the
value of the Fund's investment portfolio. The Fund does not
currently intend to employ investment strategies that
involve leverage risk.
Year 2000 Like other mutual funds, financial and business
organizations and individuals around the world, the Fund
could be adversely affected if the computer systems used by
the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and
calculate date-related information and data from and after
January 1, 2000. This possibility is commonly known as the
"Year 2000 Problem." The Fund has been advised by the
Adviser, the Administrators and the Custodian that they are
actively taking steps to address the Year 2000 Problem with
respect to the computer systems that they use and to obtain
assurances that comparable steps are being taken by the
Fund's other major service providers. While there can be no
assurance that the Fund's service providers will be Year
2000 compliant, the Fund's service providers expect that
their plans to be compliant will be achieved.
Management of the Fund _________________________________________________________
Investment The Adviser, a wholly-owned indirect subsidiary of PNC Bank,
Adviser serves as the Fund's investment adviser. The Adviser and its
affiliates are one of the largest U.S. bank managers of
mutual funds, with assets currently under management in
excess of $46 billion. BIMC (formerly known as PNC
Institutional Management Corporation or "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.
As investment adviser, BIMC manages the Fund and is
responsible for all purchases and sales of the Fund's
securities. For the investment advisory services provided
and expenses assumed by it, BIMC is entitled to receive a
fee, computed daily and payable monthly, based on the Fund's
average net assets. BIMC and PFPC, the co-administrator, may
from time to 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 BIMC and PFPC with
respect to a particular fiscal year are not recoverable. For
the fiscal year ended September 30, 1998, the Fund paid
investment advisory fees and administration fees each
aggregating .08% (net of waivers) of its average net assets.
The services provided by BIMC and the fees payable by the
Fund for these services are described further in the
Statement of Additional Information under "Management of the
Funds."
10
<PAGE>
Shareholder Information ________________________________________________________
Price of Fund The Fund's net asset value per share for purposes of pricing
Shares purchase and redemption orders is determined by PFPC Inc.
("PFPC"), the Funds co-administrator, as of 12:00 noon and
5:30 P.M., Eastern time, on each day on which both the New
York Stock Exchange and the Federal Reserve Bank of
Philadelphia are open for business (a "Business 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." Under the 1940 Act,
the Fund may postpone the date of payment of any redeemable
security for up to seven days.
Purchase of Fund shares are sold at the net asset value per share next
Shares determined after confirmation of a purchase order by PFPC,
which also serves as the Fund's transfer agent. Purchase
orders for shares are accepted only on Business Days 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, N.A. ("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 institution 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 such orders. The Fund may in
its discretion reject any order for shares.
Payment for Fund shares may be made only in federal funds
or other funds immediately available to PNC Bank. The
minimum initial investment by an institution is $3 million
for TempFund Shares; there is no minimum initial investment
for TempFund Administration Shares, TempFund Dollar Shares,
TempFund Plus Shares, TempFund Cash Reserve Shares or
TempFund Cash Management Shares, however,
11
<PAGE>
broker-dealers and other institutional investors may set a
minimum for their customers. There is no minimum subsequent
investment. The Fund, at its discretion, may reduce the
minimum initial investment for TempFund Shares for specific
institutions whose aggregate relationship with the Provident
Institutional Funds is substantially equivalent to this $3
million minimum and warrants this reduction.
Fund shares are sold and redeemed without charge by the
Fund. Institutional investors purchasing or holding Fund
shares for their customer accounts may charge customer fees
for cash management and other services provided in
connection with their accounts. A customer should,
therefore, consider the terms of its account with an
institution before purchasing Fund shares. An institution
purchasing or redeeming Fund shares on behalf of its
customers is responsible for transmitting orders to the Fund
in accordance with its customer agreements.
Conflict of interest restrictions may apply to an
institution's receipt of compensation paid by the Fund in
connection with the investment of fiduciary funds in
TempFund Administration Shares, TempFund Dollar Shares,
TempFund Plus Shares, TempFund Cash Reserve Shares or
TempFund Cash Management Shares. (See also "Management of
the Fund--Service Organizations," as described in the
Statement of Additional Information.) 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 TempFund
Administration Shares, TempFund Dollar Shares, TempFund Plus
Shares, TempFund Cash Reserve Shares or TempFund Cash
Management Shares. (See also "Management of the Fund--
Banking Laws," as described in the Statement of Additional
Information).
Redemption of Redemption orders must be transmitted to PFPC in Wilmington,
Shares Delaware in the manner described under "Purchase of Shares."
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. Call 1-
800-441-7450 (in Delaware: 302-791-5350) to place redemption
orders.
12
<PAGE>
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 shareholder 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
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. 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."
Distribution The Fund offers six classes of shares. The difference
and Shareholder between the classes of shares is the fees borne by a class
Service Plans of shares pursuant to separate fees plans adopted by each
class. TempFund Shares do not bear any fees for
distribution, servicing, shareholder servicing, sweep fees
or cash sweep marketing services. The fees borne by the
other classes are as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Cash
Shareholder Cash Sweep
Service Service 12b-1 Sweep Marketing Total
Class Fee Fee Fee Fee Fee Fees
------------------------ ------- ----------- ----- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Administration Shares... .10% -- -- -- -- .10%
Dollar Shares........... -- .25% -- -- -- .25%
Plus Shares............. -- -- .25% -- -- .25%
Cash Reserve Shares..... .10% .25% -- .05% -- .40%
Cash Management Shares.. .10% .25% -- .05% .10% .50%
-------------------------------------------------------------------------
</TABLE>
Service Fees are paid for general shareholder liaison
services. Shareholder Service Fees are paid for services
relating to the processing and administration of shareholder
accounts. The Fund has adopted a plan pursuant to Rule 12b-
1. 12b-1 Fees are paid for distribution and sales support,
and shareholder services. Cash Sweep Fees are paid for
distribution and sales support, and shareholder services.
Cash Sweep Fees are paid for providing a sweep service into
the Fund. Cash Sweep Marketing Fees are paid for providing
marketing administrative activities in connection with the
sweep program.
Shares of the Fund are not sold to individuals, but may
be sold to the following entities, which hold the shares for
the accounts of their customers.
13
<PAGE>
Administration Shares, Dollar Shares, Cash Reserve Shares
and Cash Management Shares are sold to institutional
investors such as banks, saving and loan associations, and
other financial institutions, including affiliates of PNC
Bank Corp. ("Service Organizations"). Plus Shares are sold
to broker-dealers. Because fees associated with the
distribution and/or shareholder service plans are paid out
of the Fund's assets on an outgoing basis, over time holders
of the share classes described above may pay more than the
economic equivalent of the maximum front-end sales charge
permitted by NASD Regulation, Inc.
Dividends and The Fund declares dividends daily and distributes
Distributions substantially all of its net investment income to
shareholders monthly. 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.
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. Reinvestment
elections, and any revocations 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.
Taxes The Fund's distributions will generally be taxable to
shareholders. The Fund expects that all, or substantially
all, of its distributions will consist of ordinary income.
You will be subject to income tax on these distributions
regardless whether they are paid in cash or reinvested in
additional shares.
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
treatment.
Dividends declared in December of any year, and payable
to shareholders of record on a specified date in December,
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.
You should consult your tax adviser for further
information regarding the federal, state and local tax
consequences with respect to your specific situation.
14
<PAGE>
Financial Highlights ___________________________________________________________
The financial highlights tables are intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Fund's financial statements, are incorporated by reference into the
Statement of Additional Information and included in the Annual Report, each of
which is available upon request. Administration Shares, Plus Shares, Cash
Reserve Shares and Cash Management Shares of the Fund have not yet commenced
operations, therefore no financial information has been provided for these
classes.
TempFund Shares
The table below sets forth selected financial data for a TempFund Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------------------------
1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------
<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 (.0549) .0539 .0541 .0567 .0360
Net Gains or Losses on
Securities (both
realized
and unrealized) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Total From Investment
Operations .0549 .0539 .0541 .0567 .0360
- -------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0549) (.0539) (.0541) (.0567) (.0360)
Distributions (from
capital gains) -- -- -- -- --
- -------------------------------------------------------------------------------------------------
Total Distributions (0.549) (.0539) (.0541) (.0567) (.0360)
- -------------------------------------------------------------------------------------------------
Net Asset Value End of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Total Return 5.63% 5.53% 5.55% 5.82% 3.66%
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Ratios/Supplement Data
Net Assets, End of Year
(000's) $9,686,491 $8,060,501 $5,715,004 $5,351,346 $4,480,851
Ratio of Expenses to
Average Daily Net
Assets .18%(1) .18%(1) .18%(1) .24%(1) .25%(1)
Ratio of Net Investment
Income to Average Daily
Net Assets 5.50% 5.39% 5.41% 5.67% 3.60%
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for TempFund Shares would have been
.23% for the year ended September 30, 1998, .24% for the year ended
September 30, 1997, .26% for the year ended September 30, 1996 and .27% for
the years ended September 30, 1995 and 1994, respectively.
15
<PAGE>
Financial Highlights (Continued) _______________________________________________
TempFund Dollar Shares
The table below sets forth selected financial data for a TempFund Dollar Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended September 30,
----------------------------------------------------------
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<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 .0524 .0514 .0516 .0542 .0335
Net Gains or Losses on
Securities (both
realized and
unrealized) -- -- -- -- --
- -----------------------------------------------------------------------------------
Total From Investment
Operations .0524 .0514 .0516 .0542 .0335
- -----------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0524) (.0514) (.0516) (.0542) (.0335)
Distributions (from
capital gains) -- -- -- -- --
- -----------------------------------------------------------------------------------
Total Distributions (.0524) (.0514) (.0516) (.0542) (.0335)
- -----------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Total Return 5.38% 5.27% 5.30% 5.57% 3.41%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Ratios/Supplement Data
Net Assets, End of
Year (000's) $302,476 $355,284 $162,119 $81,828 $102,105
Ratio of Expenses to
Average Daily Net
Assets .43%(1) .43%(1) .43%(1) .49%(1) .50%(1)
Ratio of Net
Investment Income to
Average Daily Net
Assets 5.25% 5.14% 5.16% 5.42% 3.35%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
(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 .48% for the year ended September 30, 1998, .49% for the year ended
September 30, 1997, .51% for the year ended September 30, 1996 and .52% for
the years ended September 30, 1995 and 1994, respectively.
16
<PAGE>
Where to Find More Information _________________________________________________
The Statement of Additional Information ("the SAI") includes additional
information about the Fund's investment policies, organization and management.
It is legally part of this prospectus (it is incorporated by reference). The
Annual and Semi-Annual Reports provide additional information about the Fund's
investments, performance and portfolio holdings.
Investors can get free copies of the above named documents, and make
shareholder inquiries, by calling 1-800-821-7432. Other information is
available on the Fund's web site at www.pif.com.
Information about the Fund (including the Fund's SAI) can be reviewed and
copied at the Securities and Exchange Commission's Public Reference Room in
Washington, D.C. Information about the operation of the Public Reference Room
may be obtained by calling the SEC at 1-800-SEC-0330. Reports and other
information about the Fund are available on the SEC's Internet site at
http://www.sec.gov. Copies of this information may be obtained, upon payment of
a duplicating fee, by writing the Public Reference Section of the SEC,
Washington, D.C. 20549-6009.
The Temporary Investment Fund, Inc. 1940 Act File No. is 811-2354
<PAGE>
TEMPCASH
AN INVESTMENT PORTFOLIO OFFERED BY
TEMPORARY INVESTMENT FUND, INC.
PROSPECTUS
January 31, 1999
Bellevue Park Corporate Center For purchase and redemption orders only
400 Bellevue Parkway call: 800-441-7450 (in Delaware:
Wilmington, DE 19809 302-791-5350). For yield information
call: 800-821-6006 (TempCash Shares
code: 21; TempCash Dollar Shares
code: 23). For other information
call: 800-821-7432 or visit our web
site at www.pif.com.
INVESTMENT ADVISER
BLACKROCK INSTITUTIONAL MANAGEMENT CORPORATION
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE
FUND'S SHARES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. IT IS A
CRIMINAL OFFENSE TO STATE OTHERWISE.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RISK/RETURN SUMMARY......................................................
Investment Goal.....................................................
Investment Policies.................................................
Principal Risks of Investing........................................
Who May Want to Invest in the Fund..................................
Performance Information.............................................
Fees and Expenses...................................................
INVESTMENT STRATEGIES AND RISK DISCLOSURE................................
MANAGEMENT OF THE FUND...................................................
SHAREHOLDER INFORMATION..................................................
Price of Fund Shares................................................
Purchase of Shares..................................................
Redemption of Shares................................................
Shareholder Service Plan............................................
Dividends and Distributions.........................................
Taxes...............................................................
FINANCIAL HIGHLIGHTS.....................................................
</TABLE>
-2-
<PAGE>
RISK/RETURN SUMMARY
INVESTMENT GOAL: The Fund seeks current income with liquidity and
stability of principal.
INVESTMENT POLICIES: The Fund invests in 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
financial services industry and repurchase
agreements relating to such obligations.
PRINCIPAL RISKS OF INVESTING: Although the Fund invests in money market
instruments which the investment adviser,
BlackRock Institutional Management Corporation
("BIMC," or the "Adviser") believes present
minimal credit risks at the time of purchase,
there is a risk that an issuer may not be able
to make principal and interest payments when
due. While the Fund seeks to maintain a constant
net asset value of $1.00 per share, the Fund is
also subject to risks related to changes in
prevailing interest rates, since generally, a
fixed-income security will increase in value
when interest rates fall and decrease in value
when interest rates rise.
Because of its concentration in the financial
services industry, the Fund will be exposed to
the risks associated with that industry, such as
government regulation, the availability and cost
of capital funds, and general economic
conditions. In addition, securities issued by
foreign entities, including foreign banks and
corporations may involve additional risks.
Examples of these risks are the lack of
available public information about the foreign
issuer, and international economic or
-3-
<PAGE>
political developments which could affect the
payment of principal and interest when due.
An investment in the Fund is not a deposit in
PNC Bank, N.A. and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or
any other government agency. Although the Fund
seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money
by investing in the Fund.
WHO MAY WANT TO INVEST The Fund is designed for institutional investors
IN THE FUND: seeking current income and stability of
principal. The Fund is particularly suitable for
banks, corporations and other financial
institutions that seek investment of short-term
funds for their own accounts or for the accounts
of their customers.
PERFORMANCE INFORMATION
The Bar Chart and the Table below indicate the risks of investing in the
Fund by showing how the performance of the Fund has varied from year to year.
The Table shows how the Fund's average annual return for one, five and ten years
compares to that of a selected market index. The Bar Chart and the Table assume
reinvestment of dividends and distributions. The Fund's past performance does
not necessarily indicate how it will perform in the future.
[BAR GRAPH APPEARS HERE]
TempCash Vs. IBC Financial Data's First Tier Institutional
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Provident Inst Funds:Tempcash Inst 9.56 8.42 6.27 3.83 3.15 4.30 6.02 5.44 5.62 5.55
IBC's First Tier Institutional 9.20 8.10 6.09 3.72 3.00 4.07 5.79 5.22 5.39 5.33
</TABLE>
During the ten-year period shown in the bar chart, the highest quarterly
return was 10.15% (for the quarter ended June 30, 1989) and the lowest quarterly
return was 3.07% (for the quarter ended March 31, 1993).
-4-
<PAGE>
THE FUND'S AVERAGE ANNUAL TOTAL RETURN FOR
PERIODS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
TEMPCASH SHARES 5.55% 5.29% 5.74%
- --------------------------------------------------------------------------------
TEMPCASH DOLLAR SHARES 5.30% 5.04% 5.49%
- --------------------------------------------------------------------------------
IBC'S MONEY FUND REPORT: FIRST
TIER INSTITUTIONS - ONLY
MONEY FUND AVERAGE*
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
7 DAY YIELD
AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<S> <C>
TEMPCASH SHARES 5.05%
- --------------------------------------------------------------------------------
TEMPCASH DOLLAR SHARES 4.80%
- --------------------------------------------------------------------------------
IBC'S MONEY FUND REPORT: FIRST TIER
INSTITUTIONS - ONLY MONEY FUND AVERAGE* 4.87%
- --------------------------------------------------------------------------------
</TABLE>
CURRENT YIELD: You may obtain the Fund's current 7-day yield by calling 1-800-
821-7432 or by visiting its web site at www.pif.com.
- -----------------------
* IBC'S MONEY FUND REPORT: FIRST TIER INSTITUTIONS - ONLY MONEY FUND AVERAGE IS
COMPRISED OF MONEY FUNDS INVESTING IN FIRST TIER ELIGIBLE MARKET INSTRUMENTS.
-5-
<PAGE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund
<TABLE>
<CAPTION>
TEMPCASH
- --------------------------------------------------------------------------------
TEMPCASH TEMPCASH
SHARES DOLLAR SHARES
-------------- -------------
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted
from Fund assets)
Management Fees .15% .15%
Other Expenses .17% .42%
Administration Fees .15% .15%
Shareholder Servicing Fees -- % .25%
Miscellaneous .02% .02%
Total Annual Fund
Operating Expenses(1) .32% .57%
==== ====
</TABLE>
- --------------------------------------------------------------------------------
(1) Total Annual Fund Operating Expenses for TempCash Shares and TempCash Dollar
Shares for the fiscal year ended September 30, 1998, with fee waivers, would
have been .18% and .43%, respectively, of the Fund's average net assets. The
Adviser and PFPC Inc., the Fund's co-administrator, 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 Adviser and PFPC expect to
continue such fee waivers, but can terminate the waivers upon 120 days prior
written notice to the Fund.
-6-
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
TEMPCASH
- -----------------------------------------------------------
TEMPCASH TEMPCASH
SHARES DOLLAR SHARES
- -----------------------------------------------------------
<S> <C> <C>
One Year $ 33 $ 58
Three years $103 $183
Five Years $180 $318
Ten Years $406 $714
- -----------------------------------------------------------
</TABLE>
-7-
<PAGE>
INVESTMENT STRATEGIES AND RISK DISCLOSURE
The Fund is a money market fund. The investment objective of the Fund is to
seek current income and stability of principal. The Fund's investment objective
may be changed by the Board of Directors without shareholder approval. The Fund
invests in a broad range of money market instruments, including government, U.S.
and foreign bank and commercial obligations and repurchase agreements relating
to such obligations. At least 25% of the Fund's total assets will be invested in
obligations of issuers in the financial services industry and repurchase
agreements relating to such obligations, unless the Fund is in a temporary
defensive position.
The Fund invests in securities maturing within 13 months or less from the
date of purchase, with certain exceptions. For example, certain government
securities held by the Fund may have remaining maturities exceeding 13 months if
such securities provide for adjustments in their interest rates not less
frequently than every 13 months. The securities purchased by the Fund are also
subject to the quality, diversification, and other requirements of Rule 2a-7
under the Investment Company Act of 1940, as amended, and other rules of the
Securities and Exchange Commission. Pursuant to Rule 2a-7, the Fund generally
will limit its purchases of any one issuer's securities (other than U.S.
Government obligations, repurchase agreements collateralized by such securities
and securities subject to certain guarantees or otherwise providing a right to
demand payment) 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; provided that the Fund may not invest more than 25% of its
total assets in the securities of more than one issuer in accordance with the
foregoing at any one time.
The Fund will only purchase securities that present minimal credit risk as
determined by the Adviser pursuant to guidelines approved by the Board of
Directors of Temporary Investment Fund, Inc. Securities purchased by the Fund
(or the issuers of such securities) will be First Tier Eligible Securities.
First Tier Eligible Securities are:
. securities that have ratings at the time of purchase (or which are
guaranteed or in some cases otherwise supported by guarantees or other
credit supports with such ratings) in the highest rating category by at
least two unaffiliated nationally recognized statistical rating
organizations ("NRSROs"), or one NRSRO, if the security or guarantee was
only rated by one NRSRO;
. securities that are issued or guaranteed by a person with such
ratings;
. securities without such short-term ratings that have been determined
to be of comparable quality by the Adviser pursuant to guidelines
approved by the Board of Trustees;
. securities issued or guaranteed as to principal or interest by the
U.S. Government or any of its agencies or instrumentalities; or
. securities issued by other open-end investment Companies that invest
in the type of obligations in which the Fund may invest.
Investments. The Fund's investments may include the following:
U.S. Government Obligations. The Fund may purchase obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities and
related custodial receipts.
-8-
<PAGE>
Bank Obligations. The Fund may purchase obligations of issuers in the
banking industry, such as bank holding company obligations and certificates of
deposit, bankers' acceptances, bank notes 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 Adviser
deems the instrument to present minimal credit risks. The Fund may also make
interest-bearing savings deposits in commercial and savings banks in amounts not
in excess of 5% of its assets.
Commercial Paper. 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.
Asset-Backed Obligations. 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 Fund currently intends to hold CMOs only as
collateral for repurchase agreements.
Investment Company Securities. The Fund may invest in securities issued by
other open-end investment companies that invest in the type of obligations in
which the Fund may invest and that determine their net asset value per share
based upon the amortized cost or penny rounding method. Investments in the
securities of other investment companies will cause the Fund (and, indirectly
the Fund's shareholders) to bear proportionately the costs incurred in
connection with the other investment companies' operations.
Municipal Obligations. The Fund may, when deemed appropriate by the
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.
Guaranteed Investment Contracts. 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. GIC investments that do not provide for payment within seven days
after notice are subject to the Fund's policy regarding investments in illiquid
securities.
Variable and Floating Rate Instruments. The Fund may purchase variable or
floating rate notes, which are instruments that provide for adjustments in the
interest rate on certain reset dates or whenever a specified interest rate index
changes, respectively.
Repurchase Agreements. The Fund may enter into repurchase agreements.
-9-
<PAGE>
Reverse Repurchase Agreements and Securities Lending. The Fund may enter
into reverse repurchase agreements. The Fund is permitted to invest up to one-
third of its total assets in reverse repurchase agreements. The Fund may also
lend its securities with a value of up to one-third of its total assets
(including the value of the collateral for the loan) to qualified brokers,
dealers, banks and other financial institutions for the purpose of realizing
additional net investment income through the receipt of interest on the loan.
Investments in reverse repurchase agreements and securities lending transactions
will be aggregated for purposes of this investment limitation.
When-Issued and Delayed Settlement Transactions. The Fund may purchase
securities on a "when-issued" or "delayed settlement" basis. The Fund expects
that commitments to purchase when-issued or delayed settlement 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 or delayed
settlement securities for speculative purposes but only in furtherance of its
investment objective.
Illiquid Securities. The Fund will not 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.
Other Types of Investments. This Prospectus describes the Fund's principal
investment strategies, and the particular types of securities in which the Fund
principally invests. The Fund may, from time to time, make other types of
investments and pursue other investment strategies in support of its overall
investment goal. Any other types of investments will comply with the Fund's
quality and maturity guidelines. These supplemental investment strategies are
described in detail in the Statement of Additional Information, which is
referred to on the back cover of this Prospectus.
RISK FACTORS. The principal risks of investing in the Fund are also
described above in the Risk/Return Summary. The following supplements that
description.
Interest Rate Risk. Generally, a fixed-income security will increase in
value when interest rates fall and decrease in value when interest rates rise.
As a result, if interest rates were to change rapidly, there is a risk that the
change in market value of the Fund's assets may not enable the Fund to maintain
a stable net asset value of $1.00 per share.
Credit Risk. The risk that an issuer will be unable to make principal and
interest payments when due is known as "credit risk." U.S. Government securities
are generally considered to be the safest type of investment in terms of credit
risk, with municipal obligations and corporate debt securities presenting
somewhat higher credit risk. Credit quality ratings published by an NRSRO are
widely accepted measures of credit risk. The lower a security is rated by an
NRSRO, the more credit risk it is considered to represent.
Other Risks. Certain investment strategies employed by the Fund may involve
additional investment risk. Liquidity risk involves certain securities which may
be difficult or impossible to sell at the time and the price that the Fund would
like. Reverse repurchase agreements, securities lending transactions and when-
issued or delayed delivery transactions may involve leverage risk.
-10-
<PAGE>
Leverage risk is associated with securities or practices that multiply small
market movements into larger changes in the value of the Fund's investment
portfolio. The fund does not currently intend to employ investment strategies
that involve leverage risk.
Concentration. The Fund intends to concentrate more than 25% of its total
assets in the obligations of issuers in the financial services industry and
repurchase agreements relating to such obligations. Because the Fund
concentrates its assets in the financial services industry it will be exposed to
the risks associated with that industry, such as government regulation, the
availability and cost of capital funds, and general economic conditions.
Foreign Exposure. Securities issued by foreign entities, including foreign
banks and corporations, may involve additional risks and considerations.
Extensive public information about the foreign issuer may not be available, and
unfavorable political, economic or governmental developments in the foreign
country involved could affect the payment of principal and interest.
Year 2000. Like other mutual funds, financial and business organizations
and individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser and the Fund's other service providers, or
persons with whom they deal, do not properly process and calculate date-related
information and data from and after January 1, 2000. This possibility is
commonly known as the "Year 2000 Problem." The Fund has been advised by the
Adviser, the Administrators and the Custodian that they are actively taking
steps to address the Year 2000 Problem with respect to the computer systems that
they use and to obtain assurances that comparable steps are being taken by the
Fund's other major service providers. While there can be no assurance that the
Fund's service providers will be Year 2000 compliant, the Fund's service
providers expect that their plans to be compliant will be achieved.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER
The Adviser, a wholly-owned indirect subsidiary of PNC Bank, serves as the
Fund's investment adviser. The Adviser and its affiliates are one of the
largest U.S. bank managers of mutual funds, with assets currently under
management in excess of $46 billion. BIMC (formerly known as PNC Institutional
Management Corporation or "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.
As investment adviser, BIMC manages the Fund and is responsible for all
purchases and sales of the Fund's securities. For the investment advisory
services provided and expenses assumed by it, BIMC is entitled to receive a fee,
computed daily and payable monthly, based on the Fund's average net assets.
BIMC and PFPC, the co-administrator, may from time to 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
BIMC and PFPC with respect to a particular fiscal year are not recoverable. For
the fiscal year ended September 30, 1998, the Fund paid investment advisory fees
and administration fees each aggregating .08% (net of waivers) of its average
net assets. The services provided by BIMC and the fees payable by the Fund for
these
-11-
<PAGE>
services are described further in the Statement of Additional Information under
"Management of the Funds."
SHAREHOLDER INFORMATION
PRICE OF FUND SHARES
The Fund's net asset value per share for purposes of pricing purchase and
redemption orders is determined by PFPC Inc. ("PFPC"), the Funds co-
administrator, as of 12:00 noon and 4:00 P.M., Eastern time, on each day on
which both the New York Stock Exchange and the Federal Reserve Bank of
Philadelphia are open for business (a "Business 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." Under the 1940 Act, the Fund may postpone the date of payment of
any redeemable security for up to seven days.
PURCHASE OF SHARES
Fund shares are sold at the net asset value per share next determined after
confirmation of a purchase order by PFPC, which also serves as the Fund's
transfer agent. Purchase orders for shares are accepted only on Business Days
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, N.A. ("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 institution 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 Fund shares may be made only in federal funds or other funds
immediately available to PNC Bank. The minimum initial investment by an
institution is $3 million for TempCash Shares and $5,000 for TempCash Dollar
Shares; however, broker-dealers and other institutional investors may set a
higher minimum for their customers. There is no minimum subsequent investment.
The Fund, at its discretion, may reduce the minimum initial investment for
TempCash Shares for specific institutions whose aggregate relationship with the
Provident Institutional Funds is substantially equivalent to this $3 million
minimum and warrants this reduction.
-12-
<PAGE>
Fund shares are sold and redeemed without charge by the Fund.
Institutional investors purchasing or holding Fund shares for their customer
accounts may charge customer fees for cash management and other services
provided in connection with their accounts. A customer should, therefore,
consider the terms of its account with an institution before purchasing Fund
shares. An institution purchasing or redeeming Fund shares on behalf of its
customers is responsible for transmitting orders to the Fund in accordance with
its customer agreements.
Conflict of interest restrictions may apply to an institution's receipt of
compensation paid by the Fund in connection with the investment of fiduciary
funds in TempCash Dollar Shares. (See also "Management of the Fund -- Service
Organizations," as described in the Statement of Additional Information.)
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 TempCash Dollar
Shares. (See also "Management of the Fund -- Banking Laws," as described in the
Statement of Additional Information.)
REDEMPTION OF SHARES
Redemption orders must be transmitted to PFPC in Wilmington, Delaware in
the manner described under "Purchase of Shares." 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. Call 1-800-441-7450 (in Delaware: 302-791-
5350) to place redemption orders.
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 TempCash Shares
account if the value of the account is less than $100,000, and in any TempCash
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 TempCash Shares account to $100,000 or more or its TempCash Dollar Shares
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."
-13-
<PAGE>
SHAREHOLDER SERVICE PLAN
Institutional investors, such as banks, savings and loan associations and
other financial institutions, including affiliates of PNC Bank Corp. ("Service
Organizations"), may purchase Dollar Shares. TempCash 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 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.
TempCash Shares are sold to institutions that have not entered into servicing
agreements with the Fund in connection with their investments.
DIVIDENDS AND DISTRIBUTIONS
The Fund declares dividends daily and distributes substantially all of its
net investment income to shareholders monthly. 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.
Dividends are determined in the same manner for each class of shares of the
Fund. TempCash Dollar Shares bear all the expense of fees paid to Service
Organizations, and as a result, at any given time, the dividend on TempCash
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. Reinvestment elections, and any revocations 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.
-14-
<PAGE>
TAXES
The Fund's distributions will generally be taxable to shareholders. The
Fund expects that all, or substantially all, of its distributions will consist
of ordinary income. You will be subject to income tax on these distributions
regardless whether they are paid in cash or reinvested in additional
shares.
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
treatment.
Dividends declared in December or any year, and payable to shareholders of
record on a specified date in December, 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.
You should consult your tax adviser for further information regarding the
federal, state and local tax consequences with respect to your specific
situation.
-15-
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the Fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Fund's financial statements, are incorporated by reference into the
Statement of Additional Information and included in the Annual Report, each of
which is available upon request.
TEMPCASH SHARES
The table below sets forth selected financial data for a TempCash Share
outstanding throughout each year presented.
YEAR ENDED SEPTEMBER 30,
------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Period ----------- ------------ ------------ ------------- -------------
Income from Investment Operations
Net Investment Income .0552 .0541 .0542 .0575 .0370
Net Gains or Losses on Securities
(both realized and unrealized) -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .0552 .0541 .0542 .0575 .0370
---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends (from net investment
income) (.0552) (.0541) (.0542) (.0575) (.0370)
Distributions (from capital
gains) -- -- -- -- --
Total Distributions (.0552) (.0541) (.0542) (.0575) (.0370)
---------- ---------- ---------- ---------- ----------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 5.66% 5.55% 5.56% 5.90% 3.76%
Ratios/Supplement Data
Net Assets, End of Year (000's) $2,499,114 $1,991,037 $1,835,326 $1,316,166 $2,330,456
Ratio of Expenses to Average
Daily
Net Assets .18%/1/ .18%/1/ .18%/1/ .16%/1/ .16%/1/
Ratio of Net Investment Income
to Average Daily Net Assets 5.52 5.41% 5.42% 5.75% 3.70%
</TABLE>
_________________
1 Without the waiver of advisory and administration fees, the ratio of expenses
to average daily net assets for TempCash Shares would have been .32% for the
year ended September 30, 1998, .30% for the year ended September 30, 1997, .33%
for the year ended September 30, 1996, .30% for the year ended September 30,
1995 and .33% for the year ended September 30, 1994.
-16-
<PAGE>
TEMPCASH DOLLAR SHARES
The table below sets forth selected financial data for a TempCash Dollar Share
outstanding throughout each year presented.
YEAR ENDED SEPTEMBER 30,
------------------------
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
----------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Period ---------- ---------- ---------- ---------- ----------
Income from Investment
Operations
Net Investment Income .0527 .0516 .0517 .0550 .0345
Net Gains or Losses on Securities
(both realized and unrealized) -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total From Investment Operations .0527 .0516 .0517 .0550 .0345
---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends (from net investment
income) (.0527) (.0516) (.0517) (.0550) (.0345)
Distributions (from capital gains) -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions (.0527) (.0516) (.0517) (.0550) (.0345)
----------- ---------- ---------- ---------- ----------
Net Asset Value End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 5.41% 5.29% 5.31% 5.65% 3.51%
Ratios/Supplement Data $ 503,809 $ 401,529 $ 527,830 $ 454,156 $ 397,948
Net Assets, End of Year (000's)
Ratio of Expenses to Average
Daily
Net Assets .43%/1/ .43%/1/ .43%/1/ .41%/1/ .41%/1/
Ratio of Net Investment Income
to Average Daily Net Assets 5.27% 5.16% 5.17% 5.50% 3.45%
</TABLE>
_________________
/1/ Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for TempCash Dollar Shares would have been
.57% for the year ended September 30, 1998, .55% for the year ended September
30, 1997, .58% for the year ended September 30, 1996, .55% for the year ended
September 30, 1995 and .58% for the year ended September 30, 1994.
-17-
<PAGE>
WHERE TO FIND MORE INFORMATION
The Statement of Additional Information (the "SAI") includes additional
information about the Fund's investment policies, organization and management.
It is legally part of this prospectus (it is incorporated by reference). The
Annual and Semi-Annual Reports provide additional information about the Fund's
investments, performance and portfolio holdings.
Investors can get free copies of the above named documents, and make shareholder
inquiries, by calling 1-800-821-7432. Other information is available on the
Fund's web site at www.pif.com.
Information about the Fund (including the Fund's SAI) can be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. Information about the operation of the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330. Reports and other information
about the Fund are available on the SEC's Internet site at http://www.sec.gov.
Copies of this information may be obtained, upon payment of a duplicating fee,
by writing the Public Reference Section of the SEC, Washington, D.C. 20549-6009.
The Temporary Investment Fund, Inc. 1940 Act File No. is 811-2354
-18-
<PAGE>
TEMPFUND and TEMPCASH
Investment Portfolios Offered By
Temporary Investment Fund, Inc.
Statement of Additional Information
January 31, 1999
Table of Contents
-----------------
Page
----
THE COMPANY.................................................................. 2
INVESTMENT OBJECTIVES AND POLICIES........................................... 2
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION............................... 10
MANAGEMENT OF THE FUNDS...................................................... 13
ADDITIONAL INFORMATION CONCERNING TAXES...................................... 23
DIVIDENDS.................................................................... 24
ADDITIONAL YIELD INFORMATION................................................. 25
ADDITIONAL DESCRIPTION CONCERNING SHARES..................................... 27
COUNSEL...................................................................... 28
AUDITORS..................................................................... 29
MISCELLANEOUS................................................................ 29
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, 1999, 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 or TempCash may be obtained by calling 800-821-7432.
Capitalized terms used but not defined herein have the same meanings as in the
Prospectuses.
-1-
<PAGE>
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,
BlackRock Institutional Management Corporation ("BIMC"), 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. BIMC 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, BIMC 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, BIMC 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, 1996, 1997 and 1998,
TempFund and TempCash paid no brokerage commissions.
BIMC 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 BIMC believes that a Fund's anticipated need for liquidity
makes such action desirable. Certain dealers (but not 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 BIMC to pay a higher price for commercial paper where it secures
such an undertaking if BIMC believes that the prepayment privilege is desirable
to assure a Fund's liquidity and such an undertaking cannot otherwise be
obtained.
-2-
<PAGE>
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 BIMC. 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 BIMC 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, BIMC 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 BIMC, 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
Administration, Dollar, Plus, Cash Reserve or Cash Management 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.
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.
-3-
<PAGE>
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 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
-4-
<PAGE>
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.
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 a 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
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.
-5-
<PAGE>
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 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
-6-
<PAGE>
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. TempCash 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 some GICs does not currently exist.
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 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.
-7-
<PAGE>
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.
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 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
-8-
<PAGE>
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 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.
-9-
<PAGE>
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 the
signature must be guaranteed. A signature guarantee may be obtained from a
domestic bank or trust company, broker, dealer, clearing agency or savings
association who are participants in a medallion program recognized by the
Securities Transfer Association. The three recognized medallion programs are
Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion
Signature Program (MSP) and the New York Stock Exchange, Inc. Medallion
Securities Program. Signature guarantees that are not part of these programs
will not be accepted. 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 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
-10-
<PAGE>
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
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
-11-
<PAGE>
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.
-12-
<PAGE>
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 Executive Officer,
Beckwith Machinery Company Beckwith Machinery Company; First
Pittsburgh, PA 15221 Vice Chairman of the Board of Directors,
Age: 54 University of Pittsburgh Medical Center Shadyside/Presbyterian Hospitals; Second Vice
Chairman of the Board of Directors, University of Pittsburgh Medical Center Health
System; Board of Overseers, Brown University School of Medicine; Board of Trustees,
Shady Side Academy; Trustee, Claude Worthington Benedum Foundation; Trustee, Chatham
College.
PHILIP E. COLDWELL2,3,4 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: 76 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. FORTUNE2,3,4 Director Financial Consultant;
2920 Ritter Lane Chairman, President, and Chief
Allentown, PA 18104 Executive Officer, Associated
Age: 82 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 Scientific Products Corp. 1990 to
Age: 56 present.
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and address the Company Other Affiliations
- ---------------- ------------- -----------------------
<S> <C> <C>
RODNEY D. JOHNSON3,4 Director President, Fairmount Capital
Fairmount Capital Advisors, Inc. (financial
Advisors, Inc. advising), since 1987.
1435 Walnut Street
Drexel Building
Philadelphia, PA 19102
Age: 57
G. WILLING PEPPER1,2 Chairman of the Retired; Chairman of the
128 Springton Lake Road Board Board, The Institute for
Media, PA 19063 Cancer Research until 1979;
Age: 90 Director, Philadelphia National Bank until
1978; President, Scott Paper Company, 1971
to 1973; Chairman of the Board, Specialty
Composites Corporation until May 1984.
THOMAS H. NEVIN President Managing Director, BIMC (since 1997);
Bellevue Park Corp. Center prior thereto, President and Chief
400 Bellevue Parkway Investment Officer, BIMC.
Wilmington, DE 19809
Age: 51
LISA M. BUONO Treasurer Vice President, Provident
Bellevue Park Corporate Advisors, Inc. since 1997;
Center prior thereto, Director of
400 Bellevue Parkway Finance and Compliance, PDI
Wilmington, DE 19809 (1993-1996)
Age: 34
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: 55
</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.
-14-
<PAGE>
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. Pepper is 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, 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 and IDR.
The following chart provides certain information for the fiscal year
ended September 30, 1998 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 Complex1
Name of Person, from Part of Fund Benefits upon Paid to
Position Registrant Expenses Retirement Directors
- ----------------------------------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
G. Nicholas Beckwith, III, Director $17,000 n/a n/a $44,000(3)2
- ----------------------------------- ------------ ------------ ------------- --------------
Philip E. Coldwell, $17,000 n/a n/a $44,000(3)2
Director
- ----------------------------------- ------------ ------------ ------------- --------------
Robert R. Fortune, $17,000 n/a n/a $63,100(5)2
Director
- ----------------------------------- ------------ ------------ ------------- --------------
Jerrold B. Harris, Director $16,100 n/a n/a $41,300(3)2
- ----------------------------------- ------------ ------------ ------------- --------------
Rodney D. Johnson, $17,000 n/a n/a $55,350(5)2
Director
- ----------------------------------- ------------ ------------ ------------- --------------
G. Willing Pepper, $26,000 n/a n/a $93,100(6)2
Chairman of the Board
==============================================================================================
</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.
-15-
<PAGE>
2. Total number of such other investment companies a director served on within
the Fund Complex during the fiscal year ended September 30, 1998.
Drinker Biddle & Reath LLP, of which Mr. McConnel is a partner,
receives legal fees as counsel to the Company. No employee of PDI, BIMC, 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.
Investment Adviser
- ------------------
The advisory services provided by BIMC and PNC Bank are described in
the Funds' Prospectuses. For the advisory services provided and expenses
assumed by it, BIMC is entitled to receive fees, computed daily and payable
monthly, at the following annual rates:
<TABLE>
<CAPTION>
TempFund:
--------
Annual Fee Average Net Assets
- ---------- ------------------
<S> <C>
.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.
</TABLE>
<TABLE>
<CAPTION>
TempCash:
--------
Annual Fee Average Net Assets
- ---------- ------------------
<S> <C>
.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.
</TABLE>
-16-
<PAGE>
BIMC 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. BIMC 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, 1998 the
expense limitations then in effect were not exceeded.
For the fiscal years ended September 30, 1998, 1997 and 1996, TempFund
paid to BIMC advisory fees (net of waivers) of $8,126,927, $6,560,502 and
$5,254,506, respectively. For the same periods, BIMC waived advisory fees with
respect to TempFund of $2,315,278, $2,576,520 and $2,765,281, respectively.
For the fiscal years ended September 30, 1998, 1997 and 1996, TempCash
paid to BIMC advisory fees (net of waivers) of $2,388,597, $2,176,446 and
$2,170,845, respectively. For the same periods, BIMC waived advisory fees with
respect to TempCash of $2,096,653, $2,576,520 and $2,106,346, respectively.
Banking Laws
- ------------
Certain banking laws and regulations with respect to investment
companies are discussed in each Fund's Prospectuses. BIMC, 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 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 BIMC and PFPC from
continuing to perform such services for the Funds and PNC Bank from continuing
to perform such services for BIMC and the Funds. If BIMC, 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.
17
<PAGE>
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 monthly, as described above
determined in the same manner as BIMC'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, 1998, 1997 and 1996, TempFund
paid PFPC and PDI administration fees (net of waivers) of $8,126,927, $6,560,502
and $5,254,506, respectively. For the same periods, PFPC and PDI waived
administration fees with respect to TempFund of $2,315,278, $2,576,520 and
$2,765,281, respectively.
For the fiscal years ended September 30, 1998, 1997 and 1996, TempCash
paid PFPC and PDI administration fees (net of waivers) of $2,388,597, $2,176,446
and $2,170,845, respectively. For the same periods, PFPC and PDI waived
administration fees with respect to TempCash of $2,096,653, $2,576,520 and
$2,106,346, 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.
-18-
<PAGE>
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.
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
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<PAGE>
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 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
- ---------------------
Each of the Funds may enter into agreements with institutional
investors ("Service Organizations") requiring them to provide support services
to their customers who beneficially own Dollar Shares and, with respect to
TempFund, Plus Shares, in consideration of .25% (on an annualized basis) of the
average daily net asset value of the Dollar and Plus Shares held by the Service
Organizations for the benefit of their customers. Such services include: (i)
aggregating and processing purchase and redemption requests from customers and
placing net purchase and redemption orders with the transfer agent; (ii)
providing customers with a service that invests the assets of their accounts in
Dollar or Plus Shares; (iii) processing dividend payments from the Fund on
behalf of customers; (iv) providing information periodically to customers
showing their positions in Dollar and Plus Shares; (v) arranging for bank wires;
(vi) responding to customer inquiries relating to the services performed by the
Service Organizations; (vii) providing sub-accounting with respect to Dollar and
Plus Shares beneficially owned by customers or the information necessary for
sub-accounting; (viii) forwarding shareholder communications from the 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 the Fund. In addition,
broker/dealers purchasing Plus Shares provide from time to time assistance (such
as the forwarding of sales literature and advertising to customers) in
connection with the distribution of Plus Shares.
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<PAGE>
TempFund may also enter into agreements with Service Organizations
requiring them to provide support services to their customers who beneficially
own Administration Shares, in consideration of .10% (on an annualized basis) of
the average daily net asset value of the Administration Shares held by the
Service Organization for the benefit of their customers. Such services include,
but are not limited to: (i) answering shareholder inquiries regarding account
status and history, the manner in which purchases, exchanges and redemptions of
shares may be effected and certain other matters pertaining to the shareholders'
investments; and (ii) assisting shareholders in designating and changing
dividend options, account designations and addresses.
TempFund may also enter into agreements with Service Organizations
requiring them to provide support services to their customers who beneficially
own Cash Reserve Shares, in consideration of .40% (on an annualized basis) of
the average net asset value of the Cash Reserve Shares held by the Service
Organization for the benefit of their customers. Such services include all
services provided to Administration Shares and Dollar Shares as well as the
following: (i) providing the necessary computer hardware and software which
links the Service Agent's DDA system to an account management system; (ii)
providing the software that aggregates the customers orders and establishes an
order to purchase or redeem shares of the Fund; (iii) establishing target levels
for the shareholders' demand deposit accounts; (iv) providing periodic
statements showing a customers account balance and, to the extent practicable,
integrating such information with other customer transactions otherwise effected
through or with a Service Agent; and (v) furnishing (either separately or an
integrated basis with other reports sent to a shareholder by a Service Agent)
monthly and year-end statements and confirmations of purchases, exchanges and
redemptions.
TempFund may also enter into agreements with Service Organizations
requiring them to provide support services to their customers who beneficially
own Cash Management Shares, in consideration of .50% (on an annualized basis) of
the average net asset value of the Cash Management Shares held by the Service
Organization for the benefit of their customers. Such services include all
services provided to Cash Reserve Shares as well as the following: (i)
implementation of marketing and promotional activities, including direct mail
promotions for sweep services, (ii) expenditures for marketing support services
for sweep services such as for telephone facilities and in-house telemarketing,
(iii) distribution of literature promoting sweep services, (iv) travel,
equipment, printing, delivery and mailing costs overhead and other office
expenses attributable to the marketing of sweep services.
A Fund's agreements with Service Organizations are governed by Plans
(called "non-12b-1 Shareholder Services Plan" for the Dollar, Administration,
Cash Reserves and Cash Management Shares and "12b-1 Services Plan" for the Plus
shares), which have been adopted by the Company's Board of Directors pursuant to
applicable rules and regulations of the SEC. Pursuant to the Plans, the Board
of Directors reviews, at least quarterly, a written report of the amounts
expended under the Fund's agreements with Service Organizations and the purposes
for which the expenditures were made. In addition, the 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.
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<PAGE>
The Board of Directors have approved the Funds' arrangements with
Service Organizations based on information provided to the Boards that there is
a reasonable likelihood that the arrangements will benefit the Class of Shares
of the Fund charged with such fees and its shareholders. Any material amendment
to the Funds' arrangements with Service Organizations must be made in a manner
approved by a majority of the Company's directors, (including a majority of the
Non-Interested Directors), and any amendment to increase materially the costs
under the 12b-1 Services Plan adopted by the Board with respect to Plus shares
must be approved by the holders of a majority of the outstanding Plus shares.
So long as the Funds' 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 Fund will be
committed to the discretion of such non-interested directors.
For the fiscal year ended September 30, 1998, TempFund Dollar Shares
were charged $772,304 in Service Organization fees, of which $104,448 was paid
to affiliates of BIMC.
For the fiscal year ended September 30, 1998, TempCash Dollar Shares
were charged $1,088,006 in Service Organization fees, of which $27,566 was paid
to affiliates of BIMC.
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.
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
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<PAGE>
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% nondeductible 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 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.
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<PAGE>
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.
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 December 31, 1998, the yield and the
compounded effective yield on TempFund Shares were 5.01% and 5.14%,
respectively. For the same period, the yield and the compounded effective yield
on TempFund Dollar Shares were 4.76% and 4.87%, respectively. For the 30-day
period ended December 31, 1998, the yield and the compounded effective yield on
TempFund Shares were 5.00% and 5.12%, respectively. Similarly, for the same 30-
day period, the yield and the compounded effective yield on TempFund Dollar
Shares were 4.75% and 4.86%, respectively.
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<PAGE>
For the seven-day period ended December 31, 1998, the yield and the
compounded effective yield on TempCash Shares were 5.05% and 5.18%,
respectively. For the same period, the yield and the compounded effective yield
on TempCash Dollar Shares were 4.81% and 4.91%, respectively. For the 30-day
period ended December 31, 1998, the yield and the compounded effective yield on
TempCash Shares were 5.04% and 5.17%, respectively. Similarly, for the same 30-
day period, the yield and the compounded effective yield on TempCash Dollar
Shares were 4.79% and 4.90%, 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 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
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<PAGE>
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 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 disciplined research, stringent credit
standards and careful management of maturities.
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<PAGE>
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.
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 Administration Shares, Dollar Shares, Plus Shares,
Cash Reserve Shares and Cash Management 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 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
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<PAGE>
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
PricewaterhouseCoopers LLP, 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, 1999.
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 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, 1998, the value of TempFund's aggregate holdings
of the securities of each of its regular brokers or dealers or their parents
was: Morgan Stanley & Co., $1,398,136,000; Goldman Sachs & Co., $790,000,000;
Lehman Brothers Holding, Inc., $200,000,000; Credit Suisse First Boston, Inc.,
$147,094,000; Bear Stearns Co., Inc., $475,000,000; Merrill Lynch & Co.,
$558,685,000; G.E. Capital Corp., $442,685,000; and SBC Warburg Dillon Read,
Inc., $302,000,000.
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<PAGE>
As of September 30, 1998, the value of TempCash's aggregate holdings
of the securities of each of its regular brokers or dealers or their parents
was: Lehman Brothers Holding, Inc., $153,106,000; Bear Stearns & Co.,
$150,000,000; G.E. Capital Corp., $123,471,000 and Merrill Lynch & Co.,
$104,000,000.
Certain Record Holders
- ----------------------
As of January 11, 1999, the name, address and percentage of ownership
of each institutional investor that owned of record 5% or more of the
outstanding shares of TempFund were as follows: Saxon & Company, PNC Bank,
Attn: Income Collect, Airport Bus, Ctr./Intl. Court 2, 200 Stevens Dr. F3-F076-
02-2, Lester, PA 19115 (5.140%); Worldcom Inc., Attn: General Accounting, 515
East Amite, Jackson, MS 39201 (8.060%).
As of January 11, 1999, the name, address and percentage of ownership
of each institutional investor that owned of record 5% or more of the
outstanding shares of TempFund Dollar Shares were as follows: Hershey Trust
Co., Attn: Rob Vowler, P.O. Box 445, Hershey, PA 17033, (5.900%); Sanbarco,
Santa Barbara Bank & Trust, Attn: Trust Div./Money Mkt. Desk P.O. Box 2340,
Santa Barbara, CA 93120 (11.310%); Cash Management Temp Fund, Broadway National
Bank, Sweep Omnibus Account, Attn: Eleanor Thomas, P.O. Box 17001, San Antonio,
TX 78217 (12.140%); D&N Bank, Attn: Duane Aho, 400 Quincy Street, Hancock, MI
49930, (5.920%); Mutual Partner/Corp. Cash Sweep, PNC Bank of New England, 125
High Street, Boston, MA 02110 (11.090%).
As of January 11, 1999, the name, address and percentage of ownership
of each institutional investor that owned of record 5% or more of the
outstanding shares of TempCash were as follows: Saxon & Company, PNC Bank,
Attn: Income College, Airport Bus. Ctr./Intl. Court 2, 200 Stevens Dr. F3-F076-
02-2, Lester, PA 19113 (11.110%); SLAM, Chase Manhattan, Steve Yonkers/SEC
Lending, 4 New York Plaza 11th Fl., New York, NY 10004 (5.100%); Wellnik & Co.,
BZN Barclays Global Investors, Attn: Peter Mandis, 45 Fremont Street 16th Fl.,
San Francisco, CA 94105 (9.340%); USAA Brokerage Services, Attn: Karl
Borgerding, BSB/Brokerage OPS/A03S, 9800 Fredericksburg Road, San Antonio, TX
78230 (5.340%); AT&T Capital Corporation, Attn: Chris Grimes, 44 Whippany Road,
Morristown, NJ 07962, (5.450%).
As of January 11, 1999, the name, address and percentage of ownership
of each institutional investor that owned of record 5% or more of the
outstanding shares of TempCash Dollar Shares were as follows: Cash Balance
Sweeps, BHC Securities Inc., Attn: Jeanmarie Beukers, 2005 Market Street, One
Commerce Square 11th Fl., Philadelphia, PA 19103 (50.790%); Citibankn NA, ICBD
Cash Management, Attn: Denise Stanley, 3800 Citibank Center Tampa, Tampa, FL
33610 (19.550%); Norwest Investment Services, Inc., Attn: Pamela Siner, 608 2nd
Avenue South 8th Fl., Minneapolis, MN 55479 (9.130%).
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<PAGE>
Financial Statements
- --------------------
The audited financial statements and notes thereto for each Fund
contained in the Company's Annual Report to Shareholders dated September 30,
1998, are each incorporated by reference into this Statement of Additional
Information. The financial statements and notes thereto for each Fund contained
in the Company's Annual Report to Shareholders have been audited by
PricewaterhouseCoopers LLP, whose report thereon also appears in such Annual
Report and is also incorporated by reference herein. No other parts of the
Annual Report are incorporated by reference herein. Such audited financial
statements and notes thereto have been incorporated herein in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
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<PAGE>
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 IBCA, Inc. ("Fitch IBCA") and Thomson
BankWatch.
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 IBCA'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 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.
A-1
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
PART C
OTHER INFORMATION
ITEM 23. Exhibits:
(a) Articles of Restatement dated March 30, 1994 are
incorporated herein by reference to Exhibit 1 of Post-
Effective Amendment No. 57 to the Registrant's
Registration Statement on Form N-1A (Nos. 2-47015/811-
2354) as filed with the SEC on August 15, 1997 ("PEA
No. 57").
(b) Registrant's By-Laws as amended and restated on October
22, 1998.
(c) See Article I, Sections Fifth, Seventh, Eight and
Fourteenth of the Articles of Retatement dated March
30, 1994, which are incorporated herein by reference to
Exhibit 1 of PEA No. 57 and Article IV of the
Registrant's By-Laws as amended and restated on January
21, 1993, which are incorporated herein by reference to
Exhibit 2 of PEA No. 57.
(d) (1) Investment Advisory Agreement between Registrant and
BlackRock Institutional Management Corporation
(formerly known as PNC Institutional Management
Corporation, "BIMC") dated March 11, 1987 is
incorporated herein by reference to Exhibit 5(a) of PEA
No. 57.
(2) Sub-Advisory Agreement between BIMC and PNC Bank,
National Association ("PNC Bank") dated March 11, 1987
is incorporated herein by reference to Exhibit 5(b) of
PEA No. 57.
(e) Distribution Agreement between Registrant and Provident
Distributors, Inc. ("PDI") dated January 18, 1994 is
incorporated herein by reference to Exhibit 6 of PEA
No. 57.
(f) None.
(g) Custodian Agreement between Registrant and PNC Bank
dated June 1, 1989 is incorporated herein by reference
to Exhibit 8 of PEA No. 57.
C-1
<PAGE>
(h) (1) Administration Agreement between Registrant, PDI
(formerly MFD Group, Inc.) and PFPC Inc. ("PFPC") dated
as of January 18, 1993 is incorporated herein by
reference to Exhibit 9(a) of PEA No. 57.
(2) Transfer Agency Agreement between Registrant and PFPC
dated June 1, 1989 is incorporated herein by reference
to Exhibit 9(b) of PEA No. 57.
(i) Opinion and Consent of Drinker Biddle & Reath LLP is
incorporated herein by reference to Exhibit 10 of Post-
Effective No. 58 to the Registrant's Registration
Statement on Form N-1A, as filed with the SEC on
January 30, 1998.
(j) Consent of PriceWaterhouseCoopers LLP.
(k) None.
(l) None.
(m) None.
(n) Financial Data Schedules.
(o) None.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Registrant is controlled by its Board of Directors.
ITEM 25. 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, which are
incorporated herein by reference to Exhibits 6, 8 and 9(b),
respectively of PEA No. 57.
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, which are
incorporated herein by reference to Exhibit 2 of PEA No. 57, provides
for the indemnification of Registrant's directors and officers.
C-2
<PAGE>
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 SEC 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 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 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
BIMC performs investment advisory services for Registrant and
certain other investment companies and accounts. The information
required by this Item 26 with respect to each director, officer and
partner of BIMC is incorporated by reference to Schedules A and D
of Form ADV filed by BIMC with the Securities and Exchange
Commission pursuant to the Investment Advisers Act of 1940 (SEC
File No. 801-13304).
Prior to March 1998, PNC Bank acted as sub-adviser to the
Registrant, Subsequently, the sub-advisory function was assumed by
BIMC. Effective February 8, 1999, PNC Bank will not be sub-adviser
for the Registrant.
ITEM 27. 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., Municipal Fund for New York Investors, Inc and the RBB Fund.
(b) The information required by this Item 27 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:
C-3
<PAGE>
<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>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
(1) PNC Bank, National Association, 200 Stevens Drive, Lester,
Pennsylvania 19113 (records relating to its functions as
custodian).
(2) Provident Distributors, Inc., Four Falls Corporate Center,
6th Floor, West Conshohocken, Pennsylvania 19428 (records
relating to its function as distributor).
(3) BlackRock Institutional Management Corporation, Bellevue
Park Corporate Center, 400 Bellevue Parkway, Wilmington,
Delaware 19809 (records relating to its functions as
investment adviser and co-administrator).
(4) 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).
(5) Drinker Biddle & Reath LLP, Philadelphia National Bank
Building, 1345 Chestnut Street, Philadelphia, Pennsylvania
19107 (Registrant's Charter, By-Laws, and Minutes Books).
ITEM 29. MANAGEMENT SERVICES
None.
ITEM 30. 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.
C-4
<PAGE>
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. 60 to
its Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment No. 60 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 January
29, 1999.
TEMPORARY INVESTMENT FUND, INC.
/s/ Thomas H. Nevin
---------------------------------------------
Thomas H. Nevin
President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 60 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 January 29, 1999
- ----------------------------
G. Nicholas Beckwith, III
* Philip E. Coldwell Director January 29, 1999
- ----------------------------
Philip E. Coldwell
* Robert R. Fortune Director January 29, 1999
- ----------------------------
Robert R. Fortune
* Jerrold B. Harris Director January 29, 1999
- ----------------------------
Jerrold B. Harris
* Rodney D. Johnson Director January 29, 1999
- ----------------------------
Rodney D. Johnson
* G. Willing Pepper Chairman of January 29, 1999
- ---------------------------- the Board
G. Willing Pepper
/s/ Thomas H. Nevin President January 29, 1999
- ----------------------------
Thomas H. Nevin
/s/ Lisa M. Buono Treasurer January 29, 1999
- ---------------------------- (Principal Financial
Lisa M. Buono and Accounting
Officer)
</TABLE>
*By: /s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Attorney-in-Fact
EXHIBITS
(b) Registrant's By-laws as amended and restated on October 22, 1998.
(j) Consent of PricewaterhouseCoopers LLP.
(n) Financial Data Schedules
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint W. Bruce McConnel, III or Vernon Stanton, Jr. 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 May 21, 1998.
/s/ G. Nicholas Beckwith, III
-----------------------------
G. Nicholas Beckwith, III
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint W. Bruce McConnel, III or Vernon Stanton, Jr. 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 May 13, 1998.
/s/ Robert R. Fortune
------------------------------
Robert R. Fortune
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint W. Bruce McConnel, III or Vernon Stanton, Jr. 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 May 13, 1998.
/s/ Jerrold B. Harris
-------------------------------------
Jerrold B. Harris
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint W. Bruce McConnel, III or Vernon Stanton, Jr. 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 May 13, 1998.
/s/ Rodney D. Johnson
---------------------
Rodney D. Johnson
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint W. Bruce McConnel, III or Vernon Stanton, Jr. 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 May 14, 1998.
/s/ G. Willing Pepper
---------------------
G. Willing Pepper
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
POWER OF ATTORNEY
I hereby appoint W. Bruce McConnel, III or Vernon Stanton, Jr. 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 May 15, 1998.
/s/ Philip E. Coldwell
----------------------
Philip E. Coldwell
<PAGE>
TEMPORARY INVESTMENT FUND, INC.
BY-LAWS
AMENDED AND RESTATED AS OF October 22, 1998
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 ninety 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>
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 elected, the Board of Directors so
elected shall meet as soon as
-2-
<PAGE>
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 which might have been
transacted at the meeting as originally notified.
-3-
<PAGE>
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.
-4-
<PAGE>
ARTICLE III
-----------
OFFICERS
--------
SECTION 1. Executive Officers. The Board of Directors 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. If an annual meeting of
stockholders is held, the Board of Directors shall elect such officers at its
first meeting following such annual meeting of stockholders. Two or more
offices, except those of President and Vice President, may be held by the same
person. 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.
-5-
<PAGE>
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 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.
-6-
<PAGE>
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.
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
-7-
<PAGE>
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.
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
-8-
<PAGE>
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 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.
-9-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 60
under the Securities Act of 1933, as amended to the Registration Statement
incorporation by referance of our report and the (File No. 2-47015) of our
report dated October 30, 1998, on our audit of the financial statements and
financial highlights of Temporary Investment Fund, Inc., which report is
incorporated by reference in the Post-Effective Amendment to the Registration
Statement. We also consent to the of Temporary Investment Fund, Inc. on Form N-
/A reference to our Firm under the heading "Auditors" the Statement of
Additional Information.
PRICEWATERHOUSECOOPERS LLP
/s/ Princewaterhousecoppers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 29, 1999
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