<PAGE>
As filed with the Securities and Exchange Commission on November 30, 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. 63
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Provident Institutional Funds
(Exact Name of Registrant As Specified In Charter)
Bellevue Park Corporate Center
400 Bellevue Parkway
Wilmington, Delaware 19809
(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 791-3329
W. BRUCE McCONNEL, III
Drinker Biddle & Reath LLP
One Logan Square
18/th/ and Cherry Streets
Philadelphia, Pennsylvania 19103-6996
Name and Address of Agent for Service
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on November 30 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 Beneficial Interest.
--------------------------------------------------------------------------------
<PAGE>
TEMPCASH
An investment portfolio offered by
Provident Institutional Funds
Supplement dated November 30, 1999 to Prospectus
dated February 10, 1999
This Supplement to the Prospectus provides new and additional
information beyond that contained in the Prospectus and should be retained and
read in conjunction with the Prospectus.
* * * * *
(1) In the Risk/Return Summary of the Prospectus -
the following sentence is added under the bar chart in the
Performance Information section on page 4:
As of September 30, 1999, the year to date return was 5.01%
(annualized).
the following footnote replaces footnote 1 under ANNUAL FUND
OPERATING EXPENSES on page 6:
(1) Total Annual Fund Operating Expenses for TempCash Shares and
TempCash Dollar Shares for the fiscal year ended September
30, 1999, with fee waivers, were .18% and .43%,
respectively, of the Classes' 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.
* * * * *
(2) In the Management of the Fund section of the Prospectus -
the second sentence of the section entitled ""Investment
Adviser" on page 11 is modified as follows:
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
$54 billion.
<PAGE>
the fifth sentence of the second paragraph of this section
on page 12 is modified as follows:
For the fiscal year ended September 30, 1999, the Fund paid
investment advisory fees and administration fees each aggregating .08% (net of
waivers) of its average net assets.
* * * * *
(3) In the Shareholder Information section of the Prospectus -
the following paragraph is added after the existing
paragraph in the section entitled "Price of Fund Shares" on page 12:
On any business day when the Bond Market Association ("BMA")
recommends that the securities markets close early, the Fund reserves the right
to close at or prior to the BMA recommended closing time. If the Fund does so,
it will cease granting same business day credit for purchase and redemption
orders received after the Fund's closing time and credit will be granted to the
next business day.
the following sentence is added to the first paragraph of
the section entitled "Taxes" on page 15:
The one major exception to these tax principles is that
distributions on, and sales, exchanges and redemptions of, shares held in an IRA
(or other tax qualified plan) will not be currently taxable.
the last sentence of this section on page 15 is modified as
follows:
You should also consult your tax adviser for further information
regarding the federal, state, local and/or foreign tax consequences with respect
to your specific situation.
* * * * *
(4) The section entitled "Financial Highlights" on pages 16 and
17 of the Prospectus is replaced with the following:
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.
-2-
<PAGE>
TempCash Shares
The table below sets forth selected financial data for a TempCash Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended September 30
-----------------------
1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------
<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............... .0496 .0552 .0541 .0542 .0575
---------- ---------- ---------- ---------- ----------
Less Distributions
Dividends to Shareholders from
Net Investment Income................. (.0496) (.0552) (.0541) (.0542) (.0575)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return.......................... 5.07% 5.66% 5.55% 5.56% 5.90%
Ratios/Supplemental Data:
Net Assets, End of Year $(000)........ 1,968,626 2,499,114 1,991,037 1,835,326 1,316,166
Ratios of Expenses to Average
Daily Net Assets/1/............... .18% .18% .18% .18% .16%
Ratios of Net Investment Income to
Average Daily Net Assets.......... 4.95% 5.52% 5.41% 5.42% 5.75%
</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
.30%, .32%, .30%, .33% and .30% for the years ended September 30, 1999,
1998, 1997, 1996 and 1995, respectively.
-3-
<PAGE>
TempCash Dollar Shares
The table below sets forth selected financial data for a TempCash Dollar Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended January 31,
----------------------
1999 1998 1997 1996 1995
--------------------------------------------------------------------------------------------
<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............... .0471 .0527 .0516 .0517 .0550
-------- -------- -------- -------- --------
Less Distributions
Dividends to Shareholders from
Net Investment Income................. (.0471) (.0527) (.0516) (.0517) (.0550)
-------- -------- -------- -------- --------
Net Asset Value, End of Period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return.......................... 4.82% 5.41% 5.29% 5.31% 5.65%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)...... 378,010 503,809 401,529 527,830 454,156
Ratios of Expenses to Average
Daily Net Assets/1/............... .43% . 43% .43% .43% .41%
Ratios of Net Investment Income to
Average Daily Net Assets.............. 4.70% 5.27% 5.16% 5.17% 5.50%
</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 .55%, .57%, .55%, .58% and .55% for the years ended September 30,
1999, 1998, 1997, 1996 and 1995, respectively.
-4-
<PAGE>
TempCash
An investment portfolio offered by
Provident Institutional Funds
Prospectus
February 10, 1999
Bellevue Park For purchase and redemption orders only call: 800-441-
Corporate Center 7450 (in Delaware: 302-791-5350). For yield
400 Bellevue Parkway information call: 800-821-6006 (TempCash Shares code:
Wilmington, DE 19809 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........................................................ 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..................................................... 11
Shareholder Information.................................................... 12
Price of Fund Shares..................................................... 12
Purchase of Shares....................................................... 12
Redemption of Shares..................................................... 13
Shareholder Service Plan................................................. 14
Dividends and Distributions.............................................. 15
Taxes.................................................................... 15
Financial Highlights....................................................... 16
</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, 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 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. 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 political developments
which could affect the payment of principal and interest
when due.
An investment in the Fund is not a deposit in PFPC Trust
Company or 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.
TempCash Shares
[CHART APPEARS HERE]
Year Annualized Returns
1989 9.56
1990 8.42
1991 6.27
1992 3.83
1993 3.15
1994 4.30
1995 6.02
1996 5.44
1997 5.62
1998 5.55
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*............................ 5.33% 5.16% 5.67%
-------------------------------------------------------------------------------
</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 institutional money market 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.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
--------------------------------------------------------------------------------
<CAPTION>
TempCash
-----------------------
TempCash TempCash
Shares Dollar Shares
--------- -------------
<S> <C> <C> <C> <C>
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, were .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.
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>
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 Trustees 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 Trustees of Provident
Institutional Funds. 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;
7
<PAGE>
. 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 The Fund may purchase obligations issued or guaranteed by
Obligations the U.S. Government or its agencies and instrumentalities
and related custodial receipts.
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 The Fund may invest in asset-backed securities which are
Obligations 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.
8
<PAGE>
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.
Guaranteed The Fund may make investments in obligations, such as
Investment guaranteed investment contracts and similar funding
Contracts 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 The Fund may purchase variable or floating rate notes, which
and Floating are instruments that provide for adjustments in the interest
Rate 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 assets in reverse repurchase agreements. The Fund may also
and 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.
Borrowing The Fund is authorized to issue senior securities or borrow
money from banks or other lenders on a temporary basis. The
Fund will borrow money when the Adviser believes that the
return from securities purchased with borrowed funds will be
greater than the cost of the borrowing. Such borrowings will
be unsecured. The Fund will not purchase portfolio
securities while borrowings in excess of 5% of the Fund's
total assets are outstanding.
9
<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. The Fund receives no income
from when-issued or delayed settlement securities prior to
delivery of such securities.
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
10
<PAGE>
repurchase agreements, securities lending transactions and
when-issued or delayed 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.
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 co-administrator 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 majority-owned indirect subsidiary of PNC
Adviser 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.
11
<PAGE>
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."
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
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 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"), an agent of the
Fund's custodian, PFPC Trust Company, 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
12
<PAGE>
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.
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 Redemption orders must be transmitted to PFPC in
Shares 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
13
<PAGE>
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."
Shareholder Institutional investors, such as banks, savings and loan
Service Plan 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
14
<PAGE>
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 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.
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.
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.
<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 .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>
Financial Highlights (Continued) _______________________________________________
TempCash Dollar Shares
The table below sets forth selected financial data for a TempCash Dollar Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------------------
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 .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
Net Assets, End of
Year (000's) $503,809 $401,529 $527,830 $454,156 $397,948
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 Provident Institutional Funds 1940 Act File No. is 811-2354.
TempCash
An Investment Portfolio offered by
Provident Institutional Funds
[ARTWORK PROVIDENT
APPEARS HERE] INSTITUTIONAL
FUNDS
Prospectus
February 10, 1999
PIF-P-002
<PAGE>
TEMPFUND
An investment portfolio offered by
Provident Institutional Funds
Supplement dated November 30, 1999 to Prospectus
dated February 10, 1999
This Supplement to the Prospectus provides new and additional
information beyond that contained in the Prospectus and should be retained and
read in conjunction with the Prospectus.
* * * * *
(1) In the Risk/Return Summary of the Prospectus -
the following sentence is added under the bar chart in the
Performance Information section on page 4.
As of September 30, 1999, the year to date return was 5.00%
(annualized).
the following sentence replaces the sentence under the Annual
Total Return Table on page 5:
Administration Shares, Plus Shares and Cash Reserve Shares
have net yet commenced operations. Cash Management Shares have not completed a
full calendar year of operations. As such, no performance information has been
provided for these classes.
the following footnote replaces footnote 1 under ANNUAL FUND
OPERATING EXPENSES:
(1) Total Annual Fund Operating Expenses for TempFund
Shares, TempFund Dollar Shares and TempFund Cash
Management Shares for the fiscal year ended September
30, 1999, with fee waivers, were .18%, .43% and .68%
(annualized), respectively, of the Classes' average net
assets. Total Annual Fund Operating Expenses for
TempFund Administration Shares, TempFund Plus Shares
and TempFund Cash Reserve Shares for the fiscal year
ended September 30, 1999, with fee waivers, would have
been .28% (estimated), .43% (estimated), and .58%
(estimated), respectively, of the Classes' 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
<PAGE>
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.
* * * * *
(2) In the Management of the Fund section of the Prospectus -
the second section entitled "Investment Adviser" on page 10
is modified as follows:
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
$54 billion.
the fifth sentence of the second paragraph of this section on page
11 is modified as follows:
For the fiscal year ended September 30, 1999, the Fund paid
investment advisory fees and administration fees each aggregating .08% (net of
waivers) of its average net assets.
* * * * *
(3) In the Shareholder Information section of the Prospectus -
the following paragraph is added after the existing paragraph in
the section entitled "Price of Fund Shares" on page 11:
On any business day when the Bond Market Association ("BMA") recommends
that the securities markets close early, the Fund reserves the right to close at
or prior to the BMA recommended closing time. If the Fund does so, it will cease
granting same business day credit for purchase and redemption orders received
after the Fund's closing time and credit will be granted to the next business
day.
the following sentence is added to the first paragraph of the
section entitled "Taxes," on page 14:
The one major exception of these tax principles is that distribution
on, and sales, exchanges and redemptions of, shares held in an IRA (or other tax
qualified plan) will not be currently taxable.
the last sentence of this section on page 15 is modified as
follows:
You should also consult your tax adviser for further information
regarding the federal, state, local and/or foreign tax consequences with respect
to your specific situation.
* * * * *
-2-
<PAGE>
(4) The section entitled "Financial Highlights" on pages 16 and 17 of
the Prospectus is replaced with the following:
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. No Administration
Shares, Cash Reserve Shares or Plus Shares were issued or outstanding during the
periods covered by these financial highlights.
-3-
<PAGE>
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,
------------------------
1999 1998 1997 1996 1995
---------------------------------------------------------------
<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........................... .0495 .0549 .0539 .0541 .0567
----------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends to Shareholders from Net Investment
Income........................................ (.0495) (.0549) (.0539) (.0541) (.0567)
----------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========== ==========
Total Return...................................... 5.06% 5.63% 5.53% 5.55% 5.82%
Ratios/Supplemental Data:
Net Assets, End of Period $(000).................. 12,045,566 9,686,491 8,060,501 5,715,004 5,351,346
Ratios of Expenses to Average Daily Net Assets/1/. .18% .18% .18% .18% .24%
Ratios of Net Investment Income to
Average Daily Net Assets.......................... 4.96% 5.50% 5.39% 5.41% 5.67%
</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
.22%, .23%, .24%, .26% and .27% for the years ended September 30, 1999,
1998, 1997, 1996 and 1995, respectively.
-4-
<PAGE>
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,
------------------------
1999 1998 1997 1996 1995
---------------------------------------------------
<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.......................... .0470 .0524 .0514 .0516 .0542
-------- -------- -------- -------- -------
Less Distributions:
Dividends to Shareholders from Net Investment
Income)...................................... (.0470) (.0524) (.0514) (.0516) (.0542)
-------- -------- -------- -------- -------
Net Asset Value, End of Period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =======
Total Return..................................... 4.81% 5.38% 5.27% 5.30% 5.57%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................. 497,178 302,476 355,284 162,119 81,828
Ratios of Expenses to Average Daily Net
Assets/1/.................................... .43% .43% .43% .43% .49%
Ratios of Net Investment Income to
Average Daily Net Assets..................... 4.71% 5.25% 5.14% 5.16% 5.42%
</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 .47%, .48%, .49%, .51% and .52% for the years ended September 30,
1999, 1998, 1997, 1996 and 1995, respectively.
-5-
<PAGE>
TempFund Cash Management Shares
The table below sets forth selected financial data for a TempFund Cash
Management Share outstanding throughout the period.
For the Period
June 14, 1999/1/
Through
September 30,
1999
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
Net Asset Value, Beginning of Period............. $ 1.00
-------
Income From Investment Operations
Net Investment Income.......................... .0135
-------
Less Distributions:
Dividends (from net investment income)......... (.0135)
-------
Net Asset Value, End of Period................... $ 1.00
=======
Total Return..................................... 4.60%/2/
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................. 13,789
Ratios of Expenses to Average Daily Net Assets3.. .68%/2/
Ratios of Net Investment Income to
Average Daily Net Assets....................... 4.57%/2/
</TABLE>
______________________
/1/ Commencement of Operations.
/2/ Annualized.
/3/ Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for TempFund Cash Management Shares
would have been .71% (annualized) for the period ended September 30, 1999.
-6-
<PAGE>
TempFund
An investment portfolio offered by
Provident Institutional Funds
Prospectus
February 10, 1999
Bellevue Park For purchase and redemption orders only call: 800-441-
Corporate Center 7450 (in Delaware: 302-791-5350). For yield
400 Bellevue Parkway information call: 800-821-6006 (TempFund Shares code:
Wilmington, DE 19809 34; TempFund Administration Shares code: H1; TempFund
Dollar Shares code: 20; TempFund Plus Shares code: H4;
TempFund Cash Reserve Shares code: H2; TempFund Cash
Management Shares code: H3). 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....................................................... 16
</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. 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 PFPC Trust
Company or 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 Shares
[CHART APPEARS HERE]
Year Annualized Returns
1989 9.39
1990 8.27
1991 6.24
1992 3.89
1993 3.12
1994 4.19
1995 5.99
1996 5.42
1997 5.60
1998 5.52
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 Year 5 Years 10 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 institutional money market 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>
<CAPTION>
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> <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 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>
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 Trustees 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 Trustees of Provident
Institutional Funds. 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>
Borrowing The Fund is authorized to issue senior securities or borrow
money from banks or other lenders on a temporary basis. The
Fund will borrow money when the Adviser believes that the
return from securities purchased with borrowed funds will be
greater than the cost of the borrowing. Such borrowings will
be unsecured. The Fund will not purchase portfolio
securities while borrowings in excess of 5% of the Fund's
total assets are outstanding.
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. The Fund receives no income
from when-issued or delayed settlement securities prior to
delivery of such securities.
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 This Prospectus describes the Fund's principal investment
of 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
9
<PAGE>
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. 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 co-administrator 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 majority-owned indirect subsidiary of PNC
Adviser 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,
10
<PAGE>
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."
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"), an agent of the
Fund's custodian, PFPC Trust Company, 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
11
<PAGE>
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, 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.
12
<PAGE>
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.
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 12b- Cash Sweep
Service Service 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
13
<PAGE>
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 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.
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.
14
<PAGE>
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.
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. 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 Op-
erations
Net Investment Income .0549 .0539 .0541 .0567 .0360
Net Gains or Losses on
Securities (both
realized and
unrealized) -- -- -- -- --
-------------------------------------------------------------------------------------------------
Total From Investment Op-
erations .0549 .0539 .0541 .0567 .0360
-------------------------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0549) (.0539) (.0541) (.0567) (.0360)
Distributions (from
capital gains) -- -- -- -- --
-------------------------------------------------------------------------------------------------
Total Distributions (.0549) (.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.
16
<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.
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 Provident Institutional Funds 1940 Act File No. is 811-2354
TempFund
An Investment Portfolio offered by
Provident Institutional Funds.
[ARTWORK PROVIDENT
APPEARS HERE] INSTITUTIONAL
FUNDS
Prospectus
February 10, 1999
PIF-P-001
<PAGE>
NEW YORK MONEY FUND
An investment portfolio offered by
Provident Institutional Funds
Supplement dated November 30, 1999 to Prospectus
dated February 10, 1999
This Supplement to the Prospectus provides new and additional
information beyond that contained in the Prospectus and should be retained and
read in conjunction with the Prospectus.
* * * * *
(1) In the Risk/Return Summary of the Prospectus -
the first sentence of the second paragraph of the section
entitled "Principal Risks of Investing" on page 3 is modified as follows:
The Fund is non-diversified because it concentrates its investments in
New York Municipal Obligations.
the following sentence is added under the bar chart in the
Performance Information section on page 4:
As of September 30, 1999, the year to date return was 2.86%
(annualized).
the following footnote replaces footnote 1 under ANNUAL FUND
OPERATING EXPENSES on page 6:
(1) Total Annual Fund Operating Expenses for New York Money
Shares for the fiscal year ended July 31, 1999, with
fee waivers, was .20% of the average net assets of the
Class. Total Annual Fund Operating Expenses for New
York Dollar Shares and New York Plus Shares for the
fiscal year ended July 31, 1999, with fee waivers,
would have been .45% (estimated) and .45% (estimated)
respectively of the Classes' 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.
* * * * *
<PAGE>
(2) In the Management of the Fund section of the Prospectus -
the second sentence of the section entitled "Investment Adviser"
on page 11 is modified as follows:
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
$54 billion.
the fifth sentence of the second paragraph of this section on
page 11 is modified as follows:
For the fiscal year ended July 31, 1999, the Fund paid investment
advisory fees and admnistration fees each aggregating .06% (net of waivers) of
its average net assets.
* * * * *
(3) In the Shareholder Information section of the Prospectus -
the following paragraph is added after the existing paragraph in
the section entitled "Price of Fund Shares" on pages 11 and 12:
On any business day when the Bond Market Association ("BMA")
recommends that the securities markets close early, the Fund reserves the right
to close at or prior to the BMA recommended closing time. If the Fund does so,
it will cease granting same business day credit for purchase and redemption
orders received after the Fund's closing time and credit will be granted to the
next business day.
the last sentence of the section entitled "Taxes" on pages 14 and
15 of this section is modified as follows:
You should also consult your tax adviser for further information
regarding the federal, state, local and/or foreign tax consequences with respect
to your specific situation.
* * * * *
(4) The section entitled "Financial Highlights" on pages 16 through
18 of the Prospectus is replaced with the following:
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
-2-
<PAGE>
Statement of Additional Information and included in the Annual Report, each of
which is available upon request. No Dollar Shares or Plus Shares were issued or
outstanding during the fiscal year ended July 31, 1999.
-3-
<PAGE>
New York Money Shares
The table below sets forth selected financial data for a New York Money Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------
1999 1998 1997 1996 1995
----------------------------------------------------
<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.......................... .0289 .0336 .0334 .0339 .0338
-------- -------- -------- -------- --------
Less Distributions:
Dividends to Shareholders from Net Investment
Income..................................... (0.0289) (0.0336) (0.0334) (0.0339) (0.0338)
-------- -------- -------- -------- --------
Net Asset Value, End of Period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return..................................... 2.93% 3.41% 3.39% 3.44% 3.43%
Ratios/Supplemental Data:
Net Assets, End of Period $(000)................. 295,728 318,091 269,821 272,145 246,650
Ratios of Expenses to Average Daily Net
Assets/1/.................................... .20% .20% 0.20% 0.20% 0.20%
Ratios of Net Investment Income to
Average Daily Net Assets..................... 2.87% 3.35% 3.34% 3.37% 3.36%
</TABLE>
___________________________________
/1/ Operating expense ratios before waivers of fees by the Investment Adviser
and Administrator for Money Shares for the years ended July 31, 1999, 1998,
1997, 1996 and 1995 were .48%, .48%, .49%, .50% and .49%, respectively.
-4-
<PAGE>
New York Dollar Shares
The table below sets forth selected financial data for a New York Dollar Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------
1999/3/ 1998/3/ 1997 1996/3/ 1995/3/
----------------------------------------------------------------------
<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.......................... -- .0303 .0309 .0089 --
Less Distributions:
Dividends to Shareholders From Net Investment
Income...................................... -- (0.0303) (0.0309) (0.0089) --
------ -------- -------- -------- ------
Net Asset Value, End of Period.................... $1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
====== ======== ======== ======== ======
Total Return...................................... -- 3.16%/2/ 3.14% 3.05%/2/ --
Ratios/Supplemental Data:
Net Assets, End of Period $(000).................. -- -- 1,148 20 --
Ratios of Expenses to Average
Daily Net Assets/1/........................... -- .45%/2/ .45% .45%/2/ --
Ratios of Net Investment Income to
Average Daily Net Assets.......................... -- 3.11%/2/ 3.09% 3.07%/2/ --
</TABLE>
______________________
/1/ Operating expense ratios before waivers of fees by the Investment Adviser
and Administrators for Dollar Shares for the years ended July 31, 1998,
1997 and 1996 were .73% (annualized), .74% and .75% (annualized)
respectively.
/2/ Annualized.
/3/ There were no Dollar Shares outstanding during the periods March 28, 1994
to April 14, 1996 and July 21, 1998 to July 31, 1999.
-5-
<PAGE>
New York Plus Shares
The table below sets forth selected financial data for a New York Plus Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------
1999/3/ 1998/3/ 1997/3/ 1996/3/ 1995/3/
--------------------------------------------
<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.......................... -- -- -- -- .0090
Less Distributions:
Dividends to Shareholders From Net Investment
Income.......................................... (--) (--) (--) (--) (0.0090)
------ ------ ------ ------ --------
Net Asset Value, End of Period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ========
Total Return...................................... -- -- -- -- 2.69%/2/
Ratios/Supplemental Data:
Net Assets, End of Period $(000).................. -- -- -- -- --
Ratios of Expenses to Average Daily Net Assets/1/. -- -- -- -- 0.45%/2/
Ratios of Net Investment Income to
Average Daily Net Assets...................... -- -- -- -- 2.64%/2/
</TABLE>
--------------------------
/1/ Operating expense ratios before waivers of fees by the Investment Adviser
and Administrator for Plus Shares for the year ended July 31, 1995 was .73%
(annualized).
/2/ Annualized.
/3/ There were no Plus Shares outstanding during the period from December 2,
1994 to July 31, 1999.
-6-
<PAGE>
New York Money Fund
An investment portfolio offered by
Provident Institutional Funds
Prospectus
February 10, 1999
Bellevue Park For purchase and redemption orders only call: 800-441-
Corporate Center 7450 (in Delaware: 302-791-5350). For yield
400 Bellevue Parkway information call: 800-821-6006 (New York Money Shares
Wilmington, DE 19809 code: 53; New York Dollar Shares code: 55; New York
Plus Shares code: 56). 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....................................... 4
Performance Information.................................................. 4
Fees and Expenses........................................................ 6
Investment Strategies and Risk Disclosure.................................. 7
Management of the Fund..................................................... 11
Shareholder Information.................................................... 11
Price of Fund Shares..................................................... 11
Purchase of Shares....................................................... 12
Redemption of Shares..................................................... 13
Shareholder Service and Distribution Plans............................... 13
Dividends and Distributions.............................................. 14
Taxes.................................................................... 14
Financial Highlights....................................................... 16
</TABLE>
2
<PAGE>
Risk/Return Summary ____________________________________________________________
Investment The Fund seeks to provide investors with as high a level of
Goal: current interest income that is exempt from federal income
tax and, to the extent possible, from New York State and New
York City personal income taxes as is consistent with the
preservation of capital and relative stability of principal.
Investment The Fund invests primarily in debt obligations issued by or
Policies: on behalf of the State of New York. We may also invest in
debt obligations issued by or on behalf of other states,
territories, and possessions of the United States, the
District of Columbia, and their respective authorities,
agencies, instrumentalities and political subdivisions, and
tax-exempt derivative securities such as tender option
bonds, participations, beneficial interests in trusts and
partnership interests ("Municipal Obligations"). Dividends
paid by the Fund that are derived from interest on
obligations that is exempt from taxation under the
Constitution or statutes of New York ("New York Municipal
Obligations") are exempt from regular federal, New York
State and New York City personal income tax. New York
Municipal Obligations include municipal securities issued by
the State of New York and its political sub-divisions, as
well as certain other governmental issuers such as the
Commonwealth of Puerto Rico.
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. 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 the Fund concentrates its investments in New York
Municipal Obligations, it is classified as non-diversified.
This means that it may invest a greater percentage of its
assets in a particular issuer, and that its performance will
be dependent upon a smaller category of securities than a
diversified portfolio. Accordingly, the Fund may experience
greater fluctuations in net asset value and may have greater
risk of loss.
Dividends derived from interest on Municipal Obligations
other than New York Municipal Obligations are exempt from
federal income tax but may be subject to New York State and
New York City personal income tax.
An investment in the Fund is not a deposit in PFPC Trust
Company or 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
3
<PAGE>
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 and their
Invest in the customers seeking as high a level of current interest income
Fund: that is exempt from federal income tax and, to the extent
possible, from New York State and New York City personal
income taxes as is consistent with the preservation of
capital and relative 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.
New York Money Shares
[PERFORMANCE CHART APPEARS HERE]
Year Annualized Returns
1989 5.80
1990 5.40
1991 3.89
1992 2.66
1993 2.22
1994 2.63
1995 3.69
1996 3.30
1997 3.48
1998 3.22
4
<PAGE>
During the ten-year period shown in the bar chart, the highest quarterly
return was 6.22% (for the quarter ended June 30, 1989) and the lowest quarterly
return was 2.09% (for the quarter ended March 31, 1994).
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>
New York Money Shares................................. 3.22% 3.26% 3.62%
New York Dollar Shares................................ 2.97% 3.01% 3.37%
New York Plus Shares (estimated)...................... 2.97% 3.01% 3.37%
IBC's Money Fund Report: New York State Specific Tax-
Free Institutions--Only Money Fund Average*.......... 2.96% 3.06% 3.55%
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
-------------------------------------------------------------------------------
<CAPTION>
7 Day Yield as of
December 31, 1998
-----------------
<S> <C>
New York Money Shares....................................... 3.43%
New York Dollar Shares...................................... 3.18%
New York Plus Shares (estimated)............................ 3.18%
IBC's Money Fund Report: New York State Specific Tax-Free
Institutions--Only Money Fund Average*..................... 3.05%
-------------------------------------------------------------------------------
</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: New York State Specific Tax-Free Institutions--Only
Money Fund Average is comprised of institutional money market funds
investing in tax-exempt obligations of New York State
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.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
<TABLE>
--------------------------------------------------------------------------------
<CAPTION>
New York Money Fund
-------------------
Money Dollar
Shares Shares Plus Shares
------ ------ -----------
(estimated)
<S> <C> <C> <C> <C> <C> <C>
Management Fees................................. .20% .20% .20%
Distribution (12b-1) Fees....................... -- -- .25%
Other Expenses.................................. .28% .53% .28%
Administration Fees............................ .20% .20% .20%
Shareholder Servicing Fees..................... -- .25% --
Miscellaneous.................................. .08% .08% .08%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses(1)......... .48% .73% .73%
--------------------------------------------------------------------------------
</TABLE>
(1) Total Annual Fund Operating Expenses for New York Money Shares, New York
Dollar Shares and New York Plus Shares for the fiscal year ended July 31,
1998, with fee waivers, were .20%, .45% and .45% (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.
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>
New York Money Fund
-------------------
Money Dollar Plus
Shares Shares Shares
------ ------ ------
(estimated)
<S> <C> <C> <C>
One Year.............................................. $ 49 $ 75 $ 75
Three years........................................... $154 $233 $233
Five Years............................................ $269 $406 $406
Ten Years............................................. $604 $906 $906
--------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
InvestmentStrategies andRisk Disclosure ________________________________________
The Fund is a money market fund. The investment objective of
the Fund is to provide investors with as high a level of
current interest income that is exempt from federal income
tax and, to the extent possible, from New York State and New
York City personal income taxes as is consistent with the
preservation of capital and relative stability of principal.
The Fund's investment objective may be changed by the Board
of Trustees without shareholder approval. The Fund invests
primarily in New York Municipal Obligations.
Substantially all of the Fund's assets are invested in
Municipal Obligations. The Fund expects that, except during
temporary defensive periods or when acceptable securities
are unavailable for investment by the Fund, the Fund's
assets will be invested primarily in New York Municipal
Obligations, although the amount of the Fund's assets
invested in such securities will vary from time to time. The
Fund will not knowingly purchase securities the interest on
which is subject to regular federal income tax; however, the
Fund may hold uninvested cash reserves pending investment
during temporary defensive periods or, if in the opinion of
the Adviser, suitable tax-exempt obligations are
unavailable. Uninvested cash reserves will not earn income.
The securities purchased by the Fund are 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. The
Fund will only purchase securities that present minimal
credit risk as determined by the Adviser pursuant to
guidelines approved by the Board of Trustees of Provident
Institutional Funds. Securities purchased by the Fund (or
the issuers of such securities) will be Eligible Securities.
Applicable Eligible Securities are:
. instruments which are rated 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 one of the top two rating categories by two
unaffiliated nationally recognized statistical rating
organizations ("NRSROs") (or one NRSRO if the security or
guarantee was rated by only one NRSRO);
. instruments issued or guaranteed by persons with short-
term debt having such ratings;
. unrated instruments determined by the Adviser, pursuant to
procedures approved by the Board of Trustees, to be of
comparable quality to such instruments; and
7
<PAGE>
. shares of other open-end investment companies that invest
in the type of obligation in which the Fund may invest.
--------------------------------------------------------------------------------
Investments The Fund's investments may include the following:
Municipal They may purchase Municipal Obligations which are classified
Obligations as "general obligation" securities and "revenue" securities.
Revenue securities may include private activity bonds which
are not payable from the unrestricted revenues of the
issuer. Consequently, the credit quality of private activity
bonds is usually directly related to the credit standing of
the corporate user of the facility involved. While interest
paid on private activity bonds will be exempt from regular
federal income tax, it may be treated as a specific tax
preference item under the federal alternative minimum tax.
The portfolio may also include "moral obligation"
securities.
Variable and The Fund may purchase variable or floating rate notes issued
Floating Rate by industrial development authorities and other governmental
Instruments entities, which are instruments that provide for adjustments
in the interest rate on certain reset dates or whenever a
specified interest rate index changes, respectively.
Borrowing The Fund is authorized to issue senior securities or borrow
money from banks or other lenders on a temporary basis. The
Fund will borrow money when the Adviser believes that the
return from securities purchased with borrowed fund will be
greater than the cost of the borrowing. Such borrowings will
be unsecured. The Fund will not purchase portfolio
securities while borrowings in excess of 5% of the Fund's
total assets are outstanding.
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 and that commitments
by the Fund to purchase when-issued securities will not
exceed 45 days. The Fund does not intend to purchase when-
issued or delayed settlement securities for speculative
purposes but only in furtherance of its investment
objective. The Fund receives no income from when-issued or
delayed settlement securities prior to delivery of such
securities.
Stand-by The Fund may acquire "stand-by commitments" with respect to
Commitments Municipal Obligations held in its portfolio. The Fund will
acquire stand-by commitments solely to facilitate portfolio
liquidity and does not intend to exercise its rights
thereunder for trading purposes.
8
<PAGE>
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.
Illiquid The Fund will not invest more than 10% of the value of its
Securities total assets in illiquid securities, which may be illiquid
due to legal or contractual restrictions on resale or the
absence of readily available market quotations. Securities
that have readily available market quotations are not deemed
illiquid for purposes of this limitation.
Other Types This Prospectus describes the Fund's principal investment
of 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. 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. Municipal
obligations generally rank between U.S. government
securities and corporate debt securities in terms of credit
safety. 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.
9
<PAGE>
Special The Fund's ability to achieve its investment objective is
Considerations dependent upon the ability of the issuers of New York
Affecting Municipal Obligations to meet their continuing obligations
the Fund for the payment of principal and interest.
Certain substantial issuers of New York Municipal
Obligations (including issuers whose obligations may be
acquired by the Fund) have experienced serious financial
difficulties in recent years. These difficulties have at
times jeopardized the credit standing and impaired the
borrowings abilities of all New York issuers and have
generally contributed to higher interest costs for their
borrowing and fewer markets for their outstanding debt
obligations. Although, several different issues of municipal
securities of New York State and its agencies and
instrumentalities and of New York City have been downgraded
by Standard & Poor's Ratings Services ("S&P") and Moody's
Investors Service, Inc. ("Moody's"), in recent years, the
most recent actions of S&P and Moody's have been to place
the debt obligations of New York State and New York City on
Credit Watch with positive implications and to upgrade the
debt obligations of New York City respectively. Strong
demand for New York Municipal Obligations has also at times
had the effect of permitting New York Municipal Obligations
to be issued with yields relatively lower, and after
issuance, to trade in the market at prices relatively
higher, than comparably rated municipal obligations issued
by other jurisdictions. A recurrence of the financial
difficulties previously experienced by certain issuers of
New York Municipal Obligations could result in defaults or
declines in the market values of those issuers' existing
obligations and, possibly, in the obligations of other
issuers of New York Municipal Obligations. Although as of
the date of this Prospectus, no issuers of New York
Municipal Obligations are in default with respect to the
payment of their Municipal Obligations, the occurrence of
any such default could affect adversely the market values
and marketability of all New York Municipal Obligations and,
consequently, the net asset value of the Fund's portfolio.
Municipal Opinions relating to the validity of Municipal Obligations
Obligations and to the exemption of interest thereon from federal income
tax (and, with respect to New York Municipal Obligations, to
the exemption of interest thereon from New York State and
New York City personal income taxes) are rendered by bond
counsel to the respective issuers at the time of issuance,
and opinions relating to the validity of and the tax-exempt
status of payments received by the Fund for tax-exempt
derivative securities are rendered by counsel to the
respective sponsors of such securities. The Adviser will
rely on such opinions and will not review independently the
underlying proceedings relating to the issuance of Municipal
Obligations, the creation of any tax-exempt derivative
securities, or the bases for such opinions.
10
<PAGE>
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 co-administrator 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 service providers. While there can
be no assurance that the Fund's service providers will by
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 majority-owned indirect subsidiary of PNC
Adviser 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 July 31, 1998, the Fund paid
investment advisory fees and administration fees each
aggregating .06% (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."
Shareholder Information ________________________________________________________
Price of The Fund's net asset value per share for purposes of pricing
Fund Shares purchase and redemption orders is determined by BIMC, the
Funds adviser, 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
11
<PAGE>
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 Fund shares are sold at the net asset value per share next
of 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
by 12:00 noon, Eastern time, for which payment has been
received by PNC Bank, N.A. ("PNC Bank"), an agent of the
Fund's custodian, PFPC Trust Company, by 4:00 P.M., Eastern
Time, will be executed the same day. Orders received after
12:00 noon Eastern Time 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.)
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 $5,000;
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 limit or reject any order for shares.
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 New
York Dollar Shares or New York Plus Shares. (See also
"Management of the Fund--Service Organizations," as
described in the Statement of Additional
12
<PAGE>
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 New York Dollar Shares or New York Plus
Shares. (See also "Management of the Fund--Banking Laws," as
described in the Statement of Additional Information.)
Redemption Redemption orders must be transmitted to PFPC in Wilmington,
of 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.
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 accepted by PFPC prior to Noon, 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 after Noon, 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
Fund account if the value of the account is less than
$4,000, 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 Fund account to $4,000 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."
Shareholder Institutional investors, such as banks, savings and loan
Service and associations and other financial institutions, including
Distribution affiliates of PNC Bank Corp. ("Service Organizations"), may
Plans purchase New York Dollar or New York Plus Shares. New York
Dollar and New York Plus Shares are identical in all
respects to Money 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 New York Dollar Shares or New York Plus Shares
requiring it to provide support services to its customers
who are the beneficial owners
13
<PAGE>
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 New York Dollar Shares or New York Plus 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 New York Dollar or New York Plus
Shares; and providing sub-accounting or the information
necessary for sub-accounting with respect to New York Dollar
or New York Plus Shares beneficially owned by customers. In
addition, broker-dealers purchasing New York Plus Shares may
be requested to provide from time to time assistance (such
as the forwarding of sales literature and advertising to
their customers) in connection with the distribution of New
York Plus Shares. 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 New York Dollar or New
York Plus Shares. New York Money Shares are sold to
institutions that have not entered into servicing agreements
with the Fund in connection with their investments.
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 constitute tax-
exempt income for shareholders for federal income tax
purposes. It is possible, depending upon the Fund's
14
<PAGE>
investments, that a portion of the Fund's distributions
could be taxable to shareholders as ordinary income or
capital gains, but the Fund does not expect that this will
be the case.
You should note that a portion of the exempt-interest
dividends paid by the Fund may constitute an item of tax
preference for purposes of determining federal alternative
minimum tax liability. Exempt-interest dividends will also
be considered along with other adjusted gross income in
determining whether any Social Security or railroad
retirement payments received by you are subject to federal
income taxes.
The Fund intends to comply with certain state tax
requirements so that the exempt-interest dividends derived
from interest on New York Municipal Obligations will be
exempt from New York State and New York City personal income
taxes (but not corporate franchise taxes.) Interest on
indebtedness incurred by a shareholder to purchase or carry
shares of the Fund is not deductible for Federal, New York
State or New York City personal income tax purposes. Except
as noted with respect to New York State and New York City
personal income taxes, dividends and distributions paid to
shareholders that are derived from income on Municipal
Obligations may be taxable income under state or local law
even though all or a portion of such dividends or
distributions may be derived from interest on tax-exempt
obligations that, if paid directly to shareholders, would be
tax-exempt income.
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, New
York State and New York City 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 also 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.
New York Money Shares
The table below sets forth selected financial data for a New York Money Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------
1998 1997 1996 1995 1994
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------
Income From Investment
Operations
Net Investment Income .0336 .0334 .0339 .0338 .0226
Net Gains or Losses on
Securities (both re-
alized and
unrealized) -- -- -- -- --
-------------------------------------------------------------------------------
Total From Investment
Operations .0336 .0334 .0339 .0338 .0226
-------------------------------------------------------------------------------
Less Distributions
Dividends (from net
investment income) (.0336) (.0334) (.0339) (.0338) (.0226)
Distributions (from
capital gains) -- -- -- -- --
-------------------------------------------------------------------------------
Total Distributions (.0336) (.0334) (.0339) (.0338) (.0226)
-------------------------------------------------------------------------------
Net Asset Value, End of
Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total Return 3.41% 3.39% 3.44% 3.43% 2.29%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Ratios/Supplemental Da-
ta:
Net Assets, End of
Year $(000's) 318,091 269,821 272,145 246,650 279,483
Ratios of Expenses to
Average Net Assets .20%(1) .20%(1) .20%(1) .20%(1) .20%(1)
Ratios of Net Invest-
ment Income to Aver-
age Daily Net Assets 3.35% 3.34% 3.37% 3.36% 2.28%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for New York Money Shares would have
been .48% for the year ended July 31, 1998, .49% for the year ended July
31, 1997, .50% for the year ended July 31, 1996, .49% for the year ended
July 31, 1995 and .48% for the year ended July 31, 1994.
16
<PAGE>
Financial Highlights (Continued) _______________________________________________
New York Dollar Shares
The table below sets forth selected financial data for a New York Dollar Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------
1998(3) 1997 1996(3) 1995(3) 1994(3)
--------------------------------------------------------------------------------
<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 Opera-
tions
Net Investment Income .0303 .0309 .0089 .0000 .0127
Net Gains or Losses on Se-
curities (both realized
and unrealized) -- -- -- -- --
--------------------------------------------------------------------------------
Total From Investment Opera-
tions .0303 .0309 .0089 .0000 .0127
--------------------------------------------------------------------------------
Less Distributions
Dividends (from net invest-
ment income) (.0303) (.0309) (.0089) .0000 (.0127)
Distributions (from capital
gains) -- -- -- -- --
--------------------------------------------------------------------------------
Total Distributions (.0303) (.0309) (.0089) .0000 (.0127)
--------------------------------------------------------------------------------
Net Asset Value, End of Pe-
riod $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Return 3.16%(2) 3.14% 3.05%(2) -- 1.96%(2)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
$(000's) -- 1,148 20 -- --
Ratios of Expenses to Aver-
age Net Assets(1) .45%(2) .45% .45%(2) -- .45%(2)
Ratios of Net Investment
Income to Average Daily
Net Assets 3.11%(2) 3.09% 3.07%(2) -- 1.94%(2)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for New York Dollar Shares would have
been .73% (annualized) for the year ended July 31, 1998, .74% for the year
ended July 31, 1997, .75% (annualized) for the year ended July 31, 1996
and .76% (annualized) for the year ended July 31, 1994.
(2) Annualized.
(3) There were no New York Dollar shares outstanding during the period from
March 28, 1994 to April 14, 1996 and July 21, 1998 to July 31, 1998.
17
<PAGE>
Financial Highlights (Continued) _______________________________________________
New York Plus Shares
The table below sets forth selected financial data for a New York Plus Share
outstanding throughout each year presented.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------
1998(3) 1997(3) 1996(3) 1995(3) 1994
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Pe-
riod $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income .0000 .0000 .0000 .0090 .0201
Net Gains or Losses on Securi-
ties (both realized and
unrealized) -- -- -- -- --
--------------------------------------------------------------------------------
Total From Investment Operations .0000 .0000 .0000 .0090 .0201
--------------------------------------------------------------------------------
Less Distributions
Dividends (from net investment
income) (.0000) (.0000) (.0000) (.0090) (.0201)
Distributions (from capital
gains) -- -- -- -- --
--------------------------------------------------------------------------------
Total Distributions (.0000) (.0000) (.0000) (.0090) (.0201)
--------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Returns -- -- -- 2.69%(2) 2.04%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net Assets, End of Year
$(000's) -- -- -- -- 435
Ratios of expenses to Average
Net Assets(1) -- -- -- .45%(2) .45%
Ratios of Net Investment Income
to Average Daily Net Assets -- -- -- 2.64%(2) 2.03%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
(1) Without the waiver of advisory and administration fees, the ratio of
expenses to average daily net assets for New York Plus Shares would have
been .73% (annualized) for the year ended July 31, 1995 and .73% for the
year ended July 31, 1994.
(2) Annualized.
(3) There were no New York Plus Shares outstanding during the period from
December 2, 1994 to July 31, 1998.
18
<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 Provident Institutional Funds 1940 Act File No. is 811-2354.
NewYork
Money Fund
An Investment Portfolio offered by
Provident Institutional Funds
[ARTWORK PROVIDENT
APPEARS HERE] INSTITUTIONAL
FUNDS
Prospectus
February 10, 1999
PIF-P-012
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
TempCash
TempFund
New York Money Fund
Statement of Additional Information
November 30, 1999
This Statement of Additional Information is not a Prospectus and should be
read in conjunction with the current Prospectuses as supplemented on November
30, 1999 for TempFund, TempCash and New York Money Fund, of Provident
Institutional Funds ("PIF" or the "Company"), as they may from time to time be
supplemented or revised. No investment in shares should be made without reading
the Prospectuses of the Funds. This Statement of Additional Information is
incorporated by reference in its entirety into each Prospectus. Copies of the
Prospectuses and Annual Reports of each of the Funds may be obtained, without
charge, by writing PIF at Bellevue Park Corporate Center, 400 Bellevue Parkway,
Wilmington, DE 19809 or calling PIF at 1-800-821-7432. The financial statements
included in the Annual Reports of each of the Funds are incorporated by
reference into this Statement of Additional Information.
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION.................................................. 1
INVESTMENT STRATEGIES, RISKS AND POLICIES............................ 2
Portfolio Transactions............................................. 2
Investment Instruments and Policies................................ 3
Variable and Floating Rate Instruments............................. 3
Repurchase Agreements.............................................. 4
Securities Lending................................................. 4
Reverse Repurchase Agreements...................................... 4
When-Issued and Delayed Settlement Transactions.................... 5
U.S. Government Obligations........................................ 5
Mortgage-Related and Other Asset-Backed Securities................. 6
Banking Industry Obligations....................................... 8
Special Considerations Regarding Foreign Investments............... 8
Guaranteed Investment Contracts.................................... 8
Investment Company Securities...................................... 9
Municipal Obligations.............................................. 9
Restricted and Other Illiquid Securities........................... 11
Stand-By Commitments............................................... 12
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SPECIAL CONSIDERATIONS RELATING TO NEW YORK MUNICIPAL OBLIGATIONS.... 13
INVESTMENT LIMITATIONS............................................... 28
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION....................... 30
In General......................................................... 30
Net Asset Value.................................................... 31
MANAGEMENT OF THE FUNDS.............................................. 32
Trustees and Officers.............................................. 32
Investment Adviser................................................. 36
Co-Administrators.................................................. 39
Distributor........................................................ 42
Custodian and Transfer Agent....................................... 42
Service Organizations.............................................. 44
Expenses........................................................... 48
ADDITIONAL INFORMATION CONCERNING TAXES.............................. 49
DIVIDENDS............................................................ 50
General............................................................ 50
ADDITIONAL YIELD AND OTHER PERFORMANCE INFORMATION................... 50
ADDITIONAL DESCRIPTION CONCERNING SHARES............................. 55
COUNSEL.............................................................. 56
AUDITOR.............................................................. 56
FINANCIAL STATEMENTS................................................. 56
MISCELLANEOUS........................................................ 57
Shareholder Vote................................................... 57
Securities Holdings of Brokers..................................... 57
Certain Record Holders............................................. 57
APPENDIX A........................................................... A-1
</TABLE>
<PAGE>
GENERAL INFORMATION
PIF was organized as a Delaware business trust on October 21, 1998. It
is the successor to the following five investment companies: (1) Temporary
Investment Fund, Inc. ("Temp"); (2) Trust for Federal Securities ("Fed"); (3)
Municipal Fund for Temporary Investment ("Muni"); (4) Municipal Fund for
California Investors, Inc. ("Cal Muni") and (5) Municipal Fund for New York
Investors, Inc. ("NY Muni") (each a "Predecessor Company," collectively the
"Predecessor Companies"). The Predecessor Companies were comprised of the
following portfolios (each, a "Predecessor Fund," collectively, the "Predecessor
Funds"): Temp - TempFund and TempCash, Fed- FedFund, T-Fund, Federal Trust Fund
and Treasury Trust Fund; Muni - MuniFund and MuniCash, Cal Muni - California
Money Fund and NY Muni - New York Money Fund.
This Statement of Additional Information relates only to TempFund,
TempCash and New York Money Fund (each a "Fund", collectively the "Funds").
The Funds commenced operations as follows: TempFund - October 1973;
TempCash - February 1984 and New York Money Fund - March 1983.
The fiscal year end for Temp and NY Muni and their respective Funds
was as follows: TempFund and TempCash - September 30 and New York Money Fund -
July 31. This Statement of Additional Information contains various charts with
respect to fees and performance information of the Predecessor Companies and/or
Predecessor Funds.
On February 10, 1999, each of the Predecessor Funds was reorganized
into a separate series of PIF. PIF is a no-load open-end management investment
company. Currently, PIF offers shares of the Funds. Each Fund is a diversified
fund, with the exception of the New York Money Fund which is classified as a
non-diversified investment company under the 1940 Act. Each of the Funds offers
a class of Shares to institutional investors. Each of the Funds also offers to
institutional investors, such as banks, savings and loan associations and other
financial institutions ("Service Organizations"), a separate class of shares,
Dollar Shares. Additionally, TempFund offers to Service Organizations the
following separate classes of Shares: Administration Shares, Cash Reserve Shares
and Cash Management Shares. TempFund and New York Money Fund also offer to
broker dealers, who provide assistance in the sale of shares and institutional
services to their customers, a separate class of shares, Plus Shares.
<PAGE>
INVESTMENT STRATEGIES, RISKS AND POLICIES
Portfolio Transactions
Subject to the general control of the Board of Trustees, BlackRock
Institutional Management Corporation ("BIMC," or the "Adviser"), the Company'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 Funds with research advice
or other services.
With respect to TempFund and TempCash, 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
the 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 Trustees 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.
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 Fund and its
customers who also are acquiring securities, including the 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
-2-
<PAGE>
preference to Service Organizations with whom a Fund enters into agreements
concerning the provision of support services to customers who beneficially own
Dollar Shares, Administration Shares, Cash Reserve Shares, Cash Management
Shares and Plus Shares.
The Funds do 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.
Investment Instruments and Policies
The following supplements the description of the investment
instruments and/or policies which are applicable to the Funds. In such cases
where an instrument or policy is utilized only by a specific Fund or Funds, its
applicability to the specific Fund is noted below:
Variable and Floating Rate Instruments. The Funds may purchase
variable and floating rate instruments. Variable and floating rate instruments
are subject to the credit quality standards described in the Prospectuses. In
some cases, the Funds may require that the obligation to pay the principal of
the instrument be backed by a letter of credit or guarantee. Such instruments
may carry stated maturities in excess of 13 months provided that the maturity-
shortening provisions stated in Rule 2a-7 are satisfied. Although a particular
variable or floating rate demand instrument may not be actively traded in a
secondary market, in some cases, a Fund may be entitled to principal on demand
and may be able to resell such notes in the dealer market.
Variable and floating rate demand instruments held by a Fund may have
maturities of more than 13 months provided: (i) the Fund is entitled to the
payment of principal and interest at any time, or during specified intervals not
exceeding 13 months, upon giving the prescribed notice (which may not exceed 30
days), and (ii) the rate of interest on such instruments is adjusted at periodic
intervals which may extend up to 13 months. Variable and floating rate notes
that do not provide for payment within seven days may be deemed illiquid and
subject to a 10% limitation on such investments.
In determining a Fund's average weighted portfolio maturity and
whether a long-term variable rate demand instrument has a remaining maturity of
13 months or less, the instrument will be deemed by a Fund to have a maturity
equal to the longer of the period remaining until its next interest rate
adjustment or the period remaining until the principal amount can be recovered
through demand. In determining a Fund's average weighted portfolio maturity and
whether a long-term floating rate demand instrument has a remaining maturity of
13 months or less, the instrument will be deemed by a Fund to have a maturity
equal to the period remaining until the principal amount can be recovered
through demand. Variable and floating notes are not typically rated by credit
rating agencies, but their issuers must satisfy the Fund's quality and maturity
requirements. If an issuer of such a note were to default on its payment
obligation, the Fund might be unable to dispose of the note because of the
absence of an active secondary market and might, for this or other reasons,
suffer a loss. The Fund invests in variable or floating rate notes only when the
Adviser deems the investment to involve minimal credit risk.
-3-
<PAGE>
Repurchase Agreements. TempFund and TempCash may purchase repurchase
agreements. In a repurchase agreement, a Fund purchases money market instruments
from financial institutions, such as banks and broker-dealers, subject to the
seller's agreement to repurchase them at an agreed upon time and price,
reflecting interest on the repurchase price for the securities subject to the
repurchase agreement. The securities subject to a repurchase agreement may bear
maturities exceeding 13 months, provided the repurchase agreement itself matures
in 13 months or less. The seller under a repurchase agreement will be required
to maintain the value of the securities subject to the agreement at not less
than the repurchase price. Default by the seller would, however, expose the Fund
to possible loss because of adverse market action or delay in connection with
the disposition of the underlying securities. Collateral for a repurchase
agreement may include cash items, obligations issued by the U.S. Government or
its agencies or instrumentalities or obligations rated in the highest category
by at least two nationally recognized statistical rating organizations (an
"NRSRO") (or by the only NRSRO providing a rating). 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. 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.
Securities Lending. TempFund and TempCash may lend their 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. Such loans would involve
risks of delay in receiving additional collateral in the event the value of the
collateral decreased below the value of the securities loaned or of delay in
recovering the securities loaned or even loss of rights in the collateral should
the borrower of the securities fail financially. Loans will only be made to
borrowers deemed by the Adviser to be creditworthy.
Reverse Repurchase Agreements. TempFund and TempCash may enter into
reverse repurchase agreements. In a reverse repurchase agreement a Fund sells a
security and simultaneously commits to repurchase that security at a future date
from the buyer. In effect, the Fund is temporarily borrowing money at an agreed
upon interest rate from the purchaser of the security, and the security sold
represents collateral for the loan.
A Fund's investment of the proceeds of a reverse repurchase agreement
involves the speculative factor known as leverage. A Fund may enter into a
reverse repurchase
-4-
<PAGE>
agreement only if the interest income from investment of the proceeds is greater
than the interest expense of the transaction and the proceeds are invested for a
period no longer than the term of the agreement. A Fund will maintain in a
segregated account, liquid securities at least equal to its purchase obligations
under these agreements. The Adviser will evaluate the creditworthiness of the
other party in determining whether a Fund will enter into a reverse repurchase
agreement. The use of reverse repurchase agreements involves certain risks. For
example, the securities acquired by a Fund with the proceeds of such an
agreement may decline in value, although the Fund is obligated to repurchase the
securities sold to the counter party at the agreed upon price. In addition, the
market value of the securities sold by a Fund may decline below the repurchase
price to which the Fund remains committed.
TempFund and TempCash are permitted to invest up to one-third of their
respective total assets in reverse repurchase agreements and securities lending
transactions. Investments in reverse repurchase agreements and securities
lending transaction will be aggregated for purposes of this investment
limitation.
When-Issued and Delayed Settlement Transactions. The Funds may utilize
when-issued and delayed settlement transactions. When-issued securities are
securities purchased for delivery beyond the normal settlement date at a stated
price and yield. Delayed settlement describes settlement of a securities
transaction in the secondary market sometime in the future. The Fund will
generally not pay for such securities or start earning interest on them until
they are received. Securities purchased on a when-issued or delayed settlement
basis are recorded as an asset and are subject to changes in value based upon
changes in the general level of interest rates. When a Fund agrees to purchase
when-issued or delayed settlement 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 or delayed settlement 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. The Funds do not intend to purchase when-issued or delayed
settlement securities for speculative purposes but only in furtherance of a
Fund's 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 the Funds 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
-5-
<PAGE>
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. TempFund and
TempCash may purchase mortgage-related and other asset-backed securities.
Mortgage-related securities include fixed and adjustable Mortgage Pass-Through
Certificates, which provide the holder with a pro-rata share of interest and
principal payments on a pool of mortgages, ordinarily on residential properties.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-related securities
and among the securities that they issue. Pass-Through Certificates guaranteed
by GNMA (also known as "Ginnie Maes") are guaranteed as to the timely payment of
principal and interest by GNMA, whose guarantee is backed by the full faith and
credit of the United States. Mortgage-related securities issued by FNMA include
FNMA guaranteed Mortgage Pass-Through Certificates (also known as "Fannie Maes")
which are guaranteed as to timely payment of principal and interest by FNMA.
They are not backed by or entitled to the full faith and credit of the United
States, but are supported by the right of the FNMA to borrow from the Treasury.
Mortgage-related securities issued by FHLMC include FHLMC Mortgage Participation
Certificates (also known as "Freddie Macs"). Freddie Macs are not guaranteed by
the United States or by any Federal Home Loan Banks and do not constitute a debt
or obligation of the United States or of any Federal Home Loan Bank. Freddie
Macs entitle the holder to timely payment of interest, which is guaranteed by
the FHLMC. FHLMC guarantees either ultimate collection or timely payment of all
principal payments on the underlying mortgage loans. When FHLMC does not
guarantee timely payment of principal, FHLMC is required to remit the amount due
on account of its guarantee of ultimate payment of principal no later than one
year after it becomes payable.
A Fund from time to time may purchase in the secondary market (i)
certain mortgage pass-through securities packaged and master serviced by PNC
Mortgage Securities Corp. ("PNC Mortgage") (or Sears Mortgage if PNC Mortgage
succeeded to the rights and duties of Sears Mortgage) or Midland Loan Services,
Inc. ("Midland"), or (ii) mortgage-related securities containing loans or
mortgages originated by PNC Bank, National Association ("PNC Bank") or its
affiliates). It is possible that under some circumstances, PNC Mortgage, Midland
or other affiliates could have interests that are in conflict with the holders
of these mortgage-backed securities, and such holders could have rights against
PNC Mortgage, Midland or their affiliates. For example, if PNC Mortgage, Midland
or their affiliates engaged in negligence or willful misconduct in carrying out
its duties as a master servicer, then any holder of the mortgage-backed security
could seek recourse against PNC Mortgage, Midland or their affiliates, as
applicable. Also, as a master servicer, PNC Mortgage, Midland or their
affiliates may make certain representations and warranties regarding he quality
of the mortgages and properties underlying a mortgage-backed security. If one or
more of those representations or warranties is false, then the holders of the
mortgage-backed securities could trigger an obligation of PNC
-6-
<PAGE>
Mortgage, Midland or their affiliates, as applicable, to repurchase the
mortgages from the issuing trust. Finally, PNC Mortgage, Midland or their
affiliates may own securities that are subordinate to the senior mortgage-backed
securities owned by a Fund.
TempCash only may also invest in classes of collateralized mortgage
obligations ("CMOs") deemed to have a remaining maturity of 13 months 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 TempCash 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.
TempFund and TempCash may also invest in non-mortgage asset-backed
securities (e.g., backed 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 is that all or a principal part 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.
-7-
<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 financial services
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 U.S. dollar-denominated 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. TempCash may invest in guaranteed
investment contracts and similar funding agreements ("GICs"). In connection with
this, TempCash makes cash contributions to a deposit fund of the insurance
company's general account. The insurance company then credits to the Fund on a
monthly basis guaranteed interest which is based on an index (in most cases this
index is expected to be the Salomon Brothers CD Index). The GICs provide that
this guaranteed interest will not be less than a certain
-8-
<PAGE>
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 Trustees.
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.
Investment Company Securities. The Funds may invest in securities
issued by other open-end investment companies that invest in the type of
obligations in which such Fund may invest and that determine their net asset
value per share based upon the amortized cost or penny rounding method.
Investments in the other investment companies will cause a Fund (and,
indirectly, the Fund's shareholders) to bear proportionately the costs incurred
in connection with the other investment companies' operations. Except as
otherwise permitted under the 1940 Act, each Fund currently intends to limit its
investments in other investment companies so that, as determined immediately
after a securities purchase is made: (a) not more that 5% of the value of its
total assets will be invested in the securities of any one investment company;
(b) not more than 10% of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (c) not more than 3% of the
outstanding voting securities of any one investment company will be owned by the
Fund. A Fund, as discussed below in "Investment Limitations" may invest all of
its assets in an open-end investment company or series thereof with
substantially the same investment objectives, restrictions and policies as the
Fund.
Municipal Obligations. New York Money Fund, TempFund and TempCash may
purchase municipal obligations. Municipal Obligations include debt obligations
issued by governmental 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 included within the term Municipal Obligations
if the interest paid thereon is (subject to the federal alternative minimum tax)
exempt from regular federal income tax.
From time to time, proposals have been introduced before Congress for
the purpose of restricting or eliminating the federal income tax exemption for
interest on Municipal Obligations. For example, under the Tax Reform Act of
1986, enacted in October 1986, interest on certain private activity bonds must
be included in an investor's alternative minimum taxable income, and corporate
investors must include all tax-exempt interest in the calculation of adjusted
current earnings for purposes of determining the corporation's alternative
minimum tax liability. The Company cannot predict what legislation or
regulations, if any, may be proposed in Congress or promulgated by the
Department of Treasury as regards the federal income tax exemption of interest
on such obligations or the impact of such legislative and regulatory activity on
such exemption.
-9-
<PAGE>
The two principal classifications of Municipal Obligations which may
be held by the Funds are "general obligation" securities and "revenue"
securities. General obligation securities are secured by the issuer's pledge of
its full faith, credit, and taxing power for the payment of principal and
interest. Revenue securities are payable only from the revenues derived from a
particular facility or class of facilities or, in some cases, from the proceeds
of a special excise tax or other specific revenue source such as the user of the
facility being financed. Revenue securities include private activity bonds which
are not payable from the unrestricted revenues of the Municipal issuer.
Consequently, the credit quality of private activity bonds is usually related to
the credit standing of the corporate user of the facility involved.
The Funds' portfolios may also include "moral obligation" bonds, which
are normally issued by special purpose public authorities. If the issuer of
moral obligation bonds is unable to meet its debt service obligations from
current revenues, it may draw on a reserve fund, the restoration of which is a
moral commitment but not a legal obligation of the state or municipality which
created the issuer.
There are, of course, variations in the quality of Municipal
Obligations, both within a particular classification and between
classifications, and the yields on Municipal Obligations depend upon a variety
of factors, including general money market conditions, the financial condition
of the issuer, general conditions of the municipal bond market, the size of a
particular offering, the maturity of the obligation and the rating of the issue.
The ratings of Moody's and S&P represent their opinions as to the quality of
Municipal Obligations. It should be emphasized, however, that ratings are
general and are not absolute standards of quality, and Municipal Obligations
with the same maturity, interest rate and rating may have different yields while
Municipal Obligations of the same maturity and interest rate with different
ratings may have the same yield. Subsequent to its purchase by the Funds, an
issue of Municipal Obligations may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by the Funds. The Adviser
will consider such an event in determining whether the Funds should continue to
hold the obligation.
An issuer's obligations under its Municipal Obligations are subject to
the provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors, such as the federal Bankruptcy Code, and laws, if any,
which may be enacted by federal or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
enforcement of such obligations or upon the ability of municipalities to levy
taxes. The power or ability of an issuer to meet its obligations for the payment
of interest on and principal of its Municipal Obligations may be materially
adversely affected by litigation or other conditions.
Among other types of Municipal Obligations, the Funds may purchase
short-term General Obligation Notes, Tax Anticipation Notes, Bond Anticipation
Notes, Revenue Anticipation Notes, Tax-Exempt Commercial Paper, Construction
Loan Notes and other forms of short-term loans. Such instruments are issued with
a short-term maturity in anticipation of the receipt of tax funds, the proceeds
of bond placements or other revenues. In addition, the Funds may invest in other
types of tax-exempt instruments, including general obligation and private
-10-
<PAGE>
activity bonds, provided they have remaining maturities of 13 months or less at
the time of purchase.
New York Money Fund may hold tax-exempt derivatives which may be in
the form of tender option bonds, participations, beneficial interests in a
trust, partnership interests or other forms. A number of different structures
have been used. For example, interests in long-term fixed-rate Municipal
Obligations, held by a bank as trustee or custodian, are coupled with tender
option, demand and other features when the tax-exempt derivatives are created.
Together, these features entitle the holder of the interest to tender (or put)
the underlying Municipal Obligation to a third party at periodic intervals and
to receive the principal amount thereof. In some cases, Municipal Obligations
are represented by custodial receipts evidencing rights to receive specific
future interest payments, principal payments, or both, on the underlying
municipal securities held by the custodian. Under such arrangements, the holder
of the custodial receipt has the option to tender the underlying municipal
security at its face value to the sponsor (usually a bank or broker dealer or
other financial institution), which is paid periodic fees equal to the
difference between the bond's fixed coupon rate and the rate that would cause
the bond, coupled with the tender option, to trade at par on the date of a rate
adjustment. The Fund may hold tax-exempt derivatives, such as participation
interests and custodial receipts, for Municipal Obligations which give the
holder the right to receive payment of principal subject to the conditions
described above. The Internal Revenue Service has not ruled on whether the
interest received on tax-exempt derivatives in the form of participation
interests or custodial receipts is tax-exempt, and accordingly, purchases of any
such interests or receipts are based on the opinion of counsel to the sponsors
of such derivative securities. Neither the Fund nor the Adviser will
independently review the underlying proceedings related to the creation of any
tax-exempt derivatives or the bases for such opinion.
Before purchasing a tax-exempt derivative for New York Money Fund, the
Adviser is required by the Fund's procedures to conclude that the tax-exempt
security and the supporting short-term obligation involve minimal credit risks
and are Eligible Securities under the Fund's Rule 2a-7 procedures. In evaluating
the creditworthiness of the entity obligated to purchase the tax-exempt
security, the Adviser will review periodically the entity's relevant financial
information. Currently, the Adviser may purchase tax-exempt derivatives for the
Fund so long as after any purchase not more than 25% of the Fund's assets are
invested in such securities.
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 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.
-11-
<PAGE>
The Adviser will monitor the liquidity of restricted and other
illiquid securities under the supervision of the Board of Trustees. In reaching
liquidity decisions, the 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).
Stand-By Commitments. New York Money Fund may acquire stand-by
commitments. Under a stand-by commitment, a dealer would agree to purchase at
New York Money Fund's option specified Municipal Obligations at their amortized
cost value to the Fund plus accrued interest, if any. (Stand-by commitments
acquired by the Fund may also be referred to as "put" options.) Stand-by
commitments may be exercisable by the Fund at any time before the maturity of
the underlying Municipal Obligations and may be sold, transferred, or assigned
only with the instruments involved. The Fund's right to exercise stand-by
commitments will be unconditional and unqualified.
-12-
<PAGE>
SPECIAL CONSIDERATIONS RELATING TO NEW YORK MUNICIPAL OBLIGATIONS
Some of the significant financial considerations relating to the New
York Tax Exempt Fund's investments in New York Municipal Securities are
summarized below. This summary information is not intended to be a complete
description and is principally derived from the Annual Information Statement of
the State of New York as supplemented and contained in official statements
relating to issues of New York Municipal Securities that were available prior to
the date of this Statement of Additional Information. The accuracy and
completeness of the information contained in those official statements have not
been independently verified.
State Economy. New York is one of the most populous states in the
-------------
nation and has a relatively high level of personal wealth. The State's economy
is diverse with a comparatively large share of the nation's finance, insurance,
transportation, communications and services employment, and a very small share
of the nation's farming and mining activity. The State's location and its
excellent air transport facilities and natural harbors have made it an important
link in international commerce. Travel and tourism constitute an important part
of the
-13-
<PAGE>
economy. Like the rest of the nation, New York has a declining
proportion of its workforce engaged in manufacturing, and an increasing
proportion engaged in service industries.
State per capita personal income has historically been significantly
higher than the national average, although the ratio has varied substantially.
Because New York City (the "City") is a regional employment center for a multi-
state region, State personal income measured on a residence basis understates
the relative importance of the State to the national economy and the size of the
base to which State taxation applies.
There can be no assurance that the State economy will not
experience worse-than-predicted results, with corresponding material and adverse
effects on the State's projections of receipts and disbursements.
State Budget. The State Constitution requires the governor (the
------------
"Governor") to submit to the State legislature (the "Legislature") a balanced
executive budget which contains a complete plan of expenditures for the ensuing
fiscal year and all moneys and revenues estimated to be available therefor,
accompanied by bills containing all proposed appropriations or reappropriations
and any new or modified revenue measures to be enacted in connection with the
executive budget. The entire plan constitutes the proposed State financial plan
for that fiscal year. The Governor is required to submit to the Legislature
quarterly budget updates which include a revised cash-basis state financial
plan, and an explanation of any changes from the previous state financial plan.
State law requires the Governor to propose a balanced budget each
year. In recent years, the State has closed projected budget gaps of $5.0
billion (1995-96), $3.9 billion (1996-97), $2.3 billion (1997-98), and less than
$1 billion (1998-99).
-14-
<PAGE>
The State's current fiscal year began on April 1, 1999 and ends on
March 31, 2000. On March 31, 1999, the State adopted the debt service portion of
the State budget for the 1999-2000 fiscal year; four months later, on August 4,
1999, it enacted the remainder of the budget. The Governor approved the budget
as passed by the Legislature. Prior to passing the budget in its entirety for
the current fiscal year, the State enacted appropriations that permitted the
State to continue its operations.
In 1999-2000, General Fund disbursements, including transfer to
support capital projects, debt service and other funds, are estimated at $37.36
billion, an increase of $868 million or 2.38 percent over 1998-99. Projected
spending under the 1999-2000 enacted budget is $215 million above the Governor's
Executive Budget recommendations, including 30-day amendments. This change is
the net result of spending actions that occurred during negotiations on the
Budget. The increase in General Fund spending is comprised of $1.1 billion in
legislative additions to the Executive Budget (primarily in education), offset
by various actions, including re-estimates of required spending based on year-
to-date results and the identification of certain other resources that offset
spending, such as $250 million from commencing the process of privatizing the
Medical Malpractice Insurance Association (MMIA), $250 million from the
retention of the Debt Reduction Reserve Fund within the General Fund and about
$100 million in excess fund balances. The MMIA was established in 1983 to
provide excess liability insurance to doctors and medical providers.
Legislation enacted with the 1999-2000 budget initiates the process of MMIA
privatization and transfers excess fund balances to the State.
The 1999-2000 enacted budget provides for $831 million in new funding
for public schools, the largest year-to-year increase in State history. The
budget also enacts several new tax cuts valued at $375 million when fully phased
in by 2003-04. None of the $1.82 billion cash surplus from 1998-99 is assumed
to support spending in 1999-2000, but instead is reserved to help offset the
costs of previously enacted tax cuts that take effect after 1999-2000.
-15-
<PAGE>
The 1999-2000 Financial Plan projects a closing balance of $2.85
billion in the General Fund. The balance is comprised of the $1.82 billion
surplus from 1998-99 that has been set aside to finance already-enacted tax
cuts, $473 million in the Tax Stabilization Reserve Fund (TSRF), $250 million in
the Debt Reduction Reserve Fund (DRRF), $107 million in the Contingency Reserve
Fund (CRF), and $200 million in the Community Projects Fund (CPF), which
finances legislative initiatives. The State expects to close 1999-2000 with
cash balances in these funds at their highest level ever.
Preliminary analysis by Division of Budget ("DOB") indicates that the
State will have a 2000-01 budget gap of approximately $1.9 billion, or about
$300 million above the 1999-2000 Executive Budget estimate (after adjusting for
the projected costs of collective bargaining). This estimate includes an
assumption for the projected costs of new collective bargaining agreements, $500
million in assumed operating efficiencies, as well as the planned application of
approximately $615 million of the $1.82 billion tax reduction reserve. In
recent years, the State has closed projected budget gaps which DOB estimates at
$5.0 billion (1995-96), $3.9 billion (1996-97), $2.3 billion (1997-98), and less
than $1 billion (1998-99). DOB will formally update its projections of receipts
and disbursements for future years as part of the Governor's 2000-01 Executive
Budget submission. The revised expectations for these years will reflect the
cumulative impact of tax reductions and spending commitments enacted over the
last several years as well as new 2000-01 Executive Budget recommendations.
The General Fund is the principal operating fund of the State and is
used to account for all financial transactions except those required to be
accounted for in another fund. It is the State's largest fund and received
almost all State taxes and other resources not dedicated to particular purposes.
In the State's 1999-2000 fiscal year, the General Fund (exclusive of transfers)
is expected to account for approximately 47.1 percent of all Governmental Funds
disbursements and 69.3 percent of total State Funds disbursements. General Fund
moneys are also transferred to other funds, primarily to support certain capital
projects and debt service payments in other fund types.
Total receipts and transfers from other funds are projected to be
$39.31 billion in 1999-2000, an increase of $2.57 billion over 1998-99. Total
General Fund disbursements and transfers to other funds are projected to be
$37.36 billion, an increase of $868 million over 1998-99. Total General Fund
receipts and transfers in 1999-2000 are now projected to be $39.31 billion, an
increase of $2.57 billion from the $36.74 billion recorded in 1998-99. This
total includes $35.93 billion in tax receipts, $1.36 billion in miscellaneous
receipts, and $2.02 billion in transfers from other funds. The transfer of the
$1.82 billion surplus recorded in 1998-99 to the 1999-2000 fiscal period has the
effect of exaggerating the growth in State receipts from year to year by
depressing reported 1998-99 figures and inflating 1999-2000 projections.
Receipts from user taxes and fees are projected to total $7.35
billion, an increase of $105 million from reported collections in the prior
year. The sales tax component of this category accounts for virtually all of
the 1999-2000 growth. Growth in base sales tax yield, after adjusting for tax
law and other changes, is projected at 5.6
-16-
<PAGE>
percent. Modest increases in motor fuel and auto rental tax receipts over 1998-
99 levels are also expected. However, receipts from other user taxes and fees
are estimated to decline by $177 million.
The yield of other excise taxes in this category, particularly the
cigarette and alcoholic beverage taxes, show long-term declining trends.
General Fund declines in 1999-2000 motor vehicle fee receipts, in contrast,
reflect statutory fee reductions and an increased amount of collections
earmarked to the Dedicated Highway and Bridge Trust Fund.
Significant statutory changes in this category during the 1999-2000
legislative session include: delaying until March 1, 2000 the implementation of
the exemption from State sales tax of clothing and footwear priced under $110;
providing week-long sales tax exemptions in September 1999 and January 2000 for
clothing and footwear priced under $500; enactment of a variety of small sales
tax exemptions including certain equipment used in providing telecommunications
service for sale, property and services used in theatrical productions, computer
hardware used to design Internet web sites, and building materials used in
farming; a reduction in the beer tax rate; and an expanded exemption from the
alcoholic beverage tax for small brewers.
Following the pattern of the last two fiscal years, education programs
receive the largest share of new funding contained in the 1999-2000 Financial
Plan. School aid is expected to grow by $831 million or 8.58 percent over 1998-
99 levels (on a State fiscal year basis). Outside of education, the largest
growth in spending is for State Operations ($207 million, including $100 million
reserved for possible collective bargaining costs); Debt Service ($183 million),
and mental hygiene programs, including funding for a cost of living increase for
care providers ($114 million). These increases were offset, in part, by
spending reductions or actions in health and social welfare ($280 million), and
in general State charges ($222 million).
Under the 1999-2000 enacted budget, General Fund spending on school
aid is projected at $10.52 billion on a State fiscal year basis, an increase of
$831 million from the prior year. The budget provides additional funding for
operating aid, building aid, and several other targeted aid programs. It also
funds the balance of aid payable for the 1998-99 school year that is due
primarily in the first quarter of the 1999-2000 fiscal year. For all other
educational programs, disbursements are projected to grow by $78 million to
$2.99 billion.
Many complex political, social and economic forces influence the
State's economy and finances, which may in turn affect the State's Financial
Plan. These forces may affect the State unpredictably from fiscal year to
fiscal year and are influenced by governments, institutions, and organizations
that are not subject to the State's control. The State Financial Plan is also
necessarily based upon forecasts of national and State economic activity.
Economic forecasts have frequently failed to predict accurately the timing and
magnitude of changes in the national and the State economies. The DOB believes
that its projections of receipts and disbursements relating to the current State
Financial Plan, and the assumptions on which they are
-17-
<PAGE>
based, are reasonable. The projections assume no changes in federal tax law,
which could substantially alter the current receipts forecast. In addition,
these projections do not include funding for new collective bargaining
agreements after the current contracts expire. Actual results, however, could
differ materially and adversely from their projections, and those projections
may be changed materially and adversely from time to time.
Debt Limits and Outstanding Debt. There are a number of methods by
--------------------------------
which the State of New York may incur debt. Under the State Constitution, the
State may not, with limited exceptions for emergencies, undertake long-term
general obligation borrowing (i.e., borrowing for more than one year) unless the
borrowing is authorized in a specific amount for a single work or purpose by the
Legislature and approved by the voters. There is no limitation on the amount of
long-term general obligation debt that may be so authorized and subsequently
incurred by the State.
-18-
<PAGE>
The State may undertake short-term borrowings without voter approval
(i) in anticipation of the receipt of taxes and revenues, by issuing tax and
revenue anticipation notes, and (ii) in anticipation of the receipt of proceeds
from the sale of duly authorized but unissued general obligation bonds, by
issuing bond anticipation notes. The State may also, pursuant to specific
constitutional authorization, directly guarantee certain obligations of the
State of New York's authorities and public benefit corporations ("Authorities").
Payments of debt service on New York State general obligation and New York
State-guaranteed bonds and notes are legally enforceable obligations of the
State of New York.
The State employs additional long-term financing mechanisms, lease-
purchase and contractual-obligation financings, which involve obligations of
public authorities or municipalities that are State-supported but are not
general obligations of the State. Under these financing arrangements, certain
public authorities and municipalities have issued obligations to finance the
construction and rehabilitation of facilities or the acquisition and
rehabilitation of equipment, and expect to meet their debt service requirements
through the receipt of rental or other contractual payments made by the State.
Although these financing arrangements involve a contractual agreement by the
State to make payments to a public authority, municipality or other entity, the
State's obligation to make such payments is generally expressly made subject to
appropriation by the Legislature and the actual availability of money to the
State for making the payments. The State has also entered into a contractual-
obligation financing arrangement with the LGAC to restructure the way the State
makes certain local aid payments.
Sustained growth in the State's economy could contribute to closing
projected budget gaps over the next several years, both in terms of higher-than-
projected tax receipts and in lower-than-expected entitlement spending. The
State assumes that the 2000-01 Financial Plan will achieve $500 million in
savings from initiatives by State agencies to deliver services more efficiently,
workforce management efforts, maximization of federal and non-General Fund
spending offsets, and other actions necessary to help bring projected
disbursements and receipts into balance. The projections do not assume any gap-
closing benefit from the potential settlement of State claims against the
tobacco industry.
Spending from Debt Service Funds are estimated at $3.64 billion in
1999-2000, up $370 million or 11.31 percent from 1998-99. Transportation
purposes, including debt service on bonds issued for State and local highway and
bridge programs financed through the New York State Thruway Authority and
supported by the Dedicated Highway and Bridge Trust Fund, account for $124
million of the year-to-year growth. Debt service for educational purposes,
including State and City University programs financed through the Dormitory
Authority, will increase by $80 million. The remaining growth is for a variety
of programs in mental health and corrections, and for general obligation
financings.
On January 13, 1992, Standard & Poor's Ratings Services ("S&P")
reduced its ratings on the State's general obligation bonds from A to A- and, in
-19-
<PAGE>
addition, reduced its ratings on the State's moral obligation, lease purchase,
guaranteed and contractual obligation debt. On August 28, 1997, S&P revised its
ratings on the State's general obligation bonds from A- to A and revised its
ratings on the State's moral obligation, lease purchase, guaranteed and
contractual obligation debt. On March 5, 1999, S&P affirmed its A rating on the
State's outstanding bonds.
On January 6, 1992, Moody's Investors Service, Inc. ("Moody's")
reduced its ratings on outstanding limited-liability State lease purchase and
contractual obligations from A to Baa1. On February 28, 1994, Moody's
reconfirmed its A rating on the State's general obligation long-term
indebtedness. On March 20, 1998, Moody's assigned the highest commercial paper
rating of P-1 to the short-term notes of the State. On March 5, 1999, Moody's
affirmed its A2 rating with a stable outlook to the State's general
obligations.
New York State has never defaulted on any of its general obligation
indebtedness or its obligations under lease-purchase or contractual-obligation
financing arrangements and has never been called upon to make any direct
payments pursuant to its guarantees.
Litigation. Certain litigation pending against New York State or its
----------
officers or employees could have a substantial or long-term adverse effect on
New York State finances.
-20-
<PAGE>
Among the more significant of these cases are those that involve (1) the
validity of agreements and treaties by which various Indian tribes transferred
title to New York State of certain land in central and upstate New York; (2)
certain aspects of New York State's Medicaid policies, including its rates,
regulations and procedures; (3) challenges to the constitutionality of Public
Health Law 2807-d, which imposes a gross receipts tax from certain patient care
services; (4) action seeking enforcement of certain sales and excise taxes and
tobacco products and motor fuel sold to non-Indian consumers on Indian
reservations; (5) a challenge to the Governor's application of his
constitutional line item veto authority; and (6) a challenge to the enactment of
the Clean Water/Clean Air Bond Act of 1996.
Several actions challenging the constitutionality of legislation
enacted during the 1990 legislative session which changed actuarial funding
methods for determining state and local contributions to state employee
retirement systems have been decided against the State. As a result, the
Comptroller developed a plan to restore the State's retirement systems to prior
funding levels. Such funding is expected to exceed prior levels by $116 million
in fiscal 1996-97, $193 million in fiscal 1997-98, peaking at $241 million in
fiscal 1998-99. Beginning in fiscal 2001-02, State contributions required under
the Comptroller's plan are projected to be less than that required under the
prior funding method. As a result of the United States Supreme Court decision
in the case of State of Delaware v. State of New York, on January 21, 1994, the
State entered into a settlement agreement with various parties. Pursuant to all
agreements executed in connection with the action, the State was required to
make aggregate payments of $351.4 million. Annual payments to the various
parties will continue through the State's 2002-03 fiscal year in amounts which
will not exceed $48.4 million in any fiscal year subsequent to the State's 1994-
95 fiscal year. Litigation challenging the constitutionality of the treatment
of certain moneys held in a reserve fund was settled in June 1996 and certain
amounts in a Supplemental Reserve Fund previously credited by the State against
prior State and local pension contributions were paid in 1998.
The legal proceedings noted above involve State finances, State
programs and miscellaneous cure rights, tort, real property and contract claims
in which the State is a defendant and the monetary damages sought are
substantial, generally in excess of $100 million. These proceedings could
affect adversely the financial condition of the State in the current fiscal year
or thereafter. Adverse developments in these proceedings, other proceedings for
which there are unanticipated, unfavorable and material judgments, or the
initiation of new proceedings could affect the ability of the State to maintain
a balanced financial plan. An adverse decision in any of these proceedings
could exceed the amount of the reserve established in the State's financial plan
for the payment of judgments and, therefore, could affect the ability of the
State to maintain a balanced financial plan.
Although other litigation is pending against New York State, except as
described herein, no current litigation involves New York State's authority, as
a matter of law, to contract
-21-
<PAGE>
indebtedness, issue its obligations, or pay such indebtedness when it matures,
or affects New York State's power or ability, as a matter of law, to impose or
collect significant amounts of taxes and revenues.
Authorities. The fiscal stability of New York State is related, in
-----------
part, to the fiscal stability of its Authorities, which generally have
responsibility for financing, constructing and operating revenue-producing
public benefit facilities. Authorities are not subject to the constitutional
restrictions on the incurrence of debt which apply to the State itself, and may
issue bonds and notes within the amounts of, and as otherwise restricted by,
their legislative authorization. The State's access to the public credit
markets could be impaired, and the market price of its outstanding debt may be
materially and adversely affected, if any of the Authorities were to default on
their respective obligations, particularly with respect to debt that is State-
supported or State-related.
Authorities are generally supported by revenues generated by the
projects financed or operated, such as fares, user fees on bridges, highway
tolls and rentals for dormitory rooms and housing. In recent years, however,
New York State has provided financial assistance through appropriations, in some
cases of a recurring nature, to certain of the Authorities for operating and
other expenses and, in fulfillment of its commitments on moral obligation
indebtedness or otherwise, for debt service. This operating assistance is
expected to continue to be required in future years. In addition, certain
statutory arrangements provide for State local assistance payments otherwise
payable to localities to be made under certain circumstances to certain
Authorities. The State has no obligation to provide additional assistance to
localities whose local assistance payments have been paid to Authorities under
these arrangements. However, in the event that such local assistance payments
are so diverted, the affected localities could seek additional State funds.
In February 1997, the Job Development Authority ("JDA") issued
approximately $85 million of State-guaranteed bonds to refinance certain of its
outstanding bonds and notes in order to restructure and improve JDA's capital
structure. Due to concerns regarding the economic viability of its programs,
JDA's loan and loan guarantee activities had been suspended since 1995. As a
result of the structural imbalances in JDA's capital structure, and defaults in
its loan portfolio and loan guarantee program incurred between 1991 and 1996,
JDA would have experienced a debt service cash flow shortfall had it not
completed its recent refinancing. JDA anticipates that it will transact
additional refinancings in 1999, 2000 and 2003 to complete its long-term plan of
finance and further alleviate cash flow imbalances which are likely to occur in
future years. JDA recently resumed its lending activities under a revised set
of lending programs and underwriting guidelines.
New York City and Other Localities. The fiscal health of the State
----------------------------------
may also be impacted by the fiscal health of its localities, particularly the
City, which has required and continues to require significant financial
assistance from the State. The City depends on State aid both to enable the
City to balance its budget and to meet its cash requirements. There can be no
assurance that there will not be reductions in State aid to the City from
amounts currently projected or that State budgets will be adopted by the April 1
statutory deadline or that any such reductions or delays will not have adverse
effects on the City's cash flow or expenditures. In
-22-
<PAGE>
addition, the Federal budget negotiation process could result in a reduction in
or a delay in the receipt of Federal grants which could have additional adverse
effects on the City's cash flow or revenues.
In 1975, New York City suffered a fiscal crisis that impaired the
borrowing ability of both the City and New York State. In that year the City
lost access to the public credit markets. The City was not able to sell short-
term notes to the public again until 1979. In 1975, S&P suspended its A rating
of City bonds. This suspension remained in effect until March 1981, at which
time the City received an investment grade rating of BBB from S&P.
On July 2, 1985, S&P revised its rating of City bonds upward to BBB+
and on November 19, 1987, to A-. On February 3, 1998 and again on May 27, 1998,
S&P assigned a BBB+ rating to the City's general obligation debt and placed the
ratings on CreditWatch with positive implications. On March 9, 1999, S&P
assigned its A- rating to Series 1999H of New York City general obligation bonds
and affirmed the A- rating on various previously issued New York City
bonds.
Moody's ratings of City bonds were revised in November 1981 from B (in
effect since 1977) to Ba1, in November 1983 to Baa, in December 1985 to Baa1, in
May 1988 to A and again in February 1991 to Baa1. On February 25, 1998, Moody's
upgraded approximately $28 billion of the City's general obligations from Baa1
to A3. On June 9, 1998, Moody's affirmed its A3 rating to the City's general
obligations and stated that its outlook was stable.
On March 8, 1999, Fitch IBCA upgraded New York City's $26 billion
outstanding general obligation bonds from A- to A.
New York City is heavily dependent on New York State and federal
assistance to cover insufficiencies in its revenues. There can be no assurance
that in the future federal and State assistance will enable the City to make up
its budget deficits. To help alleviate the City's financial difficulties, the
Legislature created the Municipal Assistance Corporation ("MAC") in 1975. Since
its creation, MAC has provided, among other things, financing assistance to the
City by refunding maturing City short-term debt and transferring to the City
funds received from sales of MAC bonds and notes. MAC is authorized to issue
bonds and notes payable from certain stock transfer tax revenues, from the
City's portion of the State sales tax derived in the City and, subject to
certain prior claims, from State per capita aid otherwise payable by the State
to the City. Failure by the State to continue the imposition of such taxes, the
reduction of the rate of such taxes to rates less than those in effect on July
2, 1975, failure by the State to pay such aid revenues and the reduction of such
aid revenues below a specified level are included among the events of default in
the resolutions authorizing MAC's long-term debt. The occurrence of an event of
default may result in the acceleration of the maturity of all or a portion of
MAC's debt. MAC bonds and notes constitute general obligations of MAC and do
not constitute an enforceable obligation or debt of either the State or the
City.
-23-
<PAGE>
Since 1975, the City's financial condition has been subject to
oversight and review by the New York State Financial Control Board (the "Control
Board") and since 1978 the City's financial statements have been audited by
independent accounting firms. To be eligible for guarantees and assistance, the
City is required during a "control period" to submit annually for Control Board
approval, and when a control period is not in effect for Control Board review, a
financial plan for the next four fiscal years covering the City and certain
agencies showing balanced budgets determined in accordance with GAAP. New York
State also established the Office of the State Deputy Comptroller for New York
City ("OSDC") to assist the Control Board in exercising its powers and
responsibilities. On June 30, 1986, the City satisfied the statutory
requirements for termination of the control period. This means that the Control
Board's powers of approval are suspended, but the Board continues to have
oversight responsibilities.
On June 10, 1997, the City submitted to the Control Board the
Financial Plan (the "1998-2001 Financial Plan") for the 1998 through 2001 fiscal
years, relating to the City, the Board of Education ("BOE") and City University
of New York ("CUNY") and reflected the City's expense and capital budgets for
the 1998 fiscal year, which were adopted on June 6, 1997. The 1998-2001
Financial Plan projected revenues and expenditures for the 1998 fiscal year
balanced in accordance with GAAP. The 1998-99 Financial Plan projected General
Fund receipts (including transfers from other funds) of $36.22 billion, an
increase of $1.02 billion over the estimated 1997-1998 level. Recurring growth
in the State General Fund tax base is projected to be approximately six percent
during 1998-99, after adjusting for tax law and administrative changes. This
growth rate is lower than the rates for 1996-97 or 1997-98, but roughly
equivalent to the rate for 1995-96.
-24-
<PAGE>
Although the City has consistently maintained balanced budgets and is
projected to achieve balanced operating results for the current fiscal year,
there can be no assurance that the gap-closing actions proposed in the 1998-2001
Financial Plan can be successfully implemented or that the City will maintain a
balanced budget in future years without additional State aid, revenue increases
or expenditure reductions. Additional tax increases and reductions in essential
City services could adversely affect the City's economic base.
The projections set forth in the 1998-2001 Financial Plan were based
on various assumptions and contingencies which are uncertain and which may not
materialize. Changes in major assumptions could significantly affect the City's
ability to balance its budget as required by State law and to meet its annual
cash flow and financing requirements. Such assumptions and contingencies
include the condition of the regional and local economies, the impact on real
estate tax revenues of the real estate market, wage increases for City employees
consistent with those assumed in the 1998-2001 Financial Plan, employment
growth, the ability to implement proposed reductions in City personnel and other
cost reduction initiatives, the ability of the Health and Hospitals Corporation
and the BOE to take actions to offset reduced revenues, the ability to complete
revenue generating transactions, provision of State and Federal aid and mandate
relief and the impact on City revenues and expenditures of Federal and State
welfare reform and any future legislation affecting Medicare or other
entitlements.
Implementation of the 1998-2001 Financial Plan is also dependent upon
the City's ability to market its securities successfully. The City's financing
program for fiscal years 1998 through 2001 contemplates the issuance of $5.7
billion of general obligation bonds and $5.7 billion of bonds to be issued by
the proposed New York City Transitional Finance Authority (the "Finance
Authority") to finance City capital projects. The Finance Authority, was
created as part of the City's effort to assist in keeping the City's
indebtedness within the forecast level of the constitutional restrictions on the
amount of debt the City is authorized to incur. Despite this additional
financing mechanism, the City currently projects that, if no further action is
taken, it will reach its debt limit in City fiscal year 1999-2000. Indebtedness
subject to the constitutional debt limit includes liability on capital contracts
that are expected to be funded with general obligation bonds, as well as general
obligation bonds. On June 2, 1997, an action was commenced seeking a
declaratory judgment declaring the legislation establishing the Transitional
Finance Authority to be unconstitutional. If such legislation which is
currently on appeal to the Court of Appeals were voided, projected contracts for
the City capital projects would exceed the City's debt limit. Future
developments concerning the City or entities issuing debt for the benefit of the
City, and public discussion of such developments, as well as prevailing market
conditions and securities credit ratings, may affect the ability or cost to sell
securities issued by the City or such entities and may also affect the market
for their outstanding securities.
The City Comptroller and other agencies and public officials have
issued reports and made public statements which, among other things, state that
projected revenues and expenditures may be different from those forecast in the
City's financial plans. It is reasonable to
-25-
<PAGE>
expect that such reports and statements will continue to be issued and to
engender public comment.
The City since 1981 has fully satisfied its seasonal financing needs
in the public credit markets, repaying all short-term obligations within their
fiscal year of issuance. Although the City's 1998 fiscal year financial plan
projected $2.4 billion of seasonal financing, the City expected to undertake
only approximately $1.4 billion of seasonal financing. The City issued $2.4
billion of short-term obligations in fiscal year 1997. The delay in the adoption
of the State's budget in certain past fiscal years has required the City to
issue short-term notes in amounts exceeding those expected early in such fiscal
years.
Certain localities, in addition to the City, have experienced
financial problems and have requested and received additional New York State
assistance during the last several State fiscal years. The potential impact on
the State of any future requests by localities for additional assistance is not
included in the State's projections of its receipts and disbursements for the
fiscal year.
Fiscal difficulties experienced by the City of Yonkers ("Yonkers")
resulted in the re-establishment of the Financial Control Board for the City of
Yonkers (the "Yonkers Board") by New York State in 1984. The Yonkers Board is
charged with oversight of the fiscal affairs of Yonkers. Future actions taken by
the State to assist Yonkers could result in increased State expenditures for
extraordinary local assistance.
On June 30, 1998, the City of Yonkers satisfied the statutory
conditions for ending the supervision of its finances by a State-ordered control
board. Pursuant to State law, the control board's powers over City finances
lapsed six months after the satisfaction of these conditions, on December 31,
1998.
Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the City
of Troy in 1994. The Supervisory Board's powers were increased in 1995, when
Troy MAC was created to help Troy avoid default on certain obligations. The
legislation creating Troy MAC prohibits the city of Troy from seeking federal
bankruptcy protection while Troy MAC bonds are outstanding. Troy MAC has issued
bonds to effect a restructuring of the City of Troy's obligations.
-26-
<PAGE>
The 1998-99 budget included $29.4 million in unrestricted aid targeted
to 57 municipalities across the State. Other assistance for municipalities with
special needs totals more than $25.6 million. Twelve upstate cities received
$24.2 million in one-time assistance from a cash flow acceleration of State aid.
Municipalities and school districts have engaged in substantial short-
term and long-term borrowings. State law requires the Comptroller to review and
make recommendations concerning the budgets of those local government units
other than New York City that are authorized by State law to issue debt to
finance deficits during the period that such deficit financing is outstanding.
From time to time, federal expenditure reductions could reduce, or in
some cases eliminate, federal funding of some local programs and accordingly
might impose substantial increased expenditure requirements on affected
localities. If the State, the City or any of the Authorities were to suffer
serious financial difficulties jeopardizing their respective access to the
public credit markets, the marketability of notes and bonds issued by localities
within the State could be adversely affected. Localities also face anticipated
and potential problems resulting from certain pending litigation, judicial
decisions and long-range economic trends. Long-range potential problems of
declining urban population, increasing expenditures and other economic trends
could adversely affect localities and require increasing the State assistance in
the future.
Year 2000 Compliance. The State is currently addressing Year 2000
--------------------
("Y2K") data processing compliance issues. Since its inception, the computer
industry has used a two-digit date convention to represent the year. In the
year 2000, the date field will contain "00" and, as a result, many computer
systems and equipment may not be able to process dates properly or may fail
since they may not be able to distinguish between the years 1900 and 2000. The
Year 2000 issue not only affects computer programs, but also the hardware,
software and networks on which they operate. In addition, any system or
equipment that is dependent on an embedded chip, such as telecommunication
equipment and security systems, may also be adversely affected.
In April 1999 the State Comptroller released an audit on the State's
Year 2000 compliance. The audit, which reviewed the State's Y2K compliance
activities through October 1998, found that the State had made progress in
achieving Y2K compliance, but needed to improve its activities in several areas,
including data interchanges and contingency planning.
The Office for Technology (OFT) will continue to monitor
-27-
<PAGE>
compliance progress for the States mission-critical and high-priority systems
and is reporting compliance progress to the Governor's Office on a quarterly
basis. The 1999-2000 enacted budget allocates $19 million for priority embedded
systems and $20 million for unanticipated expenses related to bringing
technology into Y2K compliance. OFT reports that as of June 1999, the State had
completed over 98 percent of the overall compliance effort for its mission-
critical systems; 55 of the 56 systems are now Year 2000 compliant. As of June
1999, the State had completed 87 percent of the overall compliance effort on the
high-priority systems; 236 systems are now Year 2000 compliant. The State has
also procured independent validation and verification services from a qualified
vendor to perform an automated review of code that has been fixed and a testing
review process for all mission-critical systems which is scheduled to be
completed by September 1999.
While New York State is taking what it believes to be appropriate
action to address Year 2000 compliance, there can be no guarantee that all of
the State's systems and equipment will be Year 2000 compliant and that there
will not be an adverse impact upon State operations or finances as a result.
Since Year 2000 compliance by outside parties is beyond the State's control to
remediate, the failure of outside parties to achieve Year 2000 compliance could
have an adverse impact on State operations or finances as well.
INVESTMENT LIMITATIONS
The following is a complete list of investment limitations and
policies applicable to each of the Funds or, as indicated below, to specific
Funds, that may not be changed without the affirmative votes of the holders of a
majority of each Fund's outstanding shares (as defined below under
"Miscellaneous"):
1. A Fund may not borrow money or issue senior securities except to
the extent permitted under the 1940 Act.
2. A Fund may not act as an underwriter of securities. A Fund will
not be an underwriter for purposes of this limitation if it purchases securities
in transactions in which the Fund would not be deemed to be an underwriter for
purposes of the Securities Act of 1933.
3. A Fund may not make loans. The purchase of debt obligations, the
lending of portfolio securities and the entry into repurchase agreements are not
treated as the making of loans for purposes of this limitation.
4. A Fund may not purchase or sell real estate. The purchase of
securities secured by real estate or interests therein are not considered to be
a purchase of real estate for the purposes of the limitation.
5. A Fund may not purchase or sell commodities or commodities
contracts.
-28-
<PAGE>
6. A Fund may, notwithstanding any other fundamental investment
limitations, invest all of its assets in a single open-end investment company or
series thereof with substantially the same investment objectives, restrictions
and policies as the Fund.
7. TempFund and TempCash: A Fund may not purchase the securities of
---------------------
any issuer if as a result more than 5% of the value of the Fund's assets would
be invested in the securities of such issuer except that up to 25% of the
value of the Fund's assets may be invested without regard to this 5% limitation.
8. TempFund. TempFund may not 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.
9. TempCash: TempCash may not 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 financial services 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
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.
10. New York Money Fund: The Fund may not purchase any securities
-------------------
which would cause 25% or more of the Fund's total assets at the time of
purchase to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that there
is no limitation with respect to obligations issued or guaranteed by the U.S.
government, any state or territory of the United States, or any of their
agencies, instrumentalities or political subdivisions.
The following is a list of non-fundamental investment limitations
applicable to each of the Funds or, as indicated below, to specific Funds.
Unlike a fundamental limitation, a non-fundamental investment limitation may be
changed without the approval of shareholders.
1. A Fund may not acquire any other investment company or investment
company security except in connection with a merger, consolidation,
reorganization or acquisition of assets or where otherwise permitted by the 1940
Act.
-29-
<PAGE>
2. TempFund and TempCash and NY Money: The Fund may not invest
----------------------------------
more than 10% of the value of the Fund's total assets in illiquid securities
which may be illiquid due to legal or contractual restrictions on resale or the
absence of readily available market quotations.
3. NY Money: The Fund may not invest less than 80% of its assets in
--------
securities the interest on which is exempt from Federal income taxes, except
during defensive periods or during periods of unusual market conditions.
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 shares of the Funds 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
-30-
<PAGE>
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, if, in the opinion of the directors of the Company,
ownership of shares has or may become concentrated to an extent which would
cause a Fund to be deemed a personal holding company, a Fund may compel the
redemption of, reject any order for or refuse to give effect on the books of a
Fund to the transfer of a Fund's shares in an effort to prevent that
consequence. A Fund may also redeem shares involuntarily if such redemption
appears appropriate in light of a Fund's responsibilities under the 1940 Act or
otherwise. If the Company's Board of Directors determines that conditions exist
which make payment of redemption proceeds wholly in cash unwise or undesirable,
a Fund may make payment wholly or partly in securities or other property. In
certain instances, a Fund may redeem shares pro rata from each shareholder of
record without payment of monetary consideration.
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 portfolios, or classes of shares,
must maintain a separate Master Account for each Fund's 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 share in a particular Fund is
calculated by adding the value of all portfolio securities and other assets
belonging to a Fund, subtracting the Fund's liabilities, and dividing the result
by the number of outstanding shares in the Fund. "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 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 portfolios. Determinations made in
good faith and in accordance with generally accepted accounting principles by
the Board of Trustees 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, and payments to Service Organizations
are borne solely by the Dollar Shares, Plus Shares, Administration Shares, Cash
Reserve Shares and Cash Management Shares, respectively.
In computing the net asset value of its shares for purposes of sales
and redemptions, each Fund uses the amortized cost method of valuation pursuant
to Rule 2a-7. 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
-31-
<PAGE>
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
13 months (with certain exceptions). The Board of Trustees has also established
procedures, pursuant to rules promulgated by the SEC, that are intended to
stabilize each Fund's net asset value per share for purposes of sales and
redemptions at $1.00. Such procedures include the determination, at such
intervals as the Board deems appropriate, of the extent, if any, to which a
Fund's net asset value per share calculated by using available market quotations
deviates from $1.00 per share. In the event such deviation exceeds 1/2 of 1%,
the Board will promptly consider what action, if any, should be initiated. If
the Board believes that the amount of any deviation from a Fund's $1.00
amortized cost price per share may result in material dilution or other unfair
results to investors or existing shareholders, it will take such steps as it
considers appropriate to eliminate or reduce to the extent reasonably
practicable any such dilution or unfair results. These steps may include
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten a Fund's average portfolio maturity, redeeming shares in
kind, reducing or withholding dividends, or utilizing a net asset value per
share determined by using available market quotations.
MANAGEMENT OF THE FUNDS
Trustees and Officers
The business and affairs of the Company are managed under the
direction of the Board of Trustees. The Trustees and executive officers, their
addresses, ages, principal occupations during the past five years and other
affiliations are as follows:
<TABLE>
<CAPTION>
Position with Principal Occupation
Name the Company Age During Past 5 Years
------------------------------------ ----------- --- -------------------
<S> <C> <C> <C>
G. Nicholas Beckwith, III Trustee 54 President and Chief Executive
Beckwith Machinery Company Officer, Beckwith Machinery
4565 William Penn Highway Company; First Vice Chairman of
Murrysville, PA 15668 the Board of Directors,
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
</TABLE>
-32-
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupation
Name the Company Age During Past 5 Years
---- ----------- --- -------------------
<S> <C> <C> <C>
School of Medicine; Board of Trustees,
Shady Side Academy; Trustee, Claude
Worthington Benedum Foundation;
Trustee, Chatham College; Director
or Trustee of two other investment
companies advised by BIMC.
Jerrold B. Harris Trustee 57 President and Chief Executive
VWR Scientific Products Corp. Officer, VWR Scientific Products
1310 Goshen Parkway Corp.; Director or Trustee of two
West Chester, PA 19380 other investment companies advised
by BIMC.
Rodney D. Johnson* Trustee, 58 President, Fairmount Capital
Fairmount Capital Advisors, Inc. President and Advisors, Inc.; Director or
1435 Walnut Street, Suite 300 Treasurer Trustee of five other investment
Philadelphia, PA 19102-3222 companies advised by BIMC.
Joseph P. Platt, Jr. Trustee 52 Partner, Amarna Partners (private
Amarna Partners investment company); formerly, a
One Oxford Centre, Suite 4260 Director and Executive Vice
Pittsburgh, PA 15219 President of Johnson & Higgins.
Robert C. Robb, Jr./1/ Trustee 54 Partner, Lewis, Eckert, Robb &
Lewis, Eckert, Robb & Co. Company (management and financial
425 One Plymouth Meeting consulting firm); Trustee, EQK
Plymouth Meeting, PA 19462 Realty Investors; Director,
Tamaqua Cable Products Company;
Director, Brynwood Partners;
former Director, PNC Bank.
Kenneth L. Urish Trustee 48 Managing Partner, Urish Popeck &
Urish Popeck & Co. Co. LLC (certified public
Three Gateway Center, Suite 2400 accountants and
</TABLE>
-33-
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupation
Name the Company Age During Past 5 Years
---- ----------- --- -------------------
<S> <C> <C> <C>
Pittsburgh, PA 15222 consultants).
Frederick W. Winter Trustee 54 Dean, Joseph M. Katz School of
Dean-Katz Graduate School of Business - University of
Business Pittsburgh; formerly, Dean, School
University of Pittsburgh of Management - State University
372 Mervis Hall of New York at Buffalo
Pittsburgh, PA 15260 (1994-1997); former Director, Rand
Capital (1996-1997); former
Director, Bell Sports (1991-1998);
former Director, Alkon Corporation
(1992-1998).
W. Bruce McConnel, III Secretary 56 Partner of the law firm of
Drinker Biddle & Reath LLP Drinker Biddle & Reath LLP,
One Logan Square Philadelphia, Pennsylvania
18th and Cherry Streets
Philadelphia, PA 19103-6996
</TABLE>
----------------------------
* Mr. Johnson is an "interested person" of Provident Institutional Funds, as
that term is defined in the 1940 Act, because he is an officer of the
Company.
1. From 1994 until April 14, 1998, Mr. Robb was a director of PNC Bank.
The following provides certain information about the fees received by
the trustees/directors of the Predecessor Companies and/or the Company and as
directors/trustees of the Fund Complex for the fiscal year ending September 30,
1999.
-34-
<PAGE>
<TABLE>
<CAPTION>
=========================================================================================================
Pension or Total
Retirement Compensation from
Aggregate Benefits Company and/or
Compensation Accrued as Part Predecessor
From Of Company and/or Estimated Companies and
Company and/or Predecessor Annual Fund Complex/1/
Name of Person, Predecessor Companies Benefits upon Paid to
Position Companies Expenses Retirement Trustees
-------- --------- -------- ---------- --------
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
G. Nicholas Beckwith, III, Trustee $46,000.00 n/a n/a $0
---------------------------------------------------------------------------------------------------------
Jerrold B. Harris, Trustee $46,000.00 n/a n/a $0
---------------------------------------------------------------------------------------------------------
Rodney D. Johnson*, Trustee, $56,000.00 n/a n/a $0
President and Treasurer
---------------------------------------------------------------------------------------------------------
Joseph P. Platt, Jr., Trustee $46,000.00 n/a n/a $0
---------------------------------------------------------------------------------------------------------
Robert C. Robb, Jr., /1/ Trustee $46,000.00 n/a n/a $0
---------------------------------------------------------------------------------------------------------
Kenneth L. Urish, Trust $46,000.00 n/a n/a $0
---------------------------------------------------------------------------------------------------------
Frederick W. Winter, Trustee $46,000.00 n/a n/a $0
=========================================================================================================
</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.
* This trustee is considered by the Company to be an "interested person" of
the Company as defined by the 1940 Act.
Until February 10, 1999, when the Predecessor Companies were
reorganized into the Company, G. Willing Pepper was director/trustee and
Chairman of the Board of Temp, Fed and Cal Muni. William R. Howell and Rudolph
A. Peterson were each directors of Cal Muni. Anthony Santomero was a director of
Cal Muni and NY Muni. Philip E. Coldwell and Robert F. Fortune were
directors/trustees of Temp, Fed and Muni. Thomas A. Melfe and Francis E. Drake
were each directors of NY Muni. Mr. Melfe was also Chairman of the Board of NY
Muni.
Drinker Biddle & Reath LLP, of which Mr. McConnel is a partner,
receives legal fees as counsel to the Predecessor Companies and receives legal
fees as counsel to the Company. No employee of PDI, BIMC, PFPC or PNC Bank
receives any compensation from the Predecessor Companies for acting as an
officer or director of the Predecessor Companies. The directors and officers of
the Predecessor Companies as a group owned less than 1% of the shares of each of
the Predecessor Funds.
-35-
<PAGE>
Investment Adviser
The advisory services provided by BIMC 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:
TempFund:
--------
Annual Fee Average Net Assets
---------- ------------------
.175%........................ of the first $1 billion
.150%........................ of the next $1 billion
.125%........................ of the next $1 billion
.100%........................ of the next $1 billion
.095%........................ of the next $1 billion
.090%........................ of the next $1 billion
.080%........................ of the next $1 billion
.075%........................ of the next $1 billion
.070%........................ of amounts in excess of $8 billion.
TempCash:
--------
Annual Fee Average Net Assets
---------- ------------------
.175%........................ of the first $1 billion
.150%........................ of the next $1 billion
.125%........................ of the next $1 billion
.100%........................ of the next $1 billion
.095%........................ of the next $1 billion
.090%........................ of the next $1 billion
.085%........................ of the next $1 billion
.080%........................ of amounts in excess of $7 billion.
-36-
<PAGE>
New York Money Fund:
-------------------
Annual Fee Average Net Assets
---------- ------------------
.20%......................... of the total net assets
PFPC, as described below under "Co-Administrators," and BIMC are co-
administrators of the Fund. They may from time to time reduce their fees to
ensure that the 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 Funds' average net assets.
The following chart provides information with respect to the advisory
fees paid (net of waivers) and advisory fees waived during the fiscal year of
each Fund ended in 1997, 1998 and 1999.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
FUND 1999 1998 1997
------------------------------------------------------------------------------------------------------------------
ADVISORY ADVISORY ADVISORY ADVISORY ADVISORY
FEES FEES FEES FEES FEES FEES
PAID WAIVED PAID WAIVED PAID WAIVED
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TempFund $10,104,652 $2,385,355 $8,126,927 $2,315,278 $6,560,502 $2,576,521
------------------------------------------------------------------------------------------------------------------
TempCash 2,818,513 2,151,177 2,388,597 2,096,653 2,176,446 2,041,599
------------------------------------------------------------------------------------------------------------------
</TABLE>
-37-
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
New York
Money 189,703 463,604 202,770 450,544 150,755 420,034
------------------------------------------------------------------------------------------------------------------
</TABLE>
________________________
The Funds' fiscal year ends were as follows: TempFund and TempCash -
September 30 and New York Money Fund - July 31.
-38-
<PAGE>
Co-Administrators
BIMC and PFPC serve as the Company's co-administrators. PFPC has its
principal business address at 400 Bellevue Parkway, Wilmington, Delaware 19809
and is an indirect, wholly-owned subsidiary of PNC Bank Corp. and is an
affiliate of BIMC. As the Company's co-administrators, BIMC and PFPC 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 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 co-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. For
information regarding the administrators' obligation to reimburse the Funds in
the event their expenses exceed certain prescribed limits, see "Investment
Adviser" above. Any fees waived by the administrators with respect to a
particular fiscal year are not recoverable.
The following chart provides information with respect to the
administration fees (net of waivers) paid and administration fees waived during
the fiscal years for each Fund ended in 1997, 1998 and 1999.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
FUND 1999 1998 1997
------------------------------------------------------------------------------------------------------------------
ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION ADMINISTRATION
FEES PAID FEES WAIVED FEES PAID FEES WAIVED FEES PAID FEES WAIVED
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TempFund $10,104,652 $2,385,356 $8,126,927 $2,315,278 $6,560,502 $2,576,521
------------------------------------------------------------------------------------------------------------------
</TABLE>
-39-
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TempCash 2,818,513 2,151,178 2,388,597 2,096,653 2,176,446 2,041,599
------------------------------------------------------------------------------------------------------------------
</TABLE>
-40-
<PAGE>
<TABLE>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
New York 189,703 463,605 202,770 450,544 150,755 420,034
Money
------------------------------------------------------------------------------------------------------------------
</TABLE>
-41-
<PAGE>
The Funds' fiscal year ends were as follows: TempFund and TempCash -September 30
and New York Money Fund - July 31.
Distributor
Provident Distributors, Inc. ("PDI") acts as the distributor of the
Company's shares. PDI is a Delaware corporation and has its principal business
address at Four Falls Corporate Center, 6th Floor, West Conshohocken,
Pennsylvania 19428. 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 prepares or reviews, provides advice with
respect to, and files 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 Company to the distributor for its distribution services.
Custodian and Transfer Agent
Pursuant to a Custodian Agreement, PFPC Trust Company, an affiliate of
the Adviser, serves as each Fund's custodian, holding a Fund's portfolio
securities, cash and other property. PFPC Trust Company has its principal
offices at 400 Bellevue Parkway, Wilmington, Delaware 19809, with an additional
custodial services location at 200 Stevens Drive, Suite 410, Lester,
Pennsylvania 19113. Under the Custodian Agreement, PFPC Trust Company 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
Trustees concerning a Fund's operations.
PFPC Trust Company is also authorized to select one or more banks or
trust companies to serve as sub-custodian or agent on behalf of a Fund, provided
that PFPC Trust Company 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 or
agent chosen by PFPC Trust Company. Currently, PFPC Trust Company has chosen PNC
Bank to serve as agent.
-42-
<PAGE>
Under the Custodian Agreement, each Fund pays PFPC Trust Company an
annual fee equal to $.25 for each $1,000 of each Fund's average daily gross
assets. With respect to TempFund and TempCash, such fee declines as each such
Fund's average daily gross assets increase. In addition, each Fund pays the
custodian certain types of transaction charges, and reimburses the custodian for
out-of-pocket expenses incurred on behalf of the Fund. The fees of PNC Bank are
paid by PFPC Trust Company and not the Funds.
PFPC also serves as transfer agent, registrar and dividend disbursing
agent to each Fund pursuant to a Transfer Agency Agreement. Under the Agreement,
PFPC has agreed to provide the following services: (i) maintain a separate
account or accounts in the name of a Fund; (ii) issue, transfer and redeem Fund
shares; (iii) transmit all communications by a Fund to its shareholders of
record, including reports to shareholders, dividend and distribution notices and
proxy material for its meetings of shareholders; (iv) respond to correspondence
by shareholders, security brokers and others relating to its duties; (v)
maintain shareholder accounts and sub-accounts; (vi) provide installation and
other services in connection with the Funds' computer access program maintained
to facilitate shareholder access to a Fund; (vii) send each shareholder of
record a monthly statement showing the total number of a Fund's shares owned as
of the last business day of the month (as well as the dividends paid during the
current month and year); and (viii) provide each shareholder of record with a
daily transaction report for each day on which a transaction occurs in the
shareholder's Master Account with a Fund. Further, an institution establishing
sub-accounts with PFPC is provided with a daily transaction report for each day
on which a transaction occurs in a sub-account and, as of the last calendar day
of each month, a report which sets forth the share balances for the sub-accounts
at the beginning and end of the month and income paid or reinvested during the
month. Finally, PFPC provides each shareholder of record with copies of all
information relating to dividends and distributions which is required to be
filed with the Internal Revenue Service and other appropriate taxing
authorities.
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.
-43-
<PAGE>
Service Organizations
The Funds may enter into agreements with institutional investors
("Service Organizations") requiring them to provide certain services to their
customers who beneficially own shares of the Funds. Each of the Funds may enter
into agreements with Service Organizations requiring them to provide services to
their customers who beneficially own Dollar Shares in consideration of .25% (on
an annualized basis) of the average daily net asset value of the Dollar Shares
held by the Service Organizations for the benefit of their customers. Such
services provided by a Service Organization may include (i) answering
shareholder inquiries regarding account status and history, the manner in which
purchases, exchanges and redemption of shares may be effected and certain other
matters pertaining to the shareholders' investments; (ii) assisting shareholders
in designating and changing dividend options, account designations and
addresses; (iii) aggregating and processing purchase and redemption requests
from shareholders and placing net purchase and redemption orders with the
distributor; (iv) providing shareholders with a service that invests the assets
of their accounts in shares pursuant to specific or pre-authorized instructions;
(v) processing dividend payments from the particular Series on behalf of
shareholders; (vi) providing information periodically to shareholders showing
their positions in Dollar Shares; (vii) arranging for bank wires; (viii)
responding to shareholder inquiries relating to a particular Series or the
services performed by the Service Organization; (ix) providing sub-accounting
with respect to a Series of shares beneficially owned by shareholders or the
information necessary for sub-accounting; (x) if required by law, forwarding
shareholder communications from the particular Series (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to shareholders; and (xi) other similar services
to the extent permitted under applicable statutes, rules or regulations.
TempFund and NY Money Fund may enter into agreements with Service
Organizations requiring them to provide certain sales and support services to
their shareholders who beneficially own Plus Shares in consideration of .25% (on
an annualized basis) of the average daily net asset value of the Plus Shares
held by the Service Organization for the benefit of shareholders. Sales and
support
-44-
<PAGE>
services provided by the Service Organizations may include: (a) reasonable
assistance in connection with the distribution of Plus Shares to shareholders as
requested from time to time by the distributor, which assistance may include
forwarding sales literature and advertising provided by the distributor for
shareholders; and (b) the following support services to shareholders who may
from time to time acquire and beneficially own Plus Shares: (i) establishing and
maintaining accounts and records relating to shareholders that invest in Plus
Shares; (ii) processing dividend and distribution payments from a particular
series on behalf of shareholders; (iii) providing information periodically to
shareholders showing their positions in Plus Shares; (iv) arranging for bank
wires; (v) responding to shareholder inquiries relating to the services
performed by the Service Organization; (vi) responding to routine inquiries from
shareholders concerning their investments in Plus Shares; (vii) providing
subaccounting with respect to Plus Shares beneficially owned by shareholders or
the information to the Company necessary for subaccounting; (viii) if required
by law, forwarding shareholder communications from a particular series (such as
proxies, shareholder reports, annual and semi-annual financial statements and
dividend, distribution and tax notices) to shareholders; (ix) assisting in
processing purchase, exchange and redemption requests from shareholders and in
placing such orders with service contractors; (x) assisting shareholders in
changing dividend options, account designations and addresses; (xi) providing
shareholders with a service that invests the assets of their accounts in Plus
Shares pursuant to specific or pre-authorized instructions; and (xii) providing
such other similar services as the distributor may reasonably request to the
extent the Service Organization is permitted to do so under applicable statutes,
rules and regulations.
TempFund may also enter into agreements with Service Organizations
requiring them to provide certain services to their shareholders 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 shareholders.
Services provided by the Service Organizations may include: (i) answering
shareholder inquiries regarding account status and history, the manner in which
purchases, exchanges and redemption 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 certain services to their shareholders who
beneficially own Cash Reserve Shares, in consideration of a total 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 shareholders. An initial
.10% (on an annual basis) of the average daily net asset value of such Shares
will be paid to Service Organizations for providing administrative services
which may include the services provided for Administrative Shares as described
above. Another .25% (on an annual basis) of the average daily net asset value of
such Shares will be paid to Service Organizations for providing support services
which may include the services provided for Dollar Shares as described in sub-
sections (iii) through (xi) above. Another .5% (on an annual basis) of the
average daily net asset value of such Shares will be paid to Service
Organizations for providing sweep services ("Sweep Services") which may include:
(i) providing the necessary computer hardware and software which links the
Service Organization's DDA system to an account management system; (ii)
providing
-45-
<PAGE>
software that aggregates the shareholders orders and establishes an
order to purchase or redeem shares of a Series based on established target
levels for the shareholder's demand deposit accounts; (iii) providing periodic
statements showing a shareholder's account balance and, to the extent
practicable, integrating such information with other shareholder transactions
otherwise effected through or with the Service Organization; and (iv) furnishing
(either separately or an integrated basis with other reports sent to a
shareholder by a Service Organization) 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 shareholders who
beneficially own Cash Management Shares, in consideration of a total 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 shareholders.
An initial .10% (on an annual basis) of the average daily net asset value of
such Shares will be paid to Service Organizations for providing administrative
services which may include the services provided for Administration Shares as
described above. Another .25% (on an annual basis) of the average daily net
asset value of such Shares will be paid to Service Organizations for providing
services which may include the services provided for Dollar Shares as described
in sub-sections (iii) through (xi) above. Another .5% (on an annual basis) of
the average daily net asset value of such Shares will be paid to Service
Organizations for providing Sweep Services as described above. Another .10% (on
an annual basis) of the average daily net asset value of such Shares will be
paid to Service Organizations for providing the sweep marketing services which
may include (i): marketing and activities, including direct mail promotions that
promote the Sweep Service, (ii) expenditures for other similar marketing support
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 the Sweep Services.
The Company's agreements with Service Organizations are governed by
Plans (called "Shareholder Services Plan" for the Dollar, Administration, Cash
Reserves and Cash Management Shares and "Distribution and Services Plan" for the
Plus shares), which have been adopted by the Company's Board of Trustees
pursuant to applicable rules and regulations of the SEC. Pursuant to the Plans,
the Board of Trustees reviews, at least quarterly, a written report of the
amounts expended under the Company's agreements with Service Organizations and
the purposes for which the expenditures were made. In addition, the Company's
arrangements with Service Organizations must be approved annually by a majority
of the Company's trustees, including a majority of the trustees who are not
"interested persons" of the Company as defined in the 1940 Act and have no
direct or indirect financial interest in such arrangements.
The Board of Trustees have approved the Company's arrangements with
Service Organizations based on information provided to the Board 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 Company's arrangements with Service Organizations must be made in a manner
approved by a majority of the Company's Board of Trustees (including a majority
of the Non-Interested Trustees), and any amendment to increase materially the
costs under the Distribution and Services Plan adopted by the Board with respect
-46-
<PAGE>
to Plus shares must be approved by the holders of a majority of the outstanding
Plus shares. (It should be noted that while the annual service fee with respect
to Plus shares is currently set at .25%, the Plan adopted by the Board of
Trustees with respect to New York Money Fund permits the Board to increase this
fee to .40% without shareholder approval.) So long as the Company's
arrangements with Service Organizations are in effect, the selection and
nomination of the members of the Company's Board of Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Company will be
committed to the discretion of such non-interested directors.
The following chart provides information with respect to the fees paid
to Service Organizations , including the amounts paid to affiliates of BIMC
during the fiscal year for each Fund ended in 1997, 1998 and 1999.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
FUND 1999 1998 1997
--------------------------------------------------------------------------------------------------
Total Fees/Fees to Total Fees/Fees to Total Fees/Fees to
Affiliates Affiliates Affiliates
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TempFund Administration $0/0 $0/0 $0/0
--------------------------------------------------------------------------------------------------
TempFund Dollar $998,538/99,384 $772,304/$104,448 $ 863,301/$617,378
--------------------------------------------------------------------------------------------------
TempFund Plus $0/0 $0/0 $0/0
--------------------------------------------------------------------------------------------------
TempFund Cash Reserve $0/0 $0/0 $0/0
--------------------------------------------------------------------------------------------------
TempFund Cash Management 12,627/0 0/0 0/0
--------------------------------------------------------------------------------------------------
TempCash Dollar 1,059,560/29,363 1,088,006/27,566 1,214,833/380,851
--------------------------------------------------------------------------------------------------
</TABLE>
-47-
<PAGE>
<TABLE>
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------
New York Money Dollar 0/0 504/0 8,458/8,408
--------------------------------------------------------------------------------------------------
New York Money Plus 0/0 0/0 0/0
--------------------------------------------------------------------------------------------------
</TABLE>
________________
The Funds' fiscal year ends were as follows: TempFund and TempCash -
September 30 and New York Money Fund - July 31.
Expenses
A Fund's expenses include taxes, interest, fees and salaries of the
Company's Trustees and officers who are not Trustees, 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
-48-
<PAGE>
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
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, and to distribute out its income to
shareholders each year, so that each Fund itself will be relieved of federal
income and excise taxes. If a Fund were to fail to so qualify: (1) the Fund
would be taxed at regular corporate rates without any deduction for
distributions to shareholders; and (2) shareholders would be taxed as if they
received ordinary dividends, although corporate shareholders could be eligible
for the dividends received deduction.
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.
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."
The following is applicable to New York Money Fund only:
As described above and in the Fund's Prospectus, the Fund is designed
to provide institutions with current tax-exempt interest income. The Fund is
not intended to constitute a balanced investment program nor is it designed for
investors seeking capital appreciation or maximum tax-exempt income irrespective
of fluctuations in principal. Shares of the Fund would not be suitable for tax-
exempt institutions and may not be suitable for retirement plans qualified under
Section 401 of the Code, H.R. 10 plans and individual retirement accounts
because such plans and accounts are generally tax-exempt and, therefore, not
only would not gain any additional benefit from the Fund's dividends being tax-
exempt but also such dividends would be taxable when distributed to the
beneficiary. In addition, the Fund may not be an appropriate investment for
entities which are "substantial users" of facilities financed by private
activity bonds or "related persons" thereof. "Substantial user" is defined
under U.S. Treasury Regulations to include a non-exempt person who regularly
uses a part of such facilities in his or her trade or business and whose gross
revenues derived with respect to the
-49-
<PAGE>
facilities financed by the issuance of bonds are more than 5% of the total
revenues derived by all users of such facilities, or who occupies more than 5%
of the usable area of such facilities or for whom such facilities or a part
thereof were specifically constructed, reconstructed or acquired. "Related
persons" include certain related natural persons, affiliated corporations, a
partnership and its partners, and an S Corporation and its shareholders.
In order for the Fund to pay exempt-interest dividends for any taxable
year, at least 50% of the aggregate value of the Fund's assets must consist of
exempt-interest obligations.
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
Trustees' 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 and/or Plus 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 a Fund, it is possible that the Fund's
net asset value per share may fall below $1.00.
ADDITIONAL YIELD AND OTHER PERFORMANCE INFORMATION
The "yields" and "effective yields" are calculated separately for each
Fund. 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.
-50-
<PAGE>
The following chart provides information with respect to the yields as
of each Fund's most recent fiscal year or period.*
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
7 DAY 30 DAY
--------------------------------------------------------------------------------------------------------------
YIELD COMPOUNDED YIELD COMPOUNDED
EFFECTIVE EFFECTIVE
YIELD YIELD
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TempFund 5.23 5.37 5.18 5.31
--------------------------------------------------------------------------------------------------------------
TempFund Dollar 4.98 5.10 4.93 5.05
--------------------------------------------------------------------------------------------------------------
TempFund Cash Management 4.73 4.84 4.68 4.79
--------------------------------------------------------------------------------------------------------------
TempCash 5.14 5.27 5.09 5.22
--------------------------------------------------------------------------------------------------------------
</TABLE>
-51-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
TempCash Dollar 4.89 5.01 4.84 4.96
--------------------------------------------------------------------------------------------------
</TABLE>
-52-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
New York Money Fund 2.77 2.81 2.67 2.71
-------------------------------------------------------------------------------------------------
</TABLE>
The Funds' fiscal year ends were as follows: TempFund and TempCash -
September 30 and New York Money Fund - July 31.
* No information is provided regarding the yields with respect to the
Administration, Plus and Cash Reserves Classes of TempFund and Dollar and
Plus Classes of New York Money Fund because such Classes had no Shares
outstanding on September 30, 1999. The information provided regarding the
yields with respect to Cash Management Shares of TempFund, which commenced
operations on June 14, 1999, has been annualized.
From time to time, in reports to shareholders or otherwise, a Fund's
yield or total return 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 and return will fluctuate, and any quotation of yield or return
should not be considered as representative of the future performance of the
Fund. Since yields and returns fluctuate, performance 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
or return calculations; such fees, if charged, would reduce the actual yield or
return 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
-53-
<PAGE>
future income or capital appreciation of a Fund would increase the value, not
only of the original investment, but also of the additional shares received
through reinvestment. As a result, the value of the Fund investment would
increase more quickly than if dividends or other distributions had been paid in
cash.
In addition, the Funds may also include in Materials discussions
and/or illustrations of the potential investment goals of a prospective investor
(including materials that describe general principles of investing,
questionnaires designed to help create a personal financial profile, worksheets
used to project savings needs based on certain assumptions and action plans
offering investment alternatives), investment management strategies, techniques,
policies or investment suitability of a Fund, economic and political conditions,
the relationship between sectors of the economy and the economy as a whole,
various securities markets, the effects of inflation and historical performance
of various asset classes, including but not limited to, stocks, bonds and
Treasury securities, and hypothetical investment returns based on certain
assumptions. From time to time, Materials may summarize the substance of
information contained in shareholder 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
-54-
<PAGE>
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.
ADDITIONAL DESCRIPTION CONCERNING SHARES
The Company was organized as a Delaware business trust on October 21,
1998. The Company's Declaration of Trust authorizes the Board of Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
in the Company and to classify or reclassify any unissued shares into one or
more series of shares. Pursuant to such authority, the Board of Trustees has
authorized the issuance of ten series of shares designated as TempFund,
TempCash, FedFund, T-Fund, Federal Trust Fund, Treasury Trust Fund, MuniFund,
MuniCash, California Money Fund and New York Money Fund. The Declaration of
Trust further authorizes the trustees to classify or reclassify any series of
shares into one or more classes. Currently, the classes authorized are Dollar,
Plus, Administration, Cash Reserves and Cash Management.
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 25% of the Company's shares,
the Company will call for a meeting of shareholders to consider the removal of
one or more Trustees and other certain matters. To the extent required by law,
the Company will assist in shareholder communication in such matters.
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 each Fund's Dollar, Plus, Administration, Cash Reserves and Cash
Management Shares, as described in "Service Organizations" above, shall be
entitled to vote on matters submitted to a vote of shareholders pertaining to
that Fund's arrangements with its 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 Trustees
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
-55-
<PAGE>
election of Trustees are not subject to the separate voting requirements and may
be effectively acted upon by shareholders of the investment company voting
without regard to portfolio.
Notwithstanding any provision of Delaware 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, One Logan Square, 18/th/ and Cherry
Streets, Philadelphia, Pennsylvania 19103, of which W. Bruce McConnel, III,
Secretary of the Company, is a partner, has passed upon the legality of the
shares offered hereby.
Willkie Farr & Gallagher, One Citicorp Center, 153 East 53/rd/ Street,
New York, New York 10022, acts as special New York Counsel for the Company and
has reviewed the portions of this Statement of Additional Information and the
New York Money Fund's Prospectus concerning New York taxes and the description
of special considerations relating to New York Municipal Obligations.
AUDITOR
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 October 31, 1999.
FINANCIAL STATEMENTS
The Annual Reports to Shareholders of TempFund and TempCash for their
fiscal year ended September 30, 1999 and the Annual Report to Shareholders of
New York Money Fund for the fiscal year ended July 31, 1999 have been filed with
the Securities and Exchange Commission. The financial statements in such Annual
Reports ("the Financial Statements") are incorporated by reference into this
Statement of Additional Information. The Financial Statements for Temp and NY
Muni have been audited by such Companies independent accountant,
PricewaterhouseCoopers LLP, whose reports thereon also appear in the applicable
Annual Reports and are incorporated herein by reference.
-56-
<PAGE>
MISCELLANEOUS
Shareholder Vote
As used in this Statement of Additional Information, 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 November 18, 1999, 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., $840,000,000; Goldman Sachs & Co., $660,000,000 and
Merrill Lynch; $550,000,000.
As of November 18, 1999, the value of TempCash's aggregate holdings of
the securities of each of its regular brokers or dealers or their parent was:
Morgan Stanley & Co., $100,000,000 and Goldman Sachs & Co., $100,000,000.
Certain Record Holders
As of November 5, 1999, there were no institutional investors that
owned of record 5% or more of the outstanding shares of TempFund Money
Shares.
-57-
<PAGE>
As of November 5, 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: Sanbarco, Santa
Barbara Bank & Trust, Attn: Mutual Funds, 820 State Street, Santa Barbara, CA
93101 (5.71%); For the Exclusive Benefit of Neuberger Berman LLC Customers,
Attn: Steve Gallaro/OFS Control, 55 Water Street, 27th Floor, New York, NY 10041
(6.28%); FBO Managed Omnibus, First American Trust Company, 421 North Main
Street, Santa Ana, CA 92701 (8.46%). The Company does not know whether such
persons also beneficially own such shares.
As of November 5, 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 Cash Management Shares were as follows: Broadway
National Bank, Sweep Omnibus Account, Attn: Eleanor Thomas, P.O. Box 17001, San
Antonio, TX 78217 (10.60%); C/O Vermont National Bank, Vernat Company, P.O. Box
669, Rutland, VT 05702 (6.67%); PNC Advisors (Connecticut), Attn: Susan
Skalandunas, 125 East Putnam Avenue, Greenwich, CT 06830 (6.81%). The Company
does not know whether such persons also beneficially own such shares.
As of November 5, 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 Money Shares were as follows: Saxon & Company,
PNC Bank, Attn: Lawrence Lockwood, ACI Dept./Reorg F3-076-02-2 200 Stevens
Drive, Suite 260A, Lester, PA 19113 (17.63%); Obie 7 Co., Chase Bank of Texas,
Attn: STIF Unit, Mail Code 18HCB340, P.O. Box 2558, Houston, TX 77252 (6.73%);
USAA Brokerage Services, Attn: Karl Borgerding, BSB/Brokerage OPS/A03S, 9800
Fredericksburg Road, San Antonio, TX 78230 (12.32%); Portfolio Ventures Inc.,
Attn: Susan T. Dubb, 1105 N. Market Street, Ste. 1412, Wilmington, DE 19801
(5.06). The Company does not know whether such persons also beneficially own
such shares.
As of November 5, 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 (33.46%); Citibank NA, IC&D-
Cash Management, Attn: Denise Stanley, 3800 Citibank Center Tampa, Tampa, FL
33610 (17.31%); Norwest Investment Services, Inc., Attn: Pamela Siner, 608 2nd,
Avenue South - 8th Fl., Minneapolis, MN 55479 (12.75%); Cash Balance Sweeps,
Hilliard Lyons, Attn: Barbara O'Neal, 501 Hilliard Lyons Center, Louisville, KY
40202 (18.67%). The Company does not know whether such persons also beneficially
own such shares.
-58-
<PAGE>
As of November 5, 1999, the name, address and percentage of ownership
of each institutional investor that owned of record 5% or more of the
outstanding shares of New York Money Fund were as follows: Trulin & Co., Chase
Manhattan Bank NA, Attn: Pooled Funds, P.O. Box 1412, Rochester, NY 14603
(23.05%); HSBC Bank Gen Acct #10, HSBC Bank USA, Collective TR Funds - 17th
Floor, Attn: Christine Mincel, P.O. Box 4203, Buffalo, NY 14240 (11.55%); Fleet
New York, Fleet Investment Services, Attn: Barbara Lumba, 159 East Main St.
NY/RO/T03C, Rochester, NY 14638 (17.40%); Administrative Services (IFG), Chase
Manhattan Bank, Client Service Dept., Attn: Sevan Marinos - 16th Fl., 1 Chase
Manhattan Plaza, New York, NY 10005 (26.80%). The Company does not know whether
such persons also beneficially own such shares.
-59-
<PAGE>
APPENDIX A
Commercial Paper Ratings
------------------------
A Standard & Poor's commercial paper rating is a current opinion of
the creditworthiness of an obligor with respect to financial obligations having
an original maturity of no more than 365 days. The following summarizes the
applicable rating categories used by Standard and Poor's for commercial paper:
"A-1" - Obligations are rated in the highest category indicating that
the obligor's capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.
"A-2" - Obligations are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.
Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually senior debt obligations not having an original
maturity in excess of one year, unless explicitly noted. The following
summarizes the applicable rating categories used by Moody's for commercial
paper:
"Prime-1" - Issuers (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.
"Prime-2" - Issuers (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
The applicable rating categories of Duff & Phelps for investment grade
commercial paper and short-term debt are "D-1"and "D-2". Duff & Phelps employs
three designations, "D-1+," "D-1" and "D-1-," within the highest rating
category. The following summarizes the applicable rating categories used by Duff
& Phelps for commercial paper:
60
<PAGE>
"D-1+" - Debt possesses the 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" - Debt possesses very high certainty of timely payment.
Liquidity factors are excellent and supported by good fundamental protection
factors. Risk factors are minor.
"D-1-" - Debt possesses high certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors. Risk
factors are very small.
"D-2" - Debt possesses good certainty of timely payment. Liquidity
factors and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.
Fitch IBCA short-term ratings apply to debt obligations that have time
horizons of less than 12 months for most obligations, or up to three years for
U.S. public finance securities. The following summarizes the applicable rating
categories used by Fitch IBCA for short-term obligations:
"F1" - Securities possess the highest credit quality. This designation
indicates the best capacity for timely payment of financial commitments and may
have an added "+" to denote any exceptionally strong credit feature.
"F2" - Securities possess good credit quality. This designation
indicates a satisfactory capacity for timely payment of financial commitments,
but the margin of safety is not as great as in the case of the higher ratings.
Thomson Financial BankWatch short-term ratings assess the likelihood
of an untimely payment of principal and interest of debt instruments with
original maturities of one year or less. The following summarizes the applicable
ratings used by Thomson Financial BankWatch:
"TBW-1" - This designation represents Thomson Financial BankWatch's
highest category and indicates a very high likelihood that principal and
interest will be paid on a timely basis.
"TBW-2" - This designation represents Thomson Financial BankWatch's
second-highest category and indicates that while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1."
Corporate and Municipal Long-Term Debt Ratings
----------------------------------------------
A-1
<PAGE>
The following summarizes the applicable ratings used by Standard &
Poor's for corporate and municipal debt:
"AAA" - An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.
"AA" - An obligation rated "AA" differs from the highest rated
obligations only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.
PLUS (+) OR MINUS (-) - The ratings "AA" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
"c" - The 'c' subscript is used to provide additional information to
investors that the bank may terminate its obligation to purchase tendered bonds
if the long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.
"p" - The letter 'p' indicates that the rating is provisional. A
provisional rating assumes the successful completion of the project financed by
the debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk of
default upon failure of such completion. The investor should exercise his own
judgment with respect to such likelihood and risk.
* Continuance of the ratings is contingent upon Standard & Poor's
receipt of an executed copy of the escrow agreement or closing documentation
confirming investments and cash flows.
"r" - The 'r' highlights derivative, hybrid, and certain other
obligations that Standard & Poor's believes may experience high volatility or
high variability in expected returns as a result of noncredit risks. Examples of
such obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and interest-
only and principal-only mortgage securities. The absence of an 'r' symbol should
not be taken as an indication that an obligation will exhibit no volatility or
variability in total return.
N.R. Not rated. Debt obligations of issuers outside the United
States and its territories are rated on the same basis as domestic corporate and
municipal issues. The ratings measure the creditworthiness of the obligor but do
not take into account currency exchange and related uncertainties.
A-2
<PAGE>
The following summarizes the applicable ratings used by Moody's for
corporate and municipal long-term debt:
"Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Aa" - Bonds are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than the "Aaa"
securities.
Note: Moody's applies numerical modifiers 1, 2, and 3 in the generic
rating classification for the "Aa" category. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of its generic rating category.
The following summarizes the applicable long-term debt ratings used by
Duff & Phelps for corporate and municipal long-term debt:
"AAA" - Debt is considered to be of the highest credit quality. The
risk factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.
"AA" - Debt is considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.
To provide more detailed indications of credit quality, the "AA" and
"A" ratings may be modified by the addition of a plus (+) or minus (-) sign to
show relative standing within these major categories.
The following summarizes the applicable ratings used by Fitch IBCA for
corporate and municipal bonds:
"AAA" - Bonds considered to be investment grade and of the highest
credit quality. These ratings denote the lowest expectation of credit risk and
are assigned only in case of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to be adversely affected
by foreseeable events.
"AA" - Bonds considered to be investment grade and of very high credit
quality. These ratings denote a very low expectation of credit risk and indicate
very strong capacity for timely payment of financial commitments. This capacity
is not significantly vulnerable to foreseeable events.
A-3
<PAGE>
To provide more detailed indications of credit quality, the Fitch IBCA
ratings of "AA" may be modified by the addition of a plus (+) or minus (-) sign
to denote relative standing within these major rating categories.
'NR' indicates the Fitch IBCA does not rate the issuer or issue in
question.
'Withdrawn': A rating is withdrawn when Fitch IBCA deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.
RatingAlert: Ratings are placed on RatingAlert to notify investors
that there is a reasonable probability of a rating change and the likely
direction of such change. These are designated as "Positive," indicating a
potential upgrade, "Negative," for a potential downgrade, or "Evolving," if
ratings may be raised, lowered or maintained. RatingAlert is typically resolved
over a relatively short period.
Thomson Financial BankWatch assesses the likelihood of an untimely
repayment of principal or interest over the term to maturity of long term debt
and preferred stock which are issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the rating categories used by Thomson BankWatch for long-term debt
ratings:
"AAA" - This designation indicates that the ability to repay principal
and interest on a timely basis is extremely high.
"AA" - This designation indicates a very strong ability to repay
principal and interest on a timely basis, with limited incremental risk compared
to issues rated in the highest category.
PLUS (+) OR MINUS (-) - The above ratings may include a plus or minus
sign designation which indicates where within the respective category the issue
is placed.
Municipal Note Ratings
----------------------
A Standard and Poor's note rating reflects the liquidity factors and
market access risks unique to notes due in three years or less. The following
summarizes the applicable ratings used by Standard & Poor's for municipal
notes:
"SP-1" - The issuers of these municipal notes exhibit a strong
capacity to pay principal and interest. Those issues determined to possess a
very strong capacity to pay debt service are given a plus (+) designation.
"SP-2" - The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest, with some vulnerability to adverse
financial and economic changes over the term of the notes.
A-4
<PAGE>
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and long-term
risk. The following summarizes the ratings by Moody's Investors Service, Inc.
for short-term notes:
"MIG-1"/"VMIG-1" - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.
"MIG-2"/"VMIG-2" - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
Fitch IBCA and Duff & Phelps use the short-term ratings described
under Commercial Paper Ratings for municipal notes.
A-5
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS, INC.
PART C
OTHER INFORMATION
Item 23.
(a) (1) Certificate of Trust dated October 21, 1998 is
incorporated by reference to Exhibit (a) (1) of Post-
Effective Amendment No. 61 to Registrant's Registration
Statement.
(2) Registrant's Agreement and Declaration of Trust dated
October 21, 1998 is incorporated by reference to
Exhibit (a) (2) of Post-Effective Amendment No. 61 to
Registrant's Registration Statement.
(b) Registrant's By-Laws dated October 22, 1998 is
incorporated by reference to Exhibit (b) of Post-
Effective Amendment No. 61 to Registrant's Registration
Statement.
(c) See Article II, Section 2.6, Section 2.7, Section 2.8,
Section 2.9, Section 2.10, Section 2.11 and Section
2.12; Article III, Section 3.7; Article VI; Article
VII; Article VIII, Section 8.5 and Article IX of the
Registrant's Declaration of Trust dated October 21,
1998 is incorporated by reference to Exhibit (a) (2) of
Post-Effective Amendment No. 61 to Registrant's
Registration Statement, and Article IV, Article V and
Article VI of the Registrant's By-Laws dated October
22, 1998 is incorporated by reference to Exhibit (b) of
Post-Effective Amendment No. 61 to Registrant's
Registration Statement.
(d) Investment Advisory Agreement between Registrant and
BlackRock Institutional Management Corporation ("BIMC")
dated February 10, 1999.
(e) (1) Distribution Agreement between Registrant and
Provident Distributors, Inc. ("PDI") dated February 10,
1999.
<PAGE>
(2) Distribution Agreement between Registrant and PDI dated
June 25, 1999.
(f) None.
(g) (1) Custodian Services Agreement between Registrant and PNC
Bank N.A. dated February 10, 1999.
(2) Custodian Services Agreement between Registrant and
PFPC Trust Company dated February 11, 1999.
(h) (1) Administration Agreement between Registrant, BMIC and
PFPC Inc., dated February 10, 1999.
(2) Transfer Agency Agreement between Registrant and PFPC
Inc. dated February 10, 1999.
(3) Form of Share Purchase Agreements is incorporated by
reference to Exhibit (h) (3) of Post-Effective
Amendment No. 61 of Registrant's Registration
Statement.
(i) None.
(j) (1) Consent of Counsel.
(2) Consent of PricewaterhouseCoopers LLP.
(3) Consent of Willkie Farr & Gallagher.
(k) None.
(l) None.
(m) (1) Registrant's Amended Distribution Plan with respect to
Plus Shares and Form of Distribution Agreement is
incorporated by reference to Exhibit (m) (1) of Post-
Effective Amendment No. 61 of Registrant's Registration
Statement.
(2) Registrant's Shareholder Services Plan with respect to
Dollar Shares is incorporated by reference to Exhibit
(m) (2) of Post-Effective Amendment No. 61 to
Registrant's Registration Statement.
<PAGE>
(3) Registrant's Shareholder Service Plan with respect to
Administration Shares is incorporated by reference to
Exhibit (m) (3) of Post-Effective Amendment No. 61 of
Registrant's Registration Statement.
(4) Registrant's Shareholder Service Plan with respect to
Cash Reserve Shares is incorporated by reference to
Exhibit (m) (4) of Post-Effective Amendment No. 61 of
Registrant's Registration Statement.
(5) Registrant's Shareholder Service Plan with Respect to
Cash Management Shares is incorporated by reference to
Exhibit (m) (5) of Post-Effective Amendment No. 61 of
Registrant's Registration Statement.
(6) Form of Shareholder Services Agreement is incorporated
by reference to Exhibit (m) (6) of Post-Effective
Amendment No. 62 of Registrant's Registration
Statement.
(n) Financial Data Schedules.
(o) Amended Rule 18f-3 Plan for Multi-Class System dated
February 11, 1999 is incorporated by reference to
Exhibit (o) of Post-Effective Amendment No. 62 of
Registrant's Registration Statement.
Item 24. Persons Controlled by or under Common Control with Registrant
Registrant is controlled by its Board of Trustees.
Item 25. Indemnification
Indemnification of Registrant's Co-Administrators, Principal
Underwriter, Custodian and Transfer Agent against certain stated
liabilities is provided for in Section 11 of the Co-Administration
Agreement, Section 5 of the Distribution Agreement, a form of which is
incorporated by reference to Exhibit (e) of Post-Effective Amendment
No. 61 to Registrant's Registration Statement, Section 12 of the
Custodian Services Agreement, a form of which is included herewith,
and Section 12 of the Transfer Agency Agreement.
Registrant has obtained from a major insurance carrier a directors'
and officers' liability policy covering certain types of errors and
omissions.
Article VIII of Registrant's Agreement and Declaration of Trust, which
is incorporated by reference to Exhibit (a) (2) of Post-Effective
Amendment No. 61
<PAGE>
to Registrant's Registration Statement, provides for the
indemnification of Registrant's trustees and officers.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling
persons of Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the opinion of the 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).
Item 27. Principal Underwriter
(a) PDI currently acts as principal underwriter for, in addition to
the Registrant, the following investment companies:
<PAGE>
International Dollar Reserve Fund I, Ltd.
Provident Institutional Funds Trust
Columbia Common Stock Fund, Inc.
Columbia Growth Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Daily Income Company
Columbia U.S. Government Securities Fund, Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Municipal Bond Fund, Inc.
Columbia High Yield Fund, Inc.
Columbia National Municipal Bond Fund, Inc.
GAMNA Series Funds, Inc.
WT Investment Trust
Kalmar Pooled Investment Trust
The RBB Fund, Inc.
Robertson Stephens Investment Trust
HT Insight Funds Trust
Hilliard-Lyons Government Fund, Inc.
Hilliard-Lyons Growth Fund, Inc.
Hilliard-Lyons Research Trust
The BlackRock Funds, Inc. (Distributed by BlackRock Distributors,
Inc. a wholly owned subsidiary of Provident Distributors, Inc.)
Northern Funds Trust (Distributed by Northern Funds Distributors,
LLC a wholly owned subsidiary of Provident Distributors, Inc.)
The OffitBank Investment Fund, Inc. (Distributed by Offit Funds
Distributor, Inc. a wholly owned subsidiary of Provident
Distributors, Inc.)
The OffitBank Variable Insurance Fund, Inc. (Distributed by Offit
Funds Distributor, Inc. a wholly owned subsidiary of Provident
Distributors, Inc.)
(b) The information required by this Item 27 with respect to each
director, officer or partner of PDI is incorporated by reference to
<PAGE>
Schedule A of Form BD filed by PDI with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 (SEC File
No. 8-46564).
(c) The following represents all commissions and other compensation
received by each principal underwriter who is not an affiliated person
of the registrant:
<TABLE>
<CAPTION>
Name of Net underwriting Compensation on
Principal Discounts and Redemption and Brokerage Other
Underwriter Commissions Repurchase Commissions Compensation
----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Provident
Distributors, Inc. $0 $0 $0 $0
</TABLE>
Item 28. Location of Accounts and Records
(1) PNC Bank, National Association, 200 Stevens Drive, Lester,
Pennsylvania 19113 (records relating to its function as sub-
custodian for PFPC Trust Company, the registrant's
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, One Logan Square, 18th & Cherry
Streets, Philadelphia, PA 19103-6996 (Registrant's Charter,
By-Laws, and Minutes Books).
<PAGE>
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Provident Institutional Funds certifies that it
meets all the requirements for effectiveness of this Post Effective Amendment
No. 63 to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Philadelphia, and State of
Pennsylvania, on November 30, 1999.
PROVIDENT INSTITUTIONAL FUNDS
/s/ Rodney D. Johnson
---------------------
Rodney D. Johnson
President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 63 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 Trustee November 30, 1999
----------------------------
G. Nicholas Beckwith, III
*Jerrold B. Harris Trustee November 30, 1999
----------------------------
Jerrold B. Harris
*Joseph P. Platt Trustee November 30, 1999
----------------------------
Joseph P. Platt
*Robert C. Robb, Jr. Trustee November 30, 1999
----------------------------
Robert C. Robb, Jr.
*Kenneth L. Urish Trustee November 30, 1999
----------------------------
Kenneth L. Urish
*Frederick W. Winter Trustee November 30, 1999
----------------------------
Frederick W. Winter
/s/ Rodney D. Johnson Chairman of the Board of November 30, 1999
----------------------------
</TABLE>
<PAGE>
Rodney D. Johnson Trustees, President and
Treasurer (Chief Executive Officer
and Principal Financial and
Accounting Officer)
*By: /s/ W. Bruce McConnel, III
--------------------------
W. Bruce McConnel, III
Attorney-in-Fact
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
Power of Attorney
I hereby appoint W. Bruce McConnel, III and Rodney D. Johnson attorney
for me, with full power of substitution, and in my name and on my behalf as a
trustee to sign any Registration Statement or Amendment thereto of PROVIDENT
INSTITUTIONAL FUNDS (Registration No. 2-47015) to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, and generally to do
and perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 21, 1999.
/s/ G. Nicholas Beckwith, III
--------------------------------------
G. Nicholas Beckwith, III
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
Power of Attorney
I hereby appoint W. Bruce McConnel, III and Rodney D. Johnson attorney
for me, with full power of substitution, and in my name and on my behalf as a
trustee to sign any Registration Statement or Amendment thereto of PROVIDENT
INSTITUTIONAL FUNDS. (Registration No. 2-47015) to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, and generally to do
and perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 21, 1999.
/s/ Joseph P. Platt, Jr.
---------------------------------------
Joseph P. Platt, Jr.
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
Power of Attorney
I hereby appoint W. Bruce McConnel, III and Rodney D. Johnson attorney
for me, with full power of substitution, and in my name and on my behalf as a
trustee to sign any Registration Statement or Amendment thereto of PROVIDENT
INSTITUTIONAL FUNDS (Registration No. 2-47015) to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, and generally to do
and perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 21, 1999.
/s/ Jerrold B. Harris
-----------------------------------
Jerrold B. Harris
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
Power of Attorney
I hereby appoint W. Bruce McConnel, III and Rodney D. Johnson attorney
for me, with full power of substitution, and in my name and on my behalf as a
trustee to sign any Registration Statement or Amendment thereto of PROVIDENT
INSTITUTIONAL FUNDS (Registration No. 2-47015) to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, and generally to do
and perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 21, 1999.
/s/ Robert C. Robb, Jr.
---------------------------------------
Robert C. Robb, Jr.
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
Power of Attorney
I hereby appoint W. Bruce McConnel, III and Rodney D. Johnson attorney
for me, with full power of substitution, and in my name and on my behalf as a
trustee to sign any Registration Statement or Amendment thereto of PROVIDENT
INSTITUTIONAL FUNDS (Registration No. 2-47015) to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, and generally to do
and perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 21, 1999.
/s/ Kenneth L. Urish
----------------------------------------
Kenneth L. Urish
<PAGE>
PROVIDENT INSTITUTIONAL FUNDS
Power of Attorney
I hereby appoint W. Bruce McConnel, III and Rodney D. Johnson attorney
for me, with full power of substitution, and in my name and on my behalf as a
trustee to sign any Registration Statement or Amendment thereto of PROVIDENT
INSTITUTIONAL FUNDS (Registration No. 2-47015) to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, and generally to do
and perform all things necessary to be done in that connection.
I have signed this Power of Attorney on January 20, 1999.
/s/ Frederick W. Winter
----------------------------------------
Frederick W. Winter
<PAGE>
EXHIBIT INDEX
-------------
(d) Investment Advisory Agreement between Registrant and BlackRock
Institutional Management Corporation ("BIMC") dated February
10, 1999.
(e) (1) Distribution Agreement between Registrant and Provident
Distributors, Inc. ("PDI") dated February 10, 1999.
(2) Distribution Agreement between Registrant and PDI dated June
25, 1999.
(g) (1) Custodian Services Agreement between Registrant and PNC Bank
N.A. dated February 10, 1999.
(2) Custodian Services Agreement between Registrant and PFPC Trust
Company dated February 11, 1999.
(h) (1) Administration Agreement between Registrant, BMIC and PFPC
Inc., dated February 10, 1999.
(2) Transfer Agency Agreement between Registrant and PFPC Inc.
dated February 10, 1999.
(j) (1) Consent of Counsel.
(2) Consent of PricewaterhouseCoopers LLP.
(3) Consent of Willkie Farr & Gallagher.
(n) Financial Data Schedules.
<PAGE>
Exhibit (d)
ADVISORY AGREEMENT
AGREEMENT made as of February 10, 1999 between PROVIDENT INSTITUTIONAL
FUNDS, a Delaware business trust (the "Trust"), and BLACKROCK INSTITUTIONAL
MANAGEMENT CORPORATION, a Delaware corporation (the "Investment Adviser"),
registered as an investment adviser under the Investment Advisers Act of 1940.
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and presently
offers shares representing interests in ten separate investment portfolios; and
WHEREAS, the Trust desires to retain the Investment Adviser to render
investment advisory services to the Trust, and the Investment Adviser is willing
to so render such services;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the premises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment.
-----------
(a) The Trust hereby appoints the Investment Adviser to act as
investment adviser to the following portfolios of the Trust: TempFund, TempCash,
FedFund, T-Fund, Federal Trust Fund, Treasury Trust Fund, MuniFund, MuniCash,
California Money Fund and New York Money Fund (each a "Portfolio," and
collectively, the "Portfolios") for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
(b) In the event that the Trust establishes one or more portfolios
other than the Portfolios with respect to which it desires to retain the
Investment Adviser to act as investment adviser hereunder, the Trust shall
notify the Investment Adviser in writing. If the Investment Adviser is willing
to render such services it shall notify the Trust in writing whereupon, subject
to such shareholder approval as may be required pursuant to Paragraph 9 hereof,
such portfolio shall become a Portfolio hereunder and the compensation payable
by such new Portfolio to the Investment Adviser will be as agreed in writing at
the time.
<PAGE>
2. Management. Subject to the supervision of the Board of Trustees of the
----------
Trust, the Investment Adviser will provide a continuous investment program for
each of the Portfolios, including investment research and management with
respect to all securities, investments, cash and cash equivalents in the
Portfolios. The Investment Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Trust for each of its Portfolios. The Investment Adviser will provide the
services rendered by it hereunder in accordance with the investment objective
and policies of each of the Portfolios as stated in their respective
Prospectuses. The Investment Adviser further agrees that it:
(a) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission (herein called the "Rules"), and will in
addition conduct its activities under this Agreement in accordance with all
other applicable laws;
(b) will maintain all books and records with respect to the securities
transactions of the Portfolios, keep their respective books of account and will
render to the Trust's Board of Trustees such periodic and special reports as the
Board may request; and
(c) will treat confidentiality and as proprietary information of the
Trust all records and other information relative to the Trust and prior, present
or potential shareholders, and will not use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Trust which
approval shall not be unreasonably withheld and may not be withheld where the
Investment Adviser may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
3. Services Not Exclusive. The investment management services rendered by
----------------------
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to render similar services to others so long as
its services under this Agreement are not impaired thereby.
4. Sub-Adviser. It is understood that the Investment Adviser may, if it
-----------
deems it desirable, from time to time employ such person or persons as the
Investment Adviser believes to be capable of assisting in the performance of its
obligations under this Agreement (each a "Sub-Adviser") and to terminate the
services of any such person; provided, however, that the compensation of such
person or persons shall be paid by the Investment Adviser and that the
Investment Adviser shall be as fully responsible to the Trust for the acts and
omissions of any
-2-
<PAGE>
such person as it is for its own acts and omissions; and provided further, that
the retention of any Sub-Adviser shall be approved by the trustees and
shareholders to the extent required by the 1940 Act.
5. Books and Records. In compliance with the requirements of Rule 31a-3
-----------------
of the Rules, the Investment Adviser hereby agrees that all records which it
maintains for each Portfolio are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Investment Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 the records required to be maintained by Rule 31a-1 of the Rules.
6. Expenses. During the term of this Agreement, the Investment Adviser
--------
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of (including brokerage commissions, if any)
securities purchased for the Portfolios.
In addition, if the expenses borne by any Portfolio in any fiscal year
exceed the applicable expense limitations imposed by the securities regulations
of any state in which the Shares are registered or qualified for sale to the
public, the Investment Adviser shall reimburse such Portfolio for one-half of
any excess up to the amount of the fees payable by the particular Portfolio to
it during such fiscal year pursuant to Paragraph 7 hereof; provided, however,
-------- -------
that notwithstanding the foregoing, the Investment Adviser shall reimburse such
Portfolio for one-half of such excess expenses regardless of the amount of such
fees payable to it during such fiscal year to the extent that the securities
regulations of any state in which the Shares are registered or qualified for
sale so require.
7. Compensation. For the services provided and the expenses assumed
------------
pursuant to this Agreement, the Trust, on behalf of each Portfolio, will pay the
Investment Adviser and the Investment Adviser will accept as full compensation
therefor a fee, computed daily and payable monthly, as described in the fee
schedule attached as Appendix A. The fee attributable to each Portfolio shall be
the several (and not joint or joint and several) obligation of each such
Portfolio.
8. Limitation of Liability of the Investment Adviser. The Investment
-------------------------------------------------
Adviser shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Trust in connection with the matters to which this
Agreement relates, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Investment
Adviser in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
-3-
<PAGE>
9. Duration and Termination. This Agreement shall become effective with
------------------------
respect to a Portfolio upon approval of this Agreement by vote of a majority of
the outstanding voting securities of such Portfolio and, unless sooner
terminated as provided herein, shall continue with respect to such Portfolio
until March 31, 2000. Thereafter, if not terminated, this Agreement shall
continue with respect to a Portfolio for successive annual periods ending on
March 31, provided such continuance is specifically approved at least annually
--------
(a) by the vote of a majority of those members of the Board of Trustees of the
Trust who are not parties to this Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Board of Trustees of the Trust or by vote of a majority
of the outstanding voting securities of such Portfolio; provided, however, that
-------- -------
this Agreement may be terminated with respect to a Portfolio by the Trust at any
time, without the payment of any penalty, by the Board of Trustees of the Trust
or by vote of a majority of the outstanding voting securities of such Portfolio,
on 60 days' written notice to the Investment Adviser, or by the Investment
Adviser at any time, without payment of any penalty, on 90 days' written notice
to the Trust. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meaning as such terms have in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement may be
---------------------------
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought, and no amendment of this Agreement affecting a Portfolio
shall be effective until approved by vote of the holders of a majority of the
outstanding voting securities of such Portfolio.
11. Miscellaneous. The captions in this Agreement are included for
-------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
12. Limitation of Liability. Reference is hereby made to the Declaration
-----------------------
of Trust which contains certain provisions limiting the liability of the Board
of Trustees, shareholders, officers, employees and agents of the Trust. The
obligations of the Trust created hereunder are not personally binding upon, nor
shall resort be had to the property of, any of the Board of Trustees,
shareholders, officers, employees or agents of the
-4-
<PAGE>
Trust. In addition, only the Trust property included in the Portfolio which
incurs any liability shall be used to pay such liability.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT INSTITUTIONAL FUNDS
Attest:
/s/ Rodney D. Johnson
------------------------------ ------------------------------
By: By:
Title: Title:
BLACKROCK INSTITUTIONAL
MANAGEMENT CORPORATION
Attest:
/s/ Illegible
------------------------------ ------------------------------
By: By:
Title: Title:
-5-
<PAGE>
APPENDIX A
FEE SCHEDULE
TempFund.
--------
For the services provided and the expenses assumed pursuant to this
Advisory Agreement with respect to TempFund, the Trust will pay the Investment
Adviser from the assets of TempFund and the Investment Adviser will accept as
full compensation therefor a fee, computed daily and payable monthly at the
following annual rate: .175% of the first $1 billion of TempFund's average net
assets, plus .15% of its next $1 billion of its average net assets, plus .125%
of its next $1 billion of its average net assets, plus .1% of its next $1
billion of average net assets, plus .095% of its next $1 billion of average its
average net assets, plus .09% of the next $1 billion of its average net assets,
plus .08% of its next $1 billion of its average net assets, plus .075% of the
next $1 billion of its average net assets, plus .07% of its average net assets
over $8 billion. The fee will be reduced by one-half of the amount necessary to
ensure that the ordinary operating expenses (excluding interest, taxes,
brokerage, payments to Service Organizations pursuant to Servicing Agreements
and extraordinary expenses) of TempFund do not exceed .45% of TempFund's average
net assets for any fiscal year.
TempCash and MuniCash.
---------------------
For the services provided and the expenses assumed pursuant to this
Advisory Agreement with respect to TempCash and MuniCash, the Trust will pay the
Investment Adviser from the assets belonging to either TempCash or MuniCash, as
applicable, and the Investment Adviser will accept as full compensation therefor
a fee, computed daily and payable monthly, at the following rate: .175% of the
first $1 billion of such Portfolio's average net assets, plus .15% of its next
$1 billion of average net assets, plus .125% of its next $1 billion of average
net assets, plus .1% of its next $1 billion of average net assets, plus .095% of
its next $1 billion of average net assets, plus .09% of its next $1 billion of
average net assets, plus .085% of its next $1 billion of average net assets,
plus .08% of its average net assets over $7 billion.
FedFund, T-Fund, Federal Trust Fund and Treasury Trust Fund.
-----------------------------------------------------------
For the services provided and the expenses assumed pursuant to the
Advisory Agreement with respect to FedFund, T-Fund, Federal Trust Fund and
Treasury Trust Fund, the Trust will pay the Investment Adviser from the assets
belonging to FedFund, T-Fund, Federal Trust Fund and Treasury Trust Fund (in
proportion to each such Portfolio's average net assets) and the Investment
Adviser will accept as full compensation therefor a fee, computed
-6-
<PAGE>
daily and payable monthly, at the following annual rate: .175% of the first $1
billion of the combined average net assets of FedFund, T-Fund, Federal Trust
Fund and Treasury Trust Fund; plus .150% of its next $1 billion of their
combined average net assets, plus .125% of its next $1 billion of their combined
average net assets, plus .100% of the next $1 billion of their combined average
net assets, plus .095% of the next $1 billion of their combined average net
assets, plus .090% of the next $1 billion of their combined average net assets,
plus .085% of the next $1 billion of their combined average net assets, plus
.080% of their combined average net assets over $7 billion. The fee will be
reduced by one- half of the amount necessary to ensure that the ordinary
operating expenses (excluding interest, taxes, brokerage, payments to Service
Organizations pursuant to Servicing Agreements and extraordinary expenses) of
FedFund, T-Fund, Federal Trust Fund and Treasury Trust Fund do not exceed .45%
of each such Portfolio's average net assets for any fiscal year.
Muni Fund.
---------
For the services provided and the expenses assumed pursuant to this
Advisory Agreement with respect to MuniFund, the Trust will pay the Investment
Adviser from the assets belonging to MuniFund and the Investment Adviser will
accept as full compensation therefor a fee, computed daily and payable monthly,
at the following annual rate: .175% of the first $1 billion of MuniFund's
average net assets, plus .15% of its next $1 billion of average net assets, plus
.125% of its next $1 billion of average net assets, plus .1% of its next $1
billion of average net assets, plus .095% of its next $1 billion of average net
assets, plus .09% of its next $1 billion of average net assets, plus .085% of
its next $1 billion of average net assets, plus .08% of its average net assets
over $7 billion. The fee will be reduced by one-half of the amount necessary to
ensure that the ordinary operating expenses (excluding interest, taxes,
brokerage, payments to Service Organizations pursuant to Servicing Agreements
and extraordinary expenses) of MuniFund do not exceed .45% of MuniFund's average
net assets for any fiscal year.
California Money Fund and New York Money Fund.
---------------------------------------------
For the services provided and the expenses assumed pursuant to this
Advisory Agreement, California Money Fund and New York Money Fund, as
applicable, will pay the Investment Adviser and the Investment Adviser will
accept as full compensation therefor a fee, computed daily and payable monthly,
at an annual rate of .20% of such Portfolio's average net assets.
-7-
<PAGE>
Exhibit (e) (1)
PROVIDENT INSTITUTIONAL FUNDS
Distribution Agreement
----------------------
Agreement dated February 10, 1999 between PROVIDENT INSTITUTIONAL
FUNDS, a Delaware business trust, (the "Company"), and PROVIDENT DISTRIBUTORS,
INC., a Delaware corporation (the "Distributor").
WHEREAS, the Company is an open-end, diversified management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Distributor as its
distributor to provide for the sale and distribution of each class and series of
shares ("shares") in each of the Company's investment portfolios (individually,
a "Fund," collectively, the "Funds") as listed on Appendix A (as such Appendix
may, from time to time, be supplemented (or amended)), and the Distributor is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth and intending to be legally bound, the parties hereto agree as
follows:
1. Appointment of Distributor. The Company hereby appoints the
--------------------------
Distributor as distributor of each class and series of shares in each of the
Company's Funds on the terms and for the period set forth in this Agreement. The
Distributor hereby accepts such appointment and agrees to render the services
and duties set forth in Section 2 below. In the event that the Company
establishes additional classes or investment portfolios other than the Funds
listed on Appendix A with respect to which it desires to retain the Distributor
to act as distributor hereunder, the Company shall notify the Distributor,
whereupon such Appendix A shall be supplemented (or amended) and such portfolio
shall become a Fund hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Funds (except to the extent that said
provisions may be modified in writing by the Company and Distributor at the
time).
2. Services and Duties. The Distributor enters into the following
-------------------
covenants with respect to its services and duties:
a. The Distributor agrees to sell, as agent, from time to time
during the term of this Agreement, shares upon the terms and at the current
offering price as described in the Prospectuses. The Distributor will act only
in its own behalf as principal in making agreements with selected dealers. No
brokerdealer or other person which enters into a selling or servicing agreement
with the Distributor shall be authorized to act as agent for the Company or its
Funds in connection with the
<PAGE>
offering or sale of shares to the public or otherwise. The Distributor shall use
its best efforts to sell shares of each class or series of each of the Funds but
shall not be obligated to sell any certain number of shares.
b. The Distributor shall prepare or review, provide advice with
respect to, and file with the federal and state agencies or other organization
as required by federal, state, or other applicable laws and regulations, all
sales literature (advertisements, brochures and shareholder communications) for
each of the Funds and any class or series thereof.
c. In performing all of its services and duties as Distributor, the
Distributor will act in conformity with the Declaration of Trust, By-Laws,
Prospectuses and resolutions and other instructions of the Company's Board of
Trustees and will comply with the requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, the 1940 Act and
all other applicable federal or state law.
d. The Distributor will bear the cost of (i) printing and distributing
any Prospectus (including any supplement thereto) to persons who are not
shareholders, and (ii) preparing, printing and distributing any literature,
advertisement or material which is primarily intended to result in the sale of
shares; provided, however, that the Distributor shall not be obligated to bear
-------- -------
the expenses incurred by the Company in connection with the preparation and
printing of any amendment to any Registration Statement or Prospectus necessary
for the continued effective registration of the shares under the 1933 Act and
state securities laws and the distribution of any such document to existing
shareholders of the Company's Funds.
e. The Company shall have the right to suspend the sale of shares at
any time in response to conditions in the securities markets or otherwise, and
to suspend the redemption of shares of any Fund at any time permitted by the
1940 Act or the rules and regulations of the Commission ("Rules").
f. The Company reserves the right to reject any order for shares but
will not do so arbitrarily, or without reasonable cause.
3. Limitations of Liability. The Distributor shall not be liable for
------------------------
any error of judgment or mistake of law or for any loss suffered by the Company
in connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
-2-
<PAGE>
4. Proprietary and Confidential Information. The Distributor agrees on
----------------------------------------
behalf of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and its Funds and prior, present or potential shareholders, and not to
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Distributor may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Company.
5. Indemnification.
---------------
a. The Company represents and warrants to the Distributor that the
Registration Statement contains, and that the Prospectuses at all times will
contain, all statements required by the 1933 Act and the Rules of the
Commission, will in all material respects conform to the applicable requirements
of the 1933 Act and the Rules and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
in this Section 5 shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Distributor or either of the Company's co-administrators expressly
for use in the Registration Statement or Prospectuses.
b. The Company on behalf of each Fund agrees that each Fund will
indemnify, defend and hold harmless the Distributor, its several officers, and
directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, from and against any losses, claims, damages or
liabilities, joint or several, to which the Distributor, its several officers,
and directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses or in any application or other document
executed by or on behalf of the Company with respect to such Fund or are based
upon information furnished by or on behalf of the Company with respect to such
Fund filed in any state in order to qualify the shares under the securities or
blue sky laws thereof ("Blue Sky application") or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will
-3-
<PAGE>
reimburse the Distributor, its several officers, and directors, and any person
who controls the Distributor within the meaning of Section 15 of the 1933 Act,
for any legal or other expenses reasonably incurred by the Distributor, its
several officers, and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
-------- -------
that the Company shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectus or any Blue Sky application with respect
to such Fund in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Distributor or either of the
Company's coadministrators specifically for inclusion therein or arising out of
the failure of the Distributor to deliver a current Prospectus.
c. The Company on behalf of each Fund shall not indemnify any person
pursuant to this Section 5 unless the court or other body before which the
proceeding was brought has rendered a final decision on the merits that such
person was not liable by reason of his or her willful misfeasance, bad faith or
gross negligence in the performance of his or her duties, or his or her reckless
disregard of any obligations and duties, under this Agreement ("disabling
conduct") or, in the absence of such a decision, a reasonable determination
(based upon a review of the facts) that such person was not liable by reason of
disabling conduct has been made by the vote of a majority of a quorum of the
trustees of the Company who are neither "interested parties" (as defined in the
1940 Act) nor parties to the proceeding, or by independent legal counsel in a
written opinion.
d. The Distributor will indemnify and hold harmless the Company and
each of its Funds and its several officers and trustees, and any person who
controls the Company within the meaning of Section 15 of the 1933 Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or any Blue Sky application, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company or any of its several officers
and trustees by or on behalf of the Distributor or either of the Company's co-
administrators specifically for inclusion therein, and will reimburse the
-4-
<PAGE>
Company and its several officers, trustees and such controlling persons for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
e. The obligations of each Fund under this Section 5 shall be the
several (and not the joint or joint and several) obligation of each Fund.
6. Duration and Termination. This Agreement shall become effective
------------------------
upon its execution as of the date first written above and, unless sooner
terminated as provided herein, shall continue until March 31, 2000. Thereafter,
if not terminated, this Agreement shall continue automatically for successive
terms of one year, provided that such continuance is specifically approved at
least annually (a) by a vote of a majority of those members of the Company's
Board of Trustees who are not parties to this Agreement or "interested persons"
of any such party, cast in person at a meeting called for the purpose of voting
on such approval, and (b) by the Company's Board of Trustees or by vote of a
"majority of the outstanding voting securities" of the Company; provided,
--------
however, that this Agreement may be terminated by the Company at any time,
without the payment of any penalty, by vote of a majority of the entire Board of
Trustees or by a vote of a "majority of the outstanding voting securities" of
the Company on 60- days' written notice to the Distributor, or by the
Distributor at any time, without the payment of any penalty, on 90-days' written
notice to the Company. This Agreement will automatically and immediately
terminate in the event of its "assignment." (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
7. Amendment of this Agreement. No provision of this Agreement may be
---------------------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the patty against which an enforcement of the change, waiver,
discharge or termination is sought.
8. Notices. Notices of any kind to be given to the Company hereunder
-------
by the Distributor shall be in writing and shall be duly given if mailed or
delivered to the Company at Bellevue Park Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809, Attention: Rodney D. Johnson, President,
with a copy to Philadelphia National Bank Building, 1345 Chestnut Street,
Philadelphia, Pennsylvania 19107-3496, Attention: W. Bruce McConnel, III,
Secretary, or at such other address or to such individual as shall be so
specified by the Company to the Distributor. Notices of any kind to be given to
the Distributor hereunder by the Company shall be in writing and shall be duly
given if mailed or delivered to Provident Distributors, Inc., Four Falls
Corporate Center, 6th Floor, West Conshohocken, PA
-5-
<PAGE>
19428, Attention: Monroe J. Haegele or at such other address or to such other
individual as shall be so specified by the Distributor to the Company.
9. Miscellaneous. The captions in this Agreement are included for
-------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
10. Counterparts. This Agreement may be executed in counterparts, all
------------
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT INSTITUTIONAL FUNDS
/s/ Rodney D. Johnson
-----------------------------
By: Rodney D. Johnson
Title: President
PROVIDENT DISTRIBUTORS, INC.
/s/ Philip H. Rinnander
-----------------------------
By: Philip H. Rinnander
Title: Secretary
-6-
<PAGE>
APPENDIX A
to the
DISTRIBUTION AGREEMENT
between
Provident Institutional Funds
and
Provident Distributors, Inc.
--------------------------------------------------------------------------------
TempFund
TempCash
FedFund
T-Fund
Federal Trust Fund
Treasury Trust Fund
MuniFund
MuniCash
California Money Fund
New York Money Fund
-7-
<PAGE>
Exhibit (e)(2)
PROVIDENT INSTITUTIONAL FUNDS
Distribution Agreement
----------------------
Agreement dated June 25, 1999 between PROVIDENT INSTITUTIONAL FUNDS, a
Delaware business trust, (the "Company"), and PROVIDENT DISTRIBUTORS, INC., a
Delaware corporation (the "Distributor").
WHEREAS, the Company is an open-end, diversified management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Distributor as its
distributor to provide for the sale and distribution of each class and series of
shares ("shares") in each of the Company's investment portfolios (individually,
a "Fund," collectively, the "Funds") as listed on Appendix A (as such Appendix
may, from time to time, be supplemented (or amended)), and the Distributor is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth and intending to be legally bound, the parties hereto agree as
follows:
1. Appointment of Distributor. The Company hereby appoints the
--------------------------
Distributor as distributor of each class and series of shares in each of the
Company's Funds on the terms and for the period set forth in this Agreement. The
Distributor hereby accepts such appointment and agrees to render the services
and duties set forth in Section 2 below. In the event that the Company
establishes additional classes or investment portfolios other than the Funds
listed on Appendix A with respect to which it desires to retain the Distributor
to act as distributor hereunder, the Company shall notify the Distributor,
whereupon such Appendix A shall be supplemented (or amended) and such portfolio
shall become a Fund hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Funds (except to the extent that said
provisions may be modified in writing by the Company and Distributor at the
time).
2. Services and Duties. The Distributor enters into the following
-------------------
covenants with respect to its services and duties:
a. The Distributor agrees to sell, as agent, from time to time during
the term of this Agreement, shares upon the terms and at the current offering
price as described in the Prospectuses. The Distributor will act only in its own
behalf as principal in making agreements with selected dealers. No brokerdealer
or other person which enters into a selling or servicing agreement with the
Distributor shall be authorized to act as agent for the Company or its Funds in
connection with the
<PAGE>
offering or sale of shares to the public or otherwise. The Distributor shall use
its best efforts to sell shares of each class or series of each of the Funds but
shall not be obligated to sell any certain number of shares.
b. The Distributor shall prepare or review, provide advice with
respect to, and file with the federal and state agencies or other organization
as required by federal, state, or other applicable laws and regulations, all
sales literature (advertisements, brochures and shareholder communications) for
each of the Funds and any class or series thereof.
c. In performing all of its services and duties as Distributor, the
Distributor will act in conformity with the Declaration of Trust, By-Laws,
Prospectuses and resolutions and other instructions of the Company's Board of
Trustees and will comply with the requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, the 1940 Act and
all other applicable federal or state law.
d. The Distributor will bear the cost of (i) printing and distributing
any Prospectus (including any supplement thereto) to persons who are not
shareholders, and (ii) preparing, printing and distributing any literature,
advertisement or material which is primarily intended to result in the sale of
shares; provided, however, that the Distributor shall not be obligated to bear
-------- -------
the expenses incurred by the Company in connection with the preparation and
printing of any amendment to any Registration Statement or Prospectus necessary
for the continued effective registration of the shares under the 1933 Act and
state securities laws and the distribution of any such document to existing
shareholders of the Company's Funds.
e. The Company shall have the right to suspend the sale of shares at
any time in response to conditions in the securities markets or otherwise, and
to suspend the redemption of shares of any Fund at any time permitted by the
1940 Act or the rules and regulations of the Commission ("Rules").
f. The Company reserves the right to reject any order for shares but
will not do so arbitrarily, or without reasonable cause.
3. Limitations of Liability. The Distributor shall not be liable for
------------------------
any error of judgment or mistake of law or for any loss suffered by the Company
in connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
-2-
<PAGE>
4. Proprietary and Confidential Information. The Distributor agrees on
----------------------------------------
behalf of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company and its Funds and prior, present or potential shareholders, and not to
use such records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Distributor may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Company.
5. Indemnification.
---------------
a. The Company represents and warrants to the Distributor that the
Registration Statement contains, and that the Prospectuses at all times will
contain, all statements required by the 1933 Act and the Rules of the
Commission, will in all material respects conform to the applicable requirements
of the 1933 Act and the Rules and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
in this Section 5 shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Distributor or either of the Company's co-administrators expressly
for use in the Registration Statement or Prospectuses.
b. The Company on behalf of each Fund agrees that each Fund will
indemnify, defend and hold harmless the Distributor, its several officers, and
directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, from and against any losses, claims, damages or
liabilities, joint or several, to which the Distributor, its several officers,
and directors, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses or in any application or other document
executed by or on behalf of the Company with respect to such Fund or are based
upon information furnished by or on behalf of the Company with respect to such
Fund filed in any state in order to qualify the shares under the securities or
blue sky laws thereof ("Blue Sky application") or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will
-3-
<PAGE>
reimburse the Distributor, its several officers, and directors, and any person
who controls the Distributor within the meaning of Section 15 of the 1933 Act,
for any legal or other expenses reasonably incurred by the Distributor, its
several officers, and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act, in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
-------- -------
that the Company shall not be liable in any case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, any untrue
statement, alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectus or any Blue Sky application with respect
to such Fund in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Distributor or either of the
Company's coadministrators specifically for inclusion therein or arising out of
the failure of the Distributor to deliver a current Prospectus.
c. The Company on behalf of each Fund shall not indemnify any person
pursuant to this Section 5 unless the court or other body before which the
proceeding was brought has rendered a final decision on the merits that such
person was not liable by reason of his or her willful misfeasance, bad faith or
gross negligence in the performance of his or her duties, or his or her reckless
disregard of any obligations and duties, under this Agreement ("disabling
conduct") or, in the absence of such a decision, a reasonable determination
(based upon a review of the facts) that such person was not liable by reason of
disabling conduct has been made by the vote of a majority of a quorum of the
trustees of the Company who are neither "interested parties" (as defined in the
1940 Act) nor parties to the proceeding, or by independent legal counsel in a
written opinion.
d. The Distributor will indemnify and hold harmless the Company and
each of its Funds and its several officers and trustees, and any person who
controls the Company within the meaning of Section 15 of the 1933 Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or any Blue Sky application, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company or any of its several officers
and trustees by or on behalf of the Distributor or either of the Company's co-
administrators specifically for inclusion therein, and will reimburse the
-4-
<PAGE>
Company and its several officers, trustees and such controlling persons for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
e. The obligations of each Fund under this Section 5 shall be the
several (and not the joint or joint and several) obligation of each Fund.
6. Duration and Termination. This Agreement shall become effective
------------------------
upon its execution as of the date first written above and, unless sooner
terminated as provided herein, shall continue until March 31, 2000. Thereafter,
if not terminated, this Agreement shall continue automatically for successive
terms of one year, provided that such continuance is specifically approved at
least annually (a) by a vote of a majority of those members of the Company's
Board of Trustees who are not parties to this Agreement or "interested persons"
of any such party, cast in person at a meeting called for the purpose of voting
on such approval, and (b) by the Company's Board of Trustees or by vote of a
"majority of the outstanding voting securities" of the Company; provided,
--------
however, that this Agreement may be terminated by the Company at any time,
-------
without the payment of any penalty, by vote of a majority of the entire Board of
Trustees or by a vote of a "majority of the outstanding voting securities" of
the Company on 60- days' written notice to the Distributor, or by the
Distributor at any time, without the payment of any penalty, on 90-days' written
notice to the Company. This Agreement will automatically and immediately
terminate in the event of its "assignment." (As used in this Agreement, the
terms "majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940 Act.)
7. Amendment of this Agreement. No provision of this Agreement may be
---------------------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the patty against which an enforcement of the change, waiver,
discharge or termination is sought.
8. Notices. Notices of any kind to be given to the Company hereunder
-------
by the Distributor shall be in writing and shall be duly given if mailed or
delivered to the Company at Bellevue Park Corporate Center, 400 Bellevue
Parkway, Wilmington, Delaware 19809, Attention: Rodney D. Johnson, President,
with a copy to One Logan Square, 18th and Cherry Streets, Philadelphia
Pennsylvania 19103- 6996, Attention: W. Bruce McConnel, III, Secretary, or at
such other address or to such individual as shall be so specified by the Company
to the Distributor. Notices of any kind to be given to the Distributor hereunder
by the Company shall be in writing and shall be duly given if mailed or
delivered to Provident Distributors, Inc., Four Falls Corporate Center, 6th
Floor, West Conshohocken, PA 19428, Attention:
-5-
<PAGE>
Philip H. Rinnander or at such other address or to such other individual as
shall be so specified by the Distributor to the Company.
9. Miscellaneous. The captions in this Agreement are included for
-------------
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
10. Counterparts. This Agreement may be executed in counterparts, all
------------
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT INSTITUTIONAL FUNDS
/s/ Rodney D. Johnson
-----------------------------
By: Rodney D. Johnson
Title: President
PROVIDENT DISTRIBUTORS, INC.
/s/ Philip H. Rinnander
-----------------------------
By: Philip H. Rinnander
Title: President
-6-
<PAGE>
APPENDIX A
to the
DISTRIBUTION AGREEMENT
between
Provident Institutional Funds
and
Provident Distributors, Inc.
--------------------------------------------------------------------------------
TempFund
TempCash
FedFund
T-Fund
Federal Trust Fund
Treasury Trust Fund
MuniFund
MuniCash
California Money Fund
New York Money Fund
-7-
<PAGE>
Exhibit (g)(1)
CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of February 10, 1999 by and between
PROVIDENT INSTITUTIONAL FUNDS, a Delaware business trust (the "Company"), and
PNC BANK, N.A. a national banking association ("PNC Bank").
W I T N E S S E T H
WHEREAS, the Company is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Company currently offers shares of series representing
interests in ten separate investment portfolios, known as TempFund, TempCash,
FedFund, T- Fund, Federal Trust Fund, Treasury Trust Fund, MuniFund, MuniCash,
California Money Fund and New York Money Fund (each a "Fund"), and classes of
shares in each such Fund; and
WHEREAS, the Company desires to retain PNC Bank to serve as the
Company's custodian and PNC Bank is willing to serve as the Company's custodian;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints PNC Bank to act as
-----------
custodian of the portfolio securities, cash and other
<PAGE>
property belonging to the Company for the period and on the terms set forth in
this Agreement. PNC Bank accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 21 of this Agreement. PNC Bank agrees to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder. The
Company has, and may from time to time continue to issue additional Funds and
classes of such Funds, or classify and reclassify shares of such current or
future Funds or classes. PNC Bank shall identify to each such Fund or class
property belonging to such Fund or class in such reports, confirmations and
notices to the Company called for under this Agreement. In the event that the
Company establishes additional Funds or classes, the Company shall notify PNC
Bank in writing. If PNC Bank is willing to render such services, it shall notify
the Company in writing, whereupon such Funds or classes shall become a Fund or
class hereunder, and the compensation payable by such new Fund or class to PNC
Bank will be agreed in writing at the time, pursuant to Paragraph 21 hereof.
2. Delivery of Documents. The Company has furnished PNC Bank with
---------------------
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing the
appointment of PNC Bank as custodian of the portfolio securities, cash and other
property belonging to the Company and approving this Agreement;
-2-
<PAGE>
(b) Appendix A identifying and containing the signatures of the
Company's President and Treasurer and/or other persons authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined, on behalf
of the Company; and
(c) The Company's most recent prospectuses (prospectus herein is
deemed to include the Statement of Additional Information) relating to Shares
(such prospectuses as presently in effect and all amendments and supplements
thereto are herein called the "Prospectus").
The Company will furnish PNC Bank from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
-----------
(a) "Authorized Person." As used in this Agreement, the term
--------------------
"Authorized Person" means the President and Treasurer of the Company and any
other person, whether or not any such person is an officer or employee of the
Company, duly authorized by the Board of Trustees of the Company to give Oral
and Written Instructions on behalf of the Company and listed on the Certificate
annexed hereto as Appendix A or any amendment thereto as may be received by PNC
Bank from time to time.
(b) "Book-Entry System." As used in this Agreement, the term
--------------------
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system maintained by a clearing
-3-
<PAGE>
agency registered with the SEC under Section 17A of the Securities Exchange Act
of 1934 (the "1934 Act").
(c) "Oral Instructions." As used in this Agreement, the term "Oral
--------------------
Instructions" means oral instructions actually received by PNC Bank from an
Authorized Person or from a person reasonably believed by PNC Bank to be an
Authorized Person. The Company agrees to deliver to PNC Bank, at the time and in
the manner specified in Paragraph 8(b) of this Agreement, Written Instructions
confirming Oral Instructions.
(d) "Property." The term "Property," as used in this Agreement, means:
-----------
(i) any and all securities and other property which the
Company may from time to time deposit, or cause to be deposited, with PNC
Bank or which PNC Bank may from time to time hold for the Company including
securities and Property deposited on behalf of the Company with the Book-
Entry System;
(ii) all income in respect of any of such securities or
other property;
(iii) all proceeds of the sale of any of such securities
or other property; and
(iv) all proceeds of the sale of securities issued by
the Company, which are received by PNC Bank from time to time from or on
behalf of the Company.
(e) "Written Instructions." As used in this Agreement, the term
-----------------------
"Written Instructions" means written instructions delivered by hand, mail,
tested telegram, cable,
-4-
<PAGE>
telex or facsimile sending device, and received by PNC Bank and signed by an
Authorized Person.
4. Delivery and Registration of the Property. The Company will deliver
-----------------------------------------
or cause to be delivered to PNC Bank all securities and all moneys owned by it,
including cash received for the issuance of its Shares, at any time during the
period of this Agreement. PNC Bank will not be responsible for such securities
and such moneys until actually received by it. All securities delivered to PNC
Bank (other than in bearer form) shall be registered in the name of the Company
or in the name of a nominee of the Company or in the name of PNC Bank or in the
name of any nominee of PNC Bank (with or without indication of fiduciary
status), or in the name of any sub-custodian or any nominee of any such sub-
custodian appointed pursuant to Paragraph 6 hereof or shall be properly endorsed
and in form for transfer satisfactory to PNC Bank.
5. Receipt and Disbursement of Money. (a) PNC Bank shall open and
---------------------------------
maintain a separate custodial account or accounts in the name of the Company,
subject only to draft or order by PNC Bank acting pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Company. PNC Bank
shall make payments of cash to, or for the account of, the Company from such
cash only (i) for the purchase of securities for the Company's portfolio as
provided in Paragraph 13 hereof; (ii) upon receipt of Written Instructions, for
the payment of interest, dividends, taxes, administration,
-5-
<PAGE>
accounting, advisory or management fees or expenses which are to be borne by the
Company under the terms of this Agreement, the Advisory Agreement, the
Administration Agreement and the Transfer Agency Agreement, as well as fees
borne by the Company under its agreements with institutional investors with
respect to the provision of support services to their customers who beneficially
own from time to time Shares of a Fund which has entered into such agreements;
(iii) upon receipt of Written Instructions, for payments in connection with the
conversion, exchange or surrender of securities owned or subscribed to by the
Company and held by or to be delivered to PNC Bank; (iv) to a sub-custodian
pursuant to Paragraph 6 hereof; (v) for the redemption of Company Shares; (vi)
for payment of the amount of dividends received in respect of securities sold
short; (vii) for payment against receipt of securities loaned pursuant to a
specified agreement for loaning the Company's securities; or (viii) upon receipt
of Written Instructions, for other proper Company purposes. No payment pursuant
to (i) above shall be made unless PNC Bank has received a copy of the broker's
or dealer's confirmation or the payee's invoice, as appropriate.
(b) PNC Bank is hereby authorized to endorse and collect all checks,
drafts and other negotiable instruments or other orders for the payment of money
received as custodian for the account of the Company.
6. Receipt of Securities.
---------------------
(a) Except as provided by Paragraph 7 hereof, PNC Bank shall hold and
physically segregate in a separate account,
-6-
<PAGE>
identifiable at all times from those of any other persons, firms, or
corporations, all securities and non- cash property received by it for the
account of the Company. All such securities and non-cash property are to be held
or disposed of by PNC Bank for the Company pursuant to the terms of this
Agreement. In the absence of Written Instructions accompanied by a certified
resolution of the Company's Board of Trustees authorizing the transaction, PNC
Bank shall have no power or authority to withdraw, deliver, assign, hypothecate,
pledge or otherwise dispose of any such securities and investments except in
accordance with the express terms provided for in this Agreement. In no case may
any trustee, officer, employee or agent of the Company withdraw any securities.
In connection with its duties under this Paragraph 6, PNC Bank may, at its own
expense, enter into sub-custodian agreements with other banks or trust companies
for the receipt of certain securities and cash to be held by PNC Bank for the
account of the Company pursuant to this Agreement; provided that each such bank
or trust company has an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than one million dollars
($1,000,000) for a PNC Bank subsidiary or affiliate, or of not less than twenty
million dollars ($20,000,000) if such bank or trust company is not a PNC Bank
subsidiary or affiliate and that in either case such bank or trust company
agrees with PNC Bank to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. PNC Bank shall remain responsible
for the performance of all of its duties under this Agreement and shall
-7-
<PAGE>
hold the Company harmless from the acts and omissions, under the standards of
care provided for herein, of any bank or trust company that it might choose
pursuant to this Paragraph 6.
(b) Where securities are transferred to an account of the Company
established pursuant to Paragraph 7 hereof, PNC Bank shall also by book-entry or
otherwise identify as belonging to the Company the quantity of securities in a
fungible bulk of securities registered in the name of PNC Bank (or its nominee)
or shown in PNC Bank's account on the books of the Book-Entry System. At least
monthly and from time to time, PNC Bank shall furnish the Company with a
detailed statement of the Property held for the Company under this Agreement.
7. Use of Book-Entry System. The Company shall deliver to PNC Bank
------------------------
certified resolutions of the Board of Trustees of the Company approving,
authorizing and instructing PNC Bank on a continuous and ongoing basis until
instructed to the contrary by Oral or Written Instructions actually received by
PNC Bank (a) to deposit in a Book-Entry System all securities belonging to the
Company eligible for deposit therein and (b) to utilize the Book-Entry System to
the extent possible in connection with settlements of purchases and sales of
securities by the Company, and deliveries and returns of securities loaned,
subject to repurchase or reverse repurchase agreements or used as collateral in
connection with borrowings. Without limiting the generality of such use, it is
agreed that the following provisions shall apply thereto:
-8-
<PAGE>
(a) Securities and any cash of the Company deposited in the Book-Entry
System will at all times be segregated from any assets and cash controlled by
PNC Bank in other than a fiduciary or custodian capacity but may be commingled
with other assets held in such capacities. PNC Bank and its sub-custodian, if
any, will pay out money only upon receipt of securities and will deliver
securities only upon the receipt of money.
(b) All books and records maintained by PNC Bank which relate to the
Company's participation in the Book-Entry System will at all times during PNC
Bank's regular business hours be open to the inspection of the Company's duly
authorized employees or agents, and the Company will be furnished with all
information in respect of the services rendered to it as it may require.
(c) PNC Bank will provide the Company with copies of any report
obtained by PNC Bank on the system of internal accounting control of the
Book-Entry System promptly after receipt of such a report by PNC Bank. PNC Bank
will also provide the Company with such reports on its own system of internal
control as the Company may reasonably request from time to time.
-9-
<PAGE>
8. Instructions Consistent with Charter, etc.
-----------------------------------------
(a) Unless otherwise provided in this Agreement, PNC Bank shall act
only upon Oral and Written Instructions. Although PNC Bank may know of the
provisions of the Charter and By-Laws of the Company, PNC Bank may assume that
any Oral or Written Instructions received hereunder are not in any way
inconsistent with any provisions of such Charter or By-Laws or any vote,
resolution or proceeding of the Shareholders, or of the Board of Trustees, or of
any committee thereof.
(b) PNC Bank shall be entitled to rely upon any Oral Instructions and
any Written Instructions actually received by PNC Bank pursuant to this
Agreement. The Company agrees to forward to PNC Bank Written Instructions
confirming Oral Instructions in such manner that the Written Instructions are
received by PNC Bank by the close of business of the same day that such Oral
Instructions are given to PNC Bank. The Company agrees that the fact that such
confirming Written Instructions are not received by PNC Bank shall in no way
affect the validity of the transactions or enforceability of the transactions
authorized by the Company by giving Oral Instructions. The Company agrees that
PNC Bank shall incur no liability to the Company in acting upon Oral
Instructions given to PNC Bank hereunder concerning such transactions provided
PNC Bank reasonably believes such instructions have been received from an
Authorized Person.
-10-
<PAGE>
9. Transactions Not Requiring Instructions. In the absence of
---------------------------------------
contrary Written Instructions, PNC Bank is authorized to take the following
actions:
(a) Collection of Income and Other Payments. PNC Bank shall:
---------------------------------------
(i) collect and receive for the account of the Company,
all income and other payments and distributions, including (without
limitation) stock dividends, rights, bond coupons, option premiums and
similar items, included or to be included in the Property, and promptly
advise the Company of such receipt and shall credit such income, as
collected, to the Company's custodian account;
(ii) endorse and deposit for collection, in the name of
the Company, checks, drafts, and other negotiable instruments or other
orders for the payment of money on the same day as received;
(iii) receive and hold for the account of the Company all
securities received as a distribution on the Company's portfolio securities
as a result of a stock dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement or distribution of
rights or similar securities issued with respect to any portfolio
securities belonging to the Company held by PNC Bank hereunder;
(iv) present for payment and collect the amount payable
upon all securities which may mature or be
-11-
<PAGE>
called, redeemed, or retired, or otherwise become payable on the date such
securities become payable; and
(v) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts, and other
negotiable instruments as described in Paragraph 24 of this Agreement.
(b) Miscellaneous Transactions. PNC Bank is authorized to deliver or
--------------------------
cause to be delivered Property against payment or other consideration or written
receipt therefor in the following cases:
(i) for examination by a broker selling for the account of
the Company in accordance with street delivery custom;
(ii) for the exchange of interim receipts or temporary
securities for definitive securities; and
(iii) for transfer of securities into the name of the Company
or PNC Bank or nominee of either, or for exchange of securities for a
different number of bonds, certificates, or other evidence, representing
the same aggregate face amount or number of units bearing the same interest
rate, maturity date and call provisions, if any; provided that, in any such
case, the new securities are to be delivered to PNC Bank.
-12-
<PAGE>
10. Transactions Requiring Instructions. Upon receipt of Oral or
-----------------------------------
Written Instructions and not otherwise, PNC Bank, directly or through the use of
the Book-Entry System, shall:
(a) execute and deliver to such persons as may be designated in
such Oral or Written Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of the Company as owner of any
securities may be exercised;
(b) deliver any securities held for the Company against receipt
of other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation, or the exercise of
any conversion privilege;
(c) deliver any securities held for the Company to any
protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive and hold
under the terms of this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) make such transfers or exchanges of the assets of the
Company and take such other steps as shall be stated in said Oral or
Written Instructions to be for the purpose of effectuating any duly
authorized plan of
-13-
<PAGE>
liquidation, reorganization, merger, consolidation or recapitalization of the
Company;
(e) release securities belonging to the Company to any bank or trust
company for the purpose of pledge or hypothecation to secure any loan incurred
by the Company; provided, however, that securities shall be released only upon
payment to PNC Bank of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already made, subject to
proper prior authorization, further securities may be released for that purpose;
and repay such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes evidencing the
loan;
(f) release and deliver securities owned by the Company in connection
with any reverse repurchase agreement entered into on behalf of the Company, but
only on receipt of payment therefor; and pay out moneys of the Company in
connection with such reverse repurchase agreements, but only upon the delivery
of the securities;
(g) pay out moneys of the Company in connection with any repurchase
agreement entered into on behalf of the Company, but only upon the delivery of
the subject securities; and release and deliver such securities in connection
with such repurchase agreements, but only on receipt of payment therefor; and
(h) otherwise transfer, exchange or deliver securities in accordance
with Oral or Written Instructions.
-14-
<PAGE>
11. Segregated Accounts. PNC Bank shall upon receipt of Written or
-------------------
Oral Instructions establish and maintain a segregated account or accounts on its
records for and on behalf of the Company, into which account or accounts may be
transferred cash and/or securities, including securities in the Book-Entry
System (i) for the purposes of compliance by the Company with the procedures
required by a securities or option exchange, providing such procedures comply
with the 1940 Act and Release No. 10666 or any subsequent release or releases of
the SEC relating to the maintenance of segregated accounts by registered
investment companies, and (ii) for other proper corporate purposes, but only, in
the case of clause (ii), upon receipt of Written Instructions.
12. Dividends and Distributions. The Company shall furnish PNC Bank
---------------------------
with appropriate evidence of action by the Company's Board of Trustees declaring
and authorizing the payment of any dividends and distributions. Upon receipt by
PNC Bank of Written Instructions with respect to dividends and distributions
declared by the Company's Board of Trustees and payable to Shareholders who have
elected in the proper manner to receive their distributions or dividends in
cash, and in conformance with procedures mutually agreed upon by PNC Bank, the
Company, and the Company's Transfer Agent, PNC Bank shall pay to the Company's
Transfer Agent, as agent for the Shareholders, an amount equal to the amount
indicated in said Written Instructions as payable by the Company to such
Shareholders for distribution in cash by the Transfer Agent to such
Shareholders. In lieu of paying the
-15-
<PAGE>
Company's Transfer Agent cash dividends and distributions, PNC Bank may arrange
for the direct payment of cash dividends and distributions to Shareholders by
PNC Bank in accordance with such procedures and controls as are mutually agreed
upon from time to time by and among the Company, PNC Bank and the Company's
Transfer Agent.
13. Purchases of Securities. Promptly after each decision to purchase
-----------------------
securities by the investment advisor, the Company, through the investment
advisor, shall deliver to PNC Bank Oral Instructions specifying with respect to
each such purchase: (a) the name of the issuer and the title of the securities,
(b) the number of shares or the principal amount purchased and accrued interest,
if any, (c) the date of purchase and settlement, (d) the purchase price per
unit, (e) the total amount payable upon such purchase and (f) the name of the
person from whom or the broker through whom the purchase was made. PNC Bank
shall upon receipt of securities purchased by or for the Company pay out of the
moneys held for the account of the Company the total amount payable to the
person from whom or the broker through whom the purchase was made, provided that
the same conforms to the total amount payable as set forth in such Oral
Instructions.
14. Sales of Securities. Promptly after each decision to sell
-------------------
securities by the investment advisor or exercise of an option written by the
Company, the Company, through the investment advisor, shall deliver to PNC Bank
Oral Instructions, specifying with respect to each such sale: (a) the name of
the
-16-
<PAGE>
issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale
price per unit, (e) the total amount payable to the Company upon such sale, and
(f) the name of the broker through whom or the person to whom the sale was made.
PNC Bank shall deliver the securities upon receipt of the total amount payable
to the Company upon such sale, provided that the same conforms to the total
amount payable as set forth in such Oral Instructions. Subject to the foregoing,
PNC Bank may accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
15. Records. The books and records pertaining to the Company which are
-------
in the possession of PNC Bank shall be the property of the Company. Such books
and records shall be prepared and maintained as required by the 1940 Act and
other applicable securities laws and regulations. The Company, or the Company's
authorized representatives, shall have access to such books and records at all
times during PNC Bank's normal business hours. Upon the reasonable request of
the Company, copies of any such books and records shall be provided by PNC Bank
to the Company or the Company's authorized representative at the Company's
expense.
16. Reports.
-------
(a) PNC Bank shall furnish the Company the following reports:
-17-
<PAGE>
(1) such periodic and special reports as the Company may
reasonably request;
(2) a monthly statement summarizing all transactions and entries
for the account of the Company, listing the portfolio securities belonging
to the Company with the adjusted average cost of each issue and the market
value at the end of such month, and stating the cash account of the Company
including disbursements;
(3) the reports to be furnished to the Company pursuant to Rule
17f-4; and
(4) such other information as may be agreed upon from time to time
between the Company and PNC Bank.
(b) PNC Bank shall transmit promptly to the Company any proxy
statement, proxy materials, notice of a call or conversion or similar
communications received by it as Custodian of the Property.
17. Cooperation with Accountants. PNC Bank shall cooperate with the
----------------------------
Company's independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their opinion, as such may be required from time to time by the Company.
18. Confidentiality. PNC Bank agrees on behalf of itself and its employees
---------------
to treat confidentially all records and
-18-
<PAGE>
other information relative to the Company and its prior, present, or potential
Shareholders, except, after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where PNC Bank may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company.
19. Right to Receive Advice.
-----------------------
(a) Advice of Company. If PNC Bank shall be in doubt as to any
-----------------
action to be taken or omitted by it, it may request, and shall receive, from the
Company directions or advice, including Oral or Written Instructions where
appropriate.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any
-----------------
question of law involved in any action to be taken or omitted by PNC Bank, it
may request advice at its own cost from counsel of its own choosing (who may be
counsel for the investment advisor, the Company or PNC Bank, at the option of
PNC Bank).
(c) Conflicting Advice. In case of conflict between directions,
------------------
advice or Oral or Written Instructions received by PNC Bank pursuant to
subparagraph (a) of this paragraph and advice received by PNC Bank pursuant to
subparagraph (b) of this paragraph, PNC Bank shall be entitled to rely on and
follow the advice received pursuant to the latter provision alone.
-19-
<PAGE>
(d) Protection of PNC Bank. PNC Bank shall be protected in any action
----------------------
or inaction which it takes in reliance on any directions, advice or Oral or
Written Instructions received pursuant to subparagraphs (a) or (b) of this
paragraph which PNC Bank, after receipt of any such directions, advice or Oral
or Written Instructions, in good faith believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may be. However,
nothing in this paragraph shall be construed as imposing upon PNC Bank any
obligation (i) to seek such directions, advice or Oral or Written Instructions,
or (ii) to act in accordance with such directions, advice or Oral or Written
Instructions when received, unless, under the terms of another provision of this
Agreement, the same is a condition to PNC Bank's properly taking or omitting to
take such action. Nothing in this subsection shall excuse PNC Bank when an
action or omission on the part of PNC Bank constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by PNC Bank of any duties or
obligations under this Agreement.
20. Compliance with Governmental Rules and Regulations. The Company
--------------------------------------------------
assumes full responsibility for ensuring that the Company complies with all
applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, and any
laws, rules and regulations of governmental authorities having jurisdiction
except insofar as PNC Bank has assumed a specific responsibility for compliance
hereunder.
21. Compensation. As compensation for the services rendered by PNC Bank
------------
during the term of this Agreement, the
-20-
<PAGE>
Company will pay to PNC Bank monthly fees that shall be agreed upon from time to
time in writing by PNC Bank and the Company.
22. Indemnification. The Company, as sole owner of the Property,
---------------
agrees to indemnify and hold harmless PNC Bank and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act,
and any state and foreign securities and blue sky laws, all as or to be amended
from time to time) and expenses, including (without limitation) attorneys' fees
and disbursements, arising directly or indirectly (a) from the fact that
securities included in the Property are registered in the name of any such
nominee or (b) without limiting the generality of the foregoing clause (a) from
any action or thing which PNC Bank takes or does or omits to take or do (i) at
the request or on the direction of or in reliance on the advice of the Company
or (ii) upon Oral or Written Instructions, provided, that neither PNC Bank nor
any of its nominees shall be indemnified against any liability to the Company or
to its Shareholders (or any expenses incident to such liability) arising out of
PNC Bank's or such nominee's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties or responsibilities specifically described in
this Agreement. In the event of any advance of cash for any purpose made by PNC
Bank resulting from oral or Written Instructions of the Company, or in the event
that PNC Bank or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this
-21-
<PAGE>
Agreement, except such as may arise from its or its nominee's own negligent
action, negligent failure to act or willful misconduct, any Property at any time
held for the account of the Company shall be security therefor.
23. Responsibility of PNC Bank. PNC Bank shall be under no duty to
--------------------------
take any action on behalf of the Company except as specifically set forth herein
or as may be specifically agreed to by PNC Bank in writing. In the performance
of its duties hereunder, PNC Bank shall be obligated to exercise care and
diligence and to act in good faith and to use its best efforts within reasonable
limits to insure the accuracy and completeness of all services performed under
this Agreement. PNC Bank shall be responsible for its own negligent failure to
perform its duties under this Agreement, but to the extent that duties,
obligations and responsibilities are not specifically set forth in this
Agreement, PNC Bank shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of PNC
Bank or reckless disregard of such duties, obligations and responsibilities.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, PNC Bank in connection with its duties under this Agreement
shall not be under any duty or obligation to inquire into and shall not be
liable for or in respect of (a) the validity or invalidity or authority or lack
thereof of any Oral or Written Instruction, notice or other instrument which
conforms to the applicable requirements of this Agreement, if any, and which PNC
Bank reasonably believes to be
-22-
<PAGE>
genuine; (b) the validity or invalidity of the issuance of any securities
included or to be included in the Property, the legality or illegality of the
purchase of such securities, or the propriety or impropriety of the amount paid
therefor; (c) the legality or illegality of the sale (or exchange) of any
Property or the propriety or impropriety of the amount for which such Property
is sold (or exchanged); or (d) delays or errors or loss of data occurring by
reason of circumstances beyond PNC Bank's control, including acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdown, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails, transportation, communication or power supply, nor shall
PNC Bank be under any duty or obligation to ascertain whether any Property at
any time delivered to or held by PNC Bank may properly be held by or for the
Company.
24. Collections. All collections of monies or other property in
-----------
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by PNC Bank) shall be at the sole risk of the Company. In
any case in which PNC Bank does not receive any payment due the Company within a
reasonable time after PNC Bank has made proper demands for the same, it shall so
notify the Company in writing, including copies of all demand letters, any
written responses thereto, and memoranda of all oral responses thereto and to
telephonic demands, and await instructions from the Company. PNC Bank shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. PNC Bank shall
-23-
<PAGE>
also notify the Company as soon as reasonably practicable whenever income due on
securities is not collected in due course.
25. Duration and Termination. This Agreement shall continue until: (i)
------------------------
termination by the Company or by PNC Bank in either case on sixty (60) days
written notice; or (ii) the date of the custodian services agreement to be
entered into between the Company and any successor custodian. Upon any
termination of this Agreement, pending appointment of a successor to PNC Bank or
vote of the Shareholders of the Company to dissolve or to function without a
custodian of its cash, securities or other property, PNC Bank shall not deliver
cash, securities or other property of the Company to the Company, but may
deliver them to a bank or trust company of its own selection, having an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than twenty million dollars ($20,000,000) as a custodian for
the Company to be held under terms similar to those of this Agreement.
26. Notices. All notices and other communications, including Written
-------
Instructions (collectively referred to as "Notice" or "Notices" in this
paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to PNC Bank
at PNC Bank's address, Airport Business Center, International Court 2, 200
Stevens Drive, Lester, Pennsylvania 19113 marked for the attention of the
Custodian Services Department (or its successor); (b) if to the Company, at the
address of the Company, Belleveue Park Corporate Center, 400 Bellevue Parkway,
-24-
<PAGE>
Wilmington, Delaware 19809, Attention: Rodney D. Johnson, President with a copy
to Drinker Biddle & Reath LLP, Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107, Attention: W. Bruce
McConnell, III, Secretary; or (c) if to neither of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
communication. If the location of the sender of a Notice and the address of the
addressee thereof are, at the time of sending, more than 100 miles apart, the
Notice may be sent by first-class mail, in which case it shall be deemed to have
been received five days after it is sent, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been
received immediately, and, if the location of the sender of a Notice and the
address of the addressee thereof are, at the time of sending, not more than 100
miles apart, the Notice may be sent by first-class mail, in which case it shall
be deemed to have been received three days after it is sent, or if sent by
messenger, it shall be deemed to have been received on the day it is delivered.
All postage, cable, telegram, telex and facsimile sending device charges arising
from the sending of a Notice hereunder shall be paid by the sender.
27. Further Actions. Each party agrees to perform such further acts
---------------
and execute such further documents as are necessary to effectuate the purposes
hereof.
28. Amendments. This Agreement or any part hereof may be changed only
----------
by an instrument in writing signed by the party against which enforcement of
such change is sought.
-25-
<PAGE>
29. Delegation. On thirty (30) days prior written notice to the
----------
Company, PNC Bank may assign its rights and delegate its duties hereunder to any
wholly-owned direct or indirect subsidiary of PNC Bank or PNC Bank Corp.,
provided that (i) the delegate agrees with PNC Bank to comply with all relevant
provisions of the 1940 Act; and (ii) PNC Bank and such delegate shall promptly
provide such information as the Company may request, and respond to such
questions as the Company may ask, relative to the delegation, including (without
limitation) the capabilities of the delegate. Such delegate shall be bound by
the terms of this Agreement as though an original party hereto. PNC Bank shall
unconditionally guarantee the performance of the delegate under the terms and
conditions of this Agreement.
30. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
31. Miscellaneous. This Agreement embodies the entire agreement and
-------------
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegated and/or Oral Instructions and compensation. The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a contract made
-26-
<PAGE>
in Pennsylvania and governed by Pennsylvania law. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first above
written.
PROVIDENT INSTITUTIONAL FUNDS
/s/ Rodney D. Johnson
-----------------------------
Name: Rodney D. Johnson
Title: President
PNC BANK, N.A.
/s/ Brian R. Burns
-----------------------------
Name: Brian R. Burns
Title: Senior Vice President
-27-
<PAGE>
INDEX
Paragraph Page
--------- ----
1. Appointment........................................................ 1
2. Delivery of Documents.............................................. 2
3. Definitions........................................................ 3
4. Delivery and Registration of the Property.......................... 5
5. Receipt and Disbursement of Money.................................. 5
6. Receipt of Securities.............................................. 6
7. Use of Book-Entry System........................................... 8
8. Instructions Consistent with Charter, etc.......................... 10
9. Transactions Not Requiring Instructions............................ 11
10. Transactions Requiring Instructions................................ 13
11. Segregated Accounts................................................ 15
12. Dividends and Distributions........................................ 15
13. Purchases of Securities............................................ 16
14. Sales of Securities................................................ 16
15. Records............................................................ 17
16. Reports............................................................ 17
17. Cooperation with Accountants....................................... 18
18. Confidentiality.................................................... 18
19. Right to Receive Advice............................................ 19
20. Compliance with Governmental Rules and Regulations................. 20
21. Compensation....................................................... 20
22. Indemnification.................................................... 21
23. Responsibility of PNC Bank......................................... 22
24. Collections........................................................ 23
25. Duration and Termination........................................... 24
26. Notices............................................................ 24
27. Further Actions.................................................... 25
28. Amendments......................................................... 25
29. Delegation......................................................... 26
30. Counterparts....................................................... 26
31. Miscellaneous...................................................... 26
<PAGE>
Exhibit (g)(2)
CUSTODIAN SERVICES AGREEMENT
----------------------------
THIS AGREEMENT is made as of February 11, 1999 by and between PFPC TRUST
COMPANY ("PFPC Trust"), and PROVIDENT INSTITUTIONAL FUNDS, a Delaware business
trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. As Used in This Agreement:
---------------------------------------
(a) "1933 Act" means the Securities Act of 1933, as amended.
----------
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
----------
(c) "Authorized Person" means any officer of the Fund and any other person
-------------------
authorized by the Fund to give Oral or Written Instructions on behalf
of the Fund and listed on the Authorized Persons Appendix attached
hereto or any amendment thereto as may be received by PFPC Trust. An
Authorized Person's scope of authority may be limited by the Fund by
setting forth such limitation in the Authorized Persons Appendix.
<PAGE>
(d) "Book-Entry System" means Federal Reserve Treasury book-entry system
-----------------
for United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
-----
(f) "Oral Instructions" mean oral instructions received by PFPC Trust from
------------------
an Authorized Person or from a person reasonably believed by PFPC
Trust to be an Authorized Person.
(g) "SEC" means the Securities and Exchange Commission.
-----
(h) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
-----------------
the CEA.
(i) "Shares" mean the shares of beneficial interest of any series or class
--------
of the Fund.
(j) "Property" means:
----------
(i) any and all securities and other investment items which the Fund
may from time to time deposit, or cause to be deposited, with
PFPC Trust or which PFPC Trust may from time to time hold for
the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or investment
items; and
(iv) all proceeds of the sale of securities issued by the Fund, which
are received by PFPC Trust from time to time, from or on behalf
of the Fund.
(k) "Written Instructions" mean written instructions signed by an
----------------------
Authorized Person (or a person reasonably believed by PFPC Trust to be
an Authorized Person) and received by PFPC Trust. The instructions may
be delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
-2-
<PAGE>
2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
-----------
services to the Fund, on behalf of each of its investment portfolios (each,
a "Portfolio"), and PFPC Trust accepts such appointment and agrees to
furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
---------------------
provide PFPC Trust with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
Board of Trustees, approving the appointment of PFPC Trust or its
affiliates to provide services to the Fund and approving this
Agreement;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory and (if applicable) sub-advisory
agreement or agreements;
(d) a copy of the distribution agreement with respect to each class of
Shares;
(e) a copy of each Portfolio's administration agreement if PFPC Trust is
not providing the Portfolio with such services;
(f) copies of any shareholder servicing agreements or arrangements made in
respect of the Fund or a Portfolio;
(g) a copy of the Fund's Declaration of Trust and By Laws; and
(h) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. Compliance with Laws.
--------------------
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Fund or any Portfolio.
-3-
<PAGE>
5. Instructions.
------------
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instructions or
Written Instructions it receives from an Authorized Person (or from a
person reasonably believed by PFPC Trust to be an Authorized Person)
pursuant to this Agreement. PFPC Trust may assume that any Oral
Instruction or Written Instruction received hereunder is not in any
way inconsistent with the provisions of organizational documents or
this Agreement or of any vote, resolution or proceeding of the Fund's
Board of Trustees or of the Fund's shareholders, unless and until PFPC
Trust receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions so that PFPC Trust receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received, provided that in any event PFPC Trust shall
be entitled to rely on such Oral Instructions. The fact that such
confirming Written Instructions are not received by PFPC Trust shall
in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. Where Oral
Instructions or Written Instructions reasonably appear to have been
received from an Authorized Person, PFPC Trust shall incur no
liability to the Fund in acting upon such Oral Instructions or Written
Instructions provided that PFPC Trust's actions comply with the other
provisions of this Agreement.
-4-
<PAGE>
6. Right to Receive Advice.
-----------------------
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
------------------
should or should not take, PFPC Trust may request directions or
advice, including Oral instructions or Written Instructions, from the
Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any question
-----------------
of law pertaining to any action it should or should not take, PFPC
Trust may request advice at its own cost from such counsel of its own
choosing (who may be counsel for the Fund, the Fund's investment
adviser or PFPC Trust, at the option of PFPC Trust).
(c) Conflicting Advice. In the event of a conflict between directions,
------------------
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel, PFPC
Trust shall be entitled to rely upon and follow the advice of counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any action
------------------------
it takes or does not take in reliance upon directions, advice or Oral
Instructions or Written Instructions it receives from the Fund or from
counsel and which PFPC Trust believes, in good faith, to be consistent
with those directions, advice or Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as to
impose an obligation upon PFPC Trust (i) to seek such directions,
advice or Oral Instructions or Written Instructions, or (ii) to act in
accordance with such directions, advice or Oral Instructions or
Written Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC Trust's properly
taking or not taking such action. Nothing in this subsection shall
-5-
<PAGE>
excuse PFPC Trust when an action or omission on the part of PFPC Trust
which is taken in reliance upon directions, advice or Oral or Written
Instructions constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC Trust of any duties,
obligations or responsibilities set forth in this Agreement.
7. Records; Visits. The books and records pertaining to the Fund and any
---------------
Portfolio, which are in the possession or under the control of PFPC Trust,
shall be the property of the Fund. Such books and records shall be prepared
and maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund or, Authorized Persons and the Fund's
authorized representatives shall have access to such books and records at
all times during PFPC Trust's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided
by PFPC Trust to the Fund or to an Authorized Person, at the Fund's
expense.
8. Confidentiality. PFPC Trust agrees to keep confidential all records of the
---------------
Fund and information relating to the Fund and its prior, present or
imminently potential shareholders, unless the release of such records or
information is otherwise consented to, in writing, by the Fund. The Fund
agrees that such consent shall hereby be deemed to be given where PFPC
Trust may be exposed to civil or criminal contempt proceedings or when PFPC
Trust is required to divulge such information or records to duly
constituted authorities (including quasi-regulatory authorities) or
independent auditors.
9. Cooperation with Accountants. PFPC Trust shall cooperate with the Fund's
----------------------------
independent public accountants and shall take all reasonable action to make
any requested information available to such accountants as reasonably
requested by the Fund.
-6-
<PAGE>
10. Disaster Recovery. PFPC Trust shall enter into and shall maintain in
-----------------
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall have
no liability with respect to the loss of data or service interruptions
caused by equipment failure, provided such loss or interruption is not
caused by PFPC Trust's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties or obligations under this Agreement.
11. Compensation. As compensation for custody services rendered by PFPC Trust
------------
during the term of this Agreement, the Fund will pay to PFPC Trust a fee or
fees as may be agreed to in writing by the Fund and PFPC Trust.
12. Indemnification. The Fund, on behalf of each Portfolio, agrees to
---------------
indemnify and hold harmless PFPC Trust and its affiliates and nominees from
all taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, attorneys' fees and disbursements), arising
directly or indirectly (a) from the fact that securities included in the
Property are registered in the name of such a nominee or (b) without
limiting the generality of the foregoing clause (a) from any action or
omission to act which PFPC Trust takes (i) at the request or on the
direction of or in reliance on the advice of the Fund or (ii) upon Oral
Instructions or Written Instructions. Neither PFPC Trust, nor any of its
affiliates or nominees shall be indemnified against any liability to the
Fund or its shareholders (or any expenses incident to such liability)
arising out of PFPC Trust's or its
-7-
<PAGE>
affiliates' or such nominee's own willful misfeasance, bad faith,
negligence or reckless disregard of its duties or responsibilities
specifically described in this Agreement.
13. Responsibility of PFPC Trust.
----------------------------
(a) PFPC Trust shall be under no duty to take any action on behalf of the
Fund or any Portfolio except as specifically set forth herein or as
may be specifically agreed to by PFPC Trust in writing. In the
performance of its duties hereunder, PFPC Trust shall be obligated to
exercise care and diligence, to act in good faith and to use its best
efforts, within reasonable limits, to ensure the accuracy and
completeness of all services performed under this Agreement. PFPC
Trust shall be responsible for its own negligent failure to perform
its duties under this Agreement, but to the extent that duties,
obligations and responsibilities are not specifically set forth in
this Agreement, PFPC Trust shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith or gross
negligence on its part or reckless disregard of such duties,
obligations and responsibilities.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC Trust shall not be liable for
losses beyond its control, provided that PFPC Trust has acted in
accordance with the standard of care set forth above; and (ii) PFPC
Trust shall not be under any duty or obligation to inquire into and
shall not be liable for or in respect of (A) the validity or
invalidity or authority or lack thereof of any Oral Instruction or
Written Instruction, notice or other instrument which conforms to the
applicable requirements of this
-8-
<PAGE>
Agreement, and which PFPC Trust reasonably believes to be genuine; (B)
the validity or invalidity of the issuance of any securities included
or to be included in the Property, the legality or illegality of the
purchase of such securities, or the propriety or impropriety of the
amount paid therefor; (C) the legality or illegality of the sales (or
exchange) of any Property or the propriety or impropriety of the
amount for which such Property is sold (or exchanged); or (D) subject
to section 10, delays or errors or loss of data occurring by reason of
circumstances beyond PFPC Trust's control, including acts of civil or
military authority, national emergencies, labor difficulties, fire,
flood, catastrophe, acts of God, mechanical breakdown, insurrection,
war, riots or failure of the mails, transportation, communication or
power supply, nor shall PFPC Trust be under any duty or obligation to
ascertain whether any property at any time delivered to or held by
PFPC Trust may properly be held by or for the Fund.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC Trust nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or damages
whether or not the likelihood of such losses or damages was known by
PFPC Trust or its affiliates.
14. Description of Services.
-----------------------
(a) Delivery of the Property. The Fund will deliver or arrange for
------------------------
delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares,
during the term of this Agreement. PFPC Trust will not be responsible
for any property until actual receipt.
-9-
<PAGE>
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
---------------------------------
Instructions, shall open and maintain separate accounts in the Fund's name
using all cash received from or for the account of the Fund, subject to the
terms of this Agreement. In addition, upon Written Instructions, PFPC
Trust shall open separate custodial accounts for each separate Portfolio
(collectively, the "Accounts") and shall hold in the Accounts all cash
received from or for the Accounts of the Fund specifically designated to
each separate Portfolio. PFPC Trust shall make cash payments from or for
the Accounts of a Portfolio only for:
(i) purchases of securities in the name of a Portfolio, PFPC Trust, PFPC
Trust's nominee or a sub-custodian or nominee thereof as provided in
sub-section (j) and for which PFPC Trust has received a copy of the
broker's or dealer's confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management,
support services fees or similar expenses which are to be borne by a
Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the Fund's
transfer agent, as agent for the shareholders, of an amount equal to
the amount of dividends and distributions stated in the Written
Instructions to be distributed in cash by the transfer agent to
shareholders, or, in lieu of paying the Fund's transfer agent, PFPC
Trust may arrange for the direct payment of cash dividends and
distributions to shareholders in accordance with procedures mutually
agreed upon from time to time by and among the Fund, PFPC Trust and
the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in connection with
the conversion, exchange or surrender of securities owned or
subscribed to by the Fund and held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with respect to
securities sold short;
(vii) payments made to a sub-custodian;
-10-
<PAGE>
(viii) payment against receipt of securities loaned pursuant to a specified
agreement for loaning the Fund' s securities; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received as custodian for the Accounts.
(c) Receipt of Securities: Subcustodians.
------------------------------------
(i) PFPC Trust shall hold all securities received by it for the Accounts
in a separate account that physically segregates such securities from
those of any other persons, firms or corporations, except for
securities held in a Book-Entry System. All such securities shall be
held or disposed of only upon Written Instructions of the Fund or
pursuant to the terms of this Agreement. PFPC Trust shall have no
power or authority to assign, hypothecate, pledge or otherwise dispose
of any such securities or investment, except upon the express terms of
this Agreement or upon Written Instructions authorizing the
transaction. In no case may any member of the Fund's Board of
Trustees, or any officer, employee or agent of the Fund withdraw any
securities.
At PFPC Trust's own expense and for its own convenience, PFPC Trust
may enter into sub-custodian agreements with other banks or trust
companies to perform duties with respect to domestic assets. Such bank
or trust company shall have an aggregate capital, surplus and
undivided profits, according to its last published report, of at least
one million dollars ($1,000,000), if it is a subsidiary or affiliate
of PFPC Trust, or at least twenty million dollars ($20,000,000) if
such bank or trust company is not a subsidiary or affiliate of PFPC
Trust. In addition, such bank or trust company must be qualified to
act as custodian and agree to comply with the relevant provisions of
the 1940 Act and other applicable rules and regulations. Any such
arrangement will not be entered into without prior written notice to
the Fund.
In addition, PFPC Trust may enter into arrangements with sub-
custodians with respect to services regarding foreign assets in
accordance with the requirements of the 1940 Act. Any such arrangement
will be entered into with prior written notice to the Fund (or as
otherwise provided in the 1940 Act).
PFPC Trust shall remain responsible for the performance of all of its
duties as described in this Agreement and shall hold the Fund harmless
from its own acts or omissions, under the standards of care provided
for
-11-
<PAGE>
herein, or the acts and omissions of any sub-custodian chosen by
PFPC Trust under the terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral Instructions or
-----------------------------------
Written Instructions and not otherwise, PFPC Trust, directly or through the
use of the Book-Entry System, shall:
(i) deliver any securities held for a Portfolio against the receipt of
payment for the sale of such securities;
(ii) execute in blank and deliver to such persons as may be designated in
such Oral Instructions or Written Instructions, proxies, consents,
authorizations, and any other instruments received by PFPC Trust as
custodian of the Property whereby the authority of a Portfolio as
owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its agent, when
such securities are called, redeemed, retired or otherwise become
payable at the option of the holder; provided that, in any such
case, the cash or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for a Portfolio against receipt of other
securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio to any protective
committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive
and hold under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or documents as may
be issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of the Portfolios and
take such other steps as shall be stated in said Oral Instructions
or Written Instructions to be for the purpose of effectuating a duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(vii) release securities belonging to a Portfolio to any bank or trust
company for the purpose of a pledge or hypothecation to secure any
loan incurred by the Fund on behalf of that Portfolio; provided,
however, that securities shall be released only upon payment to PFPC
Trust of the monies borrowed, except that in cases where additional
collateral is required to
-12-
<PAGE>
secure a borrowing already made subject to proper prior
authorization, further securities may be released for that purpose;
and repay such loan upon redelivery to it of the securities pledged
or hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
(viii) release and deliver securities owned by a Portfolio in connection
with any repurchase agreement (or reverse repurchase agreement)
entered into on behalf of the Portfolio, but only on receipt of
payment therefor; and pay out moneys of the Portfolio in connection
with repurchase agreements (or reverse repurchase agreement), but
only upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by a Portfolio in
connection with any conversion of such securities, pursuant to their
terms, into other securities;
(x) release and deliver securities to a broker in connection with the
broker's custody of margin collateral relating to futures and
options transactions;
(xi) release and deliver securities owned by a Portfolio for the purpose
of redeeming in kind shares of the Portfolio upon delivery thereof
to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the Fund for
other purposes.
(e) Use of Book-Entry System. PFPC Trust is authorized and instructed, on a
------------------------
continuous basis, to deposit in the Book-Entry System all securities
belonging to the Portfolios eligible for deposit therein and to utilize the
Book-Entry System to the extent possible in connection with settlements of
purchases and sales of securities by the Portfolios, and deliveries and
returns of securities loaned, subject to repurchase agreements or used as
collateral in connection with borrowings. PFPC Trust shall continue to
perform such duties until it receives Written Instructions or Oral
Instructions authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
-13-
<PAGE>
(i) With respect to securities of each Portfolio which are maintained in
the Book-Entry System, the records of PFPC Trust shall identify by
book-entry or otherwise those securities belonging to each Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry System will at
all times be segregated from any assets and cash controlled by PFPC
Trust in other than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
(iii) PFPC Trust and its sub-custodian, if any, will settle transactions as
provided in subsections 14(j) and 14(k) below.
(iv) PFPC Trust will provide the Fund with copies of any reports obtained
by PFPC Trust on the system of internal accounting control of the
Book-Entry System promptly after receipt of such a report by PFPC
Trust. PFPC Trust will also provide the Fund with such reports on its
own system of internal control as the Fund may reasonably request
from time to time.
(f) Registration of Securities. All Securities held for a Portfolio which are
--------------------------
issued or issuable only in bearer form, except such securities held in the
Book-Entry System, shall be held by PFPC Trust in bearer form; all other
securities held for a Portfolio may be registered in the name of the Fund
on behalf of that Portfolio, PFPC Trust, the Book-Entry System, a sub-
custodian, or any duly appointed nominee of the Fund, PFPC Trust, Book-
Entry System or sub-custodian. The Fund agrees to furnish to PFPC Trust
appropriate instruments to enable PFPC Trust to hold or deliver in proper
form for transfer, or to register in the name of its nominee or in the name
of the Book-Entry System or otherwise, any securities which it may hold for
the Accounts and which may from time to time be registered in the name of
the Fund on behalf of a Portfolio.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee shall vote any
-----------------------
of the securities held pursuant to this Agreement by or for the account of
a Portfolio, except in accordance with Written Instructions. PFPC Trust,
directly or through
-14-
<PAGE>
the use of the Book-Entry System, shall execute in blank and promptly
deliver all notices, proxies and proxy soliciting materials received by
PFPC Trust as custodian of the Property to the registered holder of such
securities. If the registered holder is not the Fund on behalf of a
Portfolio, then Written Instructions or Oral Instructions must designate
the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of contrary
---------------------------------------
Written Instructions, PFPC Trust is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
---------------------------------------
(A) collect and receive for the account of each Portfolio, all
income, dividends, distributions, coupons, option premiums, other
payments and similar items, included or to be included in the
Property, and, in addition, promptly advise each Portfolio of
such receipt and credit such income, as collected, to each
Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of the Fund,
checks, drafts, or other orders for the payment of money;
(C) receive and hold for the account of each Portfolio all securities
received as a distribution on the Portfolio's securities as a
result of a stock dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement or
distribution of rights or similar securities issued with respect
to any securities belonging to a Portfolio and held by PFPC Trust
hereunder;
(D) present for payment and collect the amount payable upon all
securities which may mature or be, on a mandatory basis, called,
redeemed, or retired, or otherwise become payable on the date
such securities become payable; and
(E) take any action which may be reasonably necessary and proper in
connection with the collection and receipt of such income and
other payments and the endorsement for collection of checks,
drafts, and other negotiable instruments as described in sub-
section (m) of this Section.
-15-
<PAGE>
(ii) Miscellaneous Transactions.
--------------------------
(A) PFPC Trust is authorized to deliver or cause to be delivered Property
against payment or other consideration or written receipt therefor in
the following cases:
(1) for examination by a broker or dealer selling for the account of
a Portfolio in accordance with street delivery custom;
(2) for the exchange of interim receipts or temporary securities for
definitive securities; and
(3) for transfer of securities into the name of the Fund on behalf of
a Portfolio or PFPC Trust or a sub-custodian or a nominee of one
of the foregoing, or for exchange of securities for a different
number of bonds, certificates, or other evidence, representing
the same aggregate face amount or number of units bearing the
same interest rate, maturity date and call provisions, if any;
provided that, in any such case, the new securities are to be
delivered to PFPC Trust.
(B) Unless and until PFPC Trust receives Oral Instructions or Written
Instructions to the contrary, PFPC Trust shall:
(1) pay all income items held by it which call for payment upon
presentation and hold the cash received by it upon such payment
for the account of each Portfolio;
(2) collect interest and cash dividends received, with notice to the
Fund, to the account of each Portfolio;
(3) hold for the account of each Portfolio all stock dividends,
rights and similar securities issued with respect to any
securities held by PFPC Trust; and
(4) execute as agent on behalf of the Fund all necessary ownership
certificates required by the Internal Revenue Code or the Income
Tax Regulations of the United States Treasury Department or under
the laws of any state now or hereafter in effect, inserting the
Fund's name, on behalf of a Portfolio, on such certificate as the
owner of the securities covered thereby, to the extent it may
lawfully do so.
(i) Segregated Accounts.
-------------------
-16-
<PAGE>
(i) PFPC Trust shall upon receipt of Written Instructions or Oral
Instructions establish and maintain one or more segregated
accounts on its records for and on behalf of each Portfolio. Such
accounts may be used to transfer cash and securities, including
securities in the Book-Entry System:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option exchange,
relating to transactions such as options or futures or for
short sale transactions or other similar transactions; and
(B) upon receipt of Written Instructions, for other purposes.
(ii) PFPC Trust shall arrange for the establishment of IRA custodian
accounts for shareholders holding Shares through IRA accounts, in
accordance with the Fund's prospectuses, the Internal Revenue
Code of 1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are mutually
agreed upon from time to time by and among the Fund, PFPC Trust
and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased securities
-----------------------
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker through whom the
purchase was made.
PFPC Trust shall upon receipt of securities purchased by or for a Portfolio pay
out of the moneys held for the account of the Portfolio the total amount payable
to the person from whom or the
-17-
<PAGE>
broker through whom the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Oral Instructions or Written
Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon
-------------------
receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security, including
CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the
sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Portfolio upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding the other provisions thereof, PFPC Trust may
accept payment in such form as shall be satisfactory to it, and may deliver
any securities and arrange for any payment hereunder in accordance with the
customs prevailing among dealers in securities.
(l) Reports; Proxy Materials.
------------------------
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may reasonably
request;
-18-
<PAGE>
(B) a monthly statement summarizing all transactions and entries
for the account of each Portfolio, listing each Portfolio
security belonging to each Portfolio with the adjusted
average cost of each issue and the market value at the end
of such month and stating the cash account of each Portfolio
including disbursements;
(C) the reports required to be furnished to the Fund pursuant to
Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from time to
time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property.
(m) Collections. All collections of monies or other property in respect,
-----------
or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by PFPC Trust) shall be at the sole risk of the
Fund. If payment is not received by PFPC Trust within a reasonable
time after proper demands have been made, PFPC Trust shall notify the
Fund in writing, including copies of all demand letters, written
responses and memoranda of all oral responses and shall await
instructions from the Fund. PFPC Trust shall not be obliged to take
legal action for collection unless and until reasonably indemnified to
its satisfaction. PFPC Trust shall also notify the Fund as soon as
reasonably practicable whenever income due on securities is not
collected in due course and shall provide the Fund with periodic
status reports of such income collected after a reasonable time.
15. Duration and Termination. This Agreement shall continue until terminated
------------------------
by the Fund or PFPC Trust on sixty (60) days' prior written notice to the other
party. In the event this Agreement is terminated (pending appointment of a
successor to PFPC Trust or
-19-
<PAGE>
vote of the shareholders of the Fund to dissolve or to function without a
custodian of its cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Portfolios to the Fund.
It may deliver them to a bank or trust company of PFPC Trust's choice,
having an aggregate capital, surplus and undivided profits, as shown by its
last published report, of not less than twenty million dollars
($20,000,000), as a custodian for the Fund to be held under terms similar
to those of this Agreement. Upon termination, PFPC Trust shall not be
required to make any delivery or payment of assets in such amount as PFPC
Trust may have a good faith claim against the Fund, until full payment
shall have been made to PFPC Trust of all of its fees, compensation, costs
and expenses claimed by it in good faith. PFPC Trust shall have a
contractual possessory security interest in and shall (upon notice) have a
right of setoff against the Property as security for (i) the payment of
such fees, compensation, costs and expenses, (ii) repayment of any advance
of cash for any purpose made by PFPC Trust resulting from Oral or Written
Instructions or otherwise in carrying out its custodial function or (iii)
repayment in the event that PFPC Trust or its affiliates or nominees shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement, except
such as may arise from the negligent action or failure to act or willful
misconduct of PFPC Trust or its nominee.
16. Notices. All notices and other communications, including Written
-------
Instructions, shall be in writing or by confirming telegram, cable, telex
or facsimile sending device. Notice shall be addressed (a) if to PFPC Trust
at 200 Stevens Drive, Lester, Pennsylvania 19113, Attention: Sam Sparhawk;
(b) if to the Fund, at 400 Bellevue Parkway, Wilmington, Delaware 19809,
Attention: Rodney D. Johnson, President, with a copy to Drinker
-20-
<PAGE>
Biddle & Reath LLP, One Logan Square, 18/th/ and Cherry Streets,
Philadelphia, Pennsylvania 19103-6996, Attention: W. Bruce McConnel, III,
Secretary; or (c) if to neither of the foregoing, at such other address as
shall have been given by like notice to the sender of any such notice or
other communication by the other party. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to
have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given three days after it has been mailed. If
notice is sent by messenger, it shall be deemed to have been given on the
day it is delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or waived
----------
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Delegation; Assignment. PFPC Trust may assign its rights and delegate its
----------------------
duties hereunder to any affiliate (as defined in the 1940 Act) of or any
majority-owned direct or indirect subsidiary of PFPC Trust or of PNC Bank
Corp., provided that (i) PFPC Trust gives the Fund thirty (30) days' prior
written notice; (ii) the assignee or delegate agrees to comply with the
relevant provision of the 1940 Act; and (iii) PFPC Trust and such assignee
or delegate promptly provide such information as the Fund may reasonably
request, and respond to such questions as the Fund may reasonably ask,
relative to the assignment or delegation including (without limitation) the
capabilities of the assignee or delegate. Such delegate or assignee shall
be bound by the terms of this Agreement as though an original party hereto.
PFPC Trust shall unconditionally guarantee the performance of the delegate
or assignee under the terms and conditions of this Agreement. The Fund
agrees that without the need to comply with the foregoing
-21-
<PAGE>
sentence, PFPC Trust may delegate any or all of its services and duties
hereunder to PNC Bank, National Association (or a successor thereto). In
addition, the Fund understands and agrees that PFPC Trust has as of the
date hereof delegated certain of its services and duties to PNC Bank,
National Association (or a successor thereto) without the need to comply
with the foregoing requirements of this Section 18.
19. Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
---------------
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties or Oral
Instructions.
(b) Captions. The captions in this Agreement are included for convenience
--------
of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(c) Governing Law. This Agreement shall be deemed to be a contract made in
-------------
Delaware and governed by Delaware law, without regard to principles of
conflicts of law.
-22-
<PAGE>
(d) Partial Invalidity. If any provision of this Agreement shall be held
------------------
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(e) Successors and Assigns. This Agreement shall be binding upon and shall
----------------------
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to this
--------------------
Agreement shall constitute the valid and binding execution hereof by
such party.
(g) Liability of Trustees, Etc. The names "Provident Institutional Funds"
--------------------------
and "Trustees of Provident Institutional Funds" refer specifically to
the trust created and the Trustees, as trustees but not individually
or personally, acting from time to time under a Declaration of Trust
dated October 21, 1998, which is hereby referred to and a copy of
which is on file at the principal office of the Fund. The obligations
of "Provident Institutional Funds" entered into in the name or on
behalf thereof by any of the Trustees or officers of the Fund are not
made individually, but in such capacities, and are not binding upon
any of the Trustees, officers or shareholders of the Fund personally,
but bind only the Fund property, and all persons dealing with any
Portfolio or class of shares of the Fund must look solely to the Fund
property belonging to such Portfolio or class for the enforcement of
any claims against the Fund.
-23-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PFPC TRUST COMPANY
By: /s/ Illegible
------------------------------
Title: Senior Vice President
---------------------------
PROVIDENT INSTITUTIONAL FUNDS
By: /s/ Rodney D. Johnson
------------------------------
Title:____________________________
-24-
<PAGE>
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
____________________________ ______________________________
____________________________ ______________________________
____________________________ ______________________________
____________________________ ______________________________
____________________________ ______________________________
____________________________ ______________________________
-25-
<PAGE>
Exhibit (h)(1)
PROVIDENT INSTITUTIONAL FUNDS
ADMINISTRATION AGREEMENT
------------------------
AGREEMENT dated as of February 10, 1999 between PROVIDENT
INSTITUTIONAL FUNDS, a Delaware business trust (the "Company"), BLACKROCK
INSTITUTIONAL MANAGEMENT CORPORATION, a Delaware corporation ("BIMC"), and PFPC
INC., a Delaware corporation ("PFPC") (BIMC and PFPC are hereinafter
collectively referred to as the "Administrators").
WHEREAS, the Company is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Company desires to separately retain the Administrators
to provide certain administration services as set forth herein and to retain
PFPC to provide certain accounting services as set forth herein for each class
of units of beneficial interest ("shares") in each of the Company's investment
portfolios (individually, a "Fund," and collectively, the "Funds") as listed on
Appendix A hereto (as such Appendix may, from time to time, be supplemented (or
----------
amended)), and the Administrators are willing to furnish such administration
services, and PFPC is willing to furnish such accounting services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, it is agreed between the
parties hereto as follows:
1. Appointment of Administrators. The Company hereby appoints BIMC
-----------------------------
to provide the administration services as specified below that have been
designated to it, PFPC to provide the administration services as specified below
that have been designated to it, and PFPC to provide accounting services as
specified below that have been designated to it, on the terms and for the period
set forth in this Agreement. Each of BIMC and PFPC accepts such respective
appointments and agrees to perform the services and duties set forth in Section
5 below that have been designated to it in return for the compensation provided
in Section 7 below.
In the event that the Company establishes an additional class of shares or
investment portfolio other than the classes and investment portfolios listed on
Appendix A with respect to which it desires to retain BIMC and PFPC to provide
----------
the respective administration services specified below and PFPC to provide the
accounting services specified below, the Company shall notify BIMC and PFPC,
whereupon with the consent of BIMC and PFPC such Appendix A shall be
----------
supplemented (or amended) and such class or portfolio shall be subject to the
provisions of this Agreement to the same extent as the classes and investment
portfolios currently listed on Appendix A (except to the extent that said
----------
provisions, including the compensation payable on behalf of such new class or
investment portfolio, may be modified in writing by the Company and
Administrators at the time).
<PAGE>
2. Delivery of Documents. The Company has furnished each of the
---------------------
Administrators with copies, properly certified or authenticated, of each of the
following documents and will deliver to each of them all future amendments and
supplements, if any:
a. The Company's Declaration of Trust dated October 21, 1998, as
amended (the "Charter");
b. The Company's Bylaws, as amended (the "Code");
c. Resolutions of the Company's Board of Trustees authorizing the
execution and delivery of this Agreement;
d. The Company's Registration Statement and its most recent amendment
to its Registration Statement under the Securities Act of 1933, as amended, and
under the 1940 Act on Form N- 1A as filed with the Securities and Exchange
Commission (the "Commission") relating to its Funds (the Registration Statement,
as presently in effect and as amended or supplemented from time to time, is
herein called the "Registration Statement");
e. The Company's most recent Prospectuses and Statement of Additional
Information and all amendments and supplements thereto (such Prospectuses and
Statement of Additional Information and supplements thereto, as presently in
effect and as from time to time amended and supplemented, are herein called the
"Prospectuses");
f. The Company's shareholder service and distribution plans relating
to the respective classes of shares of the Company's investment portfolios and
any amended or successor plans (each a "Plan"); and
g. The Investment Advisory Agreement relating to the Funds.
3. Instructions. Each Administrator shall be entitled to rely upon
------------
any Oral Instruction or Written Instruction it receives from an Authorized
Person (or a person reasonably believed by the Administrator to be an Authorized
Person). For purposes of this Agreement: (1) "Authorized Persons" shall be any
officer of the Company and any other person duly authorized by the Company to
provide instructions on behalf of the Company; (2) "Oral Instructions" mean oral
instructions received by the Administrator to whom the instruction is addressed
from an Authorized Person or a person reasonably believed by such Administrator
to be an Authorized Person; and (3) "Written Instructions" mean written
instructions received by the Administrator to whom the instruction is addressed
and signed by an Authorized Person or a person reasonably believed by such
Administrator to be an Authorized Person. The Administrators shall be entitled
to assume that any Oral Instruction or Written Instruction they receive is not
in any way inconsistent with the provisions of the Company's organizational
documents or this Agreement or any vote, resolution or proceeding of the
Company's Board of Trustees or its shareholders.
4. Right to Receive Advice. If an Administrator is in doubt as to any
-----------------------
action it should or should not take, it may request directions or advice,
including Oral Instructions or Written Instructions, from the Company. If an
Administrator shall be in doubt as to any question
-2-
<PAGE>
of law pertaining to any action it should or should not take, it may request
advice at its own cost from such counsel of its own choosing (who may be counsel
for the Company, the Company's investment adviser or the Administrator, at the
option of the Administrator). In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions an Administrator receives
from the Company and the advice it receives from counsel, the Administrator may
rely upon and follow the advice of counsel. Each Administrator shall be
protected in any action it takes or does not take in reliance upon directions,
advice or Oral Instructions or Written Instructions it receives from the Company
or from counsel and which the Administrator believes, in good faith, to be
consistent with those directions, advice or Oral Instructions or Written
Instructions. Nothing in this Section shall be construed so as to impose an
obligation upon an Administrator (i) to seek such directions, advice or Oral
Instructions or Written Instructions or (ii) to act in accordance with such
directions, advice or Oral Instructions or Written Instructions.
5. Services and Duties. BIMC will perform the services set forth
-------------------
below that are designated to it, and PFPC will perform the services set forth
below that are designated to it. Each Administrator will be responsible only for
the services it has agreed to provide herein, and not for the services provided
by the other Administrator or any other services.
a. Subject to the supervision and control of the Company's Board of
Trustees, BIMC shall assist in supervising all aspects of the Funds' operations,
other than (i) those investment advisory functions which are to be performed by
the Company's investment adviser pursuant to the Company's Investment Advisory
Agreement, as amended from time to time, (ii) those advisory and other services
to be performed by any sub-adviser pursuant to the Company's Sub-Advisory
Agreements, as amended from time to time, (iii) those services to be performed
by the custodian pursuant to the Company's Custodian Agreement, as amended from
time to time, (iv) those services to be performed by the distributor pursuant to
the Company's Distribution Agreement, as amended from time to time, (v) those
services to be performed by the transfer agent pursuant to the Company's
Transfer Agency Agreement, as amended from time to time, and (vi) those services
provided under the Plans.
b. Without limiting the generality of Section 5.a, BIMC shall
provide the following services to the Funds (or to individual share classes as
indicated below):
(1) The oversight and coordination of the performance of each of
the service providers to the Company, including without limitation,
its investment advisers, sub-advisers (if any), other administrators
and sub-administrators (if any), transfer agent, custodian,
distributor, shareholder servicing agents, legal counsel and
independent auditors;
(2) Acting as liaison between the Company's Board of Trustees and
its service providers;
(3) Assisting in the preparation of materials for meetings of the
Company's Board of Trustees and shareholders;
-3-
<PAGE>
(4) Providing general ongoing business management and support
services in connection with the Company's operations;
(5) After consultation with the distributor and counsel for the
Company, determining the jurisdictions in which the Funds' shares
shall be registered or qualified for sale;
(6) Assisting in monitoring of regulatory and legislative
developments which may affect the Funds; assisting in counseling the
Funds with respect to regulatory examinations or investigations; and
working with the Company's counsel in connection with regulatory
matters or litigation;
(7) Participating to the extent reasonably requested by the
Company and its counsel in the periodic updating of the Company's
Registration Statement;
(8) Compiling data and accumulating information for and
coordinating with the Company's Treasurer or Assistant Treasurer the
preparation of reports to shareholders of record and the Commission
(other than those reports required to be prepared and filed by PFPC
hereunder);
(9) Filing with the Commission and other federal and state
agencies, subject to the approval of the Company's Treasurer or
Assistant Treasurer, reports and documents other than those reports
and documents required to be filed by PFPC hereunder and those reports
and documents required to be filed by the Company's custodian or
transfer agent;
(10) Monitoring, and assisting in developing, compliance
procedures for each of the Funds, which will include without
limitation, procedures to monitor compliance with each Fund's
investment objective, policies and limitations, tax matters, and
applicable laws and regulations;
(11) Monitoring the Fund's expenses;
(12) With respect to all share classes of each Fund, providing
information and distributing written communications concerning the
particular class of shares to their shareholders of record; handling
shareholder problems and calls;
(13) With respect to certain share classes of each Fund,
supervising the services of individuals ("shareholder
representatives") whose principal responsibility and function shall be
to preserve and strengthen the Company's relationships with the
shareholders of such class;
(14) With respect to certain share classes of each Fund,
monitoring the Company's arrangements with respect to services
provided by certain institutional shareholders ("Service
Organizations") under the Plans, including monitoring and reviewing
the services rendered by Service Organizations to their customers who
-4-
<PAGE>
beneficially own shares of such class, pursuant to agreements between
the Company and such Service Organizations ("Servicing Agreements");
reviewing the qualifications of Service Organizations wishing to enter
into Servicing Agreements with the Company; assisting in the execution
and delivery of Servicing Agreements; monitoring the operations of the
Plans; monitoring the activities of the Company's transfer agent
relating to the calculation of front-end sales charges (if applicable)
and contingent deferred sales charges (if applicable) payable in
connection with the purchase and redemption of shares, and the payment
of all such sales charges to the Company's distributor or others
(subject to the applicable limitations of the National Association of
Securities Dealers, Inc. on asset-based sales charges); reporting to
the Company's Board of Trustees with respect to the amounts paid or
payable by the Company from time to time under the Plans and the
nature of the services provided by Service Organizations; and
maintaining appropriate records in connection with such duties;
(15) With respect to certain share classes of each Fund,
monitoring the Company's arrangements with respect to institutional
investors and financial intermediaries ("Participating Institutions")
purchasing shares on behalf of their customers and program
participants, including monitoring and reviewing services rendered by
Participating Institutions to their customers; providing and
supporting customized purchase and redemption procedures; providing
specialized performance reporting as required by Participating
Institutions; and monitoring the percentage investment by
Participating Institutions which are investment companies for purposes
of compliance with 1940 Act limitations;
(16) With respect to certain share classes of each Fund,
maintaining the Company's relationships with third-party industry data
services, such as NASDAQ and Lipper Analytical Services, Inc. and
reporting to such services with respect to ticker symbols, performance
information and other information regarding the Funds, as appropriate;
(17) With respect to certain share classes of each Fund,
monitoring the investor programs that are offered from time to time in
connection with such class of shares;
(18) With respect to all share classes of each Fund, providing
oversight and related support services that are intended to ensure the
delivery of quality service to the shareholders of such class;
(19) Administering all activities concerning the installation,
maintenance, monitoring and inventory control of software developed
and maintained by BIMC and used by certain shareholders of the Company
to facilitate shareholder access to the Company and related
shareholder services (herein called the "Computer Access Program").
BIMC shall provide the Trustees of the Company with such reports,
statistics and other information as they may from time to time
reasonably request in order to evaluate the Computer Access
-5-
<PAGE>
Program administered by BIMC pursuant to this Section 5(b)(19) and
BIMC's determination as to the costs that are reimbursable by each of
the Funds;
(20) With respect to all share classes of each Fund, providing
such other similar services set forth in items 12 to 19 above as the
Company may reasonably request; and
(21) With respect to certain share classes of each Fund,
providing personnel and supervising a facility in Wilmington, Delaware
(or in such other location as the Company shall reasonably request) to
receive purchase and redemption orders via the Company's toll-free in-
WATS telephone lines and transmitting such requests to the Company's
transfer agent as promptly as practicable.
c. Without limiting the generality of Section 5.a, PFPC shall provide
the following services to the Funds (or to individual share classes as indicated
below):
(1) Maintaining required financial accounts, records, journals,
ledgers and schedules for each Fund (other than those maintained or
required to be maintained by the Company's custodian or transfer agent),
and installing and maintaining a system of internal accounting controls
appropriate for entities of the size and complexity of each Fund;
(2) Participating to the "extent reasonably requested by the
Company and its counsel in the periodic updating of the Company's
Registration Statement;
(3) With assistance of Company counsel, preparing and filing the
Company's Annual and Semi-Annual Reports on Form N-SAR;
(4) Preparing and filing with the Commission the Funds' annual and
semi-annual shareholder reports;
(5) Preparing for execution and filing the Company's Form 24F-2;
(6) Preparing for execution and filing the Company's federal and
state tax returns;
(7) Maintaining the registration or qualification of shares for
sale under the securities laws of such states as PFPC shall be initially
instructed by the Company and preparing compliance filings pursuant to the
securities laws of such states. Payment of applicable fees shall be made by
the Company or Fund involved;
(8) Preparing and filing name change applications pursuant to the
securities laws of various states, as instructed by the Company. Payment of
applicable fees shall be made by the Company or Fund involved;
(9) Providing reports, financial statements and other statistical
data as reasonably requested from time to time by the Company;
-6-
<PAGE>
(10) Assisting in the preparation of materials for meetings of
the Company's Board of Trustees and shareholders;
(11) Monitoring each Fund's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986 (as
amended);
(12) Verifying investment buy/sell trade tickets when received from
a Fund's investment adviser (the "Adviser") and transmitting trades to the
Fund's custodian (the "Custodian") for settlement;
(13) Reconciling cash and investment balances of a Fund with the
Custodian, and providing the Adviser with the beginning cash balance
available for investment purposes;
(14) Calculating various contractual expenses (e.g., advisory
fees);
(15) Upon receipt of necessary information from the Company,
assisting in the monitoring and budgeting of expense accruals;
(16) Obtaining security market quotes from independent sources
approved by the Adviser, or if such quotes are unavailable, then obtaining
such prices from the Adviser, in connection with valuing a Fund's assets;
(17) Computing each Fund's net asset value, net income and net
capital gain (loss) in accordance with the Fund's Prospectus and the
resolutions of the Company's Board of Trustees;
(18) Providing periodic reports to the Company regarding
"investment company taxable income" and "net capital gain" distributions in
connection with certain tax-related distribution requirements applicable to
the Company;
(19) Together with the Company's Treasurer or Assistant Treasurer,
acting as liaison with the Company's independent public accountants, and
providing account analyses, fiscal year summaries and other audit related
schedules. PFPC shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information
is made available to such accountants for the expression of their opinion,
as such may be reasonably required by the Company from time to time;
(20) With respect to all share classes of each Fund, providing for
the preparation, supervision and mailing of confirmations for all purchase
and redemption orders to shareholders of record;
(21) With respect to all share classes of each Fund, providing and
supervising the operation of an automated data processing system to process
purchase and redemption orders (PFPC assumes responsibility in accordance
with the standard of care provided for herein for the accuracy of the data
transmitted for processing or storage, provided such data is received by
PFPC in good form and in a format acceptable to it);
-7-
<PAGE>
(22) With respect to all share classes of each Fund, maintaining a
procedure external to the transfer agent's system to reconstruct lost
purchase and redemption data;
(23) With respect to certain share classes of each Fund,
calculating the amount of fees payable with respect to the applicable Plan
on a daily basis and upon instruction from the Company remitting such fees
pursuant to such Plan; and
(24) With respect to various share classes of each Fund,
calculating and reporting to third party industry data services (e.g.,
NASDAQ, Lipper Analytical Services, Inc.) certain performance and other
information.
d. Without limiting any other provision of this Section 5, each of the
Administrators separately agrees to provide the following services (and
neither Administrator shall be responsible for the provision of such
services by the other Administrator):
(1) In compliance with the requirements of Rule 31a-3 under the
1940 Act, each Administrator agrees that all records which it
maintains for the Company are the property of the Company and further
agrees to surrender promptly to the Company any of such records upon
the Company's request. Copies of any such records maintained by an
Administrator will be provided by such Administrator to the Company at
the Company's expense. Each Administrator further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a- 1 under said Act that
relate to the services it provides hereunder.
(2) With respect only to the services designated to it hereunder,
(i) in the event of equipment failures beyond PFPC's control, PFPC
shall, at no additional expense to the Company, take reasonable steps
to minimize service interruptions but shall have no liability with
respect thereto and (ii) PFPC shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provision for emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
(3) In performing their respective services and duties hereunder,
each of the Administrators will act in conformity with the Charter,
Code, Prospectuses and resolutions and other instructions of the
Company's Board of Trustees and will comply with the requirements of
the 1940 Act and other applicable federal or state law, but neither
Administrator shall be responsible for compliance by the Company or
the other Administrator with any of the foregoing items.
6. Expenses Assumed as Administrators. Each Administrator will bear
----------------------------------
all expenses incurred by it in performing the services and duties designated to
it under this Agreement, except as otherwise expressly provided herein. Other
expenses to be incurred in the operation of the Funds, including taxes,
interest, brokerage fees and commissions, if any, salaries and fees of officers
and trustees who are not officers, directors, shareholders or employees of the
-8-
<PAGE>
Administrators, or the Company's investment adviser or the distributor for the
Funds, Commission fees and state Blue Sky fees, advisory and administration
fees, charges of custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, outside auditing and legal expenses, costs of
outside pricing services, costs of maintaining corporate existence, typesetting
and printing of prospectuses for regulatory purposes and for distribution to
current shareholders of the Funds, costs of shareholders' reports and corporate
meetings and any extraordinary expenses, will be borne by the Company, provided,
--------
however, that the Company will not bear, directly or indirectly, the cost of any
-------
activity which is primarily intended to result in the sale of shares of the
Funds otherwise than pursuant to any applicable distribution plan adopted by the
Company.
7. Compensation.
------------
a. For the services provided pursuant to Section 5 above and the
related expenses assumed with respect to those services, the Company, on behalf
of each Fund, will pay to BIMC and PFPC an aggregate fee, computed daily and
payable monthly, as agreed to between the Administrators and the Company from
time to time, together with reasonable out-of-pocket expenses. The fee
attributable to each Fund shall be the several (and not joint or joint and
several) obligation of each such Fund.
b. The Company will also reimburse BIMC monthly for their reasonable
out-of-pocket expenses incurred in administering the Computer Access Program
pursuant to the provisions of Section 5(b)(19) above, provided that BIMC will
--------
not be reimbursed for any costs: (i) which exceed the current budget for the
Computer Access Program approved by the Company's Board of Trustees; (ii) which
directly or indirectly finance any activity primarily intended to result in the
sale of shares; or (iii) which BIMC has not reasonably determined are in the
best interests of the Company and its shareholders.
c. The administration fees set forth above shall be allocated between
the Administrators as agreed to by BIMC and PFPC from time to time. For the
purpose of determining fees payable to the Administrators under this Agreement,
the value of net assets shall be computed as required by the Funds'
Prospectuses, generally accepted accounting principles and resolutions of the
Company's Board of Trustes.
d. Each Administrator will from time to time employ or associate with
itself such person or persons as it may believe to be fit to assist it in the
performance of this Agreement. Such person or persons may be officers and
employees who are employed by both the Company and the applicable Administrator.
The compensation of such person or persons shall be paid by the Administrator
utilizing the services of such person, and no obligation shall be incurred on
behalf of the Company in such respect.
8. Sub-Contracting. BIMC and PFPC are hereby separately authorized to
---------------
retain third parties and are hereby separately authorized to delegate some or
all of their respective duties and obligations hereunder to such person or
persons, provided that BIMC or PFPC, as the case may be, shall remain
responsible for the performance of such duties and obligations to the extent
provided for under this Agreement. The compensation of such person or persons
shall be
-9-
<PAGE>
paid by BIMC or PFPC, as applicable, and no obligation shall be incurred on
behalf of the Company in such respect.
9. Proprietary and Confidential Information. Each Administrator
----------------------------------------
agrees on behalf of itself and its employees to treat confidentially and as
proprietary information of the Company all records and other information
relative to the Company and the Funds and the Company's prior, present or
imminently potential shareholders, and not to use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Company. Such approval shall not be unreasonably withheld. The Company agrees
that such approval shall hereby be deemed to be given where an Administrator may
be exposed to civil or criminal contempt proceedings or when an Administrator is
required to divulge such information or records to duly constituted authorities
(including quasi-regulatory authorities) or independent auditors or when so
requested by the Company.
10. Limitations of Liability. Each Administrator shall exercise care
------------------------
and diligence in rendering its services listed in Section 5 above. Neither
Administrator shall be liable for any error of judgment or mistake of law or for
any loss suffered by the Company in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement. Any
person, even though also an officer, director, employee or agent of a particular
Administrator, who may be or become an officer, employee or agent of the
Company, shall be deemed, when rendering services to the Company or acting on
any business of the Company (other than services or business in connection with
such Administrator's duties hereunder) to be rendering such services to or
acting solely for the Company and not as an officer, director, employee or agent
or one under the control or direction of such Administrator even though paid by
it.
Neither Administrator will be responsible for losses beyond its
control. Notwithstanding anything in this Agreement to the contrary, neither
Administrator (nor its affiliates) shall be liable for any consequential,
special or indirect losses or damages, regardless of whether the likelihood of
such losses or damages was known by the Administrator.
11. Duration and Termination.
------------------------
This Agreement shall become effective as of the date first written
above and, unless sooner terminated as provided herein, shall continue until
March 31, 2000. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually (a) by a vote of a majority of those
members of the Company's Board of Trustees who are not parties to this Agreement
or "interested persons" of such party, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Company's Board of
Trustees or by vote of a "majority of the outstanding voting securities" of the
Company; provided, however, that this Agreement may be terminated by the Company
at any time, without the payment of any penalty, by vote of a majority of the
entire Board of Trustees or a vote of a "majority of the outstanding voting
securities" of the Company, on sixty (60) days' written notice to the
Administrators, or by the Administrators at any time, without the payment of any
penalty, on ninety (90) days' written
-10-
<PAGE>
notice to the Company. (As used in this Agreement, the terms "majority of the
outstanding voting securities" and "interested person" shall have the same
meaning as such terms have in the 1940 Act.)
12. Amendment of this Agreement. No provision of this Agreement may be
---------------------------
changed, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, discharge or
termination is sought.
13. Notices. Notices of any kind to be given to the Company hereunder
-------
by the Administrators shall be in writing and shall be duly given if mailed or
delivered to the Company at 400 Bellevue Parkway, Wilmington, Delaware 19809,
Attention: Rodney D. Johnson, President with a copy to Drinker Biddle & Reath
LLP, One Logan Square, 18/th/ and Cherry Streets, Philadelphia, Pennsylvania
19103-6996, Attention: W. Bruce McConnel, III, Secretary, or at such other
address or to such other individual as shall be so specified by the Company to
the Administrators. Notices of any kind to be given to the Administrators
hereunder by the Company shall be in writing and shall be duly given if mailed
or delivered to: BlackRock Institutional Management Corporation, c/o Robert
Connolly, Esq., BlackRock Advisors, Inc., 345 Park Avenue, New York, New York
10154 with a copy to Karen H. Sabath, 345 Park Avenue, New York, New York 10154;
and PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809, Attention:
Vincent J. Ciavardini with a copy to 400 Bellevue Parkway, Wilmington, Delaware
19809, Attention: Gary M. Gardner, Esq., or at such other address or to such
other individual as shall be so specified by an Administrator to the Company.
14. Miscellaneous.
-------------
a. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. This Agreement shall be deemed to be a
contract made in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
b. The names "Provident Institutional Funds" and "Trustees of
Provident Institutional Funds" refer specifically to the trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated October 21, 1998 which is hereby
referred to and a copy of which is on file at the principal office of the
Company. The obligations of "Provident Institutional Funds" entered into in the
name or on behalf thereof by any of the Trustees or officers of the Company are
not made individually, but in such capacities, and are not binding upon any of
the Trustees, shareholders, or officers of the Company personally, but bind only
the Company property, and all persons dealing with any Fund or class of shares
of the Company must look solely to the Company property belonging to such Fund
or class for the enforcement of any claims against the Company.
15. Counterparts. This Agreement may be executed in counterparts, all
------------
of which together shall constitute one and the same instrument.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT INSTITUTIONAL FUNDS
By: /s/ Rodney D. Johnson
----------------------
BLACKROCK INSTITUTIONAL
MANAGEMENT CORPORATION
By:
------------------------
PFPC INC.
By:
------------------------
-12-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT INSTITUTIONAL FUNDS
By:
------------------------
BLACKROCK INSTITUTIONAL
MANAGEMENT CORPORATION
By: /s/ Karen H. Sabath
-------------------------
Karen H. Sabath
Managing Director
PFPC INC.
By:
-----------------------
-13-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PROVIDENT INSTITUTIONAL FUNDS
By:
--------------------------
BLACKROCK INSTITUTIONAL
MANAGEMENT CORPORATION
By:
--------------------------
PFPC INC.
By:/s/ Stephen H. Wynn
---------------------------
-14-
<PAGE>
APPENDIX A
to the
Administration Agreement
Between Provident Institutional Funds,
BlackRock Institutional Management Corporation and PFPC Inc.
TempFund (all classes)
TempCash (all classes)
FedFund (all classes)
T-Fund (all classes)
Federal Trust Fund (all classes)
Treasury Trust Fund (all classes)
MuniFund (all classes)
MuniCash (all classes)
California Money Fund (all classes)
New York Money Fund (all classes)
-15-
<PAGE>
Exhibit (h)(2)
TRANSFER AGENCY SERVICES AGREEMENT
----------------------------------
THIS AGREEMENT is made as of February 10, 1999 by and between PROVIDENT
INSTITUTIONAL FUNDS, a Delaware business trust (the "Fund") and PFPC INC., a
Delaware corporation ("PFPC").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent to its
investment portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each a "Portfolio"),
and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. Definitions. As Used in this Agreement:
---------------------------------------
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
authorized by the Fund to give Oral Instructions or Written
Instructions on behalf of the Fund and listed on the Authorized
Persons Appendix attached hereto and made a part hereof or any
amendment thereto as may be received by PFPC. An Authorized Person's
scope of authority may be limited by the Fund by setting forth such
limitation in the Authorized Persons Appendix.
<PAGE>
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person.
(f) Copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
(g) Compliance with Rules and Regulations. PFPC undertakes to comply with
-------------------------------------
all applicable requirements of the Securities Laws, and "SEC" means
the Securities and Exchange Commission.
(h) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(i) "Shares" mean the shares of beneficial interest of any Portfolio or
class of the Fund .
(j) "Written Instructions" mean written instructions signed by an
Authorized Person or a person reasonably believed by PFPC to be an
Authorized Person and received by PFPC. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. Appointment. The Fund hereby appoints PFPC to serve as transfer agent,
-----------
registrar, dividend disbursing agent and shareholder servicing agent to the
Fund, in accordance with the terms set forth in this Agreement. PFPC
accepts such appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
---------------------
provide PFPC with the following:
(a) Certified or authenticated copies of the resolutions of the Fund's
Board of Trustees approving the appointment of PFPC or its affiliates
to provide services to the Fund and approving this Agreement;
-2-
<PAGE>
(b) A copy of the Fund's most recent effective registration statement;
(c) A copy of each Portfolio's advisory and (if applicable) sub-advisory
agreement or agreements;
(d) A copy of the distribution agreement with respect to each class of
Shares representing an interest in a Portfolio;
(e) A copy of each Portfolio's administration agreements if PFPC is not
providing the Portfolio with such services;
(f) A copy of any shareholder servicing agreements or arrangements made in
respect of the Fund or a Portfolio; and
4. any other applicable securities laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed
by PFPC hereunder. Except as specifically set forth herein, PFPC assumes no
responsibility for such compliance by the Fund, any Portfolio or any other
entity.
5. Instructions.
------------
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions or Written
Instructions it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any
vote, resolution or proceeding of the Fund's Board of Trustees or of
the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
-3-
<PAGE>
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions so that PFPC receives the Written Instructions by
the close of business on the same day that such Oral Instructions are
received, provided that in any event PFPC shall be entitled to rely on
such Oral Instructions. The fact that such confirming Written
Instructions are not received by PFPC shall in no way invalidate the
transactions or enforceability of the transactions authorized by the
Oral Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized Person,
PFPC shall incur no liability to the Fund in acting upon such Oral
Instructions or Written Instructions provided that PFPC's actions
comply with the other provisions of this Agreement.
6. Right to Receive Advice.
-----------------------
(a) Advice of the Fund. If PFPC is in doubt as to any action it should or
------------------
should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of law
-----------------
pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between directions,
------------------
advice or Oral Instructions or Written Instructions PFPC receives from
the Fund and the advice PFPC receives from counsel, PFPC may rely upon
and follow the advice of counsel.
-4-
<PAGE>
(d) Protection of PFPC. PFPC shall be protected in any action it takes or
------------------
does not take in reliance upon directions, advice or Oral Instructions
or Written Instructions it receives from the Fund or from counsel and
which PFPC believes, in good faith, to be consistent with those
directions, advice or Oral Instructions or Written Instructions.
Nothing in this Section shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral
Instructions or Written Instructions, or (ii) to act in accordance
with such directions, advice or Oral Instructions or Written
Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not
taking such action. Nothing in this subsection shall excuse PFPC when
an action or omission on the part of PFPC which is taken in reliance
upon directions, advice or Oral Instructions or Written Instructions
constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
7. Records; Visits. The books and records pertaining to the Fund and the
---------------
Portfolios which are in the possession or under the control of PFPC shall
be the property of the Fund. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall have
access to such books and records at all times during PFPC's normal business
hours. Upon the reasonable request of the Fund, copies of any such books
and records shall be provided by PFPC to the Fund or to an Authorized
Person, at the Fund's expense.
8. Confidentiality. PFPC agrees to keep confidential all records of the Fund
---------------
and information relating to the Fund and its prior, present or imminently
potential
-5-
<PAGE>
shareholders, unless the release of such records or information is
otherwise consented to, in writing, by the Fund. Such consent shall not be
unreasonably withheld. The Fund agrees that such consent shall hereby be
deemed to be given where PFPC may be exposed to civil or criminal contempt
proceedings or when PFPC is required to divulge such information or records
to duly constituted authorities (including quasi-regulatory authorities) or
independent auditors.
9. Cooperation with Accountants. PFPC shall take all reasonable action in the
----------------------------
performance of its duties under this Agreement to assure that the necessary
information is made available to such accountants for the expression of
their opinion, as reasonably required by the Fund.
10. Disaster Recovery. PFPC shall enter into and shall maintain in effect with
-----------------
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PFPC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
provided such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its
duties or obligations under this Agreement.
11. Compensation. As compensation for services rendered by PFPC during the
------------
term of this Agreement, the Fund, on behalf of each Portfolio, will pay to
PFPC a fee or fees as may be agreed to in writing by the Fund and PFPC.
12. Indemnification. The Fund, on behalf of each Portfolio, agrees to
---------------
indemnify and hold harmless PFPC and its affiliates, nominees and
subcontractors from any and all taxes,
-6-
<PAGE>
charges, expenses, assessments, claims and liabilities (including, without
limitation, attorneys' fees and disbursements) arising directly or
indirectly from (i) any action or omission to act which PFPC takes (a) at
the request or on the direction of or in reliance on the advice of the Fund
or (b) upon Oral Instructions or Written Instructions or (ii) the
acceptance, processing and/or negotiation of checks or other methods
utilized for the purchase of Shares. Neither PFPC, nor any of its
affiliates, nominees or subcontractors, shall be indemnified against any
liability to the Fund or its shareholders (or any expenses incident to such
liability) arising out of PFPC's or its affiliates' or such nominee's or
such subcontractor's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties in connection with the performance of its
duties and obligations specifically set forth in this Agreement, provided
that in the absence of a finding to the contrary the acceptance, processing
and/or negotiation of a fraudulent payment for the purchase of Shares shall
be presumed not to have been the result of PFPC's or its affiliates',
nominee's or subcontractor's own willful misfeasance, bad faith, negligence
or reckless disregard of such duties.
13. Responsibility of PFPC.
----------------------
(a) PFPC shall be under no duty to take any action on behalf of the Fund
or any Portfolio except as specifically set forth herein or as may be
specifically agreed to by PFPC in writing. In the performance of its
duties hereunder, PFPC shall be obligated to exercise care and
diligence, to act in good faith and to use its best efforts, within
reasonable limits, to ensure the accuracy and completeness of all
services performed under this Agreement. PFPC shall be responsible for
its own negligent failure to perform its duties under this Agreement,
but to the extent that
-7-
<PAGE>
duties, obligations and responsibilities are not expressly set forth
in this Agreement, PFPC shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith or gross
negligence on its part or reckless disregard of such duties,
obligations and responsibilities.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (1) PFPC shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with
the standard of care set forth above; and (ii) PFPC shall not be under
any duty or obligation to inquire into and shall not be liable for (A)
the validity or invalidity or authority or lack thereof of any Oral
Instruction or Written Instruction, notice or other instrument which
conforms to the applicable requirements of this Agreement, and which
PFPC reasonably believes to be genuine; or (B) subject to Section 10,
delays or errors or loss of data occurring by reason of circumstances
beyond PFPC's control, including acts of civil or military authority,
national emergencies, labor difficulties, fire, flood, catastrophe,
acts of God, mechanical breakdown, insurrection, war, riots or failure
of the mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or
damages, whether or not the likelihood of such losses or damages was
known by PFPC or its affiliates.
14. Description of Services.
-----------------------
(a) Services Provided on an Ongoing Basis, If Requested.
---------------------------------------------------
(i) Calculate service fee payments;
-8-
<PAGE>
(ii) Maintain shareholder registrations;
(iii) Review new applications and correspond with shareholders to
complete or correct information;
(iv) Direct payment processing of wires;
(v) Prepare and certify stockholder lists in conjunction with
proxy solicitations;
(vi) Prepare and mail to shareholders confirmation of activity;
(vii) Provide toll-free lines for direct shareholder use, plus
customer liaison staff for on-line inquiry response;
(viii) Mail duplicate confirmations to broker-dealers of their
clients' activity, whether executed through the
broker-dealer or directly with PFPC;
(ix) Provide periodic shareholder lists and routine/customary
statistics to the Fund;
(x) Prepare periodic mailing of year-end tax and statement
information;
(xi) Notify on a timely basis the investment adviser, accounting
agent, and custodian of fund activity;
(xii) Perform other participating broker-dealer shareholder
services as may be agreed upon from time to time; and
(xiii) Furnish state-by-state registration reports to the Fund
periodically and upon request.
(b) Services Provided by PFPC Upon Oral Instructions or Written
-----------------------------------------------------------
Instructions.
------------
(i) Accept and post daily purchases and redemptions;
(ii) Accept, post and perform shareholder transfers and
exchanges;
(iii) Pay dividends and other distributions; and
(iv) Solicit and tabulate proxies.
(c) Purchase of Shares. PFPC shall issue and credit an account of an
------------------
investor, in the manner described in the Portfolio's prospectus, once
it receives:
-9-
<PAGE>
(i) A purchase order;
(ii) Proper information to establish a shareholder account; and
(iii) Confirmation of receipt or crediting of funds for such order
to the Portfolio's custodian.
(d) Redemption of Shares. Shares shall be redeemed and payment therefor
--------------------
shall be made in accordance with the Portfolio's prospectus, when the
recordholder tenders Shares in proper form and directs the method of
redemption. If Shares are received in proper form, Shares may be
redeemed before the funds are provided to PFPC from the Portfolio's
custodian (the "Custodian").
(e) Dividends and Distributions. Upon receipt of a resolution of the
---------------------------
Fund's Board of Trustees authorizing the declaration and payment of
dividends and distributions, PFPC shall issue dividends and
distributions declared by the Fund in Shares, or, upon shareholder
election, pay such dividends and distributions in cash, if provided
for in the Portfolio's prospectus. Such issuance or payment, as well
as payments upon redemption as described above, shall be made after
deduction and payment of the required amount of funds to be withheld
in accordance with any applicable tax laws or other laws, rules or
regulations. PFPC shall mail to the Portfolio's shareholders such tax
forms and other information, or permissible substitute notice,
relating to dividends and distributions paid by the Portfolio as are
required to be filed and mailed by applicable law, rule or regulation.
PFPC shall prepare, maintain and file with the IRS and other
appropriate taxing authorities reports relating to all dividends above
a stipulated amount paid by the Portfolio to its shareholders as
required by tax or other law, rule or regulation.
-10-
<PAGE>
(f) Communications to Shareholders. Upon timely Written Instructions, PFPC
------------------------------
shall mail communications by the Fund to its shareholders, including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of Portfolio shares;
(iii) Monthly or quarterly statements;
(iv) Dividend and distribution notices;
(v) Responses to requests for share balance information;
(vi) Proxy material; and
(vii) Tax form information.
In addition, PFPC will receive and tabulate the proxy cards for the
meetings of the Fund's shareholders.
(g) Records. PFPC shall maintain records of the accounts for each
-------
shareholder showing the following information:
(i) Name, address and United States Tax Identification or Social
Security number;
(ii) Number and class of Shares held;
(iii) Historical information regarding the account of each
shareholder, including dividends and distributions paid and
the date and price for all transactions on a shareholder's
account;
(iv) Any stop or restraining order placed against a shareholder's
account;
(v) Any correspondence relating to the current maintenance of a
shareholder's account;
(vi) Information with respect to withholdings; and
(vii) Information required in order for the transfer agent to
perform any calculations contemplated or required by this
Agreement.
-11-
<PAGE>
(h) Shareholder Inspection of Stock Records. Upon a request from any
Portfolio shareholder to inspect stock records, PFPC will notify
the Fund and the Fund will issue instructions granting or denying
each such request. Unless PFPC has acted contrary to the Fund's
instructions, the Fund agrees and does hereby release PFPC from
any liability for refusal of permission for a particular
shareholder to inspect the Fund's stock records.
15. Duration and Termination. This Agreement shall continue until
------------------------
terminated by the Fund or PFPC on sixty (60) days' prior written
notice to the other party.
16. Notices. All notices and other communications, including Written
-------
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if
to PFPC, at 400 Bellevue Parkway, Wilmington, Delaware 19809; (b) if
to the Fund at 400 Bellevue Parkway, Wilmington, Delaware 19809, Attn:
Rodney D. Johnson, President, with a copy to Drinker Biddle & Reath
LLP, One Logan Square, 18th and Cherry Streets, Philadelphia,
Pennsylvania 19103-6996, Attn: W. Bruce McConnel, III, Secretary; or
(c) if to neither of the foregoing, at such other address as shall
have been given by like notice to the sender of any such notice or
other communication by the other party. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given three days
after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered.
-12-
<PAGE>
17. Amendments. This Agreement, or any term thereof, may be changed or
----------
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. Delegation; Assignment. PFPC may assign its rights and delegate its
----------------------
duties hereunder to any affiliate (as defined in the 1940 Act) of or
any majority-owned direct or indirect subsidiary of PFPC or of PNC
Bank Corp., provided that (i) PFPC gives the Fund thirty (30) days'
prior written notice; (ii) the assignee or delegate agrees to comply
with the relevant provisions of the 1940 Act; and (iii) PFPC and such
assignee or delegate promptly provide such information as the Fund may
reasonably request, and respond to such questions as the Fund may
reasonably ask, relative to the assignment or delegation, including
(without limitation) the capabilities of the assignee or delegate.
Such delegate or assignee shall be bound by the terms of this
Agreement as though an original party hereto. PFPC shall
unconditionally guarantee the performance of the delegate or assignee
under the terms and conditions of this Agreement.
19. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
---------------
execute such further documents as are necessary to effectuate the
purposes hereof.
21. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement embodies the entire agreement
----------------
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may
-13-
<PAGE>
embody in one or more separate documents their agreement, if
any, with respect to delegated duties or Oral Instructions.
(b) Captions. The captions in this Agreement are included for
--------
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction
or effect.
(c) Governing Law. This Agreement shall be deemed to be a contract
-------------
made in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(d) Partial Invalidity. If any provision of this Agreement shall be
------------------
held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
(e) Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to
--------------------
this Agreement shall constitute the valid and binding execution
hereof by such party.
(g) Liability of Trustees, Etc. The names "Provident Institutional
--------------------------
Funds" and "Trustees of Provident Institutional Funds" refer
specifically to the trust created and the Trustees, as trustees
but not individually or personally, acting from time to time
under a Declaration of Trust dated October 21, 1998, which is
hereby referred to and a copy of which is on file at the
principal office of the Fund. The obligations of "Provident
Institutional Funds" entered into in the name or on behalf
thereof by any of the Trustees or officers of the Fund are not
made
-14-
<PAGE>
individually, but in such capacities, and are not binding upon
any of the Trustees, officers or shareholders of the Fund
personally, but bind only the Fund property, and all persons
dealing with any Portfolio or class of shares of the Fund must
look solely to the Fund property belonging to such Portfolio or
class for the enforcement of any claims against the Fund.
(h) Registration as a Transfer Agent. PFPC represents that it is
--------------------------------
currently registered with the appropriate Federal agency for the
registration of transfer agents, and that it will remain so
registered for the duration of this Agreement. PFPC agrees that
it will promptly notify the Fund in the event of any material
change in its status as a registered transfer agent. Should PFPC
fail to be registered with the appropriate agency as a transfer
agent at any time during this Agreement, the Fund may, on written
notice to PFPC, immediately terminate this Agreement.
-15-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PFPC INC.
By: /s/ Illegible
-------------------
Title: Vice President
----------------
PROVIDENT INSTITUTIONAL FUNDS
By:___________________
Title:________________
-16-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PFPC INC.
By:___________________________
Title:________________________
PROVIDENT INSTITUTIONAL FUNDS
By /s/ Rodney D. Johnson
---------------------------
Title:________________________
-17-
<PAGE>
EXHIBIT A
---------
THIS EXHIBIT A, dated as of February 10, 1999, is Exhibit A to that certain
Transfer Agency Services Agreement dated as of February 10, 1999 between PFPC
Inc. and Provident Institutional Funds.
PORTFOLIOS
----------
TempFund
TempCash
FedFund
T-Fund
Federal Trust Fund
Treasury Trust Fund
MuniFund
MuniCash
California Money Fund
New York Money Fund
-18-
<PAGE>
AUTHORIZED PERSONS APPENDIX
Name (Type) Signature
-------------------------------------- --------------------------------
-------------------------------------- ---------------------------------
-------------------------------------- ---------------------------------
-------------------------------------- ---------------------------------
-------------------------------------- ---------------------------------
-------------------------------------- ---------------------------------
-------------------------------------- ---------------------------------
-------------------------------------- ---------------------------------
-19-
<PAGE>
Exhibit (j)(1)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the references to our
Firm under the caption "Counsel" in the Statement of Additional Information that
is included in Post-Effective Amendment No. 63 to the Registration Statement on
Form N-1A under the Investment Company Act of 1940, as amended, of Provident
Institutional Funds. This consent does not constitute a consent under Section 7
of the Securities Act of 1933, and in consenting to the use of our name and the
references to our Firm under such caption we have not certified any part of the
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 or the rules and regulations
of the Securities and Exchange Commission thereunder.
/s/ Drinker Biddle & Reath LLP
------------------------------
Drinker Biddle & Reath LLP
Philadelphia, Pennsylvania
November 29, 1999
<PAGE>
Exhibit (j)(2)
Consent of Independent Accountants
We consent to the incorporation by reference in Post-Effective Amendment No. 63
under the Securities Act of 1933, as amended, to the Registration Statement of
Provident Institutional Funds on Form N-1A (File No. 2-47015) of our report
dated August 27, 1999 on our audit of the financial statements and financial
highlights of New York Money Fund (a portfolio of Provident Institutional
Funds), and our report dated October 29, 1999 on our audit of the financial
statements and financial highlights of TempFund and TempCash (portfolios of
Provident Institutional Funds), which reports are included in the Annual Reports
to Shareholders for the years ended July 31, 1999 and September 30, 1999,
respectively, which are incorporated by reference in the Post-Effective
Amendment to the Registration Statement. We also consent to the incorporation by
reference of our reports and the references to our Firm under the
heading "Financial Statements" in the Statement of Additional Information and
under "Financial Highlights" in the Supplements to Prospectuses and consent to
the reference to our Firm under the heading "Auditors" in the Statement of
Additional Information.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
November 23, 1999
<PAGE>
Exhibit (j)(3)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the references to our Firm
under the caption "Counsel" included in the Statement of Additional Information
that is included in Post-Effective Amendment No. 63 to the Registration
Statement on Form N-1A under the Securities Act of 1933, as amended, and under
the Investment Company Act of 1940, as amended (Nos. 2-47015/811-2354) of
Provident Institutional Funds.
/s/ Willkie Farr & Gallagher
----------------------------
Willkie Farr & Gallagher
November 23, 1999
New York, New York
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000097098
<NAME> PROVIDENT INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 011
<NAME> TEMPFUND - MAIN CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 12,572,789,883
<INVESTMENTS-AT-VALUE> 12,572,789,883
<RECEIVABLES> 38,188,241
<ASSETS-OTHER> 57,369
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,611,035,493
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54,502,133
<TOTAL-LIABILITIES> 54,502,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,556,686,134
<SHARES-COMMON-STOCK> 12,045,711,395
<SHARES-COMMON-PRIOR> 11,244,983,583
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (152,774)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 12,556,533,360
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 675,432,440
<OTHER-INCOME> 0
<EXPENSES-NET> (24,644,494)
<NET-INVESTMENT-INCOME> 650,787,946
<REALIZED-GAINS-CURRENT> 50,928
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 650,838,874
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (631,844,393)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 227,037,649,542
<NUMBER-OF-SHARES-REDEEMED> (224,898,894,234)
<SHARES-REINVESTED> 220,267,401
<NET-CHANGE-IN-ASSETS> 2,567,515,101
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,490,007
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 29,415,205
<AVERAGE-NET-ASSETS> 13,137,484,118
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .18
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000097098
<NAME> PROVIDENT INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 012
<NAME> TEMPFUND - DOLLAR CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 12,572,789,883
<INVESTMENTS-AT-VALUE> 12,572,789,883
<RECEIVABLES> 38,188,241
<ASSETS-OTHER> 57,369
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,611,035,493
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54,502,133
<TOTAL-LIABILITIES> 54,502,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,556,686,134
<SHARES-COMMON-STOCK> 497,185,576
<SHARES-COMMON-PRIOR> 375,406,056
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (152,774)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 12,556,533,360
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 675,432,440
<OTHER-INCOME> 0
<EXPENSES-NET> (24,644,494)
<NET-INVESTMENT-INCOME> 650,787,946
<REALIZED-GAINS-CURRENT> 50,928
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 650,838,874
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18,827,954)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,533,892,817
<NUMBER-OF-SHARES-REDEEMED> (4,348,256,691)
<SHARES-REINVESTED> 9,067,103
<NET-CHANGE-IN-ASSETS> 2,567,515,101
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,490,007
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 29,415,205
<AVERAGE-NET-ASSETS> 13,137,484,118
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .047
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.047)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .43
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000097098
<NAME> PROVIDENT INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 013
<NAME> TEMPFUND - CASH MANAGEMENT CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 12,572,789,883
<INVESTMENTS-AT-VALUE> 12,572,789,883
<RECEIVABLES> 38,188,241
<ASSETS-OTHER> 57,369
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,611,035,493
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54,502,133
<TOTAL-LIABILITIES> 54,502,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,556,686,134
<SHARES-COMMON-STOCK> 13,789,163
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (152,774)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 12,556,533,360
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 675,432,440
<OTHER-INCOME> 0
<EXPENSES-NET> (24,644,494)
<NET-INVESTMENT-INCOME> 650,787,946
<REALIZED-GAINS-CURRENT> 50,928
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 650,838,874
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (115,599)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 22,677,787
<NUMBER-OF-SHARES-REDEEMED> (8,888,624)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,567,515,101
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,490,007
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 29,415,205
<AVERAGE-NET-ASSETS> 13,137,484,118
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .014
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.014)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .68
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000097098
<NAME> PROVIDENT INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 021
<NAME> TEMPCASH - MAIN CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 2,332,065,386
<INVESTMENTS-AT-VALUE> 2,332,065,386
<RECEIVABLES> 24,881,799
<ASSETS-OTHER> 29,203
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,356,976,388
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,340,621
<TOTAL-LIABILITIES> 10,340,621
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,346,776,663
<SHARES-COMMON-STOCK> 1,968,713,825
<SHARES-COMMON-PRIOR> 2,441,029,314
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (140,896)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,346,635,767
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 179,238,761
<OTHER-INCOME> 0
<EXPENSES-NET> (7,374,668)
<NET-INVESTMENT-INCOME> 171,864,093
<REALIZED-GAINS-CURRENT> (128,638)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 171,735,455
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (151,905,646)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 56,760,587,569
<NUMBER-OF-SHARES-REDEEMED> (57,357,122,062)
<SHARES-REINVESTED> 66,156,673
<NET-CHANGE-IN-ASSETS> (656,158,328)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,969,690
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,677,023
<AVERAGE-NET-ASSETS> 3,492,112,177
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .18
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000097098
<NAME> PROVIDENT INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 022
<NAME> TEMPCASH - DOLLAR CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 2,332,065,386
<INVESTMENTS-AT-VALUE> 2,332,065,386
<RECEIVABLES> 24,881,799
<ASSETS-OTHER> 29,203
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,356,976,388
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,340,621
<TOTAL-LIABILITIES> 10,340,621
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,346,776,663
<SHARES-COMMON-STOCK> 378,062,838
<SHARES-COMMON-PRIOR> 444,446,078
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (140,896)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,346,635,767
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 179,238,761
<OTHER-INCOME> 0
<EXPENSES-NET> (7,374,668)
<NET-INVESTMENT-INCOME> 171,864,093
<REALIZED-GAINS-CURRENT> (128,638)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 171,735,455
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19,958,447)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,845,834,401
<NUMBER-OF-SHARES-REDEEMED> (1,986,330,759)
<SHARES-REINVESTED> 14,715,850
<NET-CHANGE-IN-ASSETS> (656,158,328)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,969,690
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,677,023
<AVERAGE-NET-ASSETS> 3,492,112,177
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .047
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.047)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .43
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000097098
<NAME> PROVIDENT INSTITUTIONAL FUNDS
<SERIES>
<NUMBER> 101
<NAME> NEW YORK MONEY FUND - MAIN CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> JUL-31-1999
<INVESTMENTS-AT-COST> 295,351,537
<INVESTMENTS-AT-VALUE> 295,351,537
<RECEIVABLES> 1,069,295
<ASSETS-OTHER> 51,765
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 296,472,597
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 744,975
<TOTAL-LIABILITIES> 744,975
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 295,748,771
<SHARES-COMMON-STOCK> 295,750,208
<SHARES-COMMON-PRIOR> 345,298,386
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,149)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 295,727,622
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 10,041,633
<OTHER-INCOME> 0
<EXPENSES-NET> (651,756)
<NET-INVESTMENT-INCOME> 9,389,877
<REALIZED-GAINS-CURRENT> (1,390)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 9,388,487
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9,389,877)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,623,766,248
<NUMBER-OF-SHARES-REDEEMED> (1,646,296,199)
<SHARES-REINVESTED> 168,119
<NET-CHANGE-IN-ASSETS> (22,361,832)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 653,307
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,578,965
<AVERAGE-NET-ASSETS> 326,645,079
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .029
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.029)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .20
</TABLE>
