As filed with the Securities and Exchange Commission
on June 12, 1997
Registration No. 2-78458
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
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UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
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Newbury Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number (617) 563-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after
the Registration Statement becomes effective under the Securities Act of
1933.
The Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) under the Investment
Company Act of 1940; accordingly, no fee is payable herewith because of
reliance upon Rule 24f-2. A Rule 24f-2 Notice for the Registrant's most
recent fiscal year ended October 31, 1996 was filed with the Commission on
December 18, 1996. Pursuant to Rule 429, this Registration Statement
relates to shares previously registered on Form N-1A.
It is proposed that this filing will become effective on July 11, 1997,
pursuant to Rule 488.
TREASURY FUND (FORMERLY U.S. TREASURY PORTFOLIO)
PRIME FUND (FORMERLY MONEY MARKET PORTFOLIO)
TAX-EXEMPT FUND (FORMERLY DAILY TAX-EXEMPT MONEY FUND)
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following papers and documents:
Facing Page
Contents of Registration Statement
Cross Reference Sheet
Solicitation Letter to Shareholders
Forms of Proxy Card
Notices of Special Meeting
Part A - Proxy Statements and Prospectuses
Part B- Statements of Additional Information
Part C - Other Information
Signature Page
Exhibits
NEWBURY STREET TRUST (FORMERLY DAILY TAX-EXEMPT MONEY FUND):
TREASURY FUND (FORMERLY U.S. TREASURY PORTFOLIO)
FORM N-14 CROSS REFERENCE SHEET
PART A
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Form N-14 Item Number and Caption Prospectus/Proxy Statement Caption
1. Beginning of Registration Statement and Out- Cover Page
side Front Cover Page of Prospectus
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2. Beginning and Outside Back Cover Page of Pro- Table of Contents
spectus
3. Fee Table, Synopsis Information and Risk Synopsis; Comparison of Other Policies of the
Factors Funds; Comparison of Principal Risk Factors; The
Proposed Transaction
4. Information About the Transactions Synopsis; The Proposed Transaction;
Prospectus of Treasury Fund: Daily Money Class
5. Information About the Registrant dated May 30, 1997.
Synopsis; Comparison of Other Policies of the
Funds; Comparison of Principal Risk Factors;
Miscellaneous; Additional Information About
Treasury Fund - Daily Money Class; Prospectus of
Treasury Fund - Daily Money Class dated May 30,
1997; Attachment I.
6. Information About the Company Being Acquired Cover Page; Synopsis; Comparison of Other Policies
of the Funds; Comparison of Principal Risk Factors;
Miscellaneous; Prospectus of Capital Reserves: U.S.
Government Portfolio dated November 29, 1996.
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Not applicable
9. Additional Information Required for Reoffering Not applicable
by Persons Deemed to be
Underwriters
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PART B
Item Number and Caption Statement of Additional Information Caption
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Registrant Prospectus and Statement of Additional
Information of Treasury Fund - Daily Money
Class dated May 30, 1997
13. Additional Information About the Company Be- Not applicable
ing Acquired
14. Financial Statements Financial Statements of Capital Reserves:
U.S. Government Portfolio for the Fiscal
Year Ended July 31, 1996; Financial
Statements of U.S. Treasury Portfolio -
Initial Class (currently known as Treasury
Fund -Daily Money Class) for the Fiscal
Period Ended October 31, 1996.
Financial Statements of Capital Reserves:
U.S. Government Portfolio for the fiscal
period ended January 31, 1997; Financial
Statements of Treasury Fund for the Fiscal
Period Ended April 30, 1997.
Pro-Forma Financial Statements for the
Fiscal Period Ended January 31, 1997.
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Part C Information required to be included in Part C
is set forth under the appropriate item so
numbered in Part C of this Registration
Statement.
NEWBURY STREET TRUST (FORMERLY DAILY TAX-EXEMPT MONEY FUND):
PRIME FUND (FORMERLY MONEY MARKET PORTFOLIO)
FORM N-14 CROSS REFERENCE SHEET
PART A
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Form N-14 Item Number and Caption Prospectus/Proxy Statement Caption
1. Beginning of Registration Statement and Out- Cover Page
side Front Cover Page of Prospectus
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2. Beginning and Outside Back Cover Page of Pro- Table of Contents
spectus
3. Fee Table, Synopsis Information and Risk Synopsis; Comparison of Other Policies of the
Factors Funds; Comparison of Principal Risk Factors; The
Proposed Transaction
4. Information About the Transactions Synopsis; The Proposed Transaction;
Prospectus of Prime Fund: Daily Money Class dated
5. Information About the Registrant May 30, 1997.
Synopsis; Comparison of Other Policies of the
Funds; Comparison of Principal Risk Factors;
Miscellaneous; Additional Information About Prime
Fund - Daily Money Class; Prospectus of Prime
Fund - Daily Money Class dated May 30, 1997;
Attachment I.
6. Information About the Company Being Acquired Cover Page; Synopsis; Comparison of Other Policies
of the Funds; Comparison of Principal Risk Factors;
Miscellaneous; Prospectus of Capital Reserves:
Money Market Portfolio dated November 29, 1996.
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Not applicable
9. Additional Information Required for Reoffering Not applicable
by Persons Deemed to be
Underwriters
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PART B
Item Number and Caption Statement of Additional Information Caption
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Registrant Prospectus and Statement of Additional
Information of Prime Fund - Daily Money
Class dated May 30, 1997
13. Additional Information About the Company Be- Not applicable
ing Acquired
14. Financial Statements Financial Statements of Capital Reserves:
Money Market Portfolio for the fiscal year
ended July 31, 1996; Financial Statements of
Money Market Portfolio - Initial Class
(currently known as Prime Fund - Daily
Money Class) for the Fiscal Year Ended
October 31, 1996.
Financial Statements of Capital Reserves:
Money Market Portfolio for the fiscal period
ended January 31, 1997; Financial
Statements of Prime Fund for the Fiscal
Period Ended April 30, 1997.
Pro-Forma Financial Statements for the
fiscal period Ended January 31, 1997.
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Part C Information required to be included in Part C
is set forth under the appropriate item so
numbered in Part C of this Registration
Statement.
NEWBURY STREET TRUST (FORMERLY DAILY TAX-EXEMPT MONEY FUND):
TAX-EXEMPT FUND (FORMERLY DAILY TAX-EXEMPT MONEY FUND)
FORM N-14 CROSS REFERENCE SHEET
PART A
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Form N-14 Item Number and Caption Prospectus/Proxy Statement Caption
1. Beginning of Registration Statement and Out- Cover Page
side Front Cover Page of Prospectus
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2. Beginning and Outside Back Cover Page of Pro- Table of Contents
spectus
3. Fee Table, Synopsis Information and Risk Synopsis; Comparison of Other Policies of the
Factors Funds; Comparison of Principal Risk Factors; The
Proposed Transaction
4. Information About the Transactions Synopsis; The Proposed Transaction;
Prospectus of Tax-Exempt Fund: Daily Money
5. Information About the Registrant Class dated May 30, 1997.
Synopsis; Comparison of Other Policies of the
Funds; Comparison of Principal Risk Factors;
Miscellaneous; Additional Information About
Tax-Exempt Fund - Daily Money Class; Prospectus
of Tax-Exempt Fund - Daily Money Class dated
May 30, 1997; Attachment I.
6. Information About the Company Being Acquired Cover Page; Synopsis; Comparison of Other Policies
of the Funds; Comparison of Principal Risk Factors;
Miscellaneous; Prospectus of Capital Reserves:
Municipal Money Market Portfolio dated November
29, 1996.
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Not applicable
9. Additional Information Required for Reoffering Not applicable
by Persons Deemed to be
Underwriters
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PART B
Item Number and Caption Statement of Additional Information Caption
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Registrant Prospectus and Statement of Additional
Information of Tax-Exempt Fund - Daily
Money Class dated May 30, 1997
13. Additional Information About the Company Be- Not applicable
ing Acquired
14. Financial Statements Financial Statements of Capital Reserves:
Municipal Money Market Portfolio for the
fiscal year ended July 31, 1996; Financial
Statements of Daily Tax-Exempt Money
Fund - Initial Class (currently known as
Tax-Exempt Fund - Daily Money Class) for
the Fiscal Year Ended October 31, 1996.
Financial Statements of Capital Reserves:
Municipal Money Market Portfolio for the
fiscal period ended January 31, 1997;
Financial Statements of Tax-Exempt Fund
for the Fiscal Period Ended April 30, 1997.
Pro-Forma Financial Statements for the
fiscal period Ended January 31, 1997.
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Part C Information required to be included in Part C
is set forth under the appropriate item so
numbered in Part C of this Registration
Statement.
IMPORTANT PROXY MATERIALS...
PLEASE CAST YOUR VOTE NOW!
Dear Capital Reserves Funds Shareholder:
On September 17, 1997, a special shareholder meeting of the following
Capital Reserves Portfolios will be held:
(medium solid bullet) Money Market Portfolio
(medium solid bullet) U.S. Government Portfolio
(medium solid bullet) Municipal Money Market Portfolio
THIS PACKAGE CONTAINS A SEPARATE VOTING CARD FOR EACH PORTFOLIO YOU OWN.
IF THERE IS MORE THAN ONE CARD IN YOUR PACKAGE, IT IS IMPORTANT THAT YOU
VOTE EACH CARD.
The matters to be discussed are important, and directly affect your
investment. As a shareholder, you cast one vote for each share and
fractional votes for fractional shares of each portfolio you own. YOU MAY
THINK YOUR VOTE IS INSIGNIFICANT, BUT EVERY VOTE IS EXTREMELY IMPORTANT.
We must continue sending requests to vote until a majority of the shares
are voted prior to the meeting. Additional mailings are expensive, and
these costs are charged directly to the portfolios.
The enclosed Proxy Statement(s) detail(s) the proposals under
consideration. A list of each issue can be found on the first page of each
Proxy Statement. In addition, we have attached a Q&A to assist you in
understanding the proposals that may require your vote. After you have
read the material, please cast your vote promptly by signing and returning
the enclosed proxy card(s). It is important that you sign your proxy card
exactly as your name appears in the registration of the proxy card. A
postage-paid envelope has been provided. Your time will be well spent, and
you will help save the cost of additional mailings.
These proposals have been carefully considered by each portfolio's Board of
Trustees, which is responsible for protecting your interests as a
shareholder. THE BOARD OF TRUSTEES BELIEVES THESE PROPOSALS ARE FAIR AND
REASONABLE, AND RECOMMENDS THAT YOU APPROVE THEM. If you have any
questions about any of the proposals, please do not hesitate to contact
Fidelity Client Services at
800-843-3001.
Remember, this is your opportunity to voice your opinion on matters
affecting your portfolio(s). YOUR PARTICIPATION IS EXTREMELY IMPORTANT NO
MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
Thank you. We appreciate your prompt attention.
Sincerely,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Q&A IMPORTANT INFORMATION TO HELP
YOU UNDERSTAND THE PROPOSALS
THAT YOU ARE BEING ASKED TO
VOTE ON.
PLEASE READ THE FULL TEXT OF THIS PROXY STATEMENT. BELOW IS A BRIEF
OVERVIEW OF THE MATTERS TO BE VOTED UPON. YOUR VOTE IS IMPORTANT. IF YOU
HAVE ANY QUESTIONS REGARDING THE PROPOSALS PLEASE CALL CLIENT SERVICES AT
800-843-3001. WE APPRECIATE YOU PLACING YOUR TRUST IN THE CAPITAL RESERVES
PORTFOLIOS AND LOOK FORWARD TO HELPING YOU ACHIEVE YOUR FINANCIAL GOALS.
Q. WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?
A. If you are a shareholder in the following fund(s), you will be asked to
vote on the indicated proposals:
CAPITAL RESERVES: MONEY MARKET PORTFOLIO
(medium solid bullet) To approve an Agreement and Plan of Reorganization
between Money Market
Portfolio and Prime Fund, a fund of Newbury Street Trust.
CAPITAL RESERVES: U.S. GOVERNMENT PORTFOLIO
(medium solid bullet) To approve an Agreement and Plan of Reorganization
between U.S. Government
Portfolio and Treasury Fund, a fund of Newbury Street Trust.
CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
(medium solid bullet) To approve an Agreement and Plan of Reorganization
between Municipal Money
Market Portfolio and Tax-Exempt Fund, a fund of Newbury Street Trust.
Q. WHY ARE CAPITAL RESERVES: MONEY MARKET PORTFOLIO, CAPITAL RESERVES: U.S.
GOVERNMENT PORTFOLIO AND CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
EACH PROPOSING TO ADOPT AN AGREEMENT AND PLAN OF REORGANIZATION?
A. The proposal is to merge the existing Capital Reserves: Money Market
Portfolio, Capital Reserves: U.S. Government Portfolio, and Capital
Reserves: Municipal Money Market Portfolio into a newly-created class -
Capital Reserves Class - of Prime Fund, Treasury Fund, and Tax-Exempt Fund,
all larger money market funds also managed by Fidelity Management &
Research Company (FMR). FMR is presenting similar proposals to all of the
Capital Reserves Portfolios it manages. Merging the funds will help FMR
manage your money more efficiently.
If the proposals are approved, you will pay lower costs for your
investment - total fund expenses of 0.90% per year, instead of 0.99% per
year. (These expenses are based on voluntary expense limits agreed to by
FMR. They could change in the future, whether or not the Reorganization
takes place.)
Q. WILL THERE BE ANY OTHER CHANGES TO CAPITAL RESERVES: MUNICIPAL MONEY
MARKET PORTFOLIO ONCE THE REORGANIZATION OCCURS?
A. Tax-Exempt Fund: Capital Reserves Class is designed to be similar to
Capital Reserves: Municipal Money Market Portfolio. You will not have to
change how you do business with Fidelity, or have to take any other action
(other than voting) to maintain your investment.
Tax-Exempt Fund has slightly different investment policies than Capital
Reserves: Municipal Money Market Portfolio. Municipal Money Market
Portfolio may invest up to 100% of its assets in securities whose interest
is a tax preference item for purposes of the federal alternative minimum
tax, or AMT. Tax-Exempt Fund does not invest in AMT securities. AMT
securities generally pay higher yields than municipal securities that are
fully tax-exempt, but increase the tax liability for some investors. Not
investing in AMT securities will negatively impact Tax-Exempt Fund: Capital
Reserves Class's yield - approximately 0.03% - 0.08% per year compared to
Municipal Money Market Portfolio. However, this impact should be offset by
the 0.09% expense reduction if the Reorganization is approved.
Q. WILL THERE BE ANY OTHER CHANGES TO CAPITAL RESERVES: MONEY MARKET
PORTFOLIO ONCE THE REORGANIZATION OCCURS?
A. Prime Fund: Capital Reserves Class is designed to be similar to Capital
Reserves: Money Market Portfolio. You will not have to change how you do
business with Fidelity, or have to take any other action (other than
voting) to maintain your investment.
Prime Fund has slightly different investment policies than Capital
Reserves: Money Market Portfolio. Prime Fund is rated AAAm and Aaa by
Standard & Poor's and Moody's Investors Service, respectively. These
ratings prohibit the fund from investing in any second tier and split rated
securities, and limits the fund's weighted average maturity to 60 days.
Money Market Portfolio is not a rated fund, and can therefore invest up to
5% of its net assets in second tier securities, and can purchase split
rated securities.
Q. WILL THERE BE ANY OTHER CHANGES TO CAPITAL RESERVES: U.S. GOVERNMENT
PORTFOLIO ONCE THE REORGANIZATION OCCURS?
A. Treasury Fund: Capital Reserves Class is designed to be similar to
Capital Reserves: U.S. Government Portfolio. You will not have to change
how you do business with Fidelity, or have to take any other action (other
than voting) to maintain your investment.
Treasury Fund has slightly different investment policies than Capital
Reserves: U.S. Government Portfolio. U.S. Government Portfolio may invest
in U.S. Government securities that are backed by the full faith and credit
of the United States and in repurchase agreements backed by these
securities. Treasury Fund invests only in U.S. Treasury securities and in
repurchase agreements backed by these securities. Although U.S. Government
Portfolio is permitted to invest in U.S. Government securities other than
U.S. Treasury securities, it currently does not own, or does not anticipate
purchasing, any securities that would be considered ineligible for Treasury
Fund. Its portfolio holdings are therefore substantially similar, and will
not materially change when the reorganization occurs.
Q. HAS MY FUND'S BOARD OF TRUSTEES APPROVED THE PROPOSALS?
A. Yes. The Board of Trustees of each fund has unanimously approved the
proposals, and recommends that you vote to approve each one.
Q. HOW DO I VOTE MY SHARES?
A. You can vote your shares by completing and signing the enclosed proxy
card(s), and mailing them in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposals or how
to vote your shares, please call Fidelity Client Services at 800-843-3001.
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
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DAILY MONEY FUND: CAPITAL RESERVES: U.S. GOVERNMENT PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Donald J. Kirk, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Daily Money Fund: Capital Reserves: U.S. Government Portfolio which the
undersigned is entitled to vote at the Special Meeting of Shareholders of
the fund to be held at the office of the trust at 82 Devonshire St.,
Boston, MA 02109, on September 17, 1997 at 11:30 a.m. Eastern time and at
any adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # 233809409/fund# 681]
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
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__________________________________________________________________________
___________________
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1. To approve an Agreement and Plan of Reorganization FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
between Capital Reserves: U.S. Government
Portfolio and Treasury Fund. The Agreement provides
for the transfer of all of the assets of U.S. Government
Portfolio to Treasury Fund in exchange solely for
Capital Reserves Class shares of beneficial interest of
Treasury Fund and the assumption by Treasury Fund
of U.S. Government Portfolio's liabilities, followed by
the distribution of Capital Reserves Class shares of
Treasury Fund to shareholders of U.S. Government
Portfolio in liquidation of U.S. Government Portfolio.
</TABLE>
[CRUSG-PXC-0797] [cusip # 233809409/fund# 681]
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
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DAILY MONEY FUND: CAPITAL RESERVES: MONEY MARKET PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Donald J. Kirk, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Daily Money Fund: Capital Reserves: Money Market Portfolio which the
undersigned is entitled to vote at the Special Meeting of Shareholders of
the fund to be held at the office of the trust at 82 Devonshire St.,
Boston, MA 02109, on September 17, 1997 at 11:30 a.m. Eastern time and at
any adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one votes
and acts, then by that one. This Proxy shall be voted on the proposals
described in the Proxy Statement as specified on the reverse side. Receipt
of the Notice of the Meeting and the accompanying Proxy Statement is hereby
acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # 233809607/fund# 682]
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
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__________________________________________________________________________
___________________
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1. To approve an Agreement and Plan of Reorganization FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
between Capital Reserves: Money Market Portfolio
and Prime Fund. The Agreement provides for the
transfer of all of the assets of Money Market Portfolio
to Prime Fund in exchange solely for Capital Reserves
Class shares of beneficial interest of Prime Fund and
the assumption by Prime Fund of Money Market
Portfolio's liabilities, followed by the distribution of
Capital Reserves Class shares of Prime Fund to
shareholders of Money Market Portfolio in liquidation
of Money Market Portfolio.
</TABLE>
[CRMMP-PXC-0797] [cusip # 233809607/fund# 682]
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
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DAILY MONEY FUND: CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward C.
Johnson 3d, Arthur S. Loring, and Donald J. Kirk, or any one or more of
them, attorneys, with full power of substitution, to vote all shares of
Daily Money Fund: Capital Reserves: Municipal Money Market Portfolio
which the undersigned is entitled to vote at the Special Meeting of
Shareholders of the fund to be held at the office of the trust at 82
Devonshire St., Boston, MA 02109, on September 17, 1997 at 11:30 a.m.
Eastern time and at any adjournments thereof. All powers may be exercised
by a majority of said proxy holders or substitutes voting or acting or, if
only one votes and acts, then by that one. This Proxy shall be voted on
the proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When signing
in a fiduciary capacity, such as executor, administrator, trustee,
attorney, guardian, etc., please so indicate. Corporate and partnership
proxies should be signed by an authorized person indicating the person's
title.
Date _____________, 1997
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
[cusip # 233809508/fund# 683]
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with their
best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
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__________________________________________________________________________
___________________
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1. To approve an Agreement and Plan of Reorganization FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
between Capital Reserves: Municipal Money Market
Portfolio and Tax-Exempt Fund. The Agreement
provides for the transfer of all of the assets of
Municipal Money Market Portfolio to Tax-Exempt
Fund in exchange solely for Capital Reserves Class
shares of beneficial interest of Tax-Exempt Fund and
the assumption by Tax-Exempt Fund of Municipal
Money Market Portfolio's liabilities, followed by the
distribution of Capital Reserves Class shares of
Tax-Exempt Fund to shareholders of Municipal
Money Market Portfolio in liquidation of Municipal
Money Market Portfolio.
</TABLE>
[CRMMM-PXC-0797] [cusip # 233809508/fund# 683]
CAPITAL RESERVES: U.S. GOVERNMENT PORTFOLIO
A FUND OF
DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Capital Reserves: U.S. Government Portfolio:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Capital Reserves: U.S. Government Portfolio (U.S. Government
Portfolio), will be held at the office of Daily Money Fund, 82 Devonshire
Street, Boston, Massachusetts 02109 on Wednesday, September 17, 1997, at
11:30 a.m. Eastern time. The purpose of the Meeting is to consider and act
upon the following proposal, and to transact such other business as may
properly come before the Meeting or any adjournments thereof.
(1) To approve an Agreement and Plan of Reorganization between U.S.
Government Portfolio and Treasury Fund, a fund of Newbury Street Trust,
providing for the transfer of all of the assets of U.S. Government
Portfolio to Treasury Fund in exchange solely for Capital Reserves Class
shares of beneficial interest of Treasury Fund and the assumption by
Treasury Fund of U.S. Government Portfolio's liabilities, followed by the
distribution of Capital Reserves Class shares of Treasury Fund to
shareholders of U.S. Government Portfolio in liquidation of U.S. Government
Portfolio.
The Board of Trustees has fixed the close of business on July 21, 1997 as
the record date for the determination of the shareholders of U.S.
Government Portfolio entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
July 21, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
CAPITAL RESERVES: U.S. GOVERNMENT PORTFOLIO
A FUND OF
DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
PROXY STATEMENT AND PROSPECTUS
JULY 21, 1997
This Proxy Statement and Prospectus (Proxy Statement) is being furnished
to shareholders of Capital Reserves: U.S. Government Portfolio (U.S.
Government Portfolio), a fund of Daily Money Fund, in connection with the
solicitation of proxies by Daily Money Fund's Board of Trustees for use at
the Special Meeting of Shareholders of U.S. Government Portfolio and at any
adjournments thereof (the Meeting). The Meeting will be held on Wednesday,
September 17, 1997 at 11:30 a.m. Eastern time at 82 Devonshire Street,
Boston, Massachusetts 02109, the principal executive office of Daily Money
Fund.
As more fully described in this Proxy Statement, the purpose of the
Meeting is to vote on a proposed reorganization (Reorganization). Pursuant
to an Agreement and Plan of Reorganization (the Agreement), U.S. Government
Portfolio would transfer all of its assets to Treasury Fund, a fund of
Newbury Street Trust, in exchange solely for Capital Reserves Class shares
of beneficial interest of Treasury Fund (Capital Reserves Class Shares) and
the assumption by Treasury Fund of U.S. Government Portfolio's liabilities.
Capital Reserves Class Shares would then be distributed to U.S. Government
Portfolio shareholders, so that each such shareholder would receive the
number of full and fractional Capital Reserves Class Shares equal to the
number of full and fractional shares of U.S. Government Portfolio held by
such shareholder on October 30, 1997, or such other date as the parties may
agree (the Closing Date). U.S. Government Portfolio will distribute
Capital Reserves Class Shares to its shareholders in liquidation, as
provided in the Agreement.
Treasury Fund, a money market fund, is a diversified fund of Newbury
Street Trust, an open-end management investment company organized as a
Delaware business trust on December 30, 1991. Newbury Street Trust's
principal executive office is located at 82 Devonshire Street, Boston,
Massachusetts 02109 (1-800-843-3001). Treasury Fund's investment objective
is to obtain as high a level of current income as is consistent with the
preservation of capital and liquidity. Treasury Fund seeks to achieve its
investment objective by investing only in U.S. Treasury securities,
including bills, notes, and bonds, and in repurchase agreements for these
securities. Treasury Fund is currently authorized to issue three classes
of shares designated Treasury Fund - Daily Money Class shares, which are
currently outstanding, Treasury Fund - Advisor B Class shares, which also
are currently outstanding, and Treasury Fund - Capital Reserves Class
shares, which will be issued initially to U.S. Government Portfolio
shareholders in connection with the Reorganization.
This Proxy Statement, which should be retained for future reference, sets
forth concisely the information about the Reorganization and Treasury Fund
that a shareholder should know before voting on the proposed
Reorganization. This Proxy Statement is accompanied by the Prospectus for
Treasury Fund - Daily Money Class, dated May 30, 1997. The Statement of
Additional Information for Treasury Fund - Daily Money Class, dated May 30,
1997, is available upon request. The Prospectus and the Statement of
Additional Information for Treasury Fund - Daily Money Class have been
filed with the Securities and Exchange Commission (the SEC) and are
incorporated herein by reference. A Statement of Additional Information,
dated July 21, 1997, relating to this Proxy Statement has been filed with
the SEC and is incorporated herein by reference. A Prospectus, dated
November 29, 1996 (as supplemented March 21, 1997), and a Statement of
Additional Information, dated November 29, 1996 (as supplemented January 2,
1997), for U.S. Government Portfolio have been filed with the SEC and are
incorporated herein by reference. Copies of these documents, as well as
each fund's most recent annual and semi-annual reports, may be obtained
without charge by contacting Fidelity Client Services at 82 Devonshire
Street, Boston, Massachusetts 02109 or by calling 1-800-843-3001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT AND
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
VOTING INFORMATION
SYNOPSIS
COMPARISON OF OTHER POLICIES OF THE FUNDS
COMPARISON OF PRINCIPAL RISK FACTORS
THE PROPOSED TRANSACTION
ADDITIONAL INFORMATION ABOUT TREASURY FUND
MISCELLANEOUS
EXHIBIT 1. FORM OF AGREEMENT AND PLAN OF REORGANIZATION OF U.S. GOVERNMENT
PORTFOLIO
PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF
CAPITAL RESERVES: U.S. GOVERNMENT PORTFOLIO
A FUND OF DAILY MONEY FUND
TO BE HELD ON SEPTEMBER 17, 1997
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
_________________________________
VOTING INFORMATION
This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of, the
Board of Trustees of Daily Money Fund (Daily Money Fund or the trust) to be
used at the Special Meeting of Shareholders of Capital Reserves: U.S.
Government Portfolio (U.S. Government Portfolio or the fund) and at any
adjournments thereof (the Meeting), to be held on Wednesday, September 17,
1997 at 11:30 a.m. Eastern time at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and
Fidelity Management & Research Company (FMR), the fund's investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about July 21, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. and/or Management Information Services Corp. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $26,700. The expenses in connection with
preparing this Proxy Statement and its enclosures and of all solicitations
will be borne by the fund; however, because FMR has voluntarily agreed to
limit the fund's total operating expenses, it is expected that these
expenses will effectively be borne by FMR. FMR will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. Only proxies that are voted will be counted
toward establishing a quorum. Broker non-votes are not considered voted for
this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
U.S. Government Portfolio may also arrange to have votes recorded by
telephone. D.F. King & Co. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated cost of
approximately $8,000. The expenses in connection with telephone voting
will be borne by the fund; however, because FMR has voluntarily agreed to
limit the fund's total operating expenses, it is expected that these
expenses will effectively be borne by FMR. If the fund records votes by
telephone, it will use procedures designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares
in accordance with their instructions, and to confirm that their
instructions have been properly recorded. Proxies given by telephone may
be revoked at any time before they are voted in the same manner that
proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present at
the Meeting but sufficient votes to approve one or more of the proposed
items are not received, or if other matters arise requiring shareholder
attention, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those
shares present at the Meeting or represented by proxy. When voting on a
proposed adjournment, the persons named as proxies will vote FOR the
proposed adjournment all shares that they are entitled to vote with respect
to that item, unless directed to vote AGAINST the item, in which case such
shares will be voted against the proposed adjournment with respect to that
item. A shareholder vote may be taken on one or more of the items in this
Proxy Statement or on any other business properly presented at the meeting
prior to such adjournment if sufficient votes have been received and it is
otherwise appropriate.
On April 30, 1997, there were 1,352,078,103 shares of Treasury Fund -
Daily Money Class (then Daily Money Fund: U.S. Treasury Portfolio - Initial
Class) and 43,967,205 shares of Treasury Fund - Advisor B Class (then Daily
Money Fund: U.S. Treasury Portfolio - Class B) issued and outstanding.
On April 30, 1997, there were 271,615,936 shares of U.S. Government
Portfolio issued and outstanding. Shareholders of record of U.S.
Government Portfolio at the close of business on July 21, 1997, will be
entitled to vote at the Meeting. Each such shareholder will be entitled to
one vote for each full share held on that date and a proportionate share of
one vote for each fractional share held on that date.
On April 30, 1997, the trustees and officers of Daily Money Fund and of
Newbury Street Trust (then known as Daily Tax-Exempt Money Fund) owned in
the aggregate less than 1% of the shares of U.S. Government Portfolio and
Treasury Fund (then Daily Money Fund: U.S. Treasury Portfolio),
respectively.
On April 30, 1997, the following shareholders were known by Daily Money
Fund or by Newbury Street Trust to own of record or beneficially 5% or more
of U.S. Government Portfolio's or Treasury Fund's outstanding shares:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERCENTAGE OF PERCENTAGE OF
OUTSTANDING FUND OUTSTANDING CLASS
SHAREHOLDER ADDRESS SHARES SHARES
U.S. GOVERNMENT PORTFOLIO
Saperston Financial Group Buffalo, NY 11.91% --
GW & Wade Asset Management Wellesley, MA 11.85% --
Co.
Securities America, Inc. Omaha, NE 8.77% --
Muriel Siebert & Co., Inc. New York, NY 8.40% --
Oriental Financial Services Corp. Hato Rey, PR 6.93% --
TREASURY FUND - DAILY MONEY
CLASS
Texas Commerce Bank, N.A. Houston, TX 23.35% 24.11%
Bank of New York New York, NY 5.79% 5.98%
First Trust St. Paul, MN 4.91% 5.08%
First National Bank of Maryland Baltimore, MD 4.90% 5.06%
TREASURY FUND - ADVISOR B
CLASS
Advantage Capital Corp. Houston, TX 1.57% 49.78%
</TABLE>
To the knowledge of Daily Money Fund and Newbury Street Trust, no other
shareholder owned of record or beneficially 5% or more of the outstanding
shares of U.S. Government Portfolio or Treasury Fund on that date. If the
Reorganization became effective at April 30, 1997, the above shareholders
of U.S. Government Portfolio would have owned of record or beneficially the
same percentages shown above of Treasury Fund - Capital Reserves Class; the
above shareholders of Treasury Fund - Daily Money Class and Treasury Fund -
Advisor B Class would have owned of record or beneficially the same
percentages shown above of Treasury Fund - Daily Money Class and Treasury
Fund - Advisor B Class, respectively; and Texas Commerce Bank, N.A. would
have owned of record or beneficially 20.07% of Treasury Fund as a whole.
A shareholder owning of record or beneficially more than 25% of a Fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE AFFIRMATIVE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF U.S.
GOVERNMENT PORTFOLIO. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940
ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS
THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING
SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF
MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE PRESENT OR
REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING VOTING
SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
SYNOPSIS
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement, in the Agreement, and in the Prospectuses of U.S.
Government Portfolio and Treasury Fund - Daily Money Class, which are
incorporated herein by this reference. Shareholders should read the entire
Proxy Statement and the enclosed Prospectus of Treasury Fund - Daily Money
Class carefully for more complete information about the Reorganization and
Treasury Fund.
The proposal is to merge U.S. Government Portfolio into a newly-created
class - Capital Reserves Class - of Treasury Fund, a larger money market
fund also managed by FMR. FMR is presenting similar proposals to all of
the Capital Reserves Portfolios it manages. Merging U.S. Government
Portfolio into Treasury Fund - Capital Reserves Class will help FMR manage
the funds more efficiently.
If the proposal is approved you will have lower costs on your investment -
total fund expenses of 0.90% per year, instead of 0.99% per year. (These
expenses are based on voluntary expense limits agreed to by FMR. They
could change in the future, whether or not the Reorganization takes place.)
Treasury Fund - Capital Reserves Class is designed to be similar to U.S.
Government Portfolio. You will not have to change how you do business
with Fidelity or have to take any other action (other than voting) to
maintain your investment.
INVESTMENT OBJECTIVES AND POLICIES
U.S. Government Portfolio and Treasury Fund (collectively the "Funds" or
each individually a "Fund") have essentially the same investment objective.
U.S. Government Portfolio seeks as high a level of current income as is
consistent with the preservation of capital and liquidity by investing in
money market instruments. Treasury Fund seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
U.S. Government Portfolio invests only in U.S. Government securities that
are backed by the full faith and credit of the United States and in
repurchase agreements for these securities. Treasury Fund invests only in
U.S. Treasury securities and in repurchase agreements for these securities.
Although U.S. Government Portfolio is permitted to invest in U.S.
Government securities other than U.S. Treasury securities, it currently
does not own, nor does it anticipate purchasing, any portfolio securities
that would be considered ineligible investments for Treasury Fund. In
addition, Treasury Fund currently does not enter into reverse repurchase
agreements. U.S. Government Portfolio may enter into reverse repurchase
agreements but has done so only infrequently over the past several years.
EXPENSE STRUCTURE
Treasury Fund - Capital Reserves Class has lower expenses than U.S.
Government Portfolio. Thus, if shareholders approve the Reorganization,
they will have lower costs on their investments.
U.S. Government Portfolio currently pays FMR a monthly management fee at an
annual rate of 0.50% of its average net assets. Also, under a Distribution
and Service Plan adopted pursuant to Rule 12b-1 under the 1940 Act, the
Fund pays its distributor, National Financial Services Corporation (NFSC),
a monthly distribution fee at an annual rate of 0.35% of its average net
assets. Thus, U.S. Government Portfolio currently pays total management
and distribution fees of 0.85%. In addition, the Fund's Distribution and
Service Plan specifically recognizes that FMR may make payments from its
management fee revenue, past profits, or other resources (not from the
Fund's assets) to compensate financial intermediaries (including NFSC) for
providing distribution-related services for the Fund. The Board of
Trustees of Daily Money Fund has authorized FMR to make such payments of up
to 0.25% of the Fund's average net assets throughout the month based upon
the level of shareholder support and distribution services provided. FMR
has voluntarily agreed to reimburse U.S. Government Portfolio to the extent
that its total operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.99% of its average net
assets.
If U.S. Government Portfolio shareholders approve the Reorganization, they
will receive Treasury Fund - Capital Reserves Class shares, which will pay
a 0.25% management fee and a 0.50% distribution fee. The total management
and distribution fees of 0.75% to be paid by Treasury Fund - Capital
Reserves Class will be 0.10% lower, as a percentage of average net assets,
than the total management and distribution fees of 0.85% currently paid by
U.S. Government Portfolio. In addition, the Distribution and Service Plan
for Treasury Fund - Capital Reserves Class shares will specifically
recognize that FMR may make payments from its management fee revenue, past
profits or other resources (not from the Class's assets) to compensate
financial intermediaries for providing distribution-related services to the
Class. FMR has voluntarily agreed to reimburse Treasury Fund - Capital
Reserves Class to the extent that its total operating expenses (excluding
interest, taxes, brokerage commissions, and extraordinary expenses) exceed
0.90% of its average net assets -- 0.09% lower than U.S. Government
Portfolio's current 0.99% voluntary expense limitation. Although FMR may
terminate the voluntary expense limitation with respect to Treasury Fund -
Capital Reserves Class at any time without prior notice to shareholders,
FMR has no current intention of doing so.
In sum, the Reorganization would give shareholders of U.S. Government
Portfolio the opportunity to participate in a larger money market fund with
essentially the same investment objective, a comparable investment
portfolio, 0.10% lower total management and distribution fees, and a 0.09%
lower total operating expense ratio, after reimbursement.
The Board of Trustees believes that the Reorganization would benefit U.S.
Government Portfolio's shareholders and recommends that shareholders vote
in favor of the Reorganization.
THE PROPOSED REORGANIZATION
Shareholders of U.S. Government Portfolio will be asked at the Meeting to
vote upon and approve the Reorganization and the Agreement, which provides
for the acquisition by Treasury Fund of all of the assets of U.S.
Government Portfolio in exchange solely for Capital Reserves Class shares
of Treasury Fund (Capital Reserves Class Shares) and the assumption by
Treasury Fund of the liabilities of U.S. Government Portfolio. U.S.
Government Portfolio will then distribute the Capital Reserves Class Shares
to its shareholders, so that each shareholder will receive the number of
full and fractional Capital Reserves Class Shares equal to the number of
full and fractional shares of U.S. Government Portfolio held by such
shareholder on the Closing Date (defined below). The exchange of U.S.
Government Portfolio's assets for Capital Reserves Class Shares will occur
as of 4:00 p.m. Eastern time on October 30, 1997, or such other date as the
parties may agree (the Closing Date). U.S. Government Portfolio will then
be liquidated as soon as practicable thereafter.
The Funds will receive an opinion of counsel that the Reorganization will
not result in any gain or loss for federal income tax purposes to U.S.
Government Portfolio or Treasury Fund or to the shareholders of either
Fund. The rights and privileges of the former shareholders of U.S.
Government Portfolio will be effectively unchanged by the Reorganization,
except as described on page 10 under the heading "Forms of Organization."
COMPARATIVE FEE TABLES
The following tables show (i) the shareholder transaction expenses that
U.S. Government Portfolio shareholders currently incur, and the shareholder
transaction expenses that Treasury Fund - Capital Reserves Class
shareholders will incur after giving effect to the Reorganization, and (ii)
the current fees and expenses of U.S. Government Portfolio for the 12
months ended January 31, 1997 (unaudited), and the pro forma fees for
Treasury Fund - Capital Reserves Class based on the same period (unaudited)
after giving effect to the Reorganization.
SHAREHOLDER TRANSACTION EXPENSES are charges that shareholders may pay when
they buy or sell shares of a Fund.
<TABLE>
<CAPTION>
<S> <C> <C>
U.S. GOVERNMENT TREASURY FUND - CAPITAL
PORTFOLIO RESERVES CLASS
Maximum sales charge on purchases None None
and reinvested distributions
Maximum deferred sales charge None None
Redemption fee None None
Exchange fee None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
Annual fund operating expenses are paid out of each Fund's assets and, in
the case of Treasury Fund, are allocated to the appropriate Class, as
applicable. The expenses of each Fund/Class are factored into its share
price or dividends and are not charged directly to shareholder accounts.
The following figures for U.S. Government Portfolio are based on historical
expenses. The following pro forma expenses for Treasury Fund - Capital
Reserves Class are based on the proposed expense structure described above,
with Other Expenses estimated. All figures are calculated as a percentage
of average net assets.
PRO FORMA EXPENSES
U.S. GOVERNMENT TREASURY FUND -
PORTFOLIO CAPITAL RESERVES CLASS
Management Fee 0.34%* 0.25%
12b-1 Fee (Distribution Fee) 0.35% 0.50%
Other Expenses 0.30% 0.15%**
Total Fund Operating Expenses 0.99%* 0.90%**
* FMR has voluntarily agreed to reimburse U.S. Government Portfolio to the
extent that total operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.99% of the Fund's average
net assets. If this agreement were not in effect, the Fund's management
fee and total operating expenses, as a percentage of average net assets,
would have been 0.50% and 1.15%, respectively.
** FMR has voluntarily agreed to reimburse Treasury Fund - Capital Reserves
Class to the extent that total operating expenses (excluding interest,
taxes, brokerage commissions, and extraordinary expenses) exceed 0.90% of
the Class's average net assets. If this agreement were not in effect, the
Class's other expenses and total operating expenses, as a percentage of
average net assets, would be estimated to be 0.25% and 1.00%, respectively.
EXAMPLE OF EFFECT OF FUND EXPENSES
The following table illustrates the expenses on a hypothetical $1,000
investment in U.S. Government Portfolio under its current expenses, and in
Treasury Fund - Capital Reserves Class under the pro forma expenses,
calculated at the rates (after reimbursement) stated above, assuming a 5%
annual return.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
After 1 Year After 3 Years After 5 Years After 10 Years
U.S. Government Portfolio $10 $32 $55 $121
Treasury Fund - Capital $ 9 $29 $50 $111
Reserves Class
</TABLE>
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual or
expected costs, which may vary. The assumed return of 5% is not a
prediction of, and does not represent, the actual or expected performance
of either Fund/Class. Long-term shareholders may pay more than the
economic equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc. due to 12b-1 fees.
ADDITIONAL EXPENSE INFORMATION
DISTRIBUTOR. NFSC distributes U.S. Government Portfolio's shares.
Fidelity Distributors Corporation (FDC), an affiliate of FMR, currently
distributes Treasury Fund's shares and will distribute Treasury Fund -
Capital Reserves Class shares following the Reorganization.
As stated above, under a Distribution and Service Plan adopted pursuant to
Rule 12b-1 under the 1940 Act, U.S. Government Portfolio currently pays
NFSC a monthly distribution fee at an annual rate of 0.35% of the Fund's
average net assets. In addition, the U.S. Government Portfolio plan
specifically recognizes that FMR may make payments from its management fee
revenue, past profits, or other resources to compensate financial
intermediaries (including NFSC) for providing distribution-related services
for the Fund. The Board of Trustees of Daily Money Fund has authorized FMR
to make such payments of up to 0.25% of the Fund's average net assets
throughout the month based upon the level of shareholder support and
distribution services provided.
If shareholders approve the Reorganization, Treasury Fund - Capital
Reserves Class shares will be subject to a Distribution and Service Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the plan, Capital
Reserves Class will be authorized to pay FDC a monthly distribution fee as
compensation for its services and expenses in connection with the
distribution of Capital Reserves Class shares of Treasury Fund. Capital
Reserves Class will pay FDC a monthly distribution fee at an annual rate of
0.50% of its average net assets throughout the month. FDC may compensate
intermediaries that provide shareholder support services, engage in the
sale of Capital Reserves Class shares, or pay distribution expenses at an
annual rate of up to 0.50% of the average net assets they maintain. The
Capital Reserves Class plan will specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other resources
to FDC for expenses incurred in connection with the distribution of Capital
Reserves Class shares, including payments made to intermediaries that
provide shareholder support services or engage in the sale of Capital
Reserves Class shares. The Board of Trustees of Newbury Street Trust has
authorized such payments to intermediaries at an annual rate of up to 0.10%
of the average net assets they maintain.
Independent of the Capital Reserves Class plan, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of the
average net assets they maintain. The recordkeeping fee will be paid by
FMR or its affiliates, not by Treasury Fund, and will not be paid for
distribution services.
SUB-ADVISER. Currently, FMR Texas Inc., located in Irving, Texas, is each
Fund's sub-adviser and has primary responsibility for managing its
investments. FMR is responsible for providing other management services.
For FMR Texas's services to U.S. Government Portfolio, FMR pays FMR Texas
50% of its management fee (before expense reimbursements but after payments
made by FMR pursuant to the Fund's Distribution and Service Plan). For FMR
Texas's services to Treasury Fund, FMR pays FMR Texas 50% of its management
fee (before expense reimbursements).
FORMS OF ORGANIZATION
U.S. Government Portfolio is a diversified fund of Daily Money Fund, an
open-end management investment company organized as a Delaware business
trust on September 29, 1993. Daily Money Fund is authorized to issue an
unlimited number of shares of beneficial interest. U.S. Government
Portfolio is authorized to issue one class of shares.
Treasury Fund is a diversified fund of Newbury Street Trust, an open-end
management investment company organized as a Delaware business trust on
December 30, 1991. Before May 30, 1997, Treasury Fund was a series of a
different trust, Daily Money Fund, and was known as Daily Money Fund: U.S.
Treasury Portfolio. Also, before May 30, 1997, Newbury Street Trust was
known as Daily Tax-Exempt Money Fund. Effective May 30, 1997, Daily Money
Fund: U.S. Treasury Portfolio was reorganized into a newly-established
separate series of Daily Tax-Exempt Money Fund, pursuant to an Agreement
and Plan of Reorganization approved on May 9, 1997, by shareholders of
Daily Money Fund: U.S. Treasury Portfolio. In connection with that
reorganization, Daily Money Fund: U.S. Treasury Portfolio was renamed
Treasury Fund and Daily Tax-Exempt Money Fund was renamed Newbury Street
Trust. Newbury Street Trust is authorized to issue an unlimited number of
shares of beneficial interest. Treasury Fund is currently authorized to
issue three classes of shares designated Treasury Fund - Daily Money Class
(formerly Daily Money Fund: U.S. Treasury Portfolio - Initial Class)
shares, which are currently outstanding, Treasury Fund - Advisor B Class
(formerly Daily Money Fund: U.S. Treasury Portfolio - Class B) shares,
which also are currently outstanding, and Treasury Fund - Capital Reserves
Class shares, which will be issued initially to U.S. Government Portfolio
shareholders in connection with the Reorganization. A separate filing with
the Securities and Exchange Commission (the SEC) will be made prior to the
Closing Date of the Reorganization for the purpose of registering Treasury
Fund - Capital Reserves Class shares for sale.
Because U.S. Government Portfolio and Treasury Fund are series of Delaware
business trusts, organized under substantially similar Trust Instruments,
the rights of the security holders of U.S. Government Portfolio under state
law and the governing documents are expected to remain unchanged after the
Reorganization, except with regard to shareholder voting rights.
Shareholder voting rights for U.S. Government Portfolio are based on the
number of Fund shares owned (share-based voting), whereas shareholder
voting rights for Treasury Fund are based on the total dollar interest in
Treasury Fund (dollar-based voting). If U.S. Government Portfolio
shareholders approve the Reorganization, their voting rights would not be
affected because immediately following the Reorganization Newbury Street
Trust will comprise only money market funds, which are managed to maintain
a stable $1.00 share price. However, if funds with fluctuating net asset
values per share are added to Newbury Street Trust in the future, relative
voting rights would be affected. In that event, while the differences
between the Funds' voting rights would have no bearing on matters affecting
only one fund of the trust, on matters requiring trust-wide votes in which
all funds of the trust participate, dollar-based voting would provide
shareholders with voting power that is proportionate to their economic
interest, whereas share-based voting may provide shareholders who own
shares of a fund with a lower net asset value per share (NAV) than other
funds in the trust with a disproportionate ability to affect a trust-wide
vote relative to shareholders of other funds in the trust. If U.S.
Government Portfolio shareholders approve the Reorganization, their voting
rights will change to reflect those of Treasury Fund shareholders. For
more information regarding shareholder rights, refer to the section of each
Fund's Statement of Additional Information called "Description of the
Trust."
INVESTMENT OBJECTIVES AND POLICIES
The Funds have essentially the same investment objective. U.S. Government
Portfolio seeks as high a level of current income as is consistent with the
preservation of capital and liquidity by investing in money market
instruments. Treasury Fund seeks to obtain as high a level of current
income as is consistent with the preservation of capital and liquidity.
Investments in the Funds are neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that a Fund will maintain a
stable $1.00 share price.
U.S. Government Portfolio invests only in U.S. Government securities that
are backed by the full faith and credit of the United States and in
repurchase agreements for these securities. U.S. Government securities are
debt instruments issued or guaranteed by the U.S. Treasury or by an agency
or instrumentality of the U.S. Government. Treasury Fund invests only in
U.S. Treasury securities, including bills, notes, and bonds, and in
repurchase agreements for these securities. The foregoing policies are
non-fundamental operating policies of each Fund and may be changed only
upon 90 days' notice to shareholders. In addition, Treasury Fund currently
does not enter into reverse repurchase agreements. U.S. Government
Portfolio may enter into reverse repurchase agreements but has done so only
infrequently over the past several years.
Although U.S. Government Portfolio is permitted to invest in U.S.
Government securities other than U.S. Treasury securities, it currently
does not own, nor does it anticipate purchasing, any portfolio securities
that would be considered ineligible investments for Treasury Fund.
Therefore, no portfolio adjustments are anticipated in connection with the
Reorganization. However, in the event that the sale of either Fund's
assets becomes necessary prior to the effective date of the Reorganization,
any transaction costs associated with such adjustments will be borne by the
individual Fund that incurred them.
The investment objective of each Fund is fundamental and may not be
changed without the approval of a vote of at least a majority of the
outstanding voting securities of the Fund. There can be no assurance that
a Fund will achieve its objective. With the exception of fundamental
policies, investment policies of the Funds can be changed without
shareholder approval. The differences between the Funds discussed below,
except as noted, could be changed without a vote of shareholders.
COMPARISON OF OTHER POLICIES OF THE FUNDS
DIVERSIFICATION. As a matter of fundamental policy, each Fund may not,
with respect to 75% of its total assets, purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities or (Treasury Fund only)
securities of other investment companies) if, as a result, (a) more than 5%
of the Fund's total assets would be invested in the securities of that
issuer, or (b) the Fund would hold more than 10% of the outstanding voting
securities of that issuer.
BORROWING. As a matter of fundamental policy, each Fund may borrow money
only for temporary or emergency purposes and engage in reverse repurchase
agreements for any purpose, but not in an amount exceeding 33 1/3% of its
total assets (including the amount borrowed) less liabilities (other than
borrowings). As a matter of non-fundamental policy, each Fund may borrow
money only from banks or other funds advised by FMR or an affiliate of FMR,
or (U.S. Government Portfolio only) by engaging in reverse repurchase
agreements with any party, and each Fund may make additional investments
while borrowings are outstanding. Treasury Fund currently does not enter
into reverse repurchase agreements.
LENDING. As a matter of fundamental policy, each Fund may not lend any
security or make any other loan, except through the purchase of debt
securities or repurchase agreements, if as a result more than 33 1/3% of
its total assets would be lent to other parties. As a matter of
non-fundamental policy, with the exception of purchasing debt securities
and entering into repurchase agreements, neither Fund currently intends to
make loans.
OTHER INVESTMENT POLICIES. Each Fund may invest up to 10% of its assets
in illiquid securities. Consistent with its investment objective and
policies, each Fund also may enter into when-issued and forward purchase or
sale transactions and may invest in variable and floating rate securities,
stripped securities, and securities with put features. Neither Fund
currently intends to purchase futures contracts or options on futures
contracts. With respect to each Fund, this operating policy may be changed
only with the Trustees' approval and 60 days' notice to shareholders.
For cash management purposes, each Fund may invest in repurchase
agreements and (pursuant to an exemptive order granted by the SEC) in a
money market fund available only to funds and accounts managed by FMR or
its affiliates, whose goal is to seek a high level of current income while
maintaining a stable $1.00 share price. However, neither Fund currently
intends to invest in a money market fund.
In addition, the Board of Trustees of each Fund recently approved the
elimination of certain non-fundamental policies, which were identical for
both Funds, regarding a Fund's investments in (i) the securities of other
investment companies, (ii) the securities of unseasoned issuers, and (iii)
oil, gas, and mineral exploration programs. These non-fundamental policies
were originally adopted with respect to each Fund solely in response to
state law requirements, which were in addition to, and in many cases were
more restrictive than, federal law requirements. These state law
requirements are no longer applicable.
As stated above, for more information about the risks and restrictions
associated with these polices, see the Funds' Prospectuses and, for a more
detailed discussion of the Funds' investments, see their Statements of
Additional Information, which are incorporated herein by reference.
OPERATIONS OF TREASURY FUND FOLLOWING THE REORGANIZATION
FMR does not expect Treasury Fund to revise its investment objective or
policies as a result of the Reorganization. In addition, FMR does not
anticipate significant changes to Treasury Fund's management or to agents
that provide Treasury Fund with services. Specifically, the Trustees and
officers, the investment adviser and sub-adviser, the distributor, and
other agents will continue to serve Treasury Fund in their current
capacities.
As explained above, although U.S. Government Portfolio is permitted to
invest in U.S. Government securities other than U.S. Treasury securities,
it currently does not own, nor does it anticipate purchasing, any portfolio
securities that would be considered ineligible investments for Treasury
Fund. Therefore, no portfolio adjustments are anticipated in connection
with the Reorganization. However, in the event that the sale of either
Fund's assets becomes necessary prior to the effective date of the
Reorganization, any transaction costs associated with such adjustments will
be borne by the individual Fund that incurred them.
PURCHASES AND REDEMPTIONS
Treasury Fund is currently authorized to issue three classes of shares
designated Treasury Fund - Daily Money Class shares, which are currently
outstanding, Treasury Fund - Advisor B Class shares, which also are
currently outstanding, and Treasury Fund - Capital Reserves Class shares,
which will be issued initially to U.S. Government Portfolio shareholders in
connection with the Reorganization. U.S. Government Portfolio is currently
authorized to issue only one class of shares.
Both U.S. Government Portfolio and Treasury Fund - Capital Reserves Class
require a minimum initial investment of $1,000, a minimum subsequent
investment of $250, and a minimum account balance of $500. Both U.S.
Government Portfolio shares and Treasury Fund - Capital Reserves Class
shares are sold without a sales charge.
U.S. Government Portfolio is open for business and its NAV is normally
calculated each day that both the Federal Reserve Bank of New York (New
York Fed) and the New York Stock Exchange (NYSE) are open. Treasury Fund
is open for business and the NAV of Capital Reserves Class shares is
normally calculated each day that the NYSE is open. The following holiday
closings have been scheduled for 1997: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day (New York Fed only), Veterans Day (New York
Fed only), Thanksgiving Day, and Christmas Day. Although FMR expects the
same holiday schedule to be observed in the future, the New York Fed or the
NYSE may modify its holiday schedule at any time.
Both Funds are managed to keep their share prices stable at $1.00. Both
U.S. Government Portfolio shares and Treasury Fund - Capital Reserves Class
shares are purchased at the next share price calculated after an order is
received and accepted. Share price is normally calculated at 2:00 p.m. and
4:00 p.m. Eastern time. Shares may be purchased by mail, by wire, or by
exchange from another Fidelity fund. Neither U.S. Government Portfolio nor
Treasury Fund - Capital Reserves Class imposes a fee for wire purchases;
however, if shares are purchased through an investment professional, the
investment professional may impose a fee for wire purchases. Shares
purchased before 2:00 p.m. Eastern time are entitled to dividends declared
that day. Shares purchased after 2:00 p.m. Eastern time begin to earn
dividends on the following business day.
Each Fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. On any day that the New York Fed
(U.S. Government Portfolio only) or the NYSE closes early, the principal
government securities markets close early (such as on days in advance of
holidays generally observed by participants in the markets), or as
permitted by the SEC, each Fund reserves the right to advance the time on
that day by which purchase and redemption orders must be received. To the
extent that portfolio securities are traded in other markets on days when
the New York Fed (U.S. Government Portfolio only) or the NYSE is closed, a
Fund's/Class's share price may be affected on days when shareholders do not
have access to the Fund to purchase or redeem shares.
Both Funds value their portfolio securities on the basis of amortized
cost. This method minimizes the effect of changes in a security's market
value and helps the Funds maintain stable $1.00 share prices.
Fidelity Investments Institutional Operations Company, Inc., an affiliate
of FMR, performs transfer agency, dividend disbursing, and shareholder
services for the shares of each Fund. Fidelity Service Company, Inc., also
an affiliate of FMR, calculates the NAV and dividends for the shares of
each Fund and maintains the general accounting records for each Fund. NFSC
distributes U.S. Government Portfolio's shares. FDC currently distributes
Treasury Fund's shares and will distribute Treasury Fund - Capital Reserves
Class shares following the Reorganization.
Both U.S. Government Portfolio shares and Treasury Fund - Capital Reserves
Class shares may be redeemed on any business day at their respective share
price. Shares are redeemed at the next share price calculated after an
order is received and accepted. As stated above, share price is normally
calculated at 2:00 p.m. and 4:00 p.m. Eastern time. Shares redeemed before
2:00 p.m. Eastern time do not receive the dividend declared on the day of
redemption. Shares redeemed after 2:00 p.m. Eastern time do receive the
dividend declared on the day of redemption.
Both U.S. Government Portfolio shares and Treasury Fund - Capital Reserves
Class shares may be redeemed by mail, by telephone, or by wire. Both U.S.
Government Portfolio and Treasury Fund - Capital Reserves Class also offer
checkwriting privileges; the minimum amount for a check is $500. Neither
U.S. Government Portfolio nor Treasury Fund - Capital Reserves Class
charges a fee for wire redemptions; however, if shares are sold through an
investment professional, the investment professional may charge a fee for
wire redemptions. Redemption proceeds will be wired via the Federal
Reserve Wire System to the redeeming shareholder's bank account of record.
If a Fund's transfer agent receives a redemption request before 2:00 p.m.
Eastern time, redemption proceeds will normally be wired on that day. If a
Fund's transfer agent receives a redemption request after 2:00 p.m. Eastern
time, redemption proceeds will normally be wired on the following business
day.
Each Fund reserves the right to take up to seven days to pay redemption
proceeds if making immediate payment would adversely affect the Fund. In
addition, each Fund may withhold redemption proceeds until it is reasonably
assured that investments credited to the account have been received and
collected. When the New York Fed (U.S. Government Portfolio only) or the
NYSE is closed (or when trading is restricted) for any reason other than
its customary weekend or holiday closings, or under any emergency
circumstances as determined by the SEC to merit such action, each Fund may
suspend redemption or postpone payment dates.
In the case of both U.S. Government Portfolio and Treasury Fund - Capital
Reserves Class, if a shareholder's account balance falls below $500, the
shareholder will be given 30 days' notice to reestablish the minimum
balance. If the shareholder does not increase the balance, Fidelity
reserves the right to close the shareholder's account and send the proceeds
to the shareholder. Shares will be redeemed at their share price on the
day the account is closed.
If the Reorganization is approved, the purchase and redemption policies
that currently apply to U.S. Government Portfolio shares will apply to
Treasury Fund - Capital Reserves Class shares. U.S. Government Portfolio
shareholders may redeem their shares, or exchange their shares for shares
of any other available Fidelity fund, through the Closing Date.
EXCHANGES
U.S. Government Portfolio shares may be exchanged for shares of any other
Fidelity fund available in the shareholder's state. In addition, U.S.
Government Portfolio shares may be acquired through an exchange of shares
of other Fidelity funds. The exchange privileges and restrictions that
currently apply to U.S. Government Portfolio shares will apply to Treasury
Fund - Capital Reserves Class shares following the Reorganization. Refer
to U.S. Government Portfolio's Prospectus for more information regarding
how to exchange shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Each Fund declares income
dividends daily and pays them monthly. Each Fund automatically reinvests
dividend and capital gain distributions in additional shares of the Fund
(or, in the case of Treasury Fund, shares of the same Class of the Fund)
unless a shareholder requests that dividends and other distributions be
paid in cash.
On or before the Closing Date, U.S. Government Portfolio will declare one
or more dividends or distributions which, together with all such previous
dividends and distributions attributable to its current taxable year, will
have the effect of distributing substantially all of its investment company
taxable income and net realized capital gains, if any, in order to maintain
its tax status as a regulated investment company.
SHAREHOLDER SERVICES
Both U.S. Government Portfolio and Treasury Fund - Capital Reserves Class
offer sub-accounting and special services for institutions that wish to
open multiple accounts (a master account and sub-accounts). Refer to U.S.
Government Portfolio's Prospectus for more information regarding these
services.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Each Fund has received an opinion of its counsel, Kirkpatrick & Lockhart
LLP, that the Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended (the Code). Accordingly, no gain or loss will be
recognized by the Funds or their shareholders as a result of the
Reorganization. Please see the section entitled "Federal Income Tax
Considerations" for more information.
U.S. Government Portfolio and Treasury Fund had capital loss carryforwards
for federal tax purposes aggregating approximately $53,000 and $421,000 as
of July 31, 1996 and October 31, 1996, respectively. Under current federal
tax law, Treasury Fund may be limited to using only a portion, if any, of
the capital loss carryforward transferred by U.S. Government Portfolio at
the time of the Reorganization. There is no assurance that Treasury Fund
will be able to realize sufficient capital gains to use its capital loss
carryforward as well as a portion, if any, of U.S. Government Portfolio's
capital loss carryforward, before they expire. The capital loss
carryforward attributable to U.S. Government Portfolio will expire between
July 31, 2001 and July 31, 2003. The capital loss carryforward attributable
to Treasury Fund will expire on October 31, 2001.
COMPARISON OF PRINCIPAL RISK FACTORS
Because each Fund is a money market fund, each Fund must comply with
federal regulatory requirements applicable to all money market funds
concerning the quality and maturity of its investments. Federal
regulations limit money market fund investments to high-quality securities.
To be high-quality, a security must be rated in accordance with applicable
rules in one of the two highest categories for short-term securities by at
least two nationally recognized rating services (or by one, if only one
rating service has rated the security), or, if unrated, judged to be of
equivalent quality by FMR. The maturity (calculated according to
applicable regulations) of each investment cannot exceed 397 days, and a
money market fund's dollar-weighted average maturity cannot exceed 90 days.
These requirements, coupled with each Fund's emphasis on high-quality U.S.
Government securities, mean that the Funds have substantially similar
levels of risk.
The Funds pursue essentially the same investment objective and follow
similar investment policies (see "Investment Objectives and Policies" on
page 11). U.S. Government Portfolio invests only in U.S. Government
securities that are backed by the full faith and credit of the United
States and in repurchase agreements for these securities. U.S. Government
securities are debt instruments issued or guaranteed by the U.S. Treasury
or by an agency or instrumentality of the U.S. Government. Treasury Fund
invests only in U.S. Treasury securities, including bills, notes, and
bonds, and in repurchase agreements for these securities. Agency
securities are generally considered more risky than U.S. Treasury
securities. U.S. Treasury securities are backed by the full faith and
credit of the United States. Although not all agency securities are backed
by the full faith and credit of the United States, U.S. Government
Portfolio's policy of limiting its investments in agency securities to
those that are backed by the full faith and credit of the United States
minimizes the relatively greater risk associated with agency securities.
In addition, Treasury Fund is currently rated Aaa and AAAm by Moody's
Investor Service and Standard & Poor's, respectively, and thus generally
seeks to maintain an average maturity of 60 days or less. U.S. Government
Portfolio is not a rated fund, although its average maturity is currently
less than the 60-day maximum for Aaa/AAAm rated funds.
Although each Fund seeks to maintain a stable $1.00 share price, each
Fund's investment income is based on the income earned on the securities it
holds, less expenses incurred. Thus, each Fund's investment income may
fluctuate in response to changes in such expenses or changes in interest
rates.
THE PROPOSED TRANSACTION
TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN U.S. GOVERNMENT
PORTFOLIO AND TREASURY FUND
REORGANIZATION PLAN
The terms and conditions under which the Reorganization may be consummated
are set forth in the Agreement. Significant provisions of the Agreement are
summarized below; however, this summary is qualified in its entirety by
reference to the Agreement, a copy of which is attached as Exhibit 1 to
this Proxy Statement.
The Agreement contemplates (a) Treasury Fund acquiring as of the Closing
Date all of the assets of U.S. Government Portfolio in exchange solely for
Capital Reserves Class Shares and the assumption by Treasury Fund of U.S.
Government Portfolio's liabilities; and (b) the distribution of Capital
Reserves Class Shares to the shareholders of U.S. Government Portfolio as
provided for in the Agreement.
The assets of U.S. Government Portfolio to be acquired by Treasury Fund
include all cash, cash equivalents, securities, receivables (including
interest or dividends receivables), claims, choses in action, and other
property owned by U.S. Government Portfolio, and any deferred or prepaid
expenses shown as an asset on the books of U.S. Government Portfolio on the
Closing Date. Treasury Fund will assume from U.S. Government Portfolio all
liabilities, debts, obligations, and duties of U.S. Government Portfolio of
whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in the Agreement; provided, however, that U.S.
Government Portfolio will use its best efforts, to the extent practicable,
to discharge all of its known liabilities prior to the Closing Date, other
than liabilities incurred in the ordinary course of business. Treasury
Fund will deliver Capital Reserves Class Shares to U.S. Government
Portfolio, which shares U.S. Government Portfolio will then distribute to
its shareholders so that each U.S. Government Portfolio shareholder will
receive the number of full and fractional Capital Reserves Class Shares
equal to the number of full and fractional shares of U.S. Government
Portfolio held by such shareholder as of the Closing Date.
The value of U.S. Government Portfolio's assets to be acquired by Treasury
Fund, the amount of U.S. Government Portfolio's liabilities to be assumed
by Treasury Fund, and the share price of a Capital Reserves Class Share
will be determined as of the close of business (4:00 p.m. Eastern time) of
the respective Fund on the Closing Date. Portfolio securities will be
valued on the basis of amortized cost. This technique involves initially
valuing an instrument at its cost as adjusted for amortization of premium
or accretion of discount rather than at its current market value. The
amortized cost value of an instrument may be higher or lower than the price
a Fund would receive if it sold the instrument. If the Board of Trustees
of Daily Money Fund and the Board of Trustees of Newbury Street Trust
believe that a deviation from a Fund's amortized cost per share may result
in dilution or other unfair results to shareholders, the Boards have agreed
to take such corrective action, if any, as they deem appropriate to
eliminate or reduce, to the extent reasonably practicable, the dilution or
unfair results.
As of the Closing Date, U.S. Government Portfolio will distribute to its
shareholders of record the Capital Reserves Class Shares it received, so
that each U.S. Government Portfolio shareholder will receive the number of
full and fractional Capital Reserves Class Shares equal to the number of
full and fractional shares of U.S. Government Portfolio held by such
shareholder on the Closing Date; U.S. Government Portfolio will be
liquidated as soon as practicable thereafter. Such distribution will be
accomplished by opening accounts on the books of Treasury Fund in the names
of the U.S. Government Portfolio shareholders and by transferring thereto
Capital Reserves Class Shares. Each U.S. Government Portfolio shareholder's
account shall be credited with the respective PRO RATA number of full and
fractional (rounded to the third decimal place) Capital Reserves Class
Shares due that shareholder. Treasury Fund shall not issue certificates
representing its shares in connection with such exchange.
Accordingly, immediately after the Reorganization, each former U.S.
Government Portfolio shareholder will own the number of Capital Reserves
Class Shares equal to the number of that shareholder's shares of U.S.
Government Portfolio immediately prior to the Reorganization. The share
price of Treasury Fund will be unchanged by the transaction. Thus, the
Reorganization will not result in the dilution of any shareholder interest.
Any transfer taxes payable upon issuance of Capital Reserves Class Shares
in a name other than that of the registered holder of the shares on the
books of U.S. Government Portfolio as of that time shall be paid by the
person to whom such shares are to be issued as a condition of such
transfer. Any reporting responsibility of U.S. Government Portfolio is and
will continue to be its responsibility up to and including the Closing Date
and such later date on which U.S. Government Portfolio is liquidated.
It is expected that FMR will bear the cost of the Reorganization,
including professional fees, expenses associated with the filing of
registration statements, and the cost of soliciting proxies for the
Meeting, which will consist principally of printing and mailing
prospectuses and proxy statements, together with the cost of any
supplemental solicitation. However, there may be some transaction costs
associated with portfolio adjustments to U.S. Government Portfolio due to
the Reorganization which occur prior to the Closing Date which will be
borne by U.S. Government Portfolio. Any transaction costs associated with
portfolio adjustments due to the Reorganization which occur after the
Closing Date will be borne by Treasury Fund. A Fund may recognize a
taxable gain or loss on the disposition of securities pursuant to these
portfolio adjustments. See the section entitled "Reasons for the
Reorganization."
The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by a
Fund. In addition, the Agreement may be amended in any mutually agreeable
manner, except that no amendment that may have a materially adverse effect
on the shareholders' interests may be made subsequent to the Meeting.
REASONS FOR THE REORGANIZATION
The Boards of Trustees (the Boards) of Daily Money Fund and Newbury Street
Trust have determined that the Reorganization is in the best interests of
the shareholders of the Funds and that the Reorganization will not result
in a dilution of the interests of the shareholders of either Fund.
In considering the Reorganization, the Boards considered a number of
factors, including the following:
(1) the compatibility of the Funds' investment objectives and policies;
(2) the historical performance of the Funds;
(3) the relative expense ratios of the Funds;
(4) the costs to be incurred by each Fund as a result of the
Reorganization;
(5) the tax consequences of the Reorganization;
(6) the relative asset sizes of the Funds;
(7) the elimination of duplicative funds;
(8) the impact of changes to the institutional money market product line on
the Funds and their shareholders; and
(9) the benefits to FMR and to shareholders of the Funds.
FMR recommended the Reorganization to the Boards at a meeting of the
Boards on March 20, 1997. In recommending the Reorganization, FMR also
advised the Boards that the Funds have generally compatible investment
objectives and policies, with the material differences noted, and that the
Funds currently have similar investment strategies, with the material
differences noted.
The Boards considered that if the Reorganization is approved, former
shareholders of U.S. Government Portfolio will receive Treasury Fund -
Capital Reserves Class shares, which will pay a 0.25% management fee and a
0.50% distribution fee. The total management and distribution fees of
0.75% to be paid by Treasury Fund - Capital Reserves Class will be 0.10%
lower, as a percentage of average net assets, than the total management and
distribution fees of 0.85% currently paid by U.S. Government Portfolio.
FMR also informed the Boards that it would voluntarily agree to reimburse
the total operating expenses of Treasury Fund - Capital Reserves Class to
the extent that such expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.90% of its average net
assets -- 0.09% lower than U.S. Government Portfolio's 0.99% voluntary
expense limitation. In addition, FMR informed the Boards that it expected
to pay the costs associated with the Reorganization, including professional
fees and the costs of proxy solicitation, under U.S. Government Portfolio's
voluntary expense limitation. FMR further informed the Boards that although
U.S. Government Portfolio would bear any costs (as described above)
associated with portfolio adjustments made in connection with the
Reorganization, FMR believed that such costs would be minimal and would be
counterbalanced by the reduction in the total operating expenses that U.S.
Government Portfolio shareholders would pay as holders of Capital Reserves
Class Shares.
The Boards also considered that former shareholders of U.S. Government
Portfolio will receive the number of Capital Reserves Class Shares equal to
the number of their shares of U.S. Government Portfolio. In addition, the
Boards considered that the Funds expected to receive an opinion of counsel
that the Reorganization would not result in any gain or loss for federal
income tax purposes to U.S. Government Portfolio or Treasury Fund or to the
shareholders of either Fund.
Finally, the Boards considered the Reorganization in the context of a
general goal of reducing the number of duplicative funds managed by FMR.
While the reduction of duplicative funds and funds with lower assets
potentially would benefit FMR, it also should benefit shareholders by
increasing operational efficiencies and, thereby, lowering expense ratios.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Newbury Street Trust is registered with the SEC as an open-end management
investment company. Newbury Street Trust is authorized to issue an
unlimited number of shares of beneficial interest of separate series (no
par value per share). Treasury Fund is one of three current funds of the
trust. (For historical information regarding Treasury Fund and Newbury
Street Trust, see "Forms of Organization," page 10). Newbury Street
Trust's trustees have authorized the public offering of three classes of
shares of Treasury Fund designated Treasury Fund - Daily Money Class
shares, which are currently outstanding, Treasury Fund - Advisor B Class
shares, which also are currently outstanding, and Treasury Fund - Capital
Reserves Class shares, which will be issued initially to U.S. Government
Portfolio shareholders in connection with the Reorganization. A separate
filing with the SEC will be made prior to the Closing Date for the purpose
of registering Treasury Fund - Capital Reserves Class shares for sale.
Each share in a Class represents an equal proportionate interest in
Treasury Fund with each other share of that Class. Shares of Treasury Fund
entitle their holders to one vote for each dollar of net asset value held
(number of shares owned times the net asset value per share) and a
proportionate fractional vote for each fractional dollar amount held,
except that each Class of shares has exclusive voting rights on matters
pertaining to its plan of distribution. For additional information
regarding shareholder voting rights, see "Forms of Organization," page 10.
Each share of each Class of Treasury Fund is entitled to participate
equally in dividends and other distributions and in the proceeds of any
liquidation, except that dividends of each Class may be affected
differently by the allocation of Class-specific expenses.
Newbury Street Trust does not hold annual meetings of shareholders. There
will normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office have
been elected by shareholders, at which time the Trustees then in office
will call a shareholders' meeting for the election of Trustees. Under the
1940 Act, shareholders of record of at least two-thirds of the outstanding
shares of an investment company may remove a trustee by votes cast in
person or by proxy at a meeting called for that purpose. The Trustees are
required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any Trustee when requested in writing to do so
by the shareholders of record holding at least 10% of the trust's
outstanding shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of U.S. Government Portfolio's assets for Capital Reserves
Class Shares and the assumption of the liabilities of U.S. Government
Portfolio by Treasury Fund is intended to qualify for federal income tax
purposes as a tax-free reorganization under the Code. With respect to the
Reorganization, the participating Funds have received an opinion from
Kirkpatrick & Lockhart LLP, counsel to U.S. Government Portfolio and
Treasury Fund, substantially to the effect that:
(i) The acquisition by Treasury Fund of all of the assets of U.S.
Government Portfolio solely in exchange for Capital Reserves Class Shares
and the assumption by Treasury Fund of U.S. Government Portfolio's
liabilities, followed by the distribution by U.S. Government Portfolio of
Capital Reserves Class Shares to the shareholders of U.S. Government
Portfolio pursuant to the liquidation of U.S. Government Portfolio and
constructively in exchange for their U.S. Government Portfolio shares, will
constitute a reorganization within the meaning of section 368(a)(1)(C) of
the Code, and U.S. Government Portfolio and Treasury Fund will each be "a
party to a reorganization" within the meaning of section 368(b) of the
Code;
(ii) No gain or loss will be recognized by U.S. Government Portfolio upon
the transfer of all of its assets to Treasury Fund in exchange solely for
Capital Reserves Class Shares and Treasury Fund's assumption of U.S.
Government Portfolio's liabilities, followed by U.S. Government Portfolio's
subsequent distribution of those shares to its shareholders in liquidation
of U.S. Government Portfolio;
(iii) No gain or loss will be recognized by Treasury Fund upon the receipt
of the assets of U.S. Government Portfolio in exchange solely for Capital
Reserves Class Shares and its assumption of U.S. Government Portfolio's
liabilities;
(iv) The shareholders of U.S. Government Portfolio will recognize no gain
or loss upon the exchange of their U.S. Government Portfolio shares solely
for Capital Reserves Class Shares;
(v) The basis of U.S. Government Portfolio's assets in the hands of
Treasury Fund will be the same as the basis of those assets in the hands of
U.S. Government Portfolio immediately prior to the Reorganization, and the
holding period of those assets in the hands of Treasury Fund will include
the holding period of those assets in the hands of U.S. Government
Portfolio;
(vi) The basis of U.S. Government Portfolio shareholders in Capital
Reserves Class Shares will be the same as their basis in U.S. Government
Portfolio shares to be surrendered in exchange therefor; and
(vii) The holding period of the Capital Reserves Class Shares to be
received by the U.S. Government Portfolio shareholders will include the
period during which the U.S. Government Portfolio shares to be surrendered
in exchange therefor were held, provided such U.S. Government Portfolio
shares were held as capital assets by those shareholders on the date of the
Reorganization.
Shareholders of U.S. Government Portfolio should consult their tax
advisers regarding the effect, if any, of the proposed Reorganization in
light of their individual circumstances. Because the foregoing discussion
relates only to the federal income tax consequences of the Reorganization,
U.S. Government Portfolio shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.
CAPITALIZATION
The following table shows the capitalization of U.S. Government Portfolio
and Treasury Fund (then Daily Money Fund: U.S. Treasury Portfolio) as of
January 31, 1997 (unaudited) and on a pro forma combined basis (unaudited)
as of that date giving effect to the Reorganization.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NET ASSETS NAV PER SHARE SHARES OUTSTANDING
U.S. GOVERNMENT PORTFOLIO $266,416,323 $1.00 266,463,583
TREASURY FUND -
Daily Money Class $1,725,294,360 $1.00 1,725,661,110
Advisor B Class $14,478,106 $1.00 14,482,262
Capital Reserves Class -- -- --
PRO FORMA COMBINED FUND -
Daily Money Class $1,725,294,360 $1.00 1,725,661,110
Advisor B Class $14,478,106 $1.00 14,482,262
Capital Reserves Class $266,416,323 $1.00 266,463,583
</TABLE>
CONCLUSION
The Agreement and Plan of Reorganization and the transactions provided for
therein were approved by the Boards at a meeting held on March 20, 1997.
The Boards of Trustees of Daily Money Fund and Newbury Street Trust
determined that the proposed Reorganization is in the best interests of
shareholders of each Fund and that the interests of existing shareholders
of U.S. Government Portfolio and Treasury Fund would not be diluted as a
result of the Reorganization. In the event that the Reorganization is not
consummated, U.S. Government Portfolio will continue to engage in business
as a fund of a registered investment company and the Board of Daily Money
Fund will consider other proposals for the reorganization or liquidation of
the Fund.
ADDITIONAL INFORMATION ABOUT TREASURY FUND
Treasury Fund currently pays FMR a monthly management fee at an annual rate
of 0.25% of its average net assets. This management fee rate was approved
by shareholders on May 9, 1997, and went into effect on May 31, 1997.
Also, effective May 31, 1997, under a new Distribution and Service Plan
adopted pursuant to Rule 12b-1 under the 1940 Act, Treasury Fund - Daily
Money Class began paying FDC a distribution fee of 0.25% to cover most of
the Class's distribution-related costs; in connection with this change,
Treasury Fund's management fee was reduced from 0.50% to 0.25%.
The Prospectus for Treasury Fund - Daily Money Class, dated May 30, 1997,
is enclosed with this Proxy Statement and is incorporated herein by
reference. The Prospectus contains additional information about Treasury
Fund including its investment objective and policies, investment adviser,
advisory fees and expenses, and organization. The financial highlights
table that follows is for Treasury Fund - Daily Money Class. Treasury Fund
- - Capital Reserves Class is expected to commence operations on or about
October 31, 1997.
TREASURY FUND: DAILY MONEY CLASS (FORMERLY DAILY MONEY FUND:U.S. TREASURY
PORTFOLIO - INITIAL CLASS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended 1997E 1996A 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
July 31
Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period
Income from
Investment
Operations
Net
interest .024 .012 .049 .049 .029 .027 .042 .065 .079 .083 .063 .057
income
Less
Distributions
From net (.024) (.012) (.049) (.049) (.029) (.027) (.042) (.065) (.079) (.083) (.063) (.057)
interest
income
Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, end
of period
Total
returnB 2.39% 1.19% 5.06% 5.02% 2.89% 2.78% 4.25% 6.69% 8.24% 8.64% 6.45% 5.81%
Net assets, $ 1,352 $ 1,801 $ 1,801 $ 1,828 $ 2,025 $ 2,949 $ 3,094 $ 1,702 $ 1,177 $ 994 $ 320 $ 240
end of
period
(In millions)
Ratio of .65%C, .65%C, .65%C .65%C .60% .57% .59% .59% .59% .64% .64% .58%
expenses to D D
average
net assets
Ratio of net 4.81%D 4.66% 4.94% 4.89% 2.81% 2.73% 4.14% 6.42% 7.91% 8.47% 6.26% 5.67%
interest D
income to
average
net assets
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D ANNUALIZED
E SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
MISCELLANEOUS
LEGAL MATTERS. Certain legal matters in connection with the issuance of
Capital Reserves Class Shares have been passed upon by Kirkpatrick &
Lockhart LLP, counsel to Newbury Street Trust.
EXPERTS. The audited financial statements of U.S. Government Portfolio,
incorporated by reference into the Statement of Additional Information,
have been audited by Coopers & Lybrand L.L.P., independent accountants,
whose report thereon is included in the Annual Report to Shareholders for
the fiscal year ended July 31, 1996. The audited financial statements of
Treasury Fund, incorporated by reference into the Statement of Additional
Information, have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon is included in the Annual Report to
Shareholders for the fiscal year ended October 31, 1996. The financial
statements audited by Coopers & Lybrand L.L.P. have been incorporated by
reference in reliance on their reports given on their authority as experts
in auditing and accounting. Unaudited financial statements for U.S.
Government Portfolio for the six-month period ended January 31, 1997, and
unaudited financial statements for Treasury Fund for the six-month period
ended April 30, 1997, are also incorporated by reference into the Statement
of Additional Information.
AVAILABLE INFORMATION. Daily Money Fund and Newbury Street Trust are
subject to the informational requirements of the Securities Exchange Act of
1934 and the 1940 Act, and in accordance therewith file reports, proxy
material, and other information with the SEC. Such reports, proxy
material, and other information can be inspected and copied at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington D.C. 20549, and at the Northeast Regional Office of the SEC, 7
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material also can be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington D.C. 20549, at prescribed rates.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES.
Please advise Daily Money Fund, in care of Fidelity Investments
Institutional Operations Company, Inc., 82 Devonshire Street, Boston,
Massachusetts 02109, whether other persons are beneficial owners of shares
for which proxies are being solicited and, if so, the number of copies of
this Proxy Statement you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
Exhibit 1
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the 21st day of July, 1997, by and between Daily Money Fund, a Delaware
business trust, on behalf of Capital Reserves: U.S. Government Portfolio
(U.S. Government Portfolio), a series of Daily Money Fund, and Newbury
Street Trust, a Delaware business trust, on behalf of Treasury Fund
(Treasury Fund), a series of Newbury Street Trust. Daily Money Fund and
Newbury Street Trust may be referred to herein collectively as the "Trusts"
or each individually as a "Trust." Treasury Fund and U.S. Government
Portfolio may be referred to herein collectively as the "Funds" or each
individually as a "Fund."
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the Code). The reorganization will
comprise: (a) the transfer of all of the assets of U.S. Government
Portfolio to Treasury Fund solely in exchange for Capital Reserves Class
shares of beneficial interest in Treasury Fund (the Capital Reserves Class
Shares) and the assumption by Treasury Fund of U.S. Government Portfolio's
liabilities; and (b) the constructive distribution of such shares by U.S.
Government Portfolio PRO RATA to its shareholders in complete liquidation
and termination of U.S. Government Portfolio in exchange for all of U.S.
Government Portfolio's outstanding shares. The foregoing transactions are
referred to herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF U.S. GOVERNMENT PORTFOLIO. U.S.
Government Portfolio represents and warrants to and agrees with Treasury
Fund that:
(a) U.S. Government Portfolio is a series of Daily Money Fund, a business
trust duly organized, validly existing, and in good standing under the laws
of the State of Delaware, and has the power to own all of its properties
and assets and to carry out its obligations under this Agreement. It has
all necessary federal, state, and local authorizations to carry on its
business as now being conducted and to carry out this Agreement;
(b) Daily Money Fund is an open-end, management investment company duly
registered under the Investment Company Act of 1940, as amended (the 1940
Act), and such registration is in full force and effect;
(c) The Prospectus, dated November 29, 1996 (as supplemented March 21,
1997), and the Statement of Additional Information, dated November 29, 1996
(as supplemented January 2, 1997), of U.S. Government Portfolio previously
furnished to Treasury Fund, did not and do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of U.S. Government Portfolio, threatened
against U.S. Government Portfolio which assert liability on the part of
U.S. Government Portfolio. U.S. Government Portfolio knows of no facts
which might form the basis for the institution of such proceedings;
(e) U.S. Government Portfolio is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Trust Instrument or By-laws, or, to the knowledge of U.S.
Government Portfolio, of any agreement, indenture, instrument, contract,
lease, or other undertaking to which U.S. Government Portfolio is a party
or by which U.S. Government Portfolio is bound or result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which U.S. Government Portfolio is a party
or is bound;
(f) The Statement of Assets and Liabilities, the Statement of Operations,
the Statement of Changes in Net Assets, the Financial Highlights, and the
Schedule of Investments (including market values) of U.S. Government
Portfolio at July 31, 1996, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and have been furnished to Treasury Fund together
with such unaudited financial statements and schedule of investments
(including market values) for the six month period ended January 31, 1997.
Said Statement of Assets and Liabilities and Schedule of Investments fairly
present the Fund's financial position as of such date and said Statement of
Operations, Statement of Changes in Net Assets, and Financial Highlights
fairly reflect its results of operations, changes in financial position,
and financial highlights for the periods covered thereby in conformity with
generally accepted accounting principles consistently applied;
(g) U.S. Government Portfolio has no known liabilities of a material
nature, contingent or otherwise, other than those shown as belonging to it
on its statement of assets and liabilities as of July 31, 1996, and those
incurred in the ordinary course of U.S. Government Portfolio's business as
an investment company since July 31, 1996;
(h) The registration statement (Registration Statement) filed with the
Securities and Exchange Commission (Commission) by Newbury Street Trust on
Form N-14 relating to the Capital Reserves Class Shares issuable hereunder
and the proxy statement of U.S. Government Portfolio included therein
(Proxy Statement), on the effective date of the Registration Statement and
insofar as they relate to U.S. Government Portfolio (i) comply in all
material respects with the provisions of the Securities Act of 1933, as
amended (the 1933 Act), the Securities Exchange Act of 1934, as amended
(the 1934 Act), and the 1940 Act, and the rules and regulations thereunder,
and (ii) do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and at the time of the shareholders'
meeting referred to in Section 7 and on the Closing Date, the prospectus
contained in the Registration Statement of which the Proxy Statement is a
part (the Prospectus), as amended or supplemented, insofar as it relates to
U.S. Government Portfolio, does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(i) All material contracts and commitments of U.S. Government Portfolio
(other than this Agreement) will be terminated without liability to U.S.
Government Portfolio prior to the Closing Date (other than those made in
connection with redemptions of shares and the purchase and sale of
portfolio securities made in the ordinary course of business);
(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by U.S. Government
Portfolio of the transactions contemplated by this Agreement, except such
as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
state securities or blue sky laws (which term as used herein shall include
the District of Columbia and Puerto Rico);
(k) U.S. Government Portfolio has filed or will file all federal and state
tax returns which, to the knowledge of U.S. Government Portfolio's
officers, are required to be filed by U.S. Government Portfolio and has
paid or will pay all federal and state taxes shown to be due on said
returns or provision shall have been made for the payment thereof, and, to
the best of U.S. Government Portfolio's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to
such returns;
(l) U.S. Government Portfolio has met the requirements of Subchapter M of
the Code for qualification and treatment as a regulated investment company
for all prior taxable years and intends to meet such requirements for its
current taxable year ending on the Closing Date (as defined in Section 6);
(m) All of the issued and outstanding shares of U.S. Government Portfolio
are, and at the Closing Date will be, duly and validly issued and
outstanding and fully paid and nonassessable as a matter of Delaware law
(except as disclosed in the Fund's Statement of Additional Information),
and have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of U.S.
Government Portfolio will, at the Closing Date, be held by the persons and
in the amounts set forth in the list of shareholders submitted to Treasury
Fund in accordance with this Agreement;
(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, U.S. Government Portfolio will have the full right, power,
and authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of U.S. Government Portfolio to be
transferred to Treasury Fund pursuant to this Agreement. At the Closing
Date, subject only to the delivery of U.S. Government Portfolio's portfolio
securities and any such other assets as contemplated by this Agreement,
Treasury Fund will acquire U.S. Government Portfolio's portfolio securities
and any such other assets subject to no encumbrances, liens, or security
interests (except for those that may arise in the ordinary course and are
disclosed to Treasury Fund) and without any restrictions upon the transfer
thereof; and
(o) The execution, performance, and delivery of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of U.S. Government Portfolio, and this Agreement
constitutes a valid and binding obligation of U.S. Government Portfolio
enforceable in accordance with its terms, subject to shareholder approval.
2. REPRESENTATIONS AND WARRANTIES OF TREASURY FUND. Treasury Fund
represents and warrants to and agrees with U.S. Government Portfolio that:
(a) Treasury Fund is a series of Newbury Street Trust, a business trust
duly organized, validly existing, and in good standing under the laws of
the State of Delaware, and has the power to own all of its properties and
assets and to carry out its obligations under this Agreement. It has all
necessary federal, state, and local authorizations to carry on its business
as now being conducted and to carry out this Agreement;
(b) Newbury Street Trust is an open-end, management investment company
duly registered under the 1940 Act, and such registration is in full force
and effect;
(c) The Prospectus and the Statement of Additional Information of Treasury
Fund, both dated May 30, 1997, previously furnished to U.S. Government
Portfolio did not and do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Treasury Fund, threatened against Treasury
Fund which assert liability on the part of Treasury Fund. Treasury Fund
knows of no facts which might form the basis for the institution of such
proceedings;
(e) Treasury Fund is not in, and the execution, delivery, and performance
of this Agreement will not result in, violation of any provision of its
Trust Instrument or By-laws, or, to the knowledge of Treasury Fund, of any
agreement, indenture, instrument, contract, lease, or other undertaking to
which Treasury Fund is a party or by which Treasury Fund is bound or result
in the acceleration of any obligation or the imposition of any penalty
under any agreement, judgment, or decree to which Treasury Fund is a party
or is bound;
(f) The Statement of Assets and Liabilities, the Statement of Operations,
the Statement of Changes in Net Assets, the Financial Highlights, and the
Schedule of Investments (including market values) of Treasury Fund at
October 31, 1996, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and have been furnished to U.S. Government
Portfolio together with such unaudited financial statements and schedule of
investments (including market values) for the six month period ended April
30, 1997. Said Statement of Assets and Liabilities and Schedule of
Investments fairly present the Fund's financial position as of such date
and said Statement of Operations, Statement of Changes in Net Assets, and
Financial Highlights fairly reflect its results of operations, changes in
financial position, and financial highlights for the periods covered
thereby in conformity with generally accepted accounting principles
consistently applied;
(g) Treasury Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of October 31, 1996 and those
incurred in the ordinary course of Treasury Fund's business as an
investment company since October 31, 1996;
(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Treasury Fund of
the transactions contemplated by this Agreement, except such as have been
obtained under the 1933 Act, the 1934 Act, the 1940 Act, and state
securities or blue sky laws (which term as used herein shall include the
District of Columbia and Puerto Rico);
(i) Treasury Fund has filed or will file all federal and state tax returns
which, to the knowledge of Treasury Fund's officers, are required to be
filed by Treasury Fund and has paid or will pay all federal and state taxes
shown to be due on said returns or provision shall have been made for the
payment thereof, and, to the best of Treasury Fund's knowledge, no such
return is currently under audit and no assessment has been asserted with
respect to such returns;
(j) Treasury Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company for all prior
taxable years and intends to meet such requirements for its current taxable
year ending on October 31, 1997;
(k) By the Closing Date, the Capital Reserves Class Shares to be issued to
U.S. Government Portfolio will have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be legally and validly
issued and will be fully paid and nonassessable (except as disclosed in
Treasury Fund's Statement of Additional Information) by Treasury Fund, and
no shareholder of Treasury Fund will have any preemptive right of
subscription or purchase in respect thereof;
(l) The execution, performance, and delivery of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of Treasury Fund, and this Agreement constitutes a valid
and binding obligation of Treasury Fund enforceable in accordance with its
terms, subject to approval by the shareholders of U.S. Government
Portfolio;
(m) The Registration Statement and the Proxy Statement, on the effective
date of the Registration Statement and insofar as they relate to Treasury
Fund, (i) will comply in all material respects with the provisions of the
1933 Act, the 1934 Act, and the 1940 Act, and the rules and regulations
thereunder, and (ii) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the time of
the shareholders' meeting referred to in Section 7 and on the Closing Date,
the Prospectus, as amended or supplemented, insofar as it relates to
Treasury Fund, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;
(n) The issuance of the Capital Reserves Class Shares pursuant to this
Agreement will be in compliance with all applicable federal securities
laws; and
(o) All of the issued and outstanding shares of beneficial interest of
Treasury Fund have been offered for sale and sold in conformity with the
federal securities laws.
3. REORGANIZATION.
(a) Subject to the requisite approval of the shareholders of U.S.
Government Portfolio and to the other terms and conditions contained
herein, U.S. Government Portfolio agrees to assign, sell, convey, transfer,
and deliver to Treasury Fund as of the Closing Date all of the assets of
U.S. Government Portfolio of every kind and nature existing on the Closing
Date. Treasury Fund agrees in exchange therefor: (i) to assume all of
U.S. Government Portfolio's liabilities existing on or after the Closing
Date, whether or not determinable on the Closing Date, and (ii) to issue
and deliver to U.S. Government Portfolio the number of full and fractional
Capital Reserves Class Shares equal to the number of full and fractional
shares of U.S. Government Portfolio then outstanding.
(b) The assets of U.S. Government Portfolio to be acquired by Treasury
Fund shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by U.S. Government
Portfolio, and any deferred or prepaid expenses shown as an asset on the
books of U.S. Government Portfolio on the Closing Date. U.S. Government
Portfolio will pay or cause to be paid to Treasury Fund any dividend or
interest payments received by it on or after the Closing Date with respect
to the assets transferred to Treasury Fund hereunder, and Treasury Fund
will retain any dividend or interest payments received by it after the
Valuation Time with respect to the assets transferred hereunder without
regard to the payment date thereof.
(c) The liabilities of U.S. Government Portfolio to be assumed by Treasury
Fund shall include (except as otherwise provided for herein) all of U.S.
Government Portfolio's liabilities, debts, obligations, and duties, of
whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in this Agreement. Notwithstanding the foregoing,
U.S. Government Portfolio agrees to use its best efforts to discharge all
of its known liabilities prior to the Closing Date, other than liabilities
incurred in the ordinary course of business.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), U.S. Government Portfolio
will constructively distribute PRO RATA to its shareholders of record,
determined as of the Valuation Time on the Closing Date, the Capital
Reserves Class Shares in exchange for such shareholders' shares of
beneficial interest in U.S. Government Portfolio and U.S. Government
Portfolio will be liquidated in accordance with Daily Money Fund's Trust
Instrument. Such distribution shall be accomplished by the Funds' transfer
agent opening accounts on Treasury Fund's share transfer books in the names
of the U.S. Government Portfolio shareholders and transferring the Capital
Reserves Class Shares thereto. Each U.S. Government Portfolio
shareholder's account shall be credited with the respective PRO RATA number
of full and fractional (rounded to the third decimal place) Capital
Reserves Class Shares due that shareholder. All outstanding U.S.
Government Portfolio shares, including any represented by certificates,
shall simultaneously be canceled on U.S. Government Portfolio's share
transfer records. Treasury Fund shall not issue certificates representing
the Capital Reserves Class Shares in connection with the Reorganization.
(e) Any reporting responsibility of U.S. Government Portfolio is and shall
remain its responsibility up to and including the date on which it is
terminated.
(f) Any transfer taxes payable upon issuance of the Capital Reserves Class
Shares in a name other than that of the registered holder on U.S.
Government Portfolio's books of the U.S. Government Portfolio shares
constructively exchanged for the Capital Reserves Class Shares shall be
paid by the person to whom such Capital Reserves Class Shares are to be
issued, as a condition of such transfer.
4. VALUATION.
(a) The Valuation Time shall be 4:00 p.m. Eastern time on the Closing
Date, or such other date as may be mutually agreed upon in writing by the
parties hereto (the Valuation Time).
(b) On the Closing Date, Treasury Fund will deliver to U.S. Government
Portfolio the number of full and fractional Capital Reserves Class Shares
equal to the number of full and fractional shares of U.S. Government
Portfolio then outstanding.
(c) The share price of the Capital Reserves Class Shares to be delivered
to U.S. Government Portfolio, the value of the assets of U.S. Government
Portfolio transferred hereunder, and the value of the liabilities of U.S.
Government Portfolio to be assumed hereunder shall in each case be
determined as of the Valuation Time.
(d) The share price of the Capital Reserves Class Shares shall be computed
in the manner set forth in the then-current Treasury Fund - Capital
Reserves Class Prospectus and Statement of Additional Information, and the
value of the assets and liabilities of U.S. Government Portfolio shall be
computed in the manner set forth in the then-current U.S. Government
Portfolio Prospectus and Statement of Additional Information.
(e) All computations pursuant to this Section shall be made by or under
the direction of Fidelity Service Company, Inc., a wholly owned subsidiary
of FMR Corp., in accordance with its regular practice as pricing agent for
U.S. Government Portfolio and Treasury Fund.
5. FEES; EXPENSES.
(a) U.S. Government Portfolio shall be responsible for all expenses, fees
and other charges, subject to FMR's voluntary expense limitation, if
applicable. Any merger-related expenses which may be attributable to
Treasury Fund will be borne by Treasury Fund, subject to FMR's voluntary
expense limitation, if applicable.
(b) Each of Treasury Fund and U.S. Government Portfolio represents that
there is no person who has dealt with it who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or commission
arising out of the transactions contemplated by this Agreement.
6. CLOSING DATE.
(a) The Reorganization, together with related acts necessary to consummate
the same (the Closing), unless otherwise provided herein, shall occur at
the principal office of the Trusts, 82 Devonshire Street, Boston,
Massachusetts, as of the Valuation Time on October 30, 1997, or at some
other time, date, and place agreed to by U.S. Government Portfolio and
Treasury Fund (the Closing Date).
(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading thereon
is restricted, or (iii) trading or the reporting of trading on said market
or elsewhere is disrupted, all so that accurate appraisal of the total net
asset value of U.S. Government Portfolio and the net asset value per share
of Treasury Fund is impracticable, the Valuation Time and the Closing Date
shall be postponed until the first business day after the day when such
trading shall have been fully resumed and such reporting shall have been
restored, or such other date as the parties may agree.
7. SHAREHOLDER MEETING AND TERMINATION OF U.S. GOVERNMENT PORTFOLIO.
(a) U.S. Government Portfolio agrees to call a meeting of its shareholders
after the effective date of the Registration Statement, to consider
transferring its assets to Treasury Fund as herein provided, adopting this
Agreement, and authorizing the liquidation of U.S. Government Portfolio.
(b) U.S. Government Portfolio agrees that as soon as reasonably
practicable after distribution of the Capital Reserves Class Shares, U.S.
Government Portfolio shall be terminated as a series of Daily Money Fund
pursuant to its Trust Instrument, any further actions shall be taken in
connection therewith as required by applicable law, and on and after the
Closing Date U.S. Government Portfolio shall not conduct any business
except in connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF TREASURY FUND. The obligations of
Treasury Fund hereunder shall be subject to the following conditions:
(a) That U.S. Government Portfolio furnishes to Treasury Fund a statement,
dated as of the Closing Date, signed by an officer of Daily Money Fund,
certifying that as of the Valuation Time and the Closing Date all
representations and warranties of U.S. Government Portfolio made in this
Agreement are true and correct in all material respects and that U.S.
Government Portfolio has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to such
dates;
(b) That U.S. Government Portfolio furnishes Treasury Fund with copies of
the resolutions, certified by an officer of Daily Money Fund, evidencing
the adoption of this Agreement and the approval of the transactions
contemplated herein by the requisite vote of the holders of the outstanding
shares of beneficial interest of U.S. Government Portfolio;
(c) That, on or prior to the Closing Date, U.S. Government Portfolio will
declare one or more dividends or distributions which, together with all
previous such dividends or distributions attributable to its current
taxable year, shall have the effect of distributing to the shareholders of
U.S. Government Portfolio substantially all of U.S. Government Portfolio's
investment company taxable income and all of its net realized capital gain,
if any, as of the Closing Date;
(d) That U.S. Government Portfolio shall deliver to Treasury Fund at the
Closing a statement of its assets and liabilities, together with a list of
its portfolio securities showing each such security's adjusted tax basis
and holding period by lot, with values determined as provided in Section 4
of this Agreement, all as of the Valuation Time, certified on U.S.
Government Portfolio's behalf by its Treasurer or Assistant Treasurer;
(e) That U.S. Government Portfolio's custodian shall deliver to Treasury
Fund a certificate identifying the assets of U.S. Government Portfolio held
by such custodian as of the Valuation Time on the Closing Date and stating
that as of the Valuation Time: (i) the assets held by the custodian will
be transferred to Treasury Fund; (ii) U.S. Government Portfolio's assets
have been duly endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the custodian's
knowledge, all necessary taxes in conjunction with the delivery of the
assets, including all applicable federal and state stock transfer stamps,
if any, have been paid or provision for payment has been made;
(f) That U.S. Government Portfolio's transfer agent shall deliver to
Treasury Fund at the Closing a certificate setting forth the number of
shares of U.S. Government Portfolio outstanding as of the Valuation Time
and the name and address of each holder of record of any such shares and
the number of shares held of record by each such shareholder;
(g) That U.S. Government Portfolio calls a meeting of its shareholders to
be held after the effective date of the Registration Statement, to consider
transferring its assets to Treasury Fund as herein provided, adopting this
Agreement, and authorizing the liquidation and termination of U.S.
Government Portfolio;
(h) That U.S. Government Portfolio delivers to Treasury Fund a certificate
of an officer of Daily Money Fund, dated as of the Closing Date, that there
has been no material adverse change in U.S. Government Portfolio's
financial position since July 31, 1996, other than changes in the market
value of its portfolio securities, or changes due to net redemptions of its
shares, dividends paid, or losses from operations; and
(i) That all of the issued and outstanding shares of beneficial interest
of U.S. Government Portfolio shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the extent
that any audit of the records of U.S. Government Portfolio or its transfer
agent by Treasury Fund or its agents shall have revealed otherwise, U.S.
Government Portfolio shall have taken all actions that in the opinion of
Treasury Fund are necessary to remedy any prior failure on the part of U.S.
Government Portfolio to have offered for sale and sold such shares in
conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF U.S. GOVERNMENT PORTFOLIO.
(a) That Treasury Fund shall have executed and delivered to U.S.
Government Portfolio an Assumption of Liabilities, certified by an officer
of Newbury Street Trust, dated as of the Closing Date pursuant to which
Treasury Fund will assume all of the liabilities of U.S. Government
Portfolio existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;
(b) That Treasury Fund furnishes to U.S. Government Portfolio a statement,
dated as of the Closing Date, signed by an officer of Newbury Street
Trust, certifying that as of the Valuation Time and the Closing Date all
representations and warranties of Treasury Fund made in this Agreement are
true and correct in all material respects, and Treasury Fund has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That U.S. Government Portfolio shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to U.S. Government Portfolio and
Treasury Fund, to the effect that the Capital Reserves Class Shares are
duly authorized and upon delivery to U.S. Government Portfolio as provided
in this Agreement will be validly issued and will be fully paid and
nonassessable by Treasury Fund (except as disclosed in Treasury Fund's
Statement of Additional Information) and no shareholder of Treasury Fund
has any preemptive right of subscription or purchase in respect thereof.
10. CONDITIONS TO OBLIGATIONS OF TREASURY FUND AND U.S. GOVERNMENT
PORTFOLIO.
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of the
holders of the outstanding shares of beneficial interest of U.S. Government
Portfolio;
(b) That all consents of other parties and all other consents, orders, and
permits of federal, state, and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities authorities,
including "no action" positions of such federal or state authorities)
deemed necessary by Treasury Fund or U.S. Government Portfolio to permit
consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of Treasury Fund or U.S. Government
Portfolio, provided that either party hereto may for itself waive any of
such conditions;
(c) That all proceedings taken by either Fund in connection with the
transactions contemplated by this Agreement and all documents incidental
thereto shall be satisfactory in form and substance to it and its counsel,
Kirkpatrick & Lockhart LLP;
(d) That there shall not be any material litigation pending with respect
to the matters contemplated by this Agreement;
(e) That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of Treasury Fund and U.S. Government
Portfolio, threatened by the Commission; and
(f) That Treasury Fund and U.S. Government Portfolio shall have received
an opinion of Kirkpatrick & Lockhart LLP satisfactory to Treasury Fund and
U.S. Government Portfolio that for federal income tax purposes:
(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and U.S. Government Portfolio and Treasury Fund
will each be parties to the Reorganization under section 368(b) of the
Code;
(ii) No gain or loss will be recognized by U.S. Government Portfolio upon
the transfer of all of its assets to Treasury Fund in exchange solely for
the Capital Reserves Class Shares and the assumption of U.S. Government
Portfolio's liabilities followed by the distribution of those Capital
Reserves Class Shares to the shareholders of U.S. Government Portfolio in
liquidation of U.S. Government Portfolio;
(iii) No gain or loss will be recognized by Treasury Fund on the receipt
of U.S. Government Portfolio's assets in exchange solely for the Capital
Reserves Class Shares and the assumption of U.S. Government Portfolio's
liabilities;
(iv) The basis of U.S. Government Portfolio's assets in the hands of
Treasury Fund will be the same as the basis of such assets in U.S.
Government Portfolio's hands immediately prior to the Reorganization;
(v) Treasury Fund's holding period in the assets to be received from U.S.
Government Portfolio will include U.S. Government Portfolio's holding
period in such assets;
(vi) A U.S. Government Portfolio shareholder will recognize no gain or
loss on the exchange of his or her shares of beneficial interest in U.S.
Government Portfolio for the Capital Reserves Class Shares in the
Reorganization;
(vii) A U.S. Government Portfolio shareholder's basis in the Capital
Reserves Class Shares to be received by him or her will be the same as his
or her basis in the U.S. Government Portfolio shares exchanged therefor;
and
(viii) A U.S. Government Portfolio shareholder's holding period for his
or her Capital Reserves Class Shares will include the holding period of
U.S. Government Portfolio shares exchanged, provided that those U.S.
Government Portfolio shares were held as capital assets on the date of the
Reorganization.
Notwithstanding anything herein to the contrary, each of U.S. Government
Portfolio and Treasury Fund may not waive the conditions set forth in this
subsection 10(f).
11. COVENANTS OF TREASURY FUND AND U.S. GOVERNMENT PORTFOLIO.
(a) Treasury Fund and U.S. Government Portfolio each covenants to operate
its respective business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course of business
will include the payment of customary dividends and distributions;
(b) U.S. Government Portfolio covenants that it is not acquiring the
Capital Reserves Class Shares for the purpose of making any distribution
other than in accordance with the terms of this Agreement;
(c) U.S. Government Portfolio covenants that it will assist Treasury Fund
in obtaining such information as Treasury Fund reasonably requests
concerning the beneficial ownership of U.S. Government Portfolio's shares;
and
(d) U.S. Government Portfolio covenants that its liquidation and
termination will be effected in the manner provided in its Trust Instrument
in accordance with applicable law and after the Closing Date, U.S.
Government Portfolio will not conduct any business except in connection
with its liquidation and termination.
12. TERMINATION; WAIVER.
Treasury Fund and U.S. Government Portfolio may terminate this Agreement
by mutual agreement. In addition, either Treasury Fund or U.S. Government
Portfolio may at its option terminate this Agreement at or prior to the
Closing Date because:
(i) of a material breach by the other of any representation, warranty, or
agreement contained herein to be performed at or prior to the Closing Date;
or
(ii) a condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it
will not or cannot be met.
In the event of any such termination, there shall be no liability for
damages on the part of U.S. Government Portfolio or Treasury Fund, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter hereof,
constitutes the only understanding with respect to such subject matter, may
not be changed except by a letter of agreement signed by each party hereto
and shall be construed in accordance with and governed by the laws of the
State of Delaware.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Treasury Fund or U.S.
Government Portfolio; provided, however, that following the shareholders'
meeting called by U.S. Government Portfolio pursuant to Section 7 of this
Agreement, no such amendment may have the effect of changing the provisions
for determining the number of Capital Reserves Class Shares to be paid to
U.S. Government Portfolio shareholders under this Agreement to the
detriment of such shareholders without their further approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on the
interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the Agreement,
or in any document delivered pursuant hereto or in connection herewith,
shall survive the consummation of the transactions contemplated hereunder.
14. TRUST INSTRUMENTS.
A copy of the Trust Instrument of each Trust is on file with the Secretary
of State of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Trustees of each Fund as trustees
and not individually and that the obligations of each Fund under this
instrument are not binding upon any of such Fund's Trustees, officers, or
shareholders individually but are binding only upon the assets and property
of such Fund. Each Fund agrees that its obligations hereunder apply only
to such Fund and not to its shareholders individually or to the Trustees of
such Fund.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
of any rights or obligations hereunder shall be made by any party without
the written consent of the other parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any
person, firm, or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason
of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by an appropriate officer.
SIGNATURE LINES OMITTED
CAPITAL RESERVES: MONEY MARKET PORTFOLIO
A FUND OF
DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Capital Reserves: Money Market Portfolio:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Capital Reserves: Money Market Portfolio (Money Market
Portfolio), will be held at the office of Daily Money Fund, 82 Devonshire
Street, Boston, Massachusetts 02109 on Wednesday, September 17, 1997, at
11:30 a.m. Eastern time. The purpose of the Meeting is to consider and act
upon the following proposal, and to transact such other business as may
properly come before the Meeting or any adjournments thereof.
(1) To approve an Agreement and Plan of Reorganization between Money
Market Portfolio and Prime Fund, a fund of Newbury Street Trust, providing
for the transfer of all of the assets of Money Market Portfolio to Prime
Fund in exchange solely for Capital Reserves Class shares of beneficial
interest of Prime Fund and the assumption by Prime Fund of Money Market
Portfolio's liabilities, followed by the distribution of Capital Reserves
Class shares of Prime Fund to shareholders of Money Market Portfolio in
liquidation of Money Market Portfolio.
The Board of Trustees has fixed the close of business on July 21, 1997 as
the record date for the determination of the shareholders of Money Market
Portfolio entitled to notice of, and to vote at, such Meeting and any
adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
July 21, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
CAPITAL RESERVES: MONEY MARKET PORTFOLIO
A FUND OF
DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
PROXY STATEMENT AND PROSPECTUS
JULY 21, 1997
This Proxy Statement and Prospectus (Proxy Statement) is being furnished
to shareholders of Capital Reserves: Money Market Portfolio (Money Market
Portfolio), a fund of Daily Money Fund, in connection with the solicitation
of proxies by Daily Money Fund's Board of Trustees for use at the Special
Meeting of Shareholders of Money Market Portfolio and at any adjournments
thereof (the Meeting). The Meeting will be held on Wednesday, September 17,
1997 at 11:30 a.m. Eastern time at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of Daily Money Fund.
As more fully described in this Proxy Statement, the purpose of the
Meeting is to vote on a proposed reorganization (Reorganization). Pursuant
to an Agreement and Plan of Reorganization (the Agreement), Money Market
Portfolio would transfer all of its assets to Prime Fund, a fund of Newbury
Street Trust, in exchange solely for Capital Reserves Class shares of
beneficial interest of Prime Fund (Capital Reserves Class Shares) and the
assumption by Prime Fund of Money Market Portfolio's liabilities. Capital
Reserves Class Shares would then be distributed to Money Market Portfolio
shareholders, so that each such shareholder would receive the number of
full and fractional Capital Reserves Class Shares equal to the number of
full and fractional shares of Money Market Portfolio held by such
shareholder on October 30, 1997, or such other date as the parties may
agree (the Closing Date). Money Market Portfolio will distribute Capital
Reserves Class Shares to its shareholders in liquidation, as provided in
the Agreement.
Prime Fund, a money market fund, is a diversified fund of Newbury Street
Trust, an open-end management investment company organized as a Delaware
business trust on December 30, 1991. Newbury Street Trust's principal
executive office is located at 82 Devonshire Street, Boston, Massachusetts
02109 (1-800-843-3001). Prime Fund's investment objective is to obtain as
high a level of current income as is consistent with the preservation of
capital and liquidity. Prime Fund seeks to achieve its investment
objective by investing only in U.S. dollar-denominated money market
securities of domestic and foreign issuers rated in the highest rating
category by at least two nationally recognized rating services, U.S.
Government securities, and repurchase agreements. Prime Fund is currently
authorized to issue two classes of shares designated Prime Fund - Daily
Money Class shares, which are currently outstanding, and Prime Fund -
Capital Reserves Class shares, which will be issued initially to Money
Market Portfolio shareholders in connection with the Reorganization.
This Proxy Statement, which should be retained for future reference, sets
forth concisely the information about the Reorganization and Prime Fund
that a shareholder should know before voting on the proposed
Reorganization. This Proxy Statement is accompanied by the Prospectus for
Prime Fund - Daily Money Class, dated May 30, 1997. The Statement of
Additional Information for Prime Fund - Daily Money Class, dated May 30,
1997, is available upon request. The Prospectus and the Statement of
Additional Information for Prime Fund - Daily Money Class have been filed
with the Securities and Exchange Commission (the SEC) and are incorporated
herein by reference. A Statement of Additional Information, dated July 21,
1997, relating to this Proxy Statement has been filed with the SEC and is
incorporated herein by reference. A Prospectus, dated November 29, 1996
(as supplemented March 21, 1997), and a Statement of Additional
Information, dated November 29, 1996 (as supplemented January 2, 1997), for
Money Market Portfolio have been filed with the SEC and are incorporated
herein by reference. Copies of these documents, as well as each fund's most
recent annual and semi-annual reports, may be obtained without charge by
contacting Fidelity Client Services at 82 Devonshire Street, Boston,
Massachusetts 02109 or by calling 1-800-843-3001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT AND
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
VOTING INFORMATION
SYNOPSIS
COMPARISON OF OTHER POLICIES OF THE FUNDS
COMPARISON OF PRINCIPAL RISK FACTORS
THE PROPOSED TRANSACTION
ADDITIONAL INFORMATION ABOUT PRIME FUND
MISCELLANEOUS
EXHIBIT 1. FORM OF AGREEMENT AND PLAN OF REORGANIZATION OF MONEY MARKET
PORTFOLIO
PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF
CAPITAL RESERVES: MONEY MARKET PORTFOLIO
A FUND OF DAILY MONEY FUND
TO BE HELD ON SEPTEMBER 17, 1997
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
_________________________________
VOTING INFORMATION
This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of, the
Board of Trustees of Daily Money Fund (Daily Money Fund or the trust) to be
used at the Special Meeting of Shareholders of Capital Reserves: Money
Market Portfolio (Money Market Portfolio or the fund) and at any
adjournments thereof (the Meeting), to be held on Wednesday, September 17,
1997 at 11:30 a.m. Eastern time at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and
Fidelity Management & Research Company (FMR), the fund's investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about July 21, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. and/or Management Information Services Corp. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $154,300. The expenses in connection
with preparing this Proxy Statement and its enclosures and of all
solicitations will be borne by the fund; however, because FMR has
voluntarily agreed to limit the fund's total operating expenses, it is
expected that these expenses will effectively be borne by FMR. FMR will
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. Only proxies that are voted will be counted
toward establishing a quorum. Broker non-votes are not considered voted for
this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
Money Market Portfolio may also arrange to have votes recorded by
telephone. D.F. King & Co. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated cost of
approximately $18,500. The expenses in connection with telephone voting
will be borne by the fund; however, because FMR has voluntarily agreed to
limit the fund's total operating expenses, it is expected that these
expenses will effectively be borne by FMR. If the fund records votes by
telephone, it will use procedures designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares
in accordance with their instructions, and to confirm that their
instructions have been properly recorded. Proxies given by telephone may
be revoked at any time before they are voted in the same manner that
proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present at
the Meeting but sufficient votes to approve one or more of the proposed
items are not received, or if other matters arise requiring shareholder
attention, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those
shares present at the Meeting or represented by proxy. When voting on a
proposed adjournment, the persons named as proxies will vote FOR the
proposed adjournment all shares that they are entitled to vote with respect
to that item, unless directed to vote AGAINST the item, in which case such
shares will be voted against the proposed adjournment with respect to that
item. A shareholder vote may be taken on one or more of the items in this
Proxy Statement or on any other business properly presented at the meeting
prior to such adjournment if sufficient votes have been received and it is
otherwise appropriate.
On April 30, 1997, there were 2,512,804,938 shares of Prime Fund - Daily
Money Class (then Daily Money Fund: Money Market Portfolio - Initial Class)
issued and outstanding.
On April 30, 1997, there were 1,574,300,010 shares of Money Market
Portfolio issued and outstanding. Shareholders of record of Money Market
Portfolio at the close of business on July 21, 1997, will be entitled to
vote at the Meeting. Each such shareholder will be entitled to one vote
for each full share held on that date and a proportionate share of one vote
for each fractional share held on that date.
On April 30, 1997, the trustees and officers of Daily Money Fund and of
Newbury Street Trust (then known as Daily Tax-Exempt Money Fund) owned in
the aggregate less than 1% of the shares of Money Market Portfolio and
Prime Fund (then Daily Money Fund: Money Market Portfolio), respectively.
On April 30, 1997, the following shareholders were known by Daily Money
Fund or by Newbury Street Trust to own of record or beneficially 5% or more
of Money Market Portfolio's or Prime Fund's outstanding shares:
PERCENTAGE OF OUTSTANDING
SHAREHOLDER ADDRESS FUND SHARES
MONEY MARKET PORTFOLIO
Muriel Siebert & Co., Inc. New York, NY 12.30%
Securities America, Inc. Omaha, NE 9.33%
H.D. Vest Investment Irving, TX 5.37%
Securities, Inc.
Commonwealth Equity Waltham, MA 5.25%
Services
MML Investors Services, Springfield, MA 5.18%
Inc.
PRIME FUND - DAILY
MONEY CLASS
LNC Equity Sales Fort Wayne, IN 5.49%
To the knowledge of Daily Money Fund and Newbury Street Trust, no other
shareholder owned of record or beneficially 5% or more of the outstanding
shares of Money Market Portfolio or Prime Fund on that date. If the
Reorganization became effective at April 30, 1997, the above shareholders
of Money Market Portfolio would have owned of record or beneficially the
same percentages shown above of Prime Fund - Capital Reserves Class; the
above shareholder of Prime Fund - Daily Money Class would have owned of
record or beneficially the same percentage shown above of Prime Fund -
Daily Money Class; and none of the above shareholders would have owned of
record or beneficially 5% or more of Prime Fund as a whole.
VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE AFFIRMATIVE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF MONEY MARKET
PORTFOLIO. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940 ACT), THE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS THE
AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING SECURITIES
PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF MORE THAN
50% OF THE OUTSTANDING VOTING SECURITIES ARE PRESENT OR REPRESENTED BY
PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES. BROKER
NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
SYNOPSIS
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement, in the Agreement, and in the Prospectuses of Money
Market Portfolio and Prime Fund - Daily Money Class, which are incorporated
herein by this reference. Shareholders should read the entire Proxy
Statement and the enclosed Prospectus of Prime Fund - Daily Money Class
carefully for more complete information about the Reorganization and Prime
Fund.
The proposal is to merge Money Market Portfolio into a newly-created class
- - Capital Reserves Class - of Prime Fund, a larger money market fund also
managed by FMR. FMR is presenting similar proposals to all of the Capital
Reserves Portfolios it manages. Merging Money Market Portfolio into Prime
Fund - Capital Reserves Class will help FMR manage the funds more
efficiently.
If the proposal is approved you will have lower costs on your investment -
total fund expenses of 0.90% per year, instead of 0.99% per year. (These
expenses are based on voluntary expense limits agreed to by FMR. They
could change in the future, whether or not the Reorganization takes place.)
Prime Fund - Capital Reserves Class is designed to be similar to Money
Market Portfolio. You will not have to change how you do business with
Fidelity or have to take any other action (other than voting) to maintain
your investment.
Prime Fund has slightly different investment policies than Money Market
Portfolio. Both Prime Fund and Money Market Portfolio invest in U.S.
dollar-denominated money market securities rated in the highest rating
category ("first tier" securities). Money Market Portfolio, however, may
also invest in U.S. dollar-denominated money market securities rated in the
second highest rating category ("second tier" securities) and in securities
that may be deemed to be either first tier or second tier ("split-rated"
securities). Not investing in second tier or split-rated securities will
negatively impact Prime Fund - Capital Reserves Class's yield --
approximately 0.02%-0.04% per year compared to Money Market Portfolio.
This impact should be offset, however, by the 0.09% expense reduction if
the Reorganization is approved.
INVESTMENT OBJECTIVES AND POLICIES
Money Market Portfolio and Prime Fund (collectively the "Funds" or each
individually a "Fund") have essentially the same investment objective.
Money Market Portfolio seeks as high a level of current income as is
consistent with the preservation of capital and liquidity by investing in
money market instruments. Prime Fund seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
Money Market Portfolio invests only in high-quality U.S. dollar-denominated
money market securities of domestic and foreign issuers, including U.S.
Government securities and repurchase agreements. Prime Fund invests only
in U.S. dollar-denominated money market securities of domestic and foreign
issuers rated in the highest rating category by at least two nationally
recognized rating services, U.S. Government securities, and repurchase
agreements. In addition to permissible investments for Prime Fund, Money
Market Portfolio may invest in first tier securities rated in the highest
rating category by only one rating service and in second tier securities.
Each Fund also may enter into reverse repurchase agreements.
EXPENSE STRUCTURE
Prime Fund - Capital Reserves Class has lower expenses than Money Market
Portfolio. Thus, if shareholders approve the Reorganization, they will
have lower costs on their investments.
Money Market Portfolio currently pays FMR a monthly management fee at an
annual rate of 0.50% of its average net assets. Also, under a Distribution
and Service Plan adopted pursuant to Rule 12b-1 under the 1940 Act, the
Fund pays its distributor, National Financial Services Corporation (NFSC),
a monthly distribution fee at an annual rate of 0.35% of its average net
assets. Thus, Money Market Portfolio currently pays total management and
distribution fees of 0.85%. In addition, the Fund's Distribution and
Service Plan specifically recognizes that FMR may make payments from its
management fee revenue, past profits, or other resources (not from the
Fund's assets) to compensate financial intermediaries (including NFSC) for
providing distribution-related services for the Fund. The Board of
Trustees of Daily Money Fund has authorized FMR to make such payments of up
to 0.25% of the Fund's average net assets throughout the month based upon
the level of shareholder support and distribution services provided. FMR
has voluntarily agreed to reimburse Money Market Portfolio to the extent
that its total operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.99% of its average net
assets.
If Money Market Portfolio shareholders approve the Reorganization, they
will receive Prime Fund - Capital Reserves Class shares, which will pay a
0.25% management fee and a 0.50% distribution fee. The total management
and distribution fees of 0.75% to be paid by Prime Fund - Capital Reserves
Class will be 0.10% lower, as a percentage of average net assets, than the
total management and distribution fees of 0.85% currently paid by Money
Market Portfolio. In addition, the Distribution and Service Plan for Prime
Fund - Capital Reserves Class shares will specifically recognize that FMR
may make payments from its management fee revenue, past profits or other
resources (not from the Class's assets) to compensate financial
intermediaries for providing distribution-related services to the Class.
FMR has voluntarily agreed to reimburse Prime Fund - Capital Reserves Class
to the extent that its total operating expenses (excluding interest, taxes,
brokerage commissions, and extraordinary expenses) exceed 0.90% of its
average net assets -- 0.09% lower than Money Market Portfolio's 0.99%
voluntary expense limitation. Although FMR may terminate the voluntary
expense limitation with respect to Prime Fund - Capital Reserves Class at
any time without prior notice to shareholders, FMR has no current intention
of doing so.
In sum, the Reorganization would give shareholders of Money Market
Portfolio the opportunity to participate in a larger money market fund with
essentially the same investment objective, a comparable investment
portfolio, 0.10% lower total management and distribution fees, and a 0.09%
lower total operating expense ratio, after reimbursement.
The Board of Trustees believes that the Reorganization would benefit Money
Market Portfolio's shareholders and recommends that shareholders vote in
favor of the Reorganization.
THE PROPOSED REORGANIZATION
Shareholders of Money Market Portfolio will be asked at the Meeting to
vote upon and approve the Reorganization and the Agreement, which provides
for the acquisition by Prime Fund of all of the assets of Money Market
Portfolio in exchange solely for Capital Reserves Class shares of Prime
Fund (Capital Reserves Class Shares) and the assumption by Prime Fund of
the liabilities of Money Market Portfolio. Money Market Portfolio will
then distribute the Capital Reserves Class Shares to its shareholders, so
that each shareholder will receive the number of full and fractional
Capital Reserves Class Shares equal to the number of full and fractional
shares of Money Market Portfolio held by such shareholder on the Closing
Date (defined below). The exchange of Money Market Portfolio's assets for
Capital Reserves Class Shares will occur as of 4:00 p.m. Eastern time on
October 30, 1997, or such other date as the parties may agree (the Closing
Date). Money Market Portfolio will then be liquidated as soon as
practicable thereafter.
The Funds will receive an opinion of counsel that the Reorganization will
not result in any gain or loss for federal income tax purposes to Money
Market Portfolio or Prime Fund or to the shareholders of either Fund. The
rights and privileges of the former shareholders of Money Market Portfolio
will be effectively unchanged by the Reorganization, except as described on
page 10 under the heading "Forms of Organization."
COMPARATIVE FEE TABLES
The following tables show (i) the shareholder transaction expenses that
Money Market Portfolio shareholders currently incur, and the shareholder
transaction expenses that Prime Fund - Capital Reserves Class shareholders
will incur after giving effect to the Reorganization, and (ii) the current
fees and expenses of Money Market Portfolio for the 12 months ended January
31, 1997 (unaudited), and the pro forma fees for Prime Fund - Capital
Reserves Class based on the same period (unaudited) after giving effect to
the Reorganization.
SHAREHOLDER TRANSACTION EXPENSES are charges that shareholders may pay when
they buy or sell shares of a Fund.
<TABLE>
<CAPTION>
<S> <C> <C>
PRIME FUND - CAPITAL
MONEY MARKET PORTFOLIO RESERVES CLASS
Maximum sales charge on purchases None None
and reinvested distributions
Maximum deferred sales charge None None
Redemption fee None None
Exchange fee None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
Annual fund operating expenses are paid out of each Fund's assets and, in
the case of Prime Fund, are allocated to the appropriate Class, as
applicable. The expenses of each Fund/Class are factored into its share
price or dividends and are not charged directly to shareholder accounts.
The following figures for Money Market Portfolio are based on historical
expenses. The following pro forma expenses for Prime Fund - Capital
Reserves Class are based on the proposed expense structure described above,
with Other Expenses estimated. All figures are calculated as a percentage
of average net assets.
PRO FORMA EXPENSES
MONEY PRIME FUND -
MARKET CAPITAL RESERVES CLASS
PORTFOLIO
Management Fee 0.34%* 0.25%
12b-1 Fee (Distribution Fee) 0.35% 0.50%
Other Expenses 0.30% 0.15%**
Total Fund Operating Expenses 0.99%* 0.90%**
* FMR has voluntarily agreed to reimburse Money Market Portfolio to the
extent that total operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.99% of the Fund's average
net assets. If this agreement were not in effect, the Fund's management
fee and total operating expenses, as a percentage of average net assets,
would have been 0.50% and 1.15%, respectively.
** FMR has voluntarily agreed to reimburse Prime Fund - Capital Reserves
Class to the extent that total operating expenses (excluding interest,
taxes, brokerage commissions, and extraordinary expenses) exceed 0.90% of
the Class's average net assets. If this agreement were not in effect, the
Class's other expenses and total operating expenses, as a percentage of
average net assets, would be estimated to be 0.30% and 1.05%, respectively.
EXAMPLE OF EFFECT OF FUND EXPENSES
The following table illustrates the expenses on a hypothetical $1,000
investment in Money Market Portfolio under its current expenses, and in
Prime Fund - Capital Reserves Class under the pro forma expenses,
calculated at the rates (after reimbursement) stated above, assuming a 5%
annual return.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
After 1 Year After 3 Years After 5 Years After 10 Years
Money Market Portfolio $10 $32 $55 $121
Prime Fund - Capital $ 9 $29 $50 $111
Reserves Class
</TABLE>
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual or
expected costs, which may vary. The assumed return of 5% is not a
prediction of, and does not represent, the actual or expected performance
of either Fund/Class. Long-term shareholders may pay more than the
economic equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc. due to 12b-1 fees.
ADDITIONAL EXPENSE INFORMATION
DISTRIBUTOR. NFSC distributes Money Market Portfolio's shares. Fidelity
Distributors Corporation (FDC), an affiliate of FMR, currently distributes
Prime Fund's shares and will distribute Prime Fund - Capital Reserves Class
shares following the Reorganization.
As stated above, under a Distribution and Service Plan adopted pursuant to
Rule 12b-1 under the 1940 Act, Money Market Portfolio currently pays NFSC a
monthly distribution fee at an annual rate of 0.35% of the Fund's average
net assets. In addition, the Money Market Portfolio plan specifically
recognizes that FMR may make payments from its management fee revenue, past
profits, or other resources to compensate financial intermediaries
(including NFSC) for providing distribution-related services for the Fund.
The Board of Trustees of Daily Money Fund has authorized FMR to make such
payments of up to 0.25% of the Fund's average net assets throughout the
month based upon the level of shareholder support and distribution services
provided.
If shareholders approve the Reorganization, Prime Fund - Capital Reserves
Class shares will be subject to a Distribution and Service Plan adopted
pursuant to Rule 12b-1 under the 1940 Act. Under the plan, Capital
Reserves Class will be authorized to pay FDC a monthly distribution fee as
compensation for its services and expenses in connection with the
distribution of Capital Reserves Class shares of Prime Fund. Capital
Reserves Class will pay FDC a monthly distribution fee at an annual rate of
0.50% of its average net assets throughout the month. FDC may compensate
intermediaries that provide shareholder support services, engage in the
sale of Capital Reserves Class shares, or pay distribution expenses at an
annual rate of up to 0.50% of the average net assets they maintain. The
Capital Reserves Class plan will specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other resources
to FDC for expenses incurred in connection with the distribution of Capital
Reserves Class shares, including payments made to intermediaries that
provide shareholder support services or engage in the sale of Capital
Reserves Class shares. The Board of Trustees of Newbury Street Trust has
authorized such payments to intermediaries at an annual rate of up to 0.10%
of the average net assets they maintain.
Independent of the Capital Reserves Class plan, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of the
average net assets they maintain. The recordkeeping fee will be paid by
FMR or its affiliates, not by Prime Fund, and will not be paid for
distribution services.
SUB-ADVISER. Currently, FMR Texas Inc., located in Irving, Texas, is each
Fund's sub-adviser and has primary responsibility for managing its
investments. FMR is responsible for providing other management services.
For FMR Texas's services to Money Market Portfolio, FMR pays FMR Texas 50%
of its management fee (before expense reimbursements but after payments
made by FMR pursuant to the Fund's Distribution and Service Plan). For FMR
Texas's services to Prime Fund, FMR pays FMR Texas 50% of its management
fee (before expense reimbursements).
FORMS OF ORGANIZATION
Money Market Portfolio is a diversified fund of Daily Money Fund, an
open-end management investment company organized as a Delaware business
trust on September 29, 1993. Daily Money Fund is authorized to issue an
unlimited number of shares of beneficial interest. Money Market Portfolio
is authorized to issue one class of shares.
Prime Fund is a diversified fund of Newbury Street Trust, an open-end
management investment company organized as a Delaware business trust on
December 30, 1991. Before May 30, 1997, Prime Fund was a series of a
different trust, Daily Money Fund, and was known as Daily Money Fund: Money
Market Portfolio. Also, before May 30, 1997, Newbury Street Trust was
known as Daily Tax-Exempt Money Fund. Effective May 30, 1997, Daily Money
Fund: Money Market Portfolio was reorganized into a newly-established
separate series of Daily Tax-Exempt Money Fund, pursuant to an Agreement
and Plan of Reorganization approved on May 9, 1997, by shareholders of
Daily Money Fund: Money Market Portfolio. In connection with that
reorganization, Daily Money Fund: Money Market Portfolio was renamed Prime
Fund and Daily Tax-Exempt Money Fund was renamed Newbury Street Trust.
Newbury Street Trust is authorized to issue an unlimited number of shares
of beneficial interest. Prime Fund is currently authorized to issue two
classes of shares designated Prime Fund - Daily Money Class (formerly Daily
Money Fund: Money Market Portfolio - Initial Class) shares, which are
currently outstanding, and Prime Fund - Capital Reserves Class shares,
which will be issued initially to Money Market Portfolio shareholders in
connection with the Reorganization. A separate filing with the Securities
and Exchange Commission (the SEC) will be made prior to the Closing Date of
the Reorganization for the purpose of registering Prime Fund - Capital
Reserves Class shares for sale.
Because Money Market Portfolio and Prime Fund are series of Delaware
business trusts, organized under substantially similar Trust Instruments,
the rights of the security holders of Money Market Portfolio under state
law and the governing documents are expected to remain unchanged after the
Reorganization, except with regard to shareholder voting rights.
Shareholder voting rights for Money Market Portfolio are based on the
number of Fund shares owned (share-based voting), whereas shareholder
voting rights for Prime Fund are based on the total dollar interest in
Prime Fund (dollar-based voting). If Money Market Portfolio shareholders
approve the Reorganization, their voting rights would not be affected
because immediately following the Reorganization Newbury Street Trust will
comprise only money market funds, which are managed to maintain a stable
$1.00 share price. However, if funds with fluctuating net asset values per
share are added to Newbury Street Trust in the future, relative voting
rights would be affected. In that event, while the differences between the
Funds' voting rights would have no bearing on matters affecting only one
fund of the trust, on matters requiring trust-wide votes in which all funds
of the trust participate, dollar-based voting would provide shareholders
with voting power that is proportionate to their economic interest, whereas
share-based voting may provide shareholders who own shares of a fund with a
lower net asset value per share (NAV) than other funds in the trust with a
disproportionate ability to affect a trust-wide vote relative to
shareholders of other funds in the trust. If Money Market Portfolio
shareholders approve the Reorganization, their voting rights will change to
reflect those of Prime Fund shareholders. For more information regarding
shareholder rights, refer to the section of each Fund's Statement of
Additional Information called "Description of the Trust."
INVESTMENT OBJECTIVES AND POLICIES
The Funds have essentially the same investment objective. Money Market
Portfolio seeks as high a level of current income as is consistent with the
preservation of capital and liquidity by investing in money market
instruments. Prime Fund seeks to obtain as high a level of current income
as is consistent with the preservation of capital and liquidity.
Investments in the Funds are neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that a Fund will maintain a
stable $1.00 share price.
Federal regulations limit money market fund investments to high-quality
securities. To be high-quality, a security must be rated in accordance
with applicable rules in one of the two highest categories for short-term
securities by at least two nationally recognized rating services (or by
one, if only one rating service has rated the security) or, if unrated,
judged to be of equivalent quality by FMR. High-quality securities are
divided into "first tier" securities (those securities deemed to be in the
highest rating category) and "second tier" securities (those securities
deemed to be in the second highest rating category). "Split-rated"
securities may be deemed to be either first tier or second tier based on
applicable regulations.
Money Market Portfolio invests only in high-quality U.S.
dollar-denominated money market securities of domestic and foreign issuers,
including U.S. Government securities and repurchase agreements. Prime Fund
invests only in U.S. dollar-denominated money market securities of domestic
and foreign issuers rated in the highest rating category by at least two
nationally recognized rating services, U.S. Government securities, and
repurchase agreements. In addition to permissible investments for Prime
Fund, Money Market Portfolio may invest in first tier securities rated in
the highest rating category by only one rating service and in second tier
securities. Each Fund also may enter into reverse repurchase agreements.
If shareholders approve the Reorganization, it is anticipated that Money
Market Portfolio will sell any second tier or split-rated securities in the
period between shareholder approval and the Closing Date. (See "Comparison
of Principal Risk Factors," page 14.) FMR anticipates that the impact of
not purchasing second tier or split-rated securities on Money Market
Portfolio's yield will be approximately 0.02%-0.04%. The 0.02%-0.04% yield
difference should be offset, however, by the 0.09% lower total operating
expense ratio (after reimbursement) of Prime Fund - Capital Reserves Class
shares following the Reorganization. In the event that the sale of either
Fund's assets becomes necessary prior to the effective date of the
Reorganization, any transaction costs associated with such adjustments will
be borne by the individual Fund that incurred them.
The investment objective of each Fund is fundamental and may not be
changed without the approval of a vote of at least a majority of the
outstanding voting securities of the Fund. There can be no assurance that
a Fund will achieve its objective. With the exception of fundamental
policies, investment policies of the Funds can be changed without
shareholder approval. The differences between the Funds discussed below,
except as noted, could be changed without a vote of shareholders.
COMPARISON OF OTHER POLICIES OF THE FUNDS
DIVERSIFICATION. As a matter of fundamental policy, each Fund may not,
with respect to 75% of its total assets, purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities or (Prime Fund only) securities
of other investment companies) if, as a result, (a) more than 5% of the
Fund's total assets would be invested in the securities of that issuer, or
(b) the Fund would hold more than 10% of the outstanding voting securities
of that issuer. Furthermore, each Fund has a non-fundamental policy, which
is required by federal regulations applicable to taxable money market
funds, that precludes it from investing more than 5% of its total assets in
any one issuer, except that each Fund may invest up to 25% of its total
assets in the highest quality securities of a single issuer for up to three
business days.
BORROWING. As a matter of fundamental policy, each Fund may borrow money
only for temporary or emergency purposes and engage in reverse repurchase
agreements for any purpose, but not in an amount exceeding 33 1/3% of its
total assets (including the amount borrowed) less liabilities (other than
borrowings). As a matter of non-fundamental policy, each Fund may borrow
money only from banks or other funds advised by FMR or an affiliate of FMR,
or by engaging in reverse repurchase agreements with any party, and each
Fund may make additional investments while borrowings are outstanding.
LENDING. As a matter of fundamental policy, each Fund may not lend any
security or make any other loan, except through the purchase of debt
securities or repurchase agreements, if as a result more than 33 1/3% of
its total assets would be lent to other parties. As a matter of
non-fundamental policy, with the exception of purchasing debt securities
and entering into repurchase agreements, neither Fund currently intends to
lend assets other than securities to other parties, except by lending money
(up to 10% of its assets) to other funds advised by FMR or an affiliate of
FMR.
OTHER INVESTMENT POLICIES. Each Fund may invest up to 10% of its assets
in illiquid securities and will invest more than 25% of its total assets in
the financial services industry. Consistent with its investment objective
and policies, each Fund also may enter into when-issued and forward
purchase or sale transactions and may invest in asset-backed securities,
variable and floating rate securities, stripped securities, commercial
paper, certificates of deposit, bankers' acceptances, time deposits, and
securities with put features. Neither Fund currently intends to purchase
futures contracts or options on futures contracts. With respect to each
Fund, this operating policy may be changed only with the Trustees' approval
and 60 days' notice to shareholders.
For cash management purposes, each Fund may invest in repurchase
agreements and (pursuant to an exemptive order granted by the SEC) in a
money market fund available only to funds and accounts managed by FMR or
its affiliates, whose goal is to seek a high level of current income while
maintaining a stable $1.00 share price. However, neither Fund currently
intends to invest in a money market fund.
In addition, the Board of Trustees of each Fund recently approved the
elimination of certain non-fundamental policies, which were identical for
both Funds, regarding a Fund's investments in (i) the securities of other
investment companies, (ii) the securities of unseasoned issuers, and (iii)
oil, gas, and mineral exploration programs. These non-fundamental policies
were originally adopted with respect to each Fund solely in response to
state law requirements, which were in addition to, and in many cases were
more restrictive than, federal law requirements. These state law
requirements are no longer applicable.
As stated above, for more information about the risks and restrictions
associated with these polices, see the Funds' Prospectuses and, for a more
detailed discussion of the Funds' investments, see their Statements of
Additional Information, which are incorporated herein by reference.
OPERATIONS OF PRIME FUND FOLLOWING THE REORGANIZATION
FMR does not expect Prime Fund to revise its investment objective or
policies as a result of the Reorganization. In addition, FMR does not
anticipate significant changes to Prime Fund's management or to agents that
provide Prime Fund with services. Specifically, the Trustees and officers,
the investment adviser and sub-adviser, the distributor, and other agents
will continue to serve Prime Fund in their current capacities.
Because Prime Fund's investment policies differ in some respects from
Money Market Portfolio's investment policies, certain of the securities
currently held by Money Market Portfolio may need to be sold rather than
transferred to Prime Fund. As explained below under "Comparison of
Principal Risk Factors," Money Market Portfolio may invest in second tier
securities and in split-rated securities, whereas Prime Fund may not as
long as it is rated Aaa and AAAm by Moody's Investor Service (Moody's) and
Standard & Poor's (S&P), respectively. Therefore, if shareholders approve
the Reorganization, it is anticipated that Money Market Portfolio will sell
any second tier or split-rated securities in the period between shareholder
approval and the Closing Date. Any transaction costs associated with such
adjustments to the portfolio of Money Market Portfolio will be borne by
Money Market Portfolio. In the event that the sale of any assets becomes
necessary after the effective date of the Reorganization, any transaction
costs associated with such adjustments will be borne by Prime Fund.
PURCHASES AND REDEMPTIONS
Prime Fund is currently authorized to issue two classes of shares
designated Prime Fund - Daily Money Class shares, which are currently
outstanding, and Prime Fund - Capital Reserves Class shares, which will be
issued initially to Money Market Portfolio shareholders in connection with
the Reorganization. Money Market Portfolio is currently authorized to
issue only one class of shares.
Both Money Market Portfolio and Prime Fund - Capital Reserves Class
require a minimum initial investment of $1,000, a minimum subsequent
investment of $250, and a minimum account balance of $500. Both Money
Market Portfolio shares and Prime Fund - Capital Reserves Class shares are
sold without a sales charge.
Money Market Portfolio is open for business and its NAV is normally
calculated each day that both the Federal Reserve Bank of New York (New
York Fed) and the New York Stock Exchange (NYSE) are open. Prime Fund is
open for business and the NAV of Capital Reserves Class shares is normally
calculated each day that the NYSE is open. The following holiday closings
have been scheduled for 1997: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Columbus Day (New York Fed only), Veterans Day (New York
Fed only), Thanksgiving Day, and Christmas Day. Although FMR expects the
same holiday schedule to be observed in the future, the New York Fed or the
NYSE may modify its holiday schedule at any time.
Both Funds are managed to keep their share prices stable at $1.00. Both
Money Market Portfolio shares and Prime Fund - Capital Reserves Class
shares are purchased at the next share price calculated after an order is
received and accepted. Share price is normally calculated at 2:00 p.m. and
4:00 p.m. Eastern time. Shares may be purchased by mail, by wire, or by
exchange from another Fidelity fund. Neither Money Market Portfolio nor
Prime Fund - Capital Reserves Class imposes a fee for wire purchases;
however, if shares are purchased through an investment professional, the
investment professional may impose a fee for wire purchases. Shares
purchased before 2:00 p.m. Eastern time are entitled to dividends declared
that day. Shares purchased after 2:00 p.m. Eastern time begin to earn
dividends on the following business day.
Each Fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. On any day that the New York Fed
(Money Market Portfolio only) or the NYSE closes early, the principal
government securities markets close early (such as on days in advance of
holidays generally observed by participants in the markets), or as
permitted by the SEC, each Fund reserves the right to advance the time on
that day by which purchase and redemption orders must be received. To the
extent that portfolio securities are traded in other markets on days when
the New York Fed (Money Market Portfolio only) or the NYSE is closed, a
Fund's/Class's share price may be affected on days when shareholders do not
have access to the Fund to purchase or redeem shares.
Both Funds value their portfolio securities on the basis of amortized
cost. This method minimizes the effect of changes in a security's market
value and helps the Funds maintain stable $1.00 share prices.
Fidelity Investments Institutional Operations Company, Inc., an affiliate
of FMR, performs transfer agency, dividend disbursing, and shareholder
services for the shares of each Fund. Fidelity Service Company, Inc., also
an affiliate of FMR, calculates the NAV and dividends for the shares of
each Fund and maintains the general accounting records for each Fund. NFSC
distributes Money Market Portfolio's shares. FDC currently distributes
Prime Fund's shares and will distribute Prime Fund - Capital Reserves Class
shares following the Reorganization.
Both Money Market Portfolio shares and Prime Fund - Capital Reserves Class
shares may be redeemed on any business day at their respective share price.
Shares are redeemed at the next share price calculated after an order is
received and accepted. As stated above, share price is normally calculated
at 2:00 p.m. and 4:00 p.m. Eastern time. Shares redeemed before 2:00 p.m.
Eastern time do not receive the dividend declared on the day of redemption.
Shares redeemed after 2:00 p.m. Eastern time do receive the dividend
declared on the day of redemption.
Both Money Market Portfolio shares and Prime Fund - Capital Reserves Class
shares may be redeemed by mail, by telephone, or by wire. Both Money
Market Portfolio and Prime Fund - Capital Reserves Class also offer
checkwriting privileges; the minimum amount for a check is $500. Neither
Money Market Portfolio nor Prime Fund - Capital Reserves Class charges a
fee for wire redemptions; however, if shares are sold through an investment
professional, the investment professional may charge a fee for wire
redemptions. Redemption proceeds will be wired via the Federal Reserve
Wire System to the redeeming shareholder's bank account of record. If a
Fund's transfer agent receives a redemption request before 2:00 p.m.
Eastern time, redemption proceeds will normally be wired on that day. If a
Fund's transfer agent receives a redemption request after 2:00 p.m. Eastern
time, redemption proceeds will normally be wired on the following business
day.
Each Fund reserves the right to take up to seven days to pay redemption
proceeds if making immediate payment would adversely affect the Fund. In
addition, each Fund may withhold redemption proceeds until it is reasonably
assured that investments credited to the account have been received and
collected. When the New York Fed (Money Market Portfolio only) or the NYSE
is closed (or when trading is restricted) for any reason other than its
customary weekend or holiday closings, or under any emergency circumstances
as determined by the SEC to merit such action, each Fund may suspend
redemption or postpone payment dates.
In the case of both Money Market Portfolio and Prime Fund - Capital
Reserves Class, if a shareholder's account balance falls below $500, the
shareholder will be given 30 days' notice to reestablish the minimum
balance. If the shareholder does not increase the balance, Fidelity
reserves the right to close the shareholder's account and send the proceeds
to the shareholder. Shares will be redeemed at their share price on the
day the account is closed.
If the Reorganization is approved, the purchase and redemption policies
that currently apply to Money Market Portfolio shares will apply to Prime
Fund - Capital Reserves Class shares. Money Market Portfolio shareholders
may redeem their shares, or exchange their shares for shares of any other
available Fidelity fund, through the Closing Date.
EXCHANGES
Money Market Portfolio shares may be exchanged for shares of any other
Fidelity fund available in the shareholder's state. In addition, Money
Market Portfolio shares may be acquired through an exchange of shares of
other Fidelity funds. The exchange privileges and restrictions that
currently apply to Money Market Portfolio shares will apply to Prime Fund -
Capital Reserves Class shares following the Reorganization. Refer to Money
Market Portfolio's Prospectus for more information regarding how to
exchange shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Each Fund declares income
dividends daily and pays them monthly. Each Fund automatically reinvests
dividend and capital gain distributions in additional shares of the Fund
(or, in the case of Prime Fund, shares of the same Class of the Fund)
unless a shareholder requests that dividends and other distributions be
paid in cash.
On or before the Closing Date, Money Market Portfolio will declare one or
more dividends or distributions which, together with all such previous
dividends and distributions attributable to its current taxable year, will
have the effect of distributing substantially all of its investment company
taxable income and net realized capital gains, if any, in order to maintain
its tax status as a regulated investment company.
SHAREHOLDER SERVICES
Both Money Market Portfolio and Prime Fund - Capital Reserves Class offer
sub-accounting and special services for institutions that wish to open
multiple accounts (a master account and sub-accounts). Refer to Money
Market Portfolio's Prospectus for more information regarding these
services.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Each Fund has received an opinion of its counsel, Kirkpatrick & Lockhart
LLP, that the Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended (the Code). Accordingly, no gain or loss will be
recognized by the Funds or their shareholders as a result of the
Reorganization. Please see the section entitled "Federal Income Tax
Considerations" for more information.
Money Market Portfolio and Prime Fund had capital loss carryforwards for
federal tax purposes aggregating approximately $79,000 and $764,000 as of
July 31, 1996 and October 31, 1996, respectively. Under current federal tax
law, Prime Fund may be limited to using only a portion, if any, of the
capital loss carryforward transferred by Money Market Portfolio at the time
of the Reorganization. There is no assurance that Prime Fund will be able
to realize sufficient capital gains to use its capital loss carryforward as
well as a portion, if any, of Money Market Portfolio's capital loss
carryforward, before they expire. The capital loss carryforward
attributable to Money Market Portfolio will expire on July 31, 2002. The
capital loss carryforward attributable to Prime Fund will expire between
October 31, 2000 and October 31, 2003.
COMPARISON OF PRINCIPAL RISK FACTORS
Because each Fund is a money market fund, each Fund must comply with
federal regulatory requirements applicable to all money market funds
concerning the quality and maturity of its investments. Federal
regulations limit money market fund investments to high-quality securities.
To be high-quality, a security must be rated in accordance with applicable
rules in one of the two highest categories for short-term securities by at
least two nationally recognized rating services (or by one, if only one
rating service has rated the security) or, if unrated, judged to be of
equivalent quality by FMR. High-quality securities are divided into "first
tier" securities (those securities deemed to be in the highest rating
category) and "second tier" securities (those securities deemed to be in
the second highest rating category). "Split-rated" securities may be
deemed to be either first tier or second tier based on applicable
regulations. The maturity (calculated according to applicable regulations)
of each investment cannot exceed 397 days, and a money market fund's
dollar-weighted average maturity cannot exceed 90 days. These
requirements, coupled with each Fund's emphasis on first tier securities,
mean that the Funds have substantially similar levels of risk.
The Funds pursue essentially the same investment objective and follow
similar investment policies (see "Investment Objectives and Policies" on
page 11). The Funds differ, however, in the quality of their portfolio
securities. Prime Fund is currently rated Aaa and AAAm by Moody's and S&P,
respectively, and thus (i) may invest only in first tier securities, (ii)
may not invest in split-rated securities, and (iii) generally seeks to
maintain an average maturity of 60 days or less. Money Market Portfolio is
not a rated fund, although its average maturity is currently less than the
60-day maximum for Aaa/AAAm rated funds. Money Market Portfolio may invest
in first tier or second tier securities and in split-rated securities.
Although Prime Fund's current rating limits its permissible investments to
first tier securities, each Fund is subject to regulations that preclude it
from investing more than 5% of its total assets in second tier securities
or investing more than 1% of its total assets or $1 million (whichever is
greater) in the second tier securities of a single issuer.
Although each Fund seeks to maintain a stable $1.00 share price, each
Fund's investment income is based on the income earned on the securities it
holds, less expenses incurred. Thus, each Fund's investment income may
fluctuate in response to changes in such expenses or changes in interest
rates.
THE PROPOSED TRANSACTION
TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN MONEY MARKET
PORTFOLIO AND PRIME FUND
REORGANIZATION PLAN
The terms and conditions under which the Reorganization may be consummated
are set forth in the Agreement. Significant provisions of the Agreement are
summarized below; however, this summary is qualified in its entirety by
reference to the Agreement, a copy of which is attached as Exhibit 1 to
this Proxy Statement.
The Agreement contemplates (a) Prime Fund acquiring as of the Closing Date
all of the assets of Money Market Portfolio in exchange solely for Capital
Reserves Class Shares and the assumption by Prime Fund of Money Market
Portfolio's liabilities; and (b) the distribution of Capital Reserves Class
Shares to the shareholders of Money Market Portfolio as provided for in the
Agreement.
The assets of Money Market Portfolio to be acquired by Prime Fund include
all cash, cash equivalents, securities, receivables (including interest or
dividends receivables), claims, choses in action, and other property owned
by Money Market Portfolio, and any deferred or prepaid expenses shown as an
asset on the books of Money Market Portfolio on the Closing Date. Prime
Fund will assume from Money Market Portfolio all liabilities, debts,
obligations, and duties of Money Market Portfolio of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable on
the Closing Date, and whether or not specifically referred to in the
Agreement; provided, however, that Money Market Portfolio will use its best
efforts, to the extent practicable, to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred in
the ordinary course of business. Prime Fund will deliver Capital Reserves
Class Shares to Money Market Portfolio, which shares Money Market Portfolio
will then distribute to its shareholders so that each Money Market
Portfolio shareholder will receive the number of full and fractional
Capital Reserves Class Shares equal to the number of full and fractional
shares of Money Market Portfolio held by such shareholder as of the Closing
Date.
The value of Money Market Portfolio's assets to be acquired by Prime Fund,
the amount of Money Market Portfolio's liabilities to be assumed by Prime
Fund, and the share price of a Capital Reserves Class Share will be
determined as of the close of business (4:00 p.m. Eastern time) of the
respective Fund on the Closing Date. Portfolio securities will be valued
on the basis of amortized cost. This technique involves initially valuing
an instrument at its cost as adjusted for amortization of premium or
accretion of discount rather than at its current market value. The
amortized cost value of an instrument may be higher or lower than the price
a Fund would receive if it sold the instrument. If the Board of Trustees
of Daily Money Fund and the Board of Trustees of Newbury Street Trust
believe that a deviation from a Fund's amortized cost per share may result
in dilution or other unfair results to shareholders, the Boards have agreed
to take such corrective action, if any, as they deem appropriate to
eliminate or reduce, to the extent reasonably practicable, the dilution or
unfair results.
As of the Closing Date, Money Market Portfolio will distribute to its
shareholders of record the Capital Reserves Class Shares it received, so
that each Money Market Portfolio shareholder will receive the number of
full and fractional Capital Reserves Class Shares equal to the number of
full and fractional shares of Money Market Portfolio held by such
shareholder on the Closing Date; Money Market Portfolio will be liquidated
as soon as practicable thereafter. Such distribution will be accomplished
by opening accounts on the books of Prime Fund in the names of the Money
Market Portfolio shareholders and by transferring thereto Capital Reserves
Class Shares. Each Money Market Portfolio shareholder's account shall be
credited with the respective PRO RATA number of full and fractional
(rounded to the third decimal place) Capital Reserves Class Shares due that
shareholder. Prime Fund shall not issue certificates representing its
shares in connection with such exchange.
Accordingly, immediately after the Reorganization, each former Money
Market Portfolio shareholder will own the number of Capital Reserves Class
Shares equal to the number of that shareholder's shares of Money Market
Portfolio immediately prior to the Reorganization. The share price of Prime
Fund will be unchanged by the transaction. Thus, the Reorganization will
not result in the dilution of any shareholder interest.
Any transfer taxes payable upon issuance of Capital Reserves Class Shares
in a name other than that of the registered holder of the shares on the
books of Money Market Portfolio as of that time shall be paid by the person
to whom such shares are to be issued as a condition of such transfer. Any
reporting responsibility of Money Market Portfolio is and will continue to
be its responsibility up to and including the Closing Date and such later
date on which Money Market Portfolio is liquidated.
It is expected that FMR will bear the cost of the Reorganization,
including professional fees, expenses associated with the filing of
registration statements, and the cost of soliciting proxies for the
Meeting, which will consist principally of printing and mailing
prospectuses and proxy statements, together with the cost of any
supplemental solicitation. However, there may be some transaction costs
associated with portfolio adjustments to Money Market Portfolio due to the
Reorganization which occur prior to the Closing Date which will be borne by
Money Market Portfolio. Any transaction costs associated with portfolio
adjustments due to the Reorganization which occur after the Closing Date
will be borne by Prime Fund. A Fund may recognize a taxable gain or loss
on the disposition of securities pursuant to these portfolio adjustments.
See the section entitled "Reasons for the Reorganization."
The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by a
Fund. In addition, the Agreement may be amended in any mutually agreeable
manner, except that no amendment that may have a materially adverse effect
on the shareholders' interests may be made subsequent to the Meeting.
REASONS FOR THE REORGANIZATION
The Boards of Trustees (the Boards) of Daily Money Fund and Newbury Street
Trust have determined that the Reorganization is in the best interests of
the shareholders of the Funds and that the Reorganization will not result
in a dilution of the interests of the shareholders of either Fund.
In considering the Reorganization, the Boards considered a number of
factors, including the following:
(1) the compatibility of the Funds' investment objectives and policies;
(2) the historical performance of the Funds;
(3) the relative expense ratios of the Funds;
(4) the costs to be incurred by each Fund as a result of the
Reorganization;
(5) the tax consequences of the Reorganization;
(6) the relative asset sizes of the Funds;
(7) the elimination of duplicative funds;
(8) the impact of changes to the institutional money market product line
on the Funds and their shareholders; and
(9) the benefits to FMR and to shareholders of the Funds.
FMR recommended the Reorganization to the Boards at a meeting of the
Boards on March 20, 1997. In recommending the Reorganization, FMR also
advised the Boards that the Funds have generally compatible investment
objectives and policies, with the material differences noted, and that the
Funds currently have similar investment strategies, with the material
differences noted.
The Boards considered that if the Reorganization is approved, former
shareholders of Money Market Portfolio will receive Prime Fund - Capital
Reserves Class shares, which will pay a 0.25% management fee and a 0.50%
distribution fee. The total management and distribution fees of 0.75% to
be paid by Prime Fund - Capital Reserves Class will be 0.10% lower, as a
percentage of average net assets, than the total management and
distribution fees of 0.85% currently paid by Money Market Portfolio. FMR
also informed the Boards that it would voluntarily agree to reimburse the
total operating expenses of Prime Fund - Capital Reserves Class to the
extent that such expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.90% of its average net
assets -- 0.09% lower than Money Market Portfolio's 0.99% voluntary expense
limitation. In addition, FMR informed the Boards that it expected to pay
the costs associated with the Reorganization, including professional fees
and the costs of proxy solicitation, under Money Market Portfolio's
voluntary expense limitation. FMR further informed the Boards that although
Money Market Portfolio would bear any costs (as described above) associated
with portfolio adjustments made in connection with the Reorganization, FMR
believed that such costs would be minimal and would be counterbalanced by
the reduction in the total operating expenses that Money Market Portfolio
shareholders would pay as holders of Capital Reserves Class Shares.
The Boards also considered that former shareholders of Money Market
Portfolio will receive the number of Capital Reserves Class Shares equal to
the number of their shares of Money Market Portfolio. In addition, the
Boards considered that the Funds expected to receive an opinion of counsel
that the Reorganization would not result in any gain or loss for federal
income tax purposes to Money Market Portfolio or Prime Fund or to the
shareholders of either Fund.
Finally, the Boards considered the Reorganization in the context of a
general goal of reducing the number of duplicative funds managed by FMR.
While the reduction of duplicative funds and funds with lower assets
potentially would benefit FMR, it also should benefit shareholders by
increasing operational efficiencies and, thereby, lowering expense ratios.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Newbury Street Trust is registered with the SEC as an open-end management
investment company. Newbury Street Trust is authorized to issue an
unlimited number of shares of beneficial interest of separate series (no
par value per share). Prime Fund is one of three current funds of the
trust. (For historical information regarding Prime Fund and Newbury Street
Trust, see "Forms of Organization," page 10). Newbury Street Trust's
trustees have authorized the public offering of two classes of shares of
Prime Fund, designated Prime Fund - Daily Money Class shares, which are
currently outstanding, and Prime Fund - Capital Reserves Class shares,
which will be issued initially to Money Market Portfolio shareholders in
connection with the Reorganization. A separate filing with the SEC will be
made prior to the Closing Date for the purpose of registering Prime Fund -
Capital Reserves Class shares for sale. Each share in a Class represents
an equal proportionate interest in Prime Fund with each other share of that
Class. Shares of Prime Fund entitle their holders to one vote for each
dollar of net asset value held (number of shares owned times the net asset
value per share) and a proportionate fractional vote for each fractional
dollar amount held, except that each Class of shares has exclusive voting
rights on matters pertaining to its plan of distribution. For additional
information regarding shareholder voting rights, see "Forms of
Organization," page 10. Each share of each Class of Prime Fund is entitled
to participate equally in dividends and other distributions and in the
proceeds of any liquidation, except that dividends of each Class may be
affected differently by the allocation of Class-specific expenses.
Newbury Street Trust does not hold annual meetings of shareholders. There
will normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office have
been elected by shareholders, at which time the Trustees then in office
will call a shareholders' meeting for the election of Trustees. Under the
1940 Act, shareholders of record of at least two-thirds of the outstanding
shares of an investment company may remove a trustee by votes cast in
person or by proxy at a meeting called for that purpose. The Trustees are
required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any Trustee when requested in writing to do so
by the shareholders of record holding at least 10% of the trust's
outstanding shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Money Market Portfolio's assets for Capital Reserves Class
Shares and the assumption of the liabilities of Money Market Portfolio by
Prime Fund is intended to qualify for federal income tax purposes as a
tax-free reorganization under the Code. With respect to the Reorganization,
the participating Funds have received an opinion from Kirkpatrick &
Lockhart LLP, counsel to Money Market Portfolio and Prime Fund,
substantially to the effect that:
(i) The acquisition by Prime Fund of all of the assets of Money Market
Portfolio solely in exchange for Capital Reserves Class Shares and the
assumption by Prime Fund of Money Market Portfolio's liabilities, followed
by the distribution by Money Market Portfolio of Capital Reserves Class
Shares to the shareholders of Money Market Portfolio pursuant to the
liquidation of Money Market Portfolio and constructively in exchange for
their Money Market Portfolio shares, will constitute a reorganization
within the meaning of section 368(a)(1)(C) of the Code, and Money Market
Portfolio and Prime Fund will each be "a party to a reorganization" within
the meaning of section 368(b) of the Code;
(ii) No gain or loss will be recognized by Money Market Portfolio upon
the transfer of all of its assets to Prime Fund in exchange solely for
Capital Reserves Class Shares and Prime Fund's assumption of Money Market
Portfolio's liabilities, followed by Money Market Portfolio's subsequent
distribution of those shares to its shareholders in liquidation of Money
Market Portfolio;
(iii) No gain or loss will be recognized by Prime Fund upon the receipt of
the assets of Money Market Portfolio in exchange solely for Capital
Reserves Class Shares and its assumption of Money Market Portfolio's
liabilities;
(iv) The shareholders of Money Market Portfolio will recognize no gain or
loss upon the exchange of their Money Market Portfolio shares solely for
Capital Reserves Class Shares;
(v) The basis of Money Market Portfolio's assets in the hands of Prime
Fund will be the same as the basis of those assets in the hands of Money
Market Portfolio immediately prior to the Reorganization, and the holding
period of those assets in the hands of Prime Fund will include the holding
period of those assets in the hands of Money Market Portfolio;
(vi) The basis of Money Market Portfolio shareholders in Capital Reserves
Class Shares will be the same as their basis in Money Market Portfolio
shares to be surrendered in exchange therefor; and
(vii) The holding period of the Capital Reserves Class Shares to be
received by the Money Market Portfolio shareholders will include the period
during which the Money Market Portfolio shares to be surrendered in
exchange therefor were held, provided such Money Market Portfolio shares
were held as capital assets by those shareholders on the date of the
Reorganization.
Shareholders of Money Market Portfolio should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light of
their individual circumstances. Because the foregoing discussion relates
only to the federal income tax consequences of the Reorganization, Money
Market Portfolio shareholders also should consult their tax advisers as to
state and local tax consequences, if any, of the Reorganization.
CAPITALIZATION
The following table shows the capitalization of Money Market Portfolio and
Prime Fund (then Daily Money Fund: Money Market Portfolio) as of January
31, 1997 (unaudited) and on a pro forma combined basis (unaudited) as of
that date giving effect to the Reorganization.
NET ASSETS NAV PER SHARE SHARES OUTSTANDING
MONEY MARKET PORTFOLIO $1,482,122,415 $1.00 1,482,132,801
PRIME FUND -
Daily Money Class $2,528,231,872 $1.00 2,528,996,656
Capital Reserves Class -- -- --
PRO FORMA COMBINED
FUND -
Daily Money Class $2,528,231,872 $1.00 2,528,996,656
Capital Reserves Class $1,482,122,415 $1.00 1,482,132,801
CONCLUSION
The Agreement and Plan of Reorganization and the transactions provided for
therein were approved by the Boards at a meeting held on March 20, 1997.
The Boards of Trustees of Daily Money Fund and Newbury Street Trust
determined that the proposed Reorganization is in the best interests of
shareholders of each Fund and that the interests of existing shareholders
of Money Market Portfolio and Prime Fund would not be diluted as a result
of the Reorganization. In the event that the Reorganization is not
consummated, Money Market Portfolio will continue to engage in business as
a fund of a registered investment company and the Board of Daily Money Fund
will consider other proposals for the reorganization or liquidation of the
Fund.
ADDITIONAL INFORMATION ABOUT PRIME FUND
Prime Fund currently pays FMR a monthly management fee at an annual rate of
0.25% of its average net assets. This management fee rate was approved by
shareholders on May 9, 1997, and went into effect on May 31, 1997. Also,
effective May 31, 1997, under a new Distribution and Service Plan adopted
pursuant to Rule 12b-1 under the 1940 Act, Prime Fund - Daily Money Class
began paying FDC a distribution fee of 0.25% to cover most of the Class's
distribution-related costs; in connection with this change, Prime Fund's
management fee was reduced from 0.50% to 0.25%.
The Prospectus for Prime Fund - Daily Money Class, dated May 30, 1997, is
enclosed with this Proxy Statement and is incorporated herein by reference.
The Prospectus contains additional information about Prime Fund including
its investment objective and policies, investment adviser, advisory fees
and expenses, and organization. The financial highlights table that
follows is for Prime Fund - Daily Money Class. Prime Fund - Capital
Reserves Class is expected to commence operations on or about October 31,
1997.
PRIME FUND: DAILY MONEY CLASS (FORMERLY DAILY MONEY FUND: MONEY MARKET
PORTFOLIO)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended 1997E 1996A 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
July 31
Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period
Income from .024 .012 .050 .050 .029 .028 .041 .067 .080 .085 .066 .057
Investment
Operations
Net interest
income
Less (.024) (.012) (.050) (.050) (.029) (.028) (.041) (.067) (.080) (.085) (.066) (.057)
Distributions
From net
interest
income
Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, end
of period
Total returnB 2.43% 1.22% 5.13% 5.16% 2.98% 2.82% 4.21% 6.90% 8.34% 8.81% 6.81% 5.87%
Net assets, $ 2,512 $ 2,663 $ 2,581 $ 2,139 $ 1,525 $ 1,451 $ 1,531 $ 1,714 $ 1,350 $ 894 $ 561 $ 441
end
of period
(In millions)
Ratio of .65%C, .65%C, .65%C .65%C .65%C .61% .59% .60% .61% .64%C .66% .62%
expenses D D
to average
net assets
Ratio of net 4.86% 4.85% 5.00% 5.11% 2.96% 2.76% 4.19% 6.61% 7.99% 8.56% 6.57% 5.78%
interest D D
income to
average
net assets
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D ANNUALIZED
E SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
MISCELLANEOUS
LEGAL MATTERS. Certain legal matters in connection with the issuance of
Capital Reserves Class Shares have been passed upon by Kirkpatrick &
Lockhart LLP, counsel to Newbury Street Trust.
EXPERTS. The audited financial statements of Money Market Portfolio,
incorporated by reference into the Statement of Additional Information,
have been audited by Coopers & Lybrand L.L.P., independent accountants,
whose report thereon is included in the Annual Report to Shareholders for
the fiscal year ended July 31, 1996. The audited financial statements of
Prime Fund, incorporated by reference into the Statement of Additional
Information, have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon is included in the Annual Report to
Shareholders for the fiscal year ended October 31, 1996. The financial
statements audited by Coopers & Lybrand L.L.P. have been incorporated by
reference in reliance on their reports given on their authority as experts
in auditing and accounting. Unaudited financial statements for Money
Market Portfolio for the six-month period ended January 31, 1997, and
unaudited financial statements for Prime Fund for the six-month period
ended April 30, 1997, are also incorporated by reference into the Statement
of Additional Information.
AVAILABLE INFORMATION. Daily Money Fund and Newbury Street Trust are
subject to the informational requirements of the Securities Exchange Act of
1934 and the 1940 Act, and in accordance therewith file reports, proxy
material, and other information with the SEC. Such reports, proxy material,
and other information can be inspected and copied at the Public Reference
Facilities maintained by the SEC at 450 Fifth Street, N.W., Washington D.C.
20549, and at the Northeast Regional Office of the SEC, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material also
can be obtained from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington D.C. 20549, at prescribed rates.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES.
Please advise Daily Money Fund, in care of Fidelity Investments
Institutional Operations Company, Inc., 82 Devonshire Street, Boston,
Massachusetts 02109, whether other persons are beneficial owners of shares
for which proxies are being solicited and, if so, the number of copies of
this Proxy Statement you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
Exhibit 1
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the 21st day of July, 1997, by and between Daily Money Fund, a Delaware
business trust, on behalf of Capital Reserves: Money Market Portfolio
(Money Market Portfolio), a series of Daily Money Fund, and Newbury Street
Trust, a Delaware business trust, on behalf of Prime Fund (Prime Fund), a
series of Newbury Street Trust. Daily Money Fund and Newbury Street Trust
may be referred to herein collectively as the "Trusts" or each individually
as a "Trust." Prime Fund and Money Market Portfolio may be referred to
herein collectively as the "Funds" or each individually as a "Fund."
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the Code). The reorganization will
comprise: (a) the transfer of all of the assets of Money Market Portfolio
to Prime Fund solely in exchange for Capital Reserves Class shares of
beneficial interest in Prime Fund (the Capital Reserves Class Shares) and
the assumption by Prime Fund of Money Market Portfolio's liabilities; and
(b) the constructive distribution of such shares by Money Market Portfolio
PRO RATA to its shareholders in complete liquidation and termination of
Money Market Portfolio in exchange for all of Money Market Portfolio's
outstanding shares. The foregoing transactions are referred to herein as
the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF MONEY MARKET PORTFOLIO. Money Market
Portfolio represents and warrants to and agrees with Prime Fund that:
(a) Money Market Portfolio is a series of Daily Money Fund, a business
trust duly organized, validly existing, and in good standing under the laws
of the State of Delaware, and has the power to own all of its properties
and assets and to carry out its obligations under this Agreement. It has
all necessary federal, state, and local authorizations to carry on its
business as now being conducted and to carry out this Agreement;
(b) Daily Money Fund is an open-end, management investment company duly
registered under the Investment Company Act of 1940, as amended (the 1940
Act), and such registration is in full force and effect;
(c) The Prospectus, dated November 29, 1996 (as supplemented March 21,
1997), and the Statement of Additional Information, dated November 29, 1996
(as supplemented January 2, 1997), previously furnished to Prime Fund did
not and do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Money Market Portfolio, threatened against
Money Market Portfolio which assert liability on the part of Money Market
Portfolio. Money Market Portfolio knows of no facts which might form the
basis for the institution of such proceedings;
(e) Money Market Portfolio is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Trust Instrument or By-laws, or, to the knowledge of Money
Market Portfolio, of any agreement, indenture, instrument, contract, lease,
or other undertaking to which Money Market Portfolio is a party or by which
Money Market Portfolio is bound or result in the acceleration of any
obligation or the imposition of any penalty under any agreement, judgment
or decree to which Money Market Portfolio is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of Operations,
the Statement of Changes in Net Assets, the Financial Highlights, and the
Schedule of Investments (including market values) of Money Market Portfolio
at July 31, 1996, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and have been furnished to Prime Fund together
with such unaudited financial statements and schedule of investments
(including market values) for the six month period ended January 31, 1997.
Said Statement of Assets and Liabilities and Schedule of Investments fairly
present the Fund's financial position as of such date and said Statement of
Operations, Statement of Changes in Net Assets, and Financial Highlights
fairly reflect its results of operations, changes in financial position,
and financial highlights for the periods covered thereby in conformity with
generally accepted accounting principles consistently applied;
(g) Money Market Portfolio has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of July 31, 1996, and those incurred
in the ordinary course of Money Market Portfolio's business as an
investment company since July 31, 1996;
(h) The registration statement (Registration Statement) filed with the
Securities and Exchange Commission (Commission) by Newbury Street Trust on
Form N-14 relating to the Capital Reserves Class Shares issuable hereunder
and the proxy statement of Money Market Portfolio included therein (Proxy
Statement), on the effective date of the Registration Statement and insofar
as they relate to Money Market Portfolio (i) comply in all material
respects with the provisions of the Securities Act of 1933, as amended (the
1933 Act), the Securities Exchange Act of 1934, as amended (the 1934 Act),
and the 1940 Act, and the rules and regulations thereunder, and (ii) do not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders' meeting
referred to in Section 7 and on the Closing Date, the prospectus contained
in the Registration Statement of which the Proxy Statement is a part (the
Prospectus), as amended or supplemented, insofar as it relates to Money
Market Portfolio, does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading;
(i) All material contracts and commitments of Money Market Portfolio (other
than this Agreement) will be terminated without liability to Money Market
Portfolio prior to the Closing Date (other than those made in connection
with redemptions of shares and the purchase and sale of portfolio
securities made in the ordinary course of business);
(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Money Market
Portfolio of the transactions contemplated by this Agreement, except such
as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
state securities or blue sky laws (which term as used herein shall include
the District of Columbia and Puerto Rico);
(k) Money Market Portfolio has filed or will file all federal and state tax
returns which, to the knowledge of Money Market Portfolio's officers, are
required to be filed by Money Market Portfolio and has paid or will pay all
federal and state taxes shown to be due on said returns or provision shall
have been made for the payment thereof, and, to the best of Money Market
Portfolio's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(l) Money Market Portfolio has met the requirements of Subchapter M of the
Code for qualification and treatment as a regulated investment company for
all prior taxable years and intends to meet such requirements for its
current taxable year ending on the Closing Date (as defined in Section 6);
(m) All of the issued and outstanding shares of Money Market Portfolio
are, and at the Closing Date will be, duly and validly issued and
outstanding and fully paid and nonassessable as a matter of Delaware law
(except as disclosed in the Fund's Statement of Additional Information),
and have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of Money Market
Portfolio will, at the Closing Date, be held by the persons and in the
amounts set forth in the list of shareholders submitted to Prime Fund in
accordance with this Agreement;
(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, Money Market Portfolio will have the full right, power, and
authority to sell, assign, transfer, and deliver its portfolio securities
and any other assets of Money Market Portfolio to be transferred to Prime
Fund pursuant to this Agreement. At the Closing Date, subject only to the
delivery of Money Market Portfolio's portfolio securities and any such
other assets as contemplated by this Agreement, Prime Fund will acquire
Money Market Portfolio's portfolio securities and any such other assets
subject to no encumbrances, liens, or security interests (except for those
that may arise in the ordinary course and are disclosed to Prime Fund) and
without any restrictions upon the transfer thereof; and
(o) The execution, performance, and delivery of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of Money Market Portfolio, and this Agreement
constitutes a valid and binding obligation of Money Market Portfolio
enforceable in accordance with its terms, subject to shareholder approval.
2. REPRESENTATIONS AND WARRANTIES OF PRIME FUND. Prime Fund represents
and warrants to and agrees with Money Market Portfolio that:
(a) Prime Fund is a series of Newbury Street Trust, a business trust duly
organized, validly existing, and in good standing under the laws of the
State of Delaware, and has the power to own all of its properties and
assets and to carry out its obligations under this Agreement. It has all
necessary federal, state, and local authorizations to carry on its business
as now being conducted and to carry out this Agreement;
(b) Newbury Street Trust is an open-end, management investment company
duly registered under the 1940 Act, and such registration is in full force
and effect;
(c) The Prospectus and the Statement of Additional Information of Prime
Fund, both dated May 30, 1997, previously furnished to Money Market
Portfolio did not and do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Prime Fund, threatened against Prime Fund
which assert liability on the part of Prime Fund. Prime Fund knows of no
facts which might form the basis for the institution of such proceedings;
(e) Prime Fund is not in, and the execution, delivery, and performance of
this Agreement will not result in, violation of any provision of its Trust
Instrument or By-laws, or, to the knowledge of Prime Fund, of any
agreement, indenture, instrument, contract, lease, or other undertaking to
which Prime Fund is a party or by which Prime Fund is bound or result in
the acceleration of any obligation or the imposition of any penalty under
any agreement, judgment, or decree to which Prime Fund is a party or is
bound;
(f) The Statement of Assets and Liabilities, the Statement of Operations,
the Statement of Changes in Net Assets, the Financial Highlights, and the
Schedule of Investments (including market values) of Prime Fund at October
31, 1996, have been audited by Coopers & Lybrand L.L.P., independent
accountants, and have been furnished to Money Market Portfolio together
with such unaudited financial statements and schedule of investments
(including market values) for the six month period ended April 30, 1997.
Said Statement of Assets and Liabilities and Schedule of Investments fairly
present the Fund's financial position as of such date and said Statement of
Operations, Statement of Changes in Net Assets, and Financial Highlights
fairly reflect its results of operations, changes in financial position,
and financial highlights for the periods covered thereby in conformity with
generally accepted accounting principles consistently applied;
(g) Prime Fund has no known liabilities of a material nature, contingent
or otherwise, other than those shown as belonging to it on its statement of
assets and liabilities as of October 31, 1996 and those incurred in the
ordinary course of Prime Fund's business as an investment company since
October 31, 1996;
(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Prime Fund of
the transactions contemplated by this Agreement, except such as have been
obtained under the 1933 Act, the 1934 Act, the 1940 Act, and state
securities or blue sky laws (which term as used herein shall include the
District of Columbia and Puerto Rico);
(i) Prime Fund has filed or will file all federal and state tax returns
which, to the knowledge of Prime Fund's officers, are required to be filed
by Prime Fund and has paid or will pay all federal and state taxes shown to
be due on said returns or provision shall have been made for the payment
thereof, and, to the best of Prime Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to
such returns;
(j) Prime Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company for all prior
taxable years and intends to meet such requirements for its current taxable
year ending on October 31, 1997;
(k) By the Closing Date, the Capital Reserves Class Shares to be issued to
Money Market Portfolio will have been duly authorized and, when issued and
delivered pursuant to this Agreement, will be legally and validly issued
and will be fully paid and nonassessable (except as disclosed in Prime
Fund's Statement of Additional Information) by Prime Fund, and no
shareholder of Prime Fund will have any preemptive right of subscription or
purchase in respect thereof;
(l) The execution, performance, and delivery of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of Prime Fund, and this Agreement constitutes a valid
and binding obligation of Prime Fund enforceable in accordance with its
terms, subject to approval by the shareholders of Money Market Portfolio;
(m) The Registration Statement and the Proxy Statement, on the effective
date of the Registration Statement and insofar as they relate to Prime
Fund, (i) will comply in all material respects with the provisions of the
1933 Act, the 1934 Act, and the 1940 Act, and the rules and regulations
thereunder, and (ii) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the time of
the shareholders' meeting referred to in Section 7 and on the Closing Date,
the Prospectus, as amended or supplemented, insofar as it relates to Prime
Fund, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading;
(n) The issuance of the Capital Reserves Class Shares pursuant to this
Agreement will be in compliance with all applicable federal securities
laws; and
(o) All of the issued and outstanding shares of beneficial interest of
Prime Fund have been offered for sale and sold in conformity with the
federal securities laws.
3. REORGANIZATION.
(a) Subject to the requisite approval of the shareholders of Money Market
Portfolio and to the other terms and conditions contained herein, Money
Market Portfolio agrees to assign, sell, convey, transfer, and deliver to
Prime Fund as of the Closing Date all of the assets of Money Market
Portfolio of every kind and nature existing on the Closing Date. Prime
Fund agrees in exchange therefor: (i) to assume all of Money Market
Portfolio's liabilities existing on or after the Closing Date, whether or
not determinable on the Closing Date, and (ii) to issue and deliver to
Money Market Portfolio the number of full and fractional Capital Reserves
Class Shares equal to the number of full and fractional shares of Money
Market Portfolio then outstanding.
(b) The assets of Money Market Portfolio to be acquired by Prime Fund
shall include, without limitation, all cash, cash equivalents, securities,
receivables (including interest or dividends receivables), claims, choses
in action, and other property owned by Money Market Portfolio, and any
deferred or prepaid expenses shown as an asset on the books of Money Market
Portfolio on the Closing Date. Money Market Portfolio will pay or cause to
be paid to Prime Fund any dividend or interest payments received by it on
or after the Closing Date with respect to the assets transferred to Prime
Fund hereunder, and Prime Fund will retain any dividend or interest
payments received by it after the Valuation Time with respect to the assets
transferred hereunder without regard to the payment date thereof.
(c) The liabilities of Money Market Portfolio to be assumed by Prime Fund
shall include (except as otherwise provided for herein) all of Money Market
Portfolio's liabilities, debts, obligations, and duties, of whatever kind
or nature, whether absolute, accrued, contingent, or otherwise, whether or
not arising in the ordinary course of business, whether or not determinable
on the Closing Date, and whether or not specifically referred to in this
Agreement. Notwithstanding the foregoing, Money Market Portfolio agrees to
use its best efforts to discharge all of its known liabilities prior to the
Closing Date, other than liabilities incurred in the ordinary course of
business.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), Money Market Portfolio
will constructively distribute PRO RATA to its shareholders of record,
determined as of the Valuation Time on the Closing Date, the Capital
Reserves Class Shares in exchange for such shareholders' shares of
beneficial interest in Money Market Portfolio and Money Market Portfolio
will be liquidated in accordance with Daily Money Fund's Trust Instrument.
Such distribution shall be accomplished by the Funds' transfer agent
opening accounts on Prime Fund's share transfer books in the names of the
Money Market Portfolio shareholders and transferring the Capital Reserves
Class Shares thereto. Each Money Market Portfolio shareholder's account
shall be credited with the respective PRO RATA number of full and
fractional (rounded to the third decimal place) Capital Reserves Class
Shares due that shareholder. All outstanding Money Market Portfolio
shares, including any represented by certificates, shall simultaneously be
canceled on Money Market Portfolio's share transfer records. Prime Fund
shall not issue certificates representing the Capital Reserves Class Shares
in connection with the Reorganization.
(e) Any reporting responsibility of Money Market Portfolio is and shall
remain its responsibility up to and including the date on which it is
terminated.
(f) Any transfer taxes payable upon issuance of the Capital Reserves Class
Shares in a name other than that of the registered holder on Money Market
Portfolio's books of the Money Market Portfolio shares constructively
exchanged for the Capital Reserves Class Shares shall be paid by the person
to whom such Capital Reserves Class Shares are to be issued, as a condition
of such transfer.
4. VALUATION.
(a) The Valuation Time shall be 4:00 p.m. Eastern time on the Closing
Date, or such other date as may be mutually agreed upon in writing by the
parties hereto (the Valuation Time).
(b) On the Closing Date, Prime Fund will deliver to Money Market Portfolio
the number of full and fractional Capital Reserves Class Shares equal to
the number of full and fractional shares of Money Market Portfolio then
outstanding.
(c) The share price of the Capital Reserves Class Shares to be delivered
to Money Market Portfolio, the value of the assets of Money Market
Portfolio transferred hereunder, and the value of the liabilities of Money
Market Portfolio to be assumed hereunder shall in each case be determined
as of the Valuation Time.
(d) The share price of the Capital Reserves Class Shares shall be computed
in the manner set forth in the then-current Prime Fund - Capital Reserves
Class Prospectus and Statement of Additional Information, and the value of
the assets and liabilities of Money Market Portfolio shall be computed in
the manner set forth in the then-current Money Market Portfolio Prospectus
and Statement of Additional Information.
(e) All computations pursuant to this Section shall be made by or under
the direction of Fidelity Service Company, Inc., a wholly owned subsidiary
of FMR Corp., in accordance with its regular practice as pricing agent for
Money Market Portfolio and Prime Fund.
5. FEES; EXPENSES.
(a) Money Market Portfolio shall be responsible for all expenses, fees and
other charges, subject to FMR's voluntary expense limitation, if
applicable. Any merger-related expenses which may be attributable to Prime
Fund will be borne by Prime Fund, subject to FMR's voluntary expense
limitation, if applicable.
(b) Each of Prime Fund and Money Market Portfolio represents that there is
no person who has dealt with it who by reason of such dealings is entitled
to any broker's or finder's or other similar fee or commission arising out
of the transactions contemplated by this Agreement.
6. CLOSING DATE.
(a) The Reorganization, together with related acts necessary to consummate
the same (the Closing), unless otherwise provided herein, shall occur at
the principal office of the Trusts, 82 Devonshire Street, Boston,
Massachusetts, as of the Valuation Time on October 30, 1997, or at some
other time, date, and place agreed to by Money Market Portfolio and Prime
Fund (the Closing Date).
(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading thereon
is restricted, or (iii) trading or the reporting of trading on said market
or elsewhere is disrupted, all so that accurate appraisal of the total net
asset value of Money Market Portfolio and the net asset value per share of
Prime Fund is impracticable, the Valuation Time and the Closing Date shall
be postponed until the first business day after the day when such trading
shall have been fully resumed and such reporting shall have been restored,
or such other date as the parties may agree.
7. SHAREHOLDER MEETING AND TERMINATION OF MONEY MARKET PORTFOLIO.
(a) Money Market Portfolio agrees to call a meeting of its shareholders
after the effective date of the Registration Statement, to consider
transferring its assets to Prime Fund as herein provided, adopting this
Agreement, and authorizing the liquidation of Money Market Portfolio.
(b) Money Market Portfolio agrees that as soon as reasonably practicable
after distribution of the Capital Reserves Class Shares, Money Market
Portfolio shall be terminated as a series of Daily Money Fund pursuant to
its Trust Instrument, any further actions shall be taken in connection
therewith as required by applicable law, and on and after the Closing Date
Money Market Portfolio shall not conduct any business except in connection
with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF PRIME FUND. The obligations of Prime Fund
hereunder shall be subject to the following conditions:
(a) That Money Market Portfolio furnishes to Prime Fund a statement, dated
as of the Closing Date, signed by an officer of Daily Money Fund,
certifying that as of the Valuation Time and the Closing Date all
representations and warranties of Money Market Portfolio made in this
Agreement are true and correct in all material respects and that Money
Market Portfolio has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such
dates;
(b) That Money Market Portfolio furnishes Prime Fund with copies of the
resolutions, certified by an officer of Daily Money Fund, evidencing the
adoption of this Agreement and the approval of the transactions
contemplated herein by the requisite vote of the holders of the outstanding
shares of beneficial interest of Money Market Portfolio;
(c) That, on or prior to the Closing Date, Money Market Portfolio will
declare one or more dividends or distributions which, together with all
previous such dividends or distributions attributable to its current
taxable year, shall have the effect of distributing to the shareholders of
Money Market Portfolio substantially all of Money Market Portfolio's
investment company taxable income and all of its net realized capital gain,
if any, as of the Closing Date;
(d) That Money Market Portfolio shall deliver to Prime Fund at the Closing
a statement of its assets and liabilities, together with a list of its
portfolio securities showing each such security's adjusted tax basis and
holding period by lot, with values determined as provided in Section 4 of
this Agreement, all as of the Valuation Time, certified on Money Market
Portfolio's behalf by its Treasurer or Assistant Treasurer;
(e) That Money Market Portfolio's custodian shall deliver to Prime Fund a
certificate identifying the assets of Money Market Portfolio held by such
custodian as of the Valuation Time on the Closing Date and stating that as
of the Valuation Time: (i) the assets held by the custodian will be
transferred to Prime Fund; (ii) Money Market Portfolio's assets have been
duly endorsed in proper form for transfer in such condition as to
constitute good delivery thereof; and (iii) to the best of the custodian's
knowledge, all necessary taxes in conjunction with the delivery of the
assets, including all applicable federal and state stock transfer stamps,
if any, have been paid or provision for payment has been made;
(f) That Money Market Portfolio's transfer agent shall deliver to Prime
Fund at the Closing a certificate setting forth the number of shares of
Money Market Portfolio outstanding as of the Valuation Time and the name
and address of each holder of record of any such shares and the number of
shares held of record by each such shareholder;
(g) That Money Market Portfolio calls a meeting of its shareholders to be
held after the effective date of the Registration Statement, to consider
transferring its assets to Prime Fund as herein provided, adopting this
Agreement, and authorizing the liquidation and termination of Money Market
Portfolio;
(h) That Money Market Portfolio delivers to Prime Fund a certificate of an
officer of Daily Money Fund, dated as of the Closing Date, that there has
been no material adverse change in Money Market Portfolio's financial
position since July 31, 1996, other than changes in the market value of its
portfolio securities, or changes due to net redemptions of its shares,
dividends paid, or losses from operations; and
(i) That all of the issued and outstanding shares of beneficial interest
of Money Market Portfolio shall have been offered for sale and sold in
conformity with all applicable state securities laws and, to the extent
that any audit of the records of Money Market Portfolio or its transfer
agent by Prime Fund or its agents shall have revealed otherwise, Money
Market Portfolio shall have taken all actions that in the opinion of Prime
Fund are necessary to remedy any prior failure on the part of Money Market
Portfolio to have offered for sale and sold such shares in conformity with
such laws.
9. CONDITIONS TO OBLIGATIONS OF MONEY MARKET PORTFOLIO.
(a) That Prime Fund shall have executed and delivered to Money Market
Portfolio an Assumption of Liabilities, certified by an officer of Newbury
Street Trust, dated as of the Closing Date pursuant to which Prime Fund
will assume all of the liabilities of Money Market Portfolio existing at
the Valuation Time in connection with the transactions contemplated by this
Agreement;
(b) That Prime Fund furnishes to Money Market Portfolio a statement, dated
as of the Closing Date, signed by an officer of Newbury Street Trust,
certifying that as of the Valuation Time and the Closing Date all
representations and warranties of Prime Fund made in this Agreement are
true and correct in all material respects, and Prime Fund has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That Money Market Portfolio shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to Money Market Portfolio and Prime
Fund, to the effect that the Capital Reserves Class Shares are duly
authorized and upon delivery to Money Market Portfolio as provided in this
Agreement will be validly issued and will be fully paid and nonassessable
by Prime Fund (except as disclosed in Prime Fund's Statement of Additional
Information) and no shareholder of Prime Fund has any preemptive right of
subscription or purchase in respect thereof.
10. CONDITIONS TO OBLIGATIONS OF PRIME FUND AND MONEY MARKET PORTFOLIO.
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of the
holders of the outstanding shares of beneficial interest of Money Market
Portfolio;
(b) That all consents of other parties and all other consents, orders, and
permits of federal, state, and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities authorities,
including "no action" positions of such federal or state authorities)
deemed necessary by Prime Fund or Money Market Portfolio to permit
consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of Prime Fund or Money Market Portfolio,
provided that either party hereto may for itself waive any of such
conditions;
(c) That all proceedings taken by either Fund in connection with the
transactions contemplated by this Agreement and all documents incidental
thereto shall be satisfactory in form and substance to it and its counsel,
Kirkpatrick & Lockhart LLP;
(d) That there shall not be any material litigation pending with respect
to the matters contemplated by this Agreement;
(e) That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of Prime Fund and Money Market Portfolio,
threatened by the Commission; and
(f) That Prime Fund and Money Market Portfolio shall have received an
opinion of Kirkpatrick & Lockhart LLP satisfactory to Prime Fund and Money
Market Portfolio that for federal income tax purposes:
(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and Money Market Portfolio and Prime Fund will
each be parties to the Reorganization under section 368(b) of the Code;
(ii) No gain or loss will be recognized by Money Market Portfolio upon
the transfer of all of its assets to Prime Fund in exchange solely for the
Capital Reserves Class Shares and the assumption of Money Market
Portfolio's liabilities followed by the distribution of those Capital
Reserves Class Shares to the shareholders of Money Market Portfolio in
liquidation of Money Market Portfolio;
(iii) No gain or loss will be recognized by Prime Fund on the receipt of
Money Market Portfolio's assets in exchange solely for the Capital Reserves
Class Shares and the assumption of Money Market Portfolio's liabilities;
(iv) The basis of Money Market Portfolio's assets in the hands of Prime
Fund will be the same as the basis of such assets in Money Market
Portfolio's hands immediately prior to the Reorganization;
(v) Prime Fund's holding period in the assets to be received from Money
Market Portfolio will include Money Market Portfolio's holding period in
such assets;
(vi) A Money Market Portfolio shareholder will recognize no gain or loss
on the exchange of his or her shares of beneficial interest in Money Market
Portfolio for the Capital Reserves Class Shares in the Reorganization;
(vii) A Money Market Portfolio shareholder's basis in the Capital
Reserves Class Shares to be received by him or her will be the same as his
or her basis in the Money Market Portfolio shares exchanged therefor; and
(viii) A Money Market Portfolio shareholder's holding period for his or
her Capital Reserves Class Shares will include the holding period of Money
Market Portfolio shares exchanged, provided that those Money Market
Portfolio shares were held as capital assets on the date of the
Reorganization.
Notwithstanding anything herein to the contrary, each of Money Market
Portfolio and Prime Fund may not waive the conditions set forth in this
subsection 10(f).
11. COVENANTS OF PRIME FUND AND MONEY MARKET PORTFOLIO.
(a) Prime Fund and Money Market Portfolio each covenants to operate its
respective business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business
will include the payment of customary dividends and distributions;
(b) Money Market Portfolio covenants that it is not acquiring the Capital
Reserves Class Shares for the purpose of making any distribution other than
in accordance with the terms of this Agreement;
(c) Money Market Portfolio covenants that it will assist Prime Fund in
obtaining such information as Prime Fund reasonably requests concerning the
beneficial ownership of Money Market Portfolio's shares; and
(d) Money Market Portfolio covenants that its liquidation and termination
will be effected in the manner provided in its Trust Instrument in
accordance with applicable law and after the Closing Date, Money Market
Portfolio will not conduct any business except in connection with its
liquidation and termination.
12. TERMINATION; WAIVER.
Prime Fund and Money Market Portfolio may terminate this Agreement by
mutual agreement. In addition, either Prime Fund or Money Market Portfolio
may at its option terminate this Agreement at or prior to the Closing Date
because:
(i) of a material breach by the other of any representation, warranty, or
agreement contained herein to be performed at or prior to the Closing Date;
or
(ii) a condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it
will not or cannot be met.
In the event of any such termination, there shall be no liability for
damages on the part of Money Market Portfolio or Prime Fund, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter hereof,
constitutes the only understanding with respect to such subject matter, may
not be changed except by a letter of agreement signed by each party hereto
and shall be construed in accordance with and governed by the laws of the
State of Delaware.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Prime Fund or Money Market
Portfolio; provided, however, that following the shareholders' meeting
called by Money Market Portfolio pursuant to Section 7 of this Agreement,
no such amendment may have the effect of changing the provisions for
determining the number of Capital Reserves Class Shares to be paid to Money
Market Portfolio shareholders under this Agreement to the detriment of such
shareholders without their further approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on the
interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the Agreement,
or in any document delivered pursuant hereto or in connection herewith,
shall survive the consummation of the transactions contemplated hereunder.
14. TRUST INSTRUMENTS.
A copy of the Trust Instrument of each Trust is on file with the Secretary
of State of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Trustees of each Fund as trustees
and not individually and that the obligations of each Fund under this
instrument are not binding upon any of such Fund's Trustees, officers, or
shareholders individually but are binding only upon the assets and property
of such Fund. Each Fund agrees that its obligations hereunder apply only
to such Fund and not to its shareholders individually or to the Trustees of
such Fund.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
of any rights or obligations hereunder shall be made by any party without
the written consent of the other parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any
person, firm, or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason
of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by an appropriate officer.
SIGNATURE LINES OMITTED
CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
A FUND OF
DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Capital Reserves: Municipal Money Market Portfolio:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Capital Reserves: Municipal Money Market Portfolio (Municipal
Money Market Portfolio), will be held at the office of Daily Money Fund, 82
Devonshire Street, Boston, Massachusetts 02109 on Wednesday, September 17,
1997, at 11:30 a.m. Eastern time. The purpose of the Meeting is to
consider and act upon the following proposal, and to transact such other
business as may properly come before the Meeting or any adjournments
thereof.
(1) To approve an Agreement and Plan of Reorganization between Municipal
Money Market Portfolio and Tax-Exempt Fund, a fund of Newbury Street Trust,
providing for the transfer of all of the assets of Municipal Money Market
Portfolio to Tax-Exempt Fund in exchange solely for Capital Reserves Class
shares of beneficial interest of Tax-Exempt Fund and the assumption by
Tax-Exempt Fund of Municipal Money Market Portfolio's liabilities, followed
by the distribution of Capital Reserves Class shares of Tax-Exempt Fund to
shareholders of Municipal Money Market Portfolio in liquidation of
Municipal Money Market Portfolio.
The Board of Trustees has fixed the close of business on July 21, 1997 as
the record date for the determination of the shareholders of Municipal
Money Market Portfolio entitled to notice of, and to vote at, such Meeting
and any adjournments thereof.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
July 21, 1997
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN
THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED
STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR
HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance
to you and help avoid the time and expense involved in validating your vote
if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it appears
in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or
by the individual executing the proxy card. For example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
A FUND OF
DAILY MONEY FUND
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
PROXY STATEMENT AND PROSPECTUS
JULY 21, 1997
This Proxy Statement and Prospectus (Proxy Statement) is being furnished
to shareholders of Capital Reserves: Municipal Money Market Portfolio
(Municipal Money Market Portfolio), a fund of Daily Money Fund, in
connection with the solicitation of proxies by Daily Money Fund's Board of
Trustees for use at the Special Meeting of Shareholders of Municipal Money
Market Portfolio and at any adjournments thereof (the Meeting). The Meeting
will be held on Wednesday, September 17, 1997 at 11:30 a.m. Eastern time at
82 Devonshire Street, Boston, Massachusetts 02109, the principal executive
office of Daily Money Fund.
As more fully described in this Proxy Statement, the purpose of the
Meeting is to vote on a proposed reorganization (Reorganization). Pursuant
to an Agreement and Plan of Reorganization (the Agreement), Municipal Money
Market Portfolio would transfer all of its assets to Tax-Exempt Fund, a
fund of Newbury Street Trust, in exchange solely for Capital Reserves Class
shares of beneficial interest of Tax-Exempt Fund (Capital Reserves Class
Shares) and the assumption by Tax-Exempt Fund of Municipal Money Market
Portfolio's liabilities. Capital Reserves Class Shares would then be
distributed to Municipal Money Market Portfolio shareholders, so that each
such shareholder would receive the number of full and fractional Capital
Reserves Class Shares equal to the number of full and fractional shares of
Municipal Money Market Portfolio held by such shareholder on October 30,
1997, or such other date as the parties may agree (the Closing Date).
Municipal Money Market Portfolio will distribute Capital Reserves Class
Shares to its shareholders in liquidation, as provided in the Agreement.
Tax-Exempt Fund, a money market fund, is a diversified fund of Newbury
Street Trust, an open-end management investment company organized as a
Delaware business trust on December 30, 1991. Newbury Street Trust's
principal executive office is located at 82 Devonshire Street, Boston,
Massachusetts 02109 (1-800-843-3001). Tax-Exempt Fund's investment
objective is to provide individual and institutional investors with as high
a level of current income, exempt from federal income taxes, as is
consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
Tax-Exempt Fund invests in high-quality municipal money market securities
of all types. Tax-Exempt Fund normally invests so that at least 80% of its
income distributions is free from federal income tax. Tax-Exempt Fund is
currently authorized to issue two classes of shares designated Tax-Exempt
Fund - Daily Money Class shares, which are currently outstanding, and
Tax-Exempt Fund - Capital Reserves Class shares, which will be issued
initially to Municipal Money Market Portfolio shareholders in connection
with the Reorganization.
This Proxy Statement, which should be retained for future reference, sets
forth concisely the information about the Reorganization and Tax-Exempt
Fund that a shareholder should know before voting on the proposed
Reorganization. This Proxy Statement is accompanied by the Prospectus for
Tax-Exempt Fund - Daily Money Class, dated May 30, 1997. The Statement of
Additional Information for Tax-Exempt Fund - Daily Money Class, dated May
30, 1997, is available upon request. The Prospectus and the Statement of
Additional Information for Tax-Exempt Fund - Daily Money Class have been
filed with the Securities and Exchange Commission (the SEC) and are
incorporated herein by reference. A Statement of Additional Information,
dated July 21, 1997, relating to this Proxy Statement has been filed with
the SEC and is incorporated herein by reference. A Prospectus, dated
November 29, 1996 (as supplemented March 21, 1997), and a Statement of
Additional Information, dated November 29, 1996 (as supplemented January 2,
1997), for Municipal Money Market Portfolio have been filed with the SEC
and are incorporated herein by reference. Copies of these documents, as
well as each fund's most recent annual and semi-annual reports, may be
obtained without charge by contacting Fidelity Client Services at 82
Devonshire Street, Boston, Massachusetts 02109 or by calling
1-800-843-3001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT AND
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
VOTING INFORMATION
SYNOPSIS
COMPARISON OF OTHER POLICIES OF THE FUNDS
COMPARISON OF PRINCIPAL RISK FACTORS
THE PROPOSED TRANSACTION
ADDITIONAL INFORMATION ABOUT TAX-EXEMPT FUND
MISCELLANEOUS
EXHIBIT 1. FORM OF AGREEMENT AND PLAN OF REORGANIZATION OF MUNICIPAL MONEY
MARKET PORTFOLIO
PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF
CAPITAL RESERVES: MUNICIPAL MONEY MARKET PORTFOLIO
A FUND OF DAILY MONEY FUND
TO BE HELD ON SEPTEMBER 17, 1997
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
_________________________________
VOTING INFORMATION
This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of, the
Board of Trustees of Daily Money Fund (Daily Money Fund or the trust) to be
used at the Special Meeting of Shareholders of Capital Reserves: Municipal
Money Market Portfolio (Municipal Money Market Portfolio or the fund) and
at any adjournments thereof (the Meeting), to be held on Wednesday,
September 17, 1997 at 11:30 a.m. Eastern time at 82 Devonshire Street,
Boston, Massachusetts 02109, the principal executive office of the trust
and Fidelity Management & Research Company (FMR), the fund's investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice. The
solicitation is made primarily by the mailing of this Proxy Statement and
the accompanying proxy card on or about July 21, 1997. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile, or by
personal interview by representatives of the trust. In addition, D.F. King
& Co. and/or Management Information Services Corp. may be paid on a
per-call basis to solicit shareholders on behalf of the fund at an
anticipated cost of approximately $14,000. The expenses in connection with
preparing this Proxy Statement and its enclosures and of all solicitations
will be borne by the fund; however, because FMR has voluntarily agreed to
limit the fund's total operating expenses, it is expected that these
expenses will effectively be borne by FMR. FMR will reimburse brokerage
firms and others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may nevertheless
be revoked at any time prior to its use by written notification received by
the trust, by the execution of a later-dated proxy card, or by attending
the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which are
not revoked, will be voted at the Meeting. Shares represented by such
proxies will be voted in accordance with the instructions thereon. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. Only proxies that are voted will be counted
toward establishing a quorum. Broker non-votes are not considered voted for
this purpose. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the proposal is approved.
Municipal Money Market Portfolio may also arrange to have votes recorded
by telephone. D.F. King & Co. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated cost of
approximately $4,200. The expenses in connection with telephone voting
will be borne by the fund; however, because FMR has voluntarily agreed to
limit the fund's total operating expenses, it is expected that these
expenses will effectively be borne by FMR. If the fund records votes by
telephone, it will use procedures designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares
in accordance with their instructions, and to confirm that their
instructions have been properly recorded. Proxies given by telephone may
be revoked at any time before they are voted in the same manner that
proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present at
the Meeting but sufficient votes to approve one or more of the proposed
items are not received, or if other matters arise requiring shareholder
attention, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those
shares present at the Meeting or represented by proxy. When voting on a
proposed adjournment, the persons named as proxies will vote FOR the
proposed adjournment all shares that they are entitled to vote with respect
to that item, unless directed to vote AGAINST the item, in which case such
shares will be voted against the proposed adjournment with respect to that
item. A shareholder vote may be taken on one or more of the items in this
Proxy Statement or on any other business properly presented at the meeting
prior to such adjournment if sufficient votes have been received and it is
otherwise appropriate.
On April 30, 1997, there were 434,346,612 shares of Tax-Exempt Fund -
Daily Money Class (then known as Daily Tax-Exempt Money Fund - Initial
Class) issued and outstanding.
On April 30, 1997, there were 143,712,249 shares of Municipal Money Market
Portfolio issued and outstanding. Shareholders of record of Municipal
Money Market Portfolio at the close of business on July 21, 1997, will be
entitled to vote at the Meeting. Each such shareholder will be entitled to
one vote for each full share held on that date and a proportionate share of
one vote for each fractional share held on that date.
On April 30, 1997, the trustees and officers of Daily Money Fund and of
Newbury Street Trust (then known as Daily Tax-Exempt Money Fund) owned in
the aggregate less than 1% of the shares of Municipal Money Market
Portfolio and Tax-Exempt Fund (then known as Daily Tax-Exempt Money Fund),
respectively.
On April 30, 1997, the following shareholders were known by Daily Money
Fund or by Newbury Street Trust to own of record or beneficially 5% or more
of Municipal Money Market Portfolio's or Tax-Exempt Fund's outstanding
shares:
SHAREHOLDER ADDRESS PERCENTAGE OF
OUTSTANDING FUND SHARES
MUNICIPAL MONEY MARKET
PORTFOLIO
Securities America, Inc. Omaha, NE 16.22%
Muriel Siebert & Co., Inc. New York, NY 12.26%
TAX-EXEMPT FUND - DAILY
MONEY CLASS
Texas Commerce Bank, N.A. Houston, TX 9.16%
LNC Equity Sales Fort Wayne, IN 5.86%
To the knowledge of Daily Money Fund and Newbury Street Trust, no other
shareholder owned of record or beneficially 5% or more of the outstanding
shares of Municipal Money Market Portfolio or Tax-Exempt Fund on that date.
If the Reorganization became effective at April 30, 1997, the above
shareholders of Municipal Money Market Portfolio would have owned of record
or beneficially the same percentages shown above of Tax-Exempt Fund -
Capital Reserves Class; the above shareholders of Tax-Exempt Fund - Daily
Money Class would have owned of record or beneficially the same percentages
shown above of Tax-Exempt Fund - Daily Money Class; and Texas Commerce
Bank, N.A. would have owned of record or beneficially 6.89% of Tax-Exempt
Fund as a whole.
VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE AFFIRMATIVE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF MUNICIPAL
MONEY MARKET PORTFOLIO. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940
ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" MEANS
THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE VOTING
SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF THE HOLDERS OF
MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE PRESENT OR
REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE OUTSTANDING VOTING
SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED "PRESENT" FOR THIS PURPOSE.
SYNOPSIS
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement, in the Agreement, and in the Prospectuses of
Municipal Money Market Portfolio and Tax-Exempt Fund - Daily Money Class,
which are incorporated herein by this reference. Shareholders should read
the entire Proxy Statement and the enclosed Prospectus of Tax-Exempt Fund -
Daily Money Class carefully for more complete information about the
Reorganization and Tax-Exempt Fund.
The proposal is to merge Municipal Money Market Portfolio into a
newly-created class - Capital Reserves Class - of Tax-Exempt Fund, a larger
money market fund also managed by FMR. FMR is presenting similar proposals
to all of the Capital Reserves Portfolios it manages. Merging Municipal
Money Market Portfolio into Tax-Exempt Fund - Capital Reserves Class will
help FMR manage the funds more efficiently.
If the proposal is approved you will have lower costs on your investment -
total fund expenses of 0.90% per year, instead of 0.99% per year. (These
expenses are based on voluntary expense limits agreed to by FMR. They
could change in the future, whether or not the Reorganization takes place.)
Tax-Exempt Fund - Capital Reserves Class is designed to be similar to
Municipal Money Market Portfolio. You will not have to change how you do
business with Fidelity or have to take any other action (other than voting)
to maintain your investment.
Tax-Exempt Fund has slightly different investment policies than Municipal
Money Market Portfolio. Municipal Money Market Portfolio may invest up to
100% of its assets in securities whose interest is a tax preference item
for purposes of the federal alternative minimum tax, or AMT. Tax-Exempt
Fund does not currently intend to invest in AMT securities. AMT securities
generally pay higher yields than municipal securities that are fully
tax-exempt, but increase the tax liability of some investors. Not
investing in AMT securities will negatively impact Tax-Exempt Fund -
Capital Reserves Class's yield -- approximately 0.03%-0.08% per year
compared to Municipal Money Market Portfolio. This impact should be
offset, however, by the 0.09% expense reduction if the Reorganization is
approved.
INVESTMENT OBJECTIVES AND POLICIES
Municipal Money Market Portfolio and Tax-Exempt Fund (collectively the
"Funds" or each individually a "Fund") have essentially the same investment
objective. Municipal Money Market Portfolio seeks to provide investors
with as high a level of current income, exempt from federal income taxes,
as is consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of preservation of capital and liquidity.
Tax-Exempt Fund seeks to provide individual and institutional investors
with as high a level of current income, exempt from federal income taxes,
as is consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
Each Fund invests in high-quality municipal money market securities and
normally invests so that at least 80% of its income distributions is free
from federal income tax. Each Fund may invest more than 25% of its total
assets in tax-free securities that finance similar types of projects.
As noted above, the Funds have different policies regarding securities
whose interest is a tax preference item for purposes of the AMT. Municipal
Money Market Portfolio may invest up to 100% of its assets in municipal
securities subject to the AMT. Tax-Exempt Fund does not currently intend
to purchase municipal securities subject to the AMT. As of April 30, 1997,
approximately 72% of Municipal Money Market Portfolio's assets were
invested in securities subject to the AMT.
EXPENSE STRUCTURE
Tax-Exempt Fund - Capital Reserves Class has lower expenses than Municipal
Money Market Portfolio. Thus, if shareholders approve the Reorganization,
they will have lower costs on their investments.
Municipal Money Market Portfolio currently pays FMR a monthly management
fee at an annual rate of 0.50% of its average net assets. Also, under a
Distribution and Service Plan adopted pursuant to Rule 12b-1 under the 1940
Act, the Fund pays its distributor, National Financial Services Corporation
(NFSC), a monthly distribution fee at an annual rate of 0.35% of its
average net assets. Thus, Municipal Money Market Portfolio currently pays
total management and distribution fees of 0.85%. In addition, the Fund's
Distribution and Service Plan specifically recognizes that FMR may make
payments from its management fee revenue, past profits, or other resources
(not from the Fund's assets) to compensate financial intermediaries
(including NFSC) for providing distribution-related services for the Fund.
The Board of Trustees of Daily Money Fund has authorized FMR to make such
payments of up to 0.25% of the Fund's average net assets throughout the
month based upon the level of shareholder support and distribution services
provided. FMR has voluntarily agreed to reimburse Municipal Money Market
Portfolio to the extent that its total operating expenses (excluding
interest, taxes, brokerage commissions, and extraordinary expenses) exceed
0.99% of its average net assets.
If Municipal Money Market Portfolio shareholders approve the
Reorganization, they will receive Tax-Exempt Fund - Capital Reserves Class
shares, which will pay a 0.25% management fee and a 0.50% distribution fee.
The total management and distribution fees of 0.75% to be paid by
Tax-Exempt Fund - Capital Reserves Class will be 0.10% lower, as a
percentage of average net assets, than the total management and
distribution fees of 0.85% currently paid by Municipal Money Market
Portfolio. In addition, the Distribution and Service Plan for Tax-Exempt
Fund - Capital Reserves Class will specifically recognize that FMR may make
payments from its management fee revenue, past profits or other resources
(not from the Class's assets) to compensate financial intermediaries for
providing distribution-related services to the Class. FMR has voluntarily
agreed to reimburse Tax-Exempt Fund - Capital Reserves Class to the extent
that its total operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses) exceed 0.90% of its average net
assets -- 0.09% lower than Municipal Money Market Portfolio's 0.99%
voluntary expense limitation. Although FMR may terminate the voluntary
expense limitation with respect to Tax-Exempt Fund - Capital Reserves Class
at any time without prior notice to shareholders, FMR has no current
intention of doing so.
In sum, the Reorganization would give shareholders of Municipal Money
Market Portfolio the opportunity to participate in a larger money market
fund with essentially the same investment objective, 0.10% lower total
management and distribution fees, and a 0.09% lower total operating expense
ratio, after reimbursement.
The Board of Trustees believes that the Reorganization would benefit
Municipal Money Market Portfolio's shareholders and recommends that
shareholders vote in favor of the Reorganization.
THE PROPOSED REORGANIZATION
Shareholders of Municipal Money Market Portfolio will be asked at the
Meeting to vote upon and approve the Reorganization and the Agreement,
which provides for the acquisition by Tax-Exempt Fund of all of the assets
of Municipal Money Market Portfolio in exchange solely for Capital Reserves
Class shares of Tax-Exempt Fund (Capital Reserves Class Shares) and the
assumption by Tax-Exempt Fund of the liabilities of Municipal Money Market
Portfolio. Municipal Money Market Portfolio will then distribute the
Capital Reserves Class Shares to its shareholders, so that each shareholder
will receive the number of full and fractional Capital Reserves Class
Shares equal to the number of full and fractional shares of Municipal Money
Market Portfolio held by such shareholder on the Closing Date (defined
below). The exchange of Municipal Money Market Portfolio's assets for
Capital Reserves Class Shares will occur as of 4:00 p.m. Eastern time on
October 30, 1997, or such other date as the parties may agree (the Closing
Date). Municipal Money Market Portfolio will then be liquidated as soon as
practicable thereafter.
The Funds will receive an opinion of counsel that the Reorganization will
not result in any gain or loss for federal income tax purposes to Municipal
Money Market Portfolio or Tax-Exempt Fund or to the shareholders of either
Fund. The rights and privileges of the former shareholders of Municipal
Money Market Portfolio will be effectively unchanged by the Reorganization,
except as described on page 10 under the heading "Forms of Organization."
COMPARATIVE FEE TABLES
The following tables show (i) the shareholder transaction expenses that
Municipal Money Market Portfolio shareholders currently incur, and the
shareholder transaction expenses that Tax-Exempt Fund - Capital Reserves
Class shareholders will incur after giving effect to the Reorganization,
and (ii) the current fees and expenses of Municipal Money Market Portfolio
for the 12 months ended January 31, 1997 (unaudited), and the pro forma
fees for Tax-Exempt Fund - Capital Reserves Class based on the same period
(unaudited) after giving effect to the Reorganization.
SHAREHOLDER TRANSACTION EXPENSES are charges that shareholders may pay when
they buy or sell shares of a Fund.
<TABLE>
<CAPTION>
<S> <C> <C>
MUNICIPAL MONEY TAX-EXEMPT FUND -
MARKET PORTFOLIO CAPITAL RESERVES CLASS
Maximum sales charge on purchases None None
and reinvested distributions
Maximum deferred sales charge None None
Redemption fee None None
Exchange fee None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
Annual fund operating expenses are paid out of each Fund's assets and, in
the case of Tax-Exempt Fund, are allocated to the appropriate Class, as
applicable. The expenses of each Fund/Class are factored into its share
price or dividends and are not charged directly to shareholder accounts.
The following figures for Municipal Money Market Portfolio are based on
historical expenses. The following pro forma expenses for Tax-Exempt Fund
- - Capital Reserves Class are based on the proposed expense structure
described above, with Other Expenses estimated. All figures are calculated
as a percentage of average net assets.
MUNICIPAL PRO FORMA EXPENSES
MONEY TAX-EXEMPT FUND -
MARKET CAPITAL RESERVES CLASS
PORTFOLIO
Management Fee 0.31%* 0.25%
12b-1 Fee (Distribution Fee) 0.35% 0.50%
Other Expenses 0.33% 0.15%**
Total Fund Operating Expenses 0.99%* 0.90%**
* FMR has voluntarily agreed to reimburse Municipal Money Market Portfolio
to the extent that total operating expenses (excluding interest, taxes,
brokerage commissions, and extraordinary expenses) exceed 0.99% of the
Fund's average net assets. If this agreement were not in effect, the
Fund's management fee and total operating expenses, as a percentage of
average net assets, would have been 0.50% and 1.18%, respectively.
** FMR has voluntarily agreed to reimburse Tax-Exempt Fund - Capital
Reserves Class to the extent that total operating expenses (excluding
interest, taxes, brokerage commissions, and extraordinary expenses) exceed
0.90% of the Class's average net assets. If this agreement were not in
effect, the Class's other expenses and total operating expenses, as a
percentage of average net assets, would be estimated to be 0.29% and 1.04%,
respectively.
EXAMPLE OF EFFECT OF FUND EXPENSES
The following table illustrates the expenses on a hypothetical $1,000
investment in Municipal Money Market Portfolio under its current expenses,
and in Tax-Exempt Fund - Capital Reserves Class under the pro forma
expenses, calculated at the rates (after reimbursement) stated above,
assuming a 5% annual return.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
After 1 Year After 3 Years After 5 Years After 10 Years
Municipal Money $10 $32 $55 $121
Market Portfolio
Tax-Exempt Fund - $ 9 $29 $50 $111
Capital Reserves Class
</TABLE>
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual or
expected costs, which may vary. The assumed return of 5% is not a
prediction of, and does not represent, the actual or expected performance
of either Fund/Class. Long-term shareholders may pay more than the
economic equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc. due to 12b-1 fees.
ADDITIONAL EXPENSE INFORMATION
DISTRIBUTOR. NFSC distributes Municipal Money Market Portfolio's shares.
Fidelity Distributors Corporation (FDC), an affiliate of FMR, currently
distributes Tax-Exempt Fund's shares and will distribute Tax-Exempt Fund -
Capital Reserves Class shares following the Reorganization.
As stated above, under a Distribution and Service Plan adopted pursuant to
Rule 12b-1 under the 1940 Act, Municipal Money Market Portfolio currently
pays NFSC a monthly distribution fee at an annual rate of 0.35% of the
Fund's average net assets. In addition, the Municipal Money Market
Portfolio plan specifically recognizes that FMR may make payments from its
management fee revenue, past profits, or other resources to compensate
financial intermediaries (including NFSC) for providing
distribution-related services for the Fund. The Board of Trustees of Daily
Money Fund has authorized FMR to make such payments of up to 0.25% of the
Fund's average net assets throughout the month based upon the level of
shareholder support and distribution services provided.
If shareholders approve the Reorganization, Tax-Exempt Fund - Capital
Reserves Class shares will be subject to a Distribution and Service Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the plan, Capital
Reserves Class will be authorized to pay FDC a monthly distribution fee as
compensation for its services and expenses in connection with the
distribution of Capital Reserves Class shares of Tax-Exempt Fund. Capital
Reserves Class will pay FDC a monthly distribution fee at an annual rate of
0.50% of its average net assets throughout the month. FDC may compensate
intermediaries that provide shareholder support services, engage in the
sale of Capital Reserves Class shares, or pay distribution expenses at an
annual rate of up to 0.50% of the average net assets they maintain. The
Capital Reserves Class plan will specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other resources
to FDC for expenses incurred in connection with the distribution of Capital
Reserves Class shares, including payments made to intermediaries that
provide shareholder support services or engage in the sale of Capital
Reserves Class shares. The Board of Trustees of Newbury Street Trust has
authorized such payments to intermediaries at an annual rate of up to 0.10%
of the average net assets they maintain.
Independent of the Capital Reserves Class plan, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of the
average net assets they maintain. The recordkeeping fee will be paid by
FMR or its affiliates, not by Tax-Exempt Fund, and will not be paid for
distribution services.
SUB-ADVISER. Currently, FMR Texas Inc., located in Irving, Texas, is each
Fund's sub-adviser and has primary responsibility for managing its
investments. FMR is responsible for providing other management services.
For FMR Texas's services to Municipal Money Market Portfolio, FMR pays FMR
Texas 50% of its management fee (before expense reimbursements but after
payments made by FMR pursuant to the Fund's Distribution and Service Plan).
For FMR Texas's services to Tax-Exempt Fund, FMR pays FMR Texas 50% of its
management fee (before expense reimbursements).
FORMS OF ORGANIZATION
Municipal Money Market Portfolio is a diversified fund of Daily Money
Fund, an open-end management investment company organized as a Delaware
business trust on September 29, 1993. Daily Money Fund is authorized to
issue an unlimited number of shares of beneficial interest. Municipal
Money Market Portfolio is authorized to issue one class of shares.
Tax-Exempt Fund is a diversified fund of Newbury Street Trust, an open-end
management investment company organized as a Delaware business trust on
December 30, 1991. Before May 30, 1997, Newbury Street Trust was known as
Daily Tax-Exempt Money Fund, and Tax-Exempt Fund, then the only fund of the
trust, also was known as Daily Tax-Exempt Money Fund. Newbury Street Trust
is authorized to issue an unlimited number of shares of beneficial
interest. Tax-Exempt Fund is currently authorized to issue two classes of
shares designated Tax-Exempt Fund - Daily Money Class (formerly known as
Daily Tax-Exempt Money Fund - Initial Class) shares, which are currently
outstanding, and Tax-Exempt Fund - Capital Reserves Class shares, which
will be issued initially to Municipal Money Market Portfolio shareholders
in connection with the Reorganization. A separate filing with the
Securities and Exchange Commission (the SEC) will be made prior to the
Closing Date of the Reorganization for the purpose of registering
Tax-Exempt Fund - Capital Reserves Class shares for sale.
Because Municipal Money Market Portfolio and Tax-Exempt Fund are series of
Delaware business trusts, organized under substantially similar Trust
Instruments, the rights of the security holders of Municipal Money Market
Portfolio under state law and the governing documents are expected to
remain unchanged after the Reorganization, except with regard to
shareholder voting rights. Shareholder voting rights for Municipal Money
Market Portfolio are based on the number of Fund shares owned (share-based
voting), whereas shareholder voting rights for Tax-Exempt Fund are based on
the total dollar interest in Tax-Exempt Fund (dollar-based voting). If
Municipal Money Market Portfolio shareholders approve the Reorganization,
their voting rights would not be affected because immediately following the
Reorganization Newbury Street Trust will comprise only money market funds,
which are managed to maintain a stable $1.00 share price. However, if
funds with fluctuating net asset values per share are added to Newbury
Street Trust in the future, relative voting rights would be affected. In
that event, while the differences between the Funds' voting rights would
have no bearing on matters affecting only one fund of the trust, on matters
requiring trust-wide votes in which all funds of the trust participate,
dollar-based voting would provide shareholders with voting power that is
proportionate to their economic interest, whereas share-based voting may
provide shareholders who own shares of a fund with a lower net asset value
per share (NAV) than other funds in the trust with a disproportionate
ability to affect a trust-wide vote relative to shareholders of other funds
in the trust. If Municipal Money Market Portfolio shareholders approve the
Reorganization, their voting rights will change to reflect those of
Tax-Exempt Fund shareholders. For more information regarding shareholder
rights, refer to the section of each Fund's Statement of Additional
Information called "Description of the Trust."
INVESTMENT OBJECTIVES AND POLICIES
The Funds have essentially the same investment objective. Municipal Money
Market Portfolio seeks to provide investors with as high a level of current
income, exempt from federal income taxes, as is consistent with a portfolio
of high quality, short-term municipal obligations selected on the basis of
preservation of capital and liquidity. Tax-Exempt Fund seeks to provide
individual and institutional investors with as high a level of current
income, exempt from federal income taxes, as is consistent with a portfolio
of high quality, short-term municipal obligations selected on the basis of
liquidity and stability of principal. Investments in the Funds are neither
insured nor guaranteed by the U.S. Government, and there can be no
assurance that a Fund will maintain a stable $1.00 share price.
Each Fund invests in high-quality municipal money market securities and
normally invests so that at least 80% of its income distributions is free
from federal income tax. Each Fund may invest more than 25% of its total
assets in tax-free securities that finance similar types of projects.
The Funds have different policies regarding securities whose interest is a
tax preference item for purposes of the AMT. Municipal Money Market
Portfolio may invest up to 100% of its assets in municipal securities
subject to the AMT. Tax-Exempt Fund does not currently intend to purchase
municipal securities subject to the AMT. As of April 30, 1997,
approximately 72% of Municipal Money Market Portfolio's assets were
invested in securities subject to the AMT. AMT securities generally pay
higher yields than municipal securities that are fully tax-exempt, but
increase the tax liability of some investors.
If shareholders approve the Reorganization, it is anticipated that
Municipal Money Market Portfolio will sell any securities subject to the
AMT in the period between shareholder approval and the Closing Date. The
yield spread on securities subject to the AMT as compared to securities not
subject to the AMT is approximately 0.05%-0.10%. This translates into an
approximate 0.03%-0.08% yield advantage for Municipal Money Market
Portfolio given its recent levels of investment in securities subject to
the AMT. The 0.03%-0.08% yield difference should be offset, however, by
the 0.09% lower total operating expense ratio (after reimbursement) of
Tax-Exempt Fund - Capital Reserves Class shares following the
Reorganization. In the event that the sale of either Fund's assets becomes
necessary prior to the effective date of the Reorganization, any
transaction costs and taxable gain or loss associated with such adjustments
will be borne by the individual Fund that incurred them.
The investment objective of each Fund is fundamental and may not be
changed without the approval of a vote of at least a majority of the
outstanding voting securities of the Fund. There can be no assurance that
a Fund will achieve its objective. With the exception of fundamental
policies, investment policies of the Funds can be changed without
shareholder approval. The differences between the Funds discussed below,
except as noted, could be changed without a vote of shareholders.
COMPARISON OF OTHER POLICIES OF THE FUNDS
DIVERSIFICATION. As a matter of fundamental policy, each Fund may not,
with respect to 75% of its total assets, purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities or (Tax-Exempt Fund only)
securities of other investment companies) if, as a result, (a) more than 5%
of the Fund's total assets would be invested in the securities of that
issuer, or (b) the Fund would hold more than 10% of the outstanding voting
securities of that issuer.
BORROWING. As a matter of fundamental policy, each Fund may borrow money
only for temporary or emergency purposes (not for leveraging or
investment), but not in an amount exceeding 33 1/3% of its total assets
(including the amount borrowed) less liabilities (other than borrowings).
Any borrowings that come to exceed this amount (by reason of a decline in
net assets, in the case of Tax-Exempt Fund) will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation. As a matter of non-fundamental policy, each
Fund may borrow money only from banks or other funds advised by FMR or an
affiliate of FMR, or by engaging in reverse repurchase agreements with any
party, and each Fund may make additional investments while borrowings are
outstanding.
LENDING. As a matter of fundamental policy, each Fund may not lend any
security or make any other loan, except through the purchase of debt
securities or repurchase agreements, if as a result more than 33 1/3% of
its total assets would be lent to other parties. As a matter of
non-fundamental policy, with the exception of purchasing debt securities,
neither Fund currently intends to make loans or engage in repurchase
agreements.
SHORT SALES. As a matter of non-fundamental policy, Municipal Money
Market Portfolio does not currently intend to sell securities short, unless
it owns or has the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short. As a matter of fundamental policy, Tax-Exempt Fund may not make
short sales of securities.
MARGIN PURCHASES. As a matter of non-fundamental policy, subject to
revision upon 60 days' notice to shareholders, Municipal Money Market
Portfolio does not currently intend to purchase securities on margin,
except that the Fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts do not
constitute purchasing securities on margin. As a matter of fundamental
policy, Tax-Exempt Fund may not purchase any securities on margin, except
for such short-term credits as are necessary for the clearance of
transactions.
UNDERWRITING. As a matter of fundamental policy, Municipal Money Market
Portfolio may not underwrite securities issued by others, except to the
extent that the Fund may be considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of restricted securities. As
a matter of fundamental policy, Tax-Exempt Fund may not underwrite any
issue of securities, except to the extent that the purchase of municipal
bonds in accordance with the Fund's investment objective, policies, and
restrictions, either directly from the issuer or from an underwriter for an
issuer, may be deemed underwriting.
REAL ESTATE. As a matter of fundamental policy, Municipal Money Market
Portfolio may not purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments, but this policy does not
prevent the Fund from investing in securities or other instruments backed
by real estate or securities of companies engaged in the real estate
business. As a matter of fundamental policy, Tax-Exempt Fund may not
purchase or sell real estate, but this policy does not prevent the Fund
from investing in municipal bonds or other obligations secured by real
estate or interests therein.
COMMODITIES. As a matter of fundamental policy, Municipal Money Market
Portfolio may not purchase or sell physical commodities unless acquired as
a result of ownership of securities or other instruments. As a matter of
fundamental policy, Tax-Exempt Fund may not purchase or sell commodities or
commodity (futures) contracts.
OIL, GAS, AND MINERAL EXPLORATION PROGRAMS. As a matter of fundamental
policy, Tax-Exempt Fund may not invest in oil, gas or other mineral
exploration or development programs. The Board of Trustees of Daily Money
Fund recently approved the elimination of Municipal Money Market
Portfolio's identical non-fundamental policy (for the reasons stated
below).
OTHER INVESTMENT POLICIES. Each Fund may invest up to 10% of its assets
in illiquid securities. Consistent with its investment objective and
policies, each Fund also may enter into when-issued and forward purchase or
sale transactions and may invest in variable and floating rate securities,
municipal lease obligations, and securities with put features, and in
obligations of U.S. territories and possessions such as Guam, the Virgin
Islands, and Puerto Rico, and their political subdivisions and public
corporations. Municipal Money Market Portfolio does not currently intend
to purchase futures contracts or options on futures contracts. This
operating policy may be changed only with the Trustees' approval and 60
days' notice to shareholders.
FMR normally invests each Fund's assets according to its investment
strategy and does not expect to invest in federally taxable obligations.
However, each Fund reserves the right to hold a substantial amount of
uninvested cash or to invest more than normally permitted in federally
taxable obligations for temporary, defensive purposes.
For cash management purposes, each Fund may invest in repurchase
agreements and (pursuant to an exemptive order granted by the SEC) in a
money market fund available only to funds and accounts managed by FMR or
its affiliates, whose goal is to seek a high level of current income exempt
from federal income tax while maintaining a stable $1.00 share price.
However, neither Fund currently intends to invest in repurchase agreements
and Tax-Exempt Fund does not currently intend to invest in a money market
fund.
In addition, the Board of Trustees of each Fund recently approved the
elimination of certain non-fundamental policies, which were identical for
both Funds, regarding a Fund's (i) investments in the securities of other
investment companies, (ii) investments in the securities of unseasoned
issuers, and (iii) purchases and sales of futures contracts and call
options. These non-fundamental policies were originally adopted with
respect to each Fund solely in response to state law requirements, which
were in addition to, and in many cases were more restrictive than, federal
law requirements. These state law requirements are no longer applicable.
As stated above, for more information about the risks and restrictions
associated with these polices, see the Funds' Prospectuses and, for a more
detailed discussion of the Funds' investments, see their Statements of
Additional Information, which are incorporated herein by reference.
OPERATIONS OF TAX-EXEMPT FUND FOLLOWING THE REORGANIZATION
FMR does not expect Tax-Exempt Fund to revise its investment objective or
policies as a result of the Reorganization. In addition, FMR does not
anticipate significant changes to Tax-Exempt Fund's management or to agents
that provide Tax-Exempt Fund with services. Specifically, the Trustees and
officers, the investment adviser and sub-adviser, the distributor, and
other agents will continue to serve Tax-Exempt Fund in their current
capacities.
Because Tax-Exempt Fund's investment policies differ in some respects from
Municipal Money Market Portfolio's investment policies, certain of the
securities currently held by Municipal Money Market Portfolio may need to
be sold rather than transferred to Tax-Exempt Fund. As explained above,
Municipal Money Market Portfolio may invest in securities subject to the
AMT, whereas Tax-Exempt Fund does not currently intend to purchase
securities subject to the AMT. Therefore, if shareholders approve the
Reorganization, it is anticipated that Municipal Money Market Portfolio
will sell any securities subject to the AMT in the period between
shareholder approval and the Closing Date. Any transaction costs and
taxable gain or loss associated with such adjustments to the portfolio of
Municipal Money Market Portfolio will be borne by Municipal Money Market
Portfolio. In the event that the sale of any assets becomes necessary
after the effective date of the Reorganization, any transaction costs and
taxable gain or loss associated with such adjustments will be borne by
Tax-Exempt Fund.
PURCHASES AND REDEMPTIONS
Tax-Exempt Fund is currently authorized to issue two classes of shares
designated Tax-Exempt Fund - Daily Money Class shares, which are currently
outstanding, and Tax-Exempt Fund - Capital Reserves Class shares, which
will be issued initially to Municipal Money Market Portfolio shareholders
in connection with the Reorganization. Municipal Money Market Portfolio is
currently authorized to issue only one class of shares.
Both Municipal Money Market Portfolio and Tax-Exempt Fund - Capital
Reserves Class require a minimum initial investment of $1,000, a minimum
subsequent investment of $250, and a minimum account balance of $500. Both
Municipal Money Market Portfolio shares and Tax-Exempt Fund - Capital
Reserves Class shares are sold without a sales charge.
Municipal Money Market Portfolio is open for business and its NAV is
normally calculated each day that both the Federal Reserve Bank of Kansas
City (Kansas City Fed) and the New York Stock Exchange (NYSE) are open.
Tax-Exempt Fund is open for business and the NAV of Capital Reserves Class
shares is normally calculated each day that the NYSE is open. The
following holiday closings have been scheduled for 1997: New Year's Day,
Martin Luther King's Birthday, Washington's Birthday, Good Friday, Memorial
Day, Independence Day, Labor Day, Columbus Day (Kansas City Fed only),
Veterans Day (Kansas City Fed only), Thanksgiving Day, and Christmas Day.
Although FMR expects the same holiday schedule to be observed in the
future, the Kansas City Fed or the NYSE may modify its holiday schedule at
any time.
Both Funds are managed to keep their share prices stable at $1.00. Both
Municipal Money Market Portfolio shares and Tax-Exempt Fund - Capital
Reserves Class shares are purchased at the next share price calculated
after an order is received and accepted. Share price is normally
calculated at 12:00 noon and 4:00 p.m. Eastern time. Shares may be
purchased by mail, by wire, or by exchange from another Fidelity fund.
Neither Municipal Money Market Portfolio nor Tax-Exempt Fund - Capital
Reserves Class imposes a fee for wire purchases; however, if shares are
purchased through an investment professional, the investment professional
may impose a fee for wire purchases. Shares purchased before 12:00 noon
Eastern time are entitled to dividends declared that day. Shares purchased
after 12:00 noon Eastern time begin to earn dividends on the following
business day.
Each Fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. On any day that the Kansas City
Fed (Municipal Money Market Portfolio only) or the NYSE closes early, the
principal government securities markets close early (such as on days in
advance of holidays generally observed by participants in the markets), or
as permitted by the SEC, each Fund reserves the right to advance the time
on that day by which purchase and redemption orders must be received. To
the extent that portfolio securities are traded in other markets on days
when the Kansas City Fed (Municipal Money Market Portfolio only) or the
NYSE is closed, a Fund's/Class's share price may be affected on days when
shareholders do not have access to the Fund to purchase or redeem shares.
Both Funds value their portfolio securities on the basis of amortized
cost. This method minimizes the effect of changes in a security's market
value and helps the Funds maintain stable $1.00 share prices.
UMB Bank, n.a. (UMB), located at 1010 Grand Avenue, Kansas City, Missouri,
is each Fund's transfer agent, although it employs Fidelity Investments
Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, to
perform these functions for each Fund. Pursuant to a sub-arrangement with
UMB, FIIOC performs transfer agency, dividend disbursing, and shareholder
services for the shares of each Fund. In addition, pursuant to a
sub-arrangement with UMB, Fidelity Service Company, Inc., also an affiliate
of FMR, calculates the NAV and dividends for the shares of each Fund and
maintains the general accounting records for each Fund. NFSC distributes
Municipal Money Market Portfolio's shares. FDC currently distributes
Tax-Exempt Fund's shares and will distribute Tax-Exempt Fund - Capital
Reserves Class shares following the Reorganization.
Both Municipal Money Market Portfolio shares and Tax-Exempt Fund - Capital
Reserves Class shares may be redeemed on any business day at their
respective share price. Shares are redeemed at the next share price
calculated after an order is received and accepted. As stated above, share
price is normally calculated at 12:00 noon and 4:00 p.m. Eastern time.
Shares redeemed before 12:00 noon Eastern time do not receive the dividend
declared on the day of redemption. Shares redeemed after 12:00 noon
Eastern time do receive the dividend declared on the day of redemption.
Both Municipal Money Market Portfolio shares and Tax-Exempt Fund - Capital
Reserves Class shares may be redeemed by mail, by telephone, or by wire.
Both Municipal Money Market Portfolio and Tax-Exempt Fund - Capital
Reserves Class also offer checkwriting privileges; the minimum amount for a
check is $500. Neither Municipal Money Market Portfolio nor Tax-Exempt
Fund - Capital Reserves Class charges a fee for wire redemptions; however,
if shares are sold through an investment professional, the investment
professional may charge a fee for wire redemptions. Redemption proceeds
will be wired via the Federal Reserve Wire System to the redeeming
shareholder's bank account of record. If a Fund's transfer agent receives
a redemption request before 12:00 noon Eastern time, redemption proceeds
will normally be wired on that day. If a Fund's transfer agent receives a
redemption request after 12:00 noon Eastern time, redemption proceeds will
normally be wired on the following business day.
Each Fund reserves the right to take up to seven days to pay redemption
proceeds if making immediate payment would adversely affect the Fund. In
addition, each Fund may withhold redemption proceeds until it is reasonably
assured that investments credited to the account have been received and
collected. When the Kansas City Fed (Municipal Money Market Portfolio
only) or the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, each
Fund may suspend redemption or postpone payment dates.
In the case of both Municipal Money Market Portfolio and Tax-Exempt Fund -
Capital Reserves Class, if a shareholder's account balance falls below
$500, the shareholder will be given 30 days' notice to reestablish the
minimum balance. If the shareholder does not increase the balance,
Fidelity reserves the right to close the shareholder's account and send the
proceeds to the shareholder. Shares will be redeemed at their share price
on the day the account is closed.
If the Reorganization is approved, the purchase and redemption policies
that currently apply to Municipal Money Market Portfolio shares will apply
to Tax-Exempt Fund - Capital Reserves Class shares. Municipal Money Market
Portfolio shareholders may redeem their shares, or exchange their shares
for shares of any other available Fidelity fund, through the Closing Date.
EXCHANGES
Municipal Money Market Portfolio shares may be exchanged for shares of any
other Fidelity fund available in the shareholder's state. In addition,
Municipal Money Market Portfolio shares may be acquired through an exchange
of shares of other Fidelity funds. The exchange privileges and
restrictions that currently apply to Municipal Money Market Portfolio
shares will apply to Tax-Exempt Fund - Capital Reserves Class shares
following the Reorganization. Refer to Municipal Money Market Portfolio's
Prospectus for more information regarding how to exchange shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Each Fund declares income
dividends daily and pays them monthly. Each Fund automatically reinvests
dividend and capital gain distributions in additional shares of the Fund
(or, in the case of Tax-Exempt Fund, shares of the same Class of the Fund)
unless a shareholder requests that dividends and other distributions be
paid in cash.
On or before the Closing Date, Municipal Money Market Portfolio will
declare one or more dividends or distributions which, together with all
such previous dividends and distributions attributable to its current
taxable year, will have the effect of distributing substantially all of its
investment company taxable income and net realized capital gains, if any,
in order to maintain its tax status as a regulated investment company.
SHAREHOLDER SERVICES
Both Municipal Money Market Portfolio and Tax-Exempt Fund - Capital
Reserves Class offer sub-accounting and special services for institutions
that wish to open multiple accounts (a master account and sub-accounts).
Refer to Municipal Money Market Portfolio's Prospectus for more information
regarding these services.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Each Fund has received an opinion of its counsel, Kirkpatrick & Lockhart
LLP, that the Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of
1986, as amended (the Code). Accordingly, no gain or loss will be
recognized by the Funds or their shareholders as a result of the
Reorganization. Please see the section entitled "Federal Income Tax
Considerations" for more information.
Municipal Money Market Portfolio and Tax-Exempt Fund had capital loss
carryforwards for federal tax purposes aggregating approximately $25,000
and $98,000 as of July 31, 1996 and October 31, 1996, respectively. Under
current federal tax law, Tax-Exempt Fund may be limited to using only a
portion, if any, of the capital loss carryforward transferred by Municipal
Money Market Portfolio at the time of the Reorganization. There is no
assurance that Tax-Exempt Fund will be able to realize sufficient capital
gains to use its capital loss carryforward as well as a portion, if any, of
Municipal Money Market Portfolio's capital loss carryforward, before they
expire. The capital loss carryforward attributable to Municipal Money
Market Portfolio will expire between July 31, 2000 and July 31, 2004. The
capital loss carryforward attributable to Tax-Exempt Fund will expire
between October 31, 2000 and October 31, 2004.
COMPARISON OF PRINCIPAL RISK FACTORS
Because each Fund is a money market fund, each Fund must comply with
federal regulatory requirements applicable to all money market funds
concerning the quality and maturity of its investments. Federal
regulations limit money market fund investments to high-quality securities.
To be high-quality, a security must be rated in accordance with applicable
rules in one of the two highest categories for short-term securities by at
least two nationally recognized rating services (or by one, if only one
rating service has rated the security) or, if unrated, judged to be of
equivalent quality by FMR. The maturity (calculated according to
applicable regulations) of each investment cannot exceed 397 days, and a
money market fund's dollar-weighted average maturity cannot exceed 90 days.
These requirements mean that the Funds have substantially similar levels of
risk.
The Funds pursue essentially the same investment objective and follow
similar investment policies (see "Investment Objectives and Policies" on
page 11). However, as explained above, Municipal Money Market Portfolio
may invest in securities subject to the AMT, whereas Tax-Exempt Fund does
not currently intend to purchase securities subject to the AMT.
Although each Fund seeks to maintain a stable $1.00 share price, each
Fund's investment income is based on the income earned on the securities it
holds, less expenses incurred. Thus, each Fund's investment income may
fluctuate in response to changes in such expenses or changes in interest
rates.
THE PROPOSED TRANSACTION
TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN MUNICIPAL MONEY
MARKET PORTFOLIO AND TAX-EXEMPT FUND
REORGANIZATION PLAN
The terms and conditions under which the Reorganization may be consummated
are set forth in the Agreement. Significant provisions of the Agreement are
summarized below; however, this summary is qualified in its entirety by
reference to the Agreement, a copy of which is attached as Exhibit 1 to
this Proxy Statement.
The Agreement contemplates (a) Tax-Exempt Fund acquiring as of the Closing
Date all of the assets of Municipal Money Market Portfolio in exchange
solely for Capital Reserves Class Shares and the assumption by Tax-Exempt
Fund of Municipal Money Market Portfolio's liabilities; and (b) the
distribution of Capital Reserves Class Shares to the shareholders of
Municipal Money Market Portfolio as provided for in the Agreement.
The assets of Municipal Money Market Portfolio to be acquired by
Tax-Exempt Fund include all cash, cash equivalents, securities, receivables
(including interest or dividends receivables), claims, choses in action,
and other property owned by Municipal Money Market Portfolio, and any
deferred or prepaid expenses shown as an asset on the books of Municipal
Money Market Portfolio on the Closing Date. Tax-Exempt Fund will assume
from Municipal Money Market Portfolio all liabilities, debts, obligations,
and duties of Municipal Money Market Portfolio of whatever kind or nature,
whether absolute, accrued, contingent, or otherwise, whether or not arising
in the ordinary course of business, whether or not determinable on the
Closing Date, and whether or not specifically referred to in the Agreement;
provided, however, that Municipal Money Market Portfolio will use its best
efforts, to the extent practicable, to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred in
the ordinary course of business. Tax-Exempt Fund will deliver Capital
Reserves Class Shares to Municipal Money Market Portfolio, which shares
Municipal Money Market Portfolio will then distribute to its shareholders
so that each Municipal Money Market Portfolio shareholder will receive the
number of full and fractional Capital Reserves Class Shares equal to the
number of full and fractional shares of Municipal Money Market Portfolio
held by such shareholder as of the Closing Date.
The value of Municipal Money Market Portfolio's assets to be acquired by
Tax-Exempt Fund, the amount of Municipal Money Market Portfolio's
liabilities to be assumed by Tax-Exempt Fund, and the share price of a
Capital Reserves Class Share will be determined as of the close of business
(4:00 p.m. Eastern time) of the respective Fund on the Closing Date.
Portfolio securities will be valued on the basis of amortized cost. This
technique involves initially valuing an instrument at its cost as adjusted
for amortization of premium or accretion of discount rather than at its
current market value. The amortized cost value of an instrument may be
higher or lower than the price a Fund would receive if it sold the
instrument. If the Board of Trustees of Daily Money Fund and the Board of
Trustees of Newbury Street Trust believe that a deviation from a Fund's
amortized cost per share may result in dilution or other unfair results to
shareholders, the Boards have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results.
As of the Closing Date, Municipal Money Market Portfolio will distribute
to its shareholders of record the Capital Reserves Class Shares it
received, so that each Municipal Money Market Portfolio shareholder will
receive the number of full and fractional Capital Reserves Class Shares
equal to the number of full and fractional shares of Municipal Money Market
Portfolio held by such shareholder on the Closing Date; Municipal Money
Market Portfolio will be liquidated as soon as practicable thereafter. Such
distribution will be accomplished by opening accounts on the books of
Tax-Exempt Fund in the names of the Municipal Money Market Portfolio
shareholders and by transferring thereto Capital Reserves Class Shares.
Each Municipal Money Market Portfolio shareholder's account shall be
credited with the respective PRO RATA number of full and fractional
(rounded to the third decimal place) Capital Reserves Class Shares due that
shareholder. Tax-Exempt Fund shall not issue certificates representing its
shares in connection with such exchange.
Accordingly, immediately after the Reorganization, each former Municipal
Money Market Portfolio shareholder will own the number of Capital Reserves
Class Shares equal to the number of that shareholder's shares of Municipal
Money Market Portfolio immediately prior to the Reorganization. The share
price of Tax-Exempt Fund will be unchanged by the transaction. Thus, the
Reorganization will not result in the dilution of any shareholder interest.
Any transfer taxes payable upon issuance of Capital Reserves Class Shares
in a name other than that of the registered holder of the shares on the
books of Municipal Money Market Portfolio as of that time shall be paid by
the person to whom such shares are to be issued as a condition of such
transfer. Any reporting responsibility of Municipal Money Market Portfolio
is and will continue to be its responsibility up to and including the
Closing Date and such later date on which Municipal Money Market Portfolio
is liquidated.
It is expected that FMR will bear the cost of the Reorganization,
including professional fees, expenses associated with the filing of
registration statements, and the cost of soliciting proxies for the
Meeting, which will consist principally of printing and mailing
prospectuses and proxy statements, together with the cost of any
supplemental solicitation. However, there may be some transaction costs
associated with portfolio adjustments to Municipal Money Market Portfolio
due to the Reorganization which occur prior to the Closing Date which will
be borne by Municipal Money Market Portfolio. Any transaction costs
associated with portfolio adjustments due to the Reorganization which occur
after the Closing Date will be borne by Tax-Exempt Fund. A Fund may
recognize a taxable gain or loss on the disposition of securities pursuant
to these portfolio adjustments. See the section entitled "Reasons for the
Reorganization."
The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by a
Fund. In addition, the Agreement may be amended in any mutually agreeable
manner, except that no amendment that may have a materially adverse effect
on the shareholders' interests may be made subsequent to the Meeting.
REASONS FOR THE REORGANIZATION
The Boards of Trustees (the Boards) of Daily Money Fund and Newbury Street
Trust have determined that the Reorganization is in the best interests of
the shareholders of the Funds and that the Reorganization will not result
in a dilution of the interests of the shareholders of either Fund.
In considering the Reorganization, the Boards considered a number of
factors, including the following:
(1) the compatibility of the Funds' investment objectives and policies;
(2) the historical performance of the Funds;
(3) the relative expense ratios of the Funds;
(4) the costs to be incurred by each Fund as a result of the
Reorganization;
(5) the tax consequences of the Reorganization;
(6) the relative asset sizes of the Funds;
(7) the elimination of duplicative funds;
(8) the impact of changes to the institutional money market product line on
the Funds and their shareholders; and
(9) the benefits to FMR and to shareholders of the Funds.
FMR recommended the Reorganization to the Boards at a meeting of the
Boards on March 20, 1997. In recommending the Reorganization, FMR also
advised the Boards that the Funds have generally compatible investment
objectives and policies, with the material differences noted, and that the
Funds currently have similar investment strategies, with the material
differences noted.
The Boards considered that if the Reorganization is approved, former
shareholders of Municipal Money Market Portfolio will receive Tax-Exempt
Fund - Capital Reserves Class shares, which will pay a 0.25% management fee
and a 0.50% distribution fee. The total management and distribution fees
of 0.75% to be paid by Tax-Exempt Fund - Capital Reserves Class will be
0.10% lower, as a percentage of average net assets, than the total
management and distribution fees of 0.85% currently paid by Municipal Money
Market Portfolio. FMR also informed the Boards that it would voluntarily
agree to reimburse the total operating expenses of Tax-Exempt Fund -
Capital Reserves Class to the extent that such expenses (excluding
interest, taxes, brokerage commissions, and extraordinary expenses) exceed
0.90% of its average net assets -- 0.09% lower than Municipal Money Market
Portfolio's 0.99% voluntary expense limitation. In addition, FMR informed
the Boards that it expected to pay the costs associated with the
Reorganization, including professional fees and the costs of proxy
solicitation, under Municipal Money Market Portfolio's voluntary expense
limitation. FMR further informed the Boards that although Municipal Money
Market Portfolio would bear any costs (as described above) associated with
portfolio adjustments made in connection with the Reorganization, FMR
believed that such costs would be minimal and would be counterbalanced by
the reduction in the total operating expenses that Municipal Money Market
Portfolio shareholders would pay as holders of Capital Reserves Class
Shares.
The Boards also considered that former shareholders of Municipal Money
Market Portfolio will receive the number of Capital Reserves Class Shares
equal to the number of their shares of Municipal Money Market Portfolio. In
addition, the Boards considered that the Funds expected to receive an
opinion of counsel that the Reorganization would not result in any gain or
loss for federal income tax purposes to Municipal Money Market Portfolio or
Tax-Exempt Fund or to the shareholders of either Fund.
Finally, the Boards considered the Reorganization in the context of a
general goal of reducing the number of duplicative funds managed by FMR.
While the reduction of duplicative funds and funds with lower assets
potentially would benefit FMR, it also should benefit shareholders by
increasing operational efficiencies and, thereby, lowering expense ratios.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Newbury Street Trust is registered with the SEC as an open-end management
investment company. Newbury Street Trust is authorized to issue an
unlimited number of shares of beneficial interest of separate series (no
par value per share). Tax-Exempt Fund is one of three current funds of the
trust. Newbury Street Trust's trustees have authorized the public offering
of two classes of shares of Tax-Exempt Fund designated Tax-Exempt Fund -
Daily Money Class shares, which are currently outstanding, and Tax-Exempt
Fund - Capital Reserves Class shares, which will be issued initially to
Municipal Money Market Portfolio shareholders in connection with the
Reorganization. A separate filing with the SEC will be made prior to the
Closing Date for the purpose of registering Tax-Exempt Fund - Capital
Reserves Class shares for sale. Each share in a Class represents an equal
proportionate interest in Tax-Exempt Fund with each other share of that
Class. Shares of Tax-Exempt Fund entitle their holders to one vote for
each dollar of net asset value held (number of shares owned times the net
asset value per share) and a proportionate fractional vote for each
fractional dollar amount held, except that each Class of shares has
exclusive voting rights on matters pertaining to its plan of distribution.
For additional information regarding shareholder voting rights, see "Forms
of Organization," page 10. Each share of each Class of Tax-Exempt Fund is
entitled to participate equally in dividends and other distributions and in
the proceeds of any liquidation, except that dividends of each Class may be
affected differently by the allocation of Class-specific expenses.
Newbury Street Trust does not hold annual meetings of shareholders. There
will normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office have
been elected by shareholders, at which time the Trustees then in office
will call a shareholders' meeting for the election of Trustees. Under the
1940 Act, shareholders of record of at least two-thirds of the outstanding
shares of an investment company may remove a trustee by votes cast in
person or by proxy at a meeting called for that purpose. The Trustees are
required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any Trustee when requested in writing to do so
by the shareholders of record holding at least 10% of the trust's
outstanding shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Municipal Money Market Portfolio's assets for Capital
Reserves Class Shares and the assumption of the liabilities of Municipal
Money Market Portfolio by Tax-Exempt Fund is intended to qualify for
federal income tax purposes as a tax-free reorganization under the Code.
With respect to the Reorganization, the participating Funds have received
an opinion from Kirkpatrick & Lockhart LLP, counsel to Municipal Money
Market Portfolio and Tax-Exempt Fund, substantially to the effect that:
(i) The acquisition by Tax-Exempt Fund of all of the assets of Municipal
Money Market Portfolio solely in exchange for Capital Reserves Class Shares
and the assumption by Tax-Exempt Fund of Municipal Money Market Portfolio's
liabilities, followed by the distribution by Municipal Money Market
Portfolio of Capital Reserves Class Shares to the shareholders of Municipal
Money Market Portfolio pursuant to the liquidation of Municipal Money
Market Portfolio and constructively in exchange for their Municipal Money
Market Portfolio shares, will constitute a reorganization within the
meaning of section 368(a)(1)(C) of the Code, and Municipal Money Market
Portfolio and Tax-Exempt Fund will each be "a party to a reorganization"
within the meaning of section 368(b) of the Code;
(ii) No gain or loss will be recognized by Municipal Money Market
Portfolio upon the transfer of all of its assets to Tax-Exempt Fund in
exchange solely for Capital Reserves Class Shares and Tax-Exempt Fund's
assumption of Municipal Money Market Portfolio's liabilities, followed by
Municipal Money Market Portfolio's subsequent distribution of those shares
to its shareholders in liquidation of Municipal Money Market Portfolio;
(iii) No gain or loss will be recognized by Tax-Exempt Fund upon the
receipt of the assets of Municipal Money Market Portfolio in exchange
solely for Capital Reserves Class Shares and its assumption of Municipal
Money Market Portfolio's liabilities;
(iv) The shareholders of Municipal Money Market Portfolio will recognize
no gain or loss upon the exchange of their Municipal Money Market Portfolio
shares solely for Capital Reserves Class Shares;
(v) The basis of Municipal Money Market Portfolio's assets in the hands
of Tax-Exempt Fund will be the same as the basis of those assets in the
hands of Municipal Money Market Portfolio immediately prior to the
Reorganization, and the holding period of those assets in the hands of
Tax-Exempt Fund will include the holding period of those assets in the
hands of Municipal Money Market Portfolio;
(vi) The basis of Municipal Money Market Portfolio shareholders in Capital
Reserves Class Shares will be the same as their basis in Municipal Money
Market Portfolio shares to be surrendered in exchange therefor; and
(vii) The holding period of the Capital Reserves Class Shares to be
received by the Municipal Money Market Portfolio shareholders will include
the period during which the Municipal Money Market Portfolio shares to be
surrendered in exchange therefor were held, provided such Municipal Money
Market Portfolio shares were held as capital assets by those shareholders
on the date of the Reorganization.
Shareholders of Municipal Money Market Portfolio should consult their tax
advisers regarding the effect, if any, of the proposed Reorganization in
light of their individual circumstances. Because the foregoing discussion
relates only to the federal income tax consequences of the Reorganization,
Municipal Money Market Portfolio shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.
CAPITALIZATION
The following table shows the capitalization of Municipal Money Market
Portfolio and Tax-Exempt Fund (then known as Daily Tax-Exempt Money Fund)
as of January 31, 1997 (unaudited) and on a pro forma combined basis
(unaudited) as of that date giving effect to the Reorganization.
NET ASSETS NAV PER SHARE SHARES OUTSTANDING
MUNICIPAL MONEY $151,649,209 $1.00 151,671,200
MARKET PORTFOLIO
TAX-EXEMPT FUND -
Daily Money Class $475,283,694 $1.00 475,389,822
Capital Reserves Class -- -- --
PRO FORMA COMBINED
FUND -
Daily Money Class $475,283,694 $1.00 475,389,822
Capital Reserves Class $151,649,209 $1.00 151,671,200
CONCLUSION
The Agreement and Plan of Reorganization and the transactions provided for
therein were approved by the Boards at a meeting held on March 20, 1997.
The Boards of Trustees of Daily Money Fund and Newbury Street Trust
determined that the proposed Reorganization is in the best interests of
shareholders of each Fund and that the interests of existing shareholders
of Municipal Money Market Portfolio and Tax-Exempt Fund would not be
diluted as a result of the Reorganization. In the event that the
Reorganization is not consummated, Municipal Money Market Portfolio will
continue to engage in business as a fund of a registered investment company
and the Board of Daily Money Fund will consider other proposals for the
reorganization or liquidation of the Fund.
ADDITIONAL INFORMATION ABOUT TAX-EXEMPT FUND
Tax-Exempt Fund currently pays FMR a monthly management fee at an annual
rate of 0.25% of its average net assets. This management fee rate was
approved by shareholders on May 9, 1997, and went into effect on May 31,
1997. Also, effective May 31, 1997, under a new Distribution and Service
Plan adopted pursuant to Rule 12b-1 under the 1940 Act, Tax-Exempt Fund -
Daily Money Class began paying FDC a distribution fee of 0.25% to cover
most of the Class's distribution-related costs; in connection with this
change, Tax-Exempt Fund's management fee was reduced from 0.50% to 0.25%.
The Prospectus for Tax-Exempt Fund - Daily Money Class, dated May 30, 1997,
is enclosed with this Proxy Statement and is incorporated herein by
reference. The Prospectus contains additional information about Tax-Exempt
Fund including its investment objective and policies, investment adviser,
advisory fees and expenses, and organization. The financial highlights
table that follows is for Tax-Exempt Fund - Daily Money Class. Tax-Exempt
Fund - Capital Reserves Class is expected to commence operations on October
31, 1997.
TAX-EXEMPT FUND: DAILY MONEY CLASS (FORMERLY DAILY TAX-EXEMPT MONEY FUND)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended 1997D 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
October 31
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from .015 .030 .033 .022 .021 .029 .044 .053 .056 .045 .039
Investment
Operations
Net interest
income
Less (.015) (.030) (.033) (.022) (.021) (.029) (.044) (.053) (.056) (.045) (.039)
Distributions
From net
interest income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end
of period
Total returnA 1.47% 3.02% 3.36% 2.21% 2.11% 2.93% 4.46% 5.38% 5.72% 4.55% 3.93%
Net assets, end $ 434 $ 500 $ 559 $ 454 $ 539 $ 485 $ 304 $ 259 $ 204 $ 212 $ 288
of period
(In millions)
Ratio of .65%B,C .65%B .65%B .65%B .61% .63% .65%B .65%B .64%B .70%B .63%
expenses
to average
net assets
Ratio of net 2.95%C 2.98% 3.31% 2.17% 2.09% 2.86% 4.29% 5.32% 5.64% 4.37% 3.87%
interest
income to
average
net assets
</TABLE>
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
C ANNUALIZED
D SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
MISCELLANEOUS
LEGAL MATTERS. Certain legal matters in connection with the issuance of
Capital Reserves Class Shares have been passed upon by Kirkpatrick &
Lockhart LLP, counsel to Newbury Street Trust.
EXPERTS. The audited financial statements of Municipal Money Market
Portfolio, incorporated by reference into the Statement of Additional
Information, have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report thereon is included in the Annual Report to
Shareholders for the fiscal year ended July 31, 1996. The audited financial
statements of Tax-Exempt Fund, incorporated by reference into the Statement
of Additional Information, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual
Report to Shareholders for the fiscal year ended October 31, 1996. The
financial statements audited by Coopers & Lybrand L.L.P. and by Price
Waterhouse LLP have been incorporated by reference in reliance on their
reports given on their authority as experts in auditing and accounting.
Unaudited financial statements for Municipal Money Market Portfolio for the
six-month period ended January 31, 1997, and unaudited financial statements
for Tax-Exempt Fund for the six-month period ended April 30, 1997, are also
incorporated by reference into the Statement of Additional Information.
AVAILABLE INFORMATION. Daily Money Fund and Newbury Street Trust are
subject to the informational requirements of the Securities Exchange Act of
1934 and the 1940 Act, and in accordance therewith file reports, proxy
material, and other information with the SEC. Such reports, proxy material,
and other information can be inspected and copied at the Public Reference
Facilities maintained by the SEC at 450 Fifth Street, N.W., Washington D.C.
20549, and at the Northeast Regional Office of the SEC, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material also
can be obtained from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington D.C. 20549, at prescribed rates.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES.
Please advise Daily Money Fund, in care of Fidelity Investments
Institutional Operations Company, Inc., 82 Devonshire Street, Boston,
Massachusetts 02109, whether other persons are beneficial owners of shares
for which proxies are being solicited and, if so, the number of copies of
this Proxy Statement you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
Exhibit 1
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of
the 21st day of July, 1997, by and between Daily Money Fund, a Delaware
business trust, on behalf of Capital Reserves: Municipal Money Market
Portfolio (Municipal Money Market Portfolio), a series of Daily Money
Fund, and Newbury Street Trust, a Delaware business trust, on behalf of
Tax-Exempt Fund (Tax-Exempt Fund), a series of Newbury Street Trust. Daily
Money Fund and Newbury Street Trust may be referred to herein collectively
as the "Trusts" or each individually as a "Trust." Tax-Exempt Fund and
Municipal Money Market Portfolio may be referred to herein collectively as
the "Funds" or each individually as a "Fund."
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the Code). The reorganization will
comprise: (a) the transfer of all of the assets of Municipal Money Market
Portfolio to Tax-Exempt Fund solely in exchange for Capital Reserves Class
shares of beneficial interest in Tax-Exempt Fund (the Capital Reserves
Class Shares) and the assumption by Tax-Exempt Fund of Municipal Money
Market Portfolio's liabilities; and (b) the constructive distribution of
such shares by Municipal Money Market Portfolio PRO RATA to its
shareholders in complete liquidation and termination of Municipal Money
Market Portfolio in exchange for all of Municipal Money Market Portfolio's
outstanding shares. The foregoing transactions are referred to herein as
the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF MUNICIPAL MONEY MARKET PORTFOLIO.
Municipal Money Market Portfolio represents and warrants to and agrees with
Tax-Exempt Fund that:
(a) Municipal Money Market Portfolio is a series of Daily Money Fund, a
business trust duly organized, validly existing, and in good standing under
the laws of the State of Delaware, and has the power to own all of its
properties and assets and to carry out its obligations under this
Agreement. It has all necessary federal, state, and local authorizations
to carry on its business as now being conducted and to carry out this
Agreement;
(b) Daily Money Fund is an open-end, management investment company duly
registered under the Investment Company Act of 1940, as amended (the 1940
Act), and such registration is in full force and effect;
(c) The Prospectus, dated November 29, 1996 (as supplemented March 21,
1997), and the Statement of Additional Information, dated November 29, 1996
(as supplemented January 2, 1997), of Municipal Money Market Portfolio
previously furnished to Tax-Exempt Fund, did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Municipal Money Market Portfolio,
threatened against Municipal Money Market Portfolio which assert liability
on the part of Municipal Money Market Portfolio. Municipal Money Market
Portfolio knows of no facts which might form the basis for the institution
of such proceedings;
(e) Municipal Money Market Portfolio is not in, and the execution,
delivery, and performance of this Agreement will not result in, violation
of any provision of its Trust Instrument or By-laws, or, to the knowledge
of Municipal Money Market Portfolio, of any agreement, indenture,
instrument, contract, lease, or other undertaking to which Municipal Money
Market Portfolio is a party or by which Municipal Money Market Portfolio is
bound or result in the acceleration of any obligation or the imposition of
any penalty under any agreement, judgment or decree to which Municipal
Money Market Portfolio is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of Operations,
the Statement of Changes in Net Assets, the Financial Highlights, and the
Schedule of Investments (including market values) of Municipal Money Market
Portfolio at July 31, 1996, have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and have been furnished to Tax-Exempt Fund
together with such unaudited financial statements and schedule of
investments (including market values) for the six month period ended
January 31, 1997. Said Statement of Assets and Liabilities and Schedule of
Investments fairly present the Fund's financial position as of such date
and said Statement of Operations, Statement of Changes in Net Assets, and
Financial Highlights fairly reflect its results of operations, changes in
financial position, and financial highlights for the periods covered
thereby in conformity with generally accepted accounting principles
consistently applied;
(g) Municipal Money Market Portfolio has no known liabilities of a material
nature, contingent or otherwise, other than those shown as belonging to it
on its statement of assets and liabilities as of July 31, 1996, and those
incurred in the ordinary course of Municipal Money Market Portfolio's
business as an investment company since July 31, 1996;
(h) The registration statement (Registration Statement) filed with the
Securities and Exchange Commission (Commission) by Newbury Street Trust on
Form N-14 relating to the Capital Reserves Class Shares issuable hereunder
and the proxy statement of Municipal Money Market Portfolio included
therein (Proxy Statement), on the effective date of the Registration
Statement and insofar as they relate to Municipal Money Market Portfolio
(i) comply in all material respects with the provisions of the Securities
Act of 1933, as amended (the 1933 Act), the Securities Exchange Act of
1934, as amended (the 1934 Act), and the 1940 Act, and the rules and
regulations thereunder, and (ii) do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and at
the time of the shareholders' meeting referred to in Section 7 and on the
Closing Date, the prospectus contained in the Registration Statement of
which the Proxy Statement is a part (the Prospectus), as amended or
supplemented, insofar as it relates to Municipal Money Market Portfolio,
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(i) All material contracts and commitments of Municipal Money Market
Portfolio (other than this Agreement) will be terminated without liability
to Municipal Money Market Portfolio prior to the Closing Date (other than
those made in connection with redemptions of shares and the purchase and
sale of portfolio securities made in the ordinary course of business);
(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Municipal Money
Market Portfolio of the transactions contemplated by this Agreement, except
such as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act,
and state securities or blue sky laws (which term as used herein shall
include the District of Columbia and Puerto Rico);
(k) Municipal Money Market Portfolio has filed or will file all federal and
state tax returns which, to the knowledge of Municipal Money Market
Portfolio's officers, are required to be filed by Municipal Money Market
Portfolio and has paid or will pay all federal and state taxes shown to be
due on said returns or provision shall have been made for the payment
thereof, and, to the best of Municipal Money Market Portfolio's knowledge,
no such return is currently under audit and no assessment has been asserted
with respect to such returns;
(l) Municipal Money Market Portfolio has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company for all prior taxable years and intends to meet such
requirements for its current taxable year ending on the Closing Date (as
defined in Section 6);
(m) All of the issued and outstanding shares of Municipal Money Market
Portfolio are, and at the Closing Date will be, duly and validly issued and
outstanding and fully paid and nonassessable as a matter of Delaware law
(except as disclosed in the Fund's Statement of Additional Information),
and have been offered for sale in conformity with all applicable federal
securities laws. All of the issued and outstanding shares of Municipal
Money Market Portfolio will, at the Closing Date, be held by the persons
and in the amounts set forth in the list of shareholders submitted to
Tax-Exempt Fund in accordance with this Agreement;
(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, Municipal Money Market Portfolio will have the full right,
power, and authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of Municipal Money Market Portfolio to be
transferred to Tax-Exempt Fund pursuant to this Agreement. At the Closing
Date, subject only to the delivery of Municipal Money Market Portfolio's
portfolio securities and any such other assets as contemplated by this
Agreement, Tax-Exempt Fund will acquire Municipal Money Market Portfolio's
portfolio securities and any such other assets subject to no encumbrances,
liens, or security interests (except for those that may arise in the
ordinary course and are disclosed to Tax-Exempt Fund) and without any
restrictions upon the transfer thereof; and
(o) The execution, performance, and delivery of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of Municipal Money Market Portfolio, and this Agreement
constitutes a valid and binding obligation of Municipal Money Market
Portfolio enforceable in accordance with its terms, subject to shareholder
approval.
2. REPRESENTATIONS AND WARRANTIES OF TAX-EXEMPT FUND. Tax-Exempt Fund
represents and warrants to and agrees with Municipal Money Market Portfolio
that:
(a) Tax-Exempt Fund is a series of Newbury Street Trust, a business trust
duly organized, validly existing, and in good standing under the laws of
the State of Delaware, and has the power to own all of its properties and
assets and to carry out its obligations under this Agreement. It has all
necessary federal, state, and local authorizations to carry on its business
as now being conducted and to carry out this Agreement;
(b) Newbury Street Trust is an open-end, management investment company
duly registered under the 1940 Act, and such registration is in full force
and effect;
(c) The Prospectus and the Statement of Additional Information of
Tax-Exempt Fund, both dated May 30, 1997, previously furnished to Municipal
Money Market Portfolio did not and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Tax-Exempt Fund, threatened against
Tax-Exempt Fund which assert liability on the part of Tax-Exempt Fund.
Tax-Exempt Fund knows of no facts which might form the basis for the
institution of such proceedings;
(e) Tax-Exempt Fund is not in, and the execution, delivery, and performance
of this Agreement will not result in, violation of any provision of its
Trust Instrument or By-laws, or, to the knowledge of Tax-Exempt Fund, of
any agreement, indenture, instrument, contract, lease, or other undertaking
to which Tax-Exempt Fund is a party or by which Tax-Exempt Fund is bound or
result in the acceleration of any obligation or the imposition of any
penalty under any agreement, judgment, or decree to which Tax-Exempt Fund
is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of Operations,
the Statement of Changes in Net Assets, the Financial Highlights, and the
Schedule of Investments (including market values) of Tax-Exempt Fund at
October 31, 1996, have been audited by Price Waterhouse LLP, independent
accountants, and have been furnished to Municipal Money Market Portfolio
together with such unaudited financial statements and schedule of
investments (including market values) for the six month period ended April
30, 1997. Said Statement of Assets and Liabilities and Schedule of
Investments fairly present the Fund's financial position as of such date
and said Statement of Operations, Statement of Changes in Net Assets, and
Financial Highlights fairly reflect its results of operations, changes in
financial position, and financial highlights for the periods covered
thereby in conformity with generally accepted accounting principles
consistently applied;
(g) Tax-Exempt Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of October 31, 1996 and those
incurred in the ordinary course of Tax-Exempt Fund's business as an
investment company since October 31, 1996;
(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Tax-Exempt Fund
of the transactions contemplated by this Agreement, except such as have
been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and state
securities or blue sky laws (which term as used herein shall include the
District of Columbia and Puerto Rico);
(i) Tax-Exempt Fund has filed or will file all federal and state tax
returns which, to the knowledge of Tax-Exempt Fund's officers, are required
to be filed by Tax-Exempt Fund and has paid or will pay all federal and
state taxes shown to be due on said returns or provision shall have been
made for the payment thereof, and, to the best of Tax-Exempt Fund's
knowledge, no such return is currently under audit and no assessment has
been asserted with respect to such returns;
(j) Tax-Exempt Fund has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment company for all
prior taxable years and intends to meet such requirements for its current
taxable year ending on October 31, 1997;
(k) By the Closing Date, the Capital Reserves Class Shares to be issued to
Municipal Money Market Portfolio will have been duly authorized and, when
issued and delivered pursuant to this Agreement, will be legally and
validly issued and will be fully paid and nonassessable (except as
disclosed in Tax-Exempt Fund's Statement of Additional Information) by
Tax-Exempt Fund, and no shareholder of Tax-Exempt Fund will have any
preemptive right of subscription or purchase in respect thereof;
(l) The execution, performance, and delivery of this Agreement will have
been duly authorized prior to the Closing Date by all necessary corporate
action on the part of Tax-Exempt Fund, and this Agreement constitutes a
valid and binding obligation of Tax-Exempt Fund enforceable in accordance
with its terms, subject to approval by the shareholders of Municipal Money
Market Portfolio;
(m) The Registration Statement and the Proxy Statement, on the effective
date of the Registration Statement and insofar as they relate to Tax-Exempt
Fund, (i) will comply in all material respects with the provisions of the
1933 Act, the 1934 Act, and the 1940 Act, and the rules and regulations
thereunder, and (ii) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the time of
the shareholders' meeting referred to in Section 7 and on the Closing Date,
the Prospectus, as amended or supplemented, insofar as it relates to
Tax-Exempt Fund, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading;
(n) The issuance of the Capital Reserves Class Shares pursuant to this
Agreement will be in compliance with all applicable federal securities
laws; and
(o) All of the issued and outstanding shares of beneficial interest of
Tax-Exempt Fund have been offered for sale and sold in conformity with the
federal securities laws.
3. REORGANIZATION.
(a) Subject to the requisite approval of the shareholders of Municipal
Money Market Portfolio and to the other terms and conditions contained
herein, Municipal Money Market Portfolio agrees to assign, sell, convey,
transfer, and deliver to Tax-Exempt Fund as of the Closing Date all of the
assets of Municipal Money Market Portfolio of every kind and nature
existing on the Closing Date. Tax-Exempt Fund agrees in exchange therefor:
(i) to assume all of Municipal Money Market Portfolio's liabilities
existing on or after the Closing Date, whether or not determinable on the
Closing Date, and (ii) to issue and deliver to Municipal Money Market
Portfolio the number of full and fractional Capital Reserves Class Shares
equal to the number of full and fractional shares of Municipal Money Market
Portfolio then outstanding.
(b) The assets of Municipal Money Market Portfolio to be acquired by
Tax-Exempt Fund shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest or dividends
receivables), claims, choses in action, and other property owned by
Municipal Money Market Portfolio, and any deferred or prepaid expenses
shown as an asset on the books of Municipal Money Market Portfolio on the
Closing Date. Municipal Money Market Portfolio will pay or cause to be paid
to Tax-Exempt Fund any dividend or interest payments received by it on or
after the Closing Date with respect to the assets transferred to Tax-Exempt
Fund hereunder, and Tax-Exempt Fund will retain any dividend or interest
payments received by it after the Valuation Time with respect to the assets
transferred hereunder without regard to the payment date thereof.
(c) The liabilities of Municipal Money Market Portfolio to be assumed by
Tax-Exempt Fund shall include (except as otherwise provided for herein) all
of Municipal Money Market Portfolio's liabilities, debts, obligations, and
duties, of whatever kind or nature, whether absolute, accrued, contingent,
or otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in this Agreement. Notwithstanding the foregoing,
Municipal Money Market Portfolio agrees to use its best efforts to
discharge all of its known liabilities prior to the Closing Date, other
than liabilities incurred in the ordinary course of business.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable (the Liquidation Date), Municipal Money Market
Portfolio will constructively distribute PRO RATA to its shareholders of
record, determined as of the Valuation Time on the Closing Date, the
Capital Reserves Class Shares in exchange for such shareholders' shares of
beneficial interest in Municipal Money Market Portfolio and Municipal Money
Market Portfolio will be liquidated in accordance with Daily Money Fund's
Trust Instrument. Such distribution shall be accomplished by the Funds'
transfer agent opening accounts on Tax-Exempt Fund's share transfer books
in the names of the Municipal Money Market Portfolio shareholders and
transferring the Capital Reserves Class Shares thereto. Each Municipal
Money Market Portfolio shareholder's account shall be credited with the
respective PRO RATA number of full and fractional (rounded to the third
decimal place) Capital Reserves Class Shares due that shareholder. All
outstanding Municipal Money Market Portfolio shares, including any
represented by certificates, shall simultaneously be canceled on Municipal
Money Market Portfolio's share transfer records. Tax-Exempt Fund shall not
issue certificates representing the Capital Reserves Class Shares in
connection with the Reorganization.
(e) Any reporting responsibility of Municipal Money Market Portfolio is
and shall remain its responsibility up to and including the date on which
it is terminated.
(f) Any transfer taxes payable upon issuance of the Capital Reserves Class
Shares in a name other than that of the registered holder on Municipal
Money Market Portfolio's books of the Municipal Money Market Portfolio
shares constructively exchanged for the Capital Reserves Class Shares shall
be paid by the person to whom such Capital Reserves Class Shares are to be
issued, as a condition of such transfer.
4. VALUATION.
(a) The Valuation Time shall be 4:00 p.m. Eastern time on the Closing
Date, or such other date as may be mutually agreed upon in writing by the
parties hereto (the Valuation Time).
(b) On the Closing Date, Tax-Exempt Fund will deliver to Municipal Money
Market Portfolio the number of full and fractional Capital Reserves Class
Shares equal to the number of full and fractional shares of Municipal Money
Market Portfolio then outstanding.
(c) The share price of the Capital Reserves Class Shares to be delivered
to Municipal Money Market Portfolio, the value of the assets of Municipal
Money Market Portfolio transferred hereunder, and the value of the
liabilities of Municipal Money Market Portfolio to be assumed hereunder
shall in each case be determined as of the Valuation Time.
(d) The share price of the Capital Reserves Class Shares shall be computed
in the manner set forth in the then-current Tax-Exempt Fund - Capital
Reserves Class Prospectus and Statement of Additional Information, and the
value of the assets and liabilities of Municipal Money Market Portfolio
shall be computed in the manner set forth in the then-current Municipal
Money Market Portfolio Prospectus and Statement of Additional Information.
(e) All computations pursuant to this Section shall be made by or under
the direction of Fidelity Service Company, Inc., a wholly owned subsidiary
of FMR Corp., in accordance with its regular practice as pricing agent for
Municipal Money Market Portfolio and Tax-Exempt Fund.
5. FEES; EXPENSES.
(a) Municipal Money Market Portfolio shall be responsible for all
expenses, fees and other charges, subject to FMR's voluntary expense
limitation, if applicable. Any merger-related expenses which may be
attributable to Tax-Exempt Fund will be borne by Tax-Exempt Fund, subject
to FMR's voluntary expense limitation, if applicable.
(b) Each of Tax-Exempt Fund and Municipal Money Market Portfolio represents
that there is no person who has dealt with it who by reason of such
dealings is entitled to any broker's or finder's or other similar fee or
commission arising out of the transactions contemplated by this Agreement.
6. CLOSING DATE.
(a) The Reorganization, together with related acts necessary to consummate
the same (the Closing), unless otherwise provided herein, shall occur at
the principal office of the Trusts, 82 Devonshire Street, Boston,
Massachusetts, as of the Valuation Time on October 30, 1997, or at some
other time, date, and place agreed to by Municipal Money Market Portfolio
and Tax-Exempt Fund (the Closing Date).
(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading thereon
is restricted, or (iii) trading or the reporting of trading on said market
or elsewhere is disrupted, all so that accurate appraisal of the total net
asset value of Municipal Money Market Portfolio and the net asset value per
share of Tax-Exempt Fund is impracticable, the Valuation Time and the
Closing Date shall be postponed until the first business day after the day
when such trading shall have been fully resumed and such reporting shall
have been restored, or such other date as the parties may agree.
7. SHAREHOLDER MEETING AND TERMINATION OF MUNICIPAL MONEY MARKET
PORTFOLIO.
(a) Municipal Money Market Portfolio agrees to call a meeting of its
shareholders after the effective date of the Registration Statement, to
consider transferring its assets to Tax-Exempt Fund as herein provided,
adopting this Agreement, and authorizing the liquidation of Municipal Money
Market Portfolio.
(b) Municipal Money Market Portfolio agrees that as soon as reasonably
practicable after distribution of the Capital Reserves Class Shares,
Municipal Money Market Portfolio shall be terminated as a series of Daily
Money Fund pursuant to its Trust Instrument, any further actions shall be
taken in connection therewith as required by applicable law, and on and
after the Closing Date Municipal Money Market Portfolio shall not conduct
any business except in connection with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF TAX-EXEMPT FUND. The obligations of
Tax-Exempt Fund hereunder shall be subject to the following conditions:
(a) That Municipal Money Market Portfolio furnishes to Tax-Exempt Fund a
statement, dated as of the Closing Date, signed by an officer of Daily
Money Fund, certifying that as of the Valuation Time and the Closing Date
all representations and warranties of Municipal Money Market Portfolio made
in this Agreement are true and correct in all material respects and that
Municipal Money Market Portfolio has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such dates;
(b) That Municipal Money Market Portfolio furnishes Tax-Exempt Fund with
copies of the resolutions, certified by an officer of Daily Money Fund,
evidencing the adoption of this Agreement and the approval of the
transactions contemplated herein by the requisite vote of the holders of
the outstanding shares of beneficial interest of Municipal Money Market
Portfolio;
(c) That, on or prior to the Closing Date, Municipal Money Market
Portfolio will declare one or more dividends or distributions which,
together with all previous such dividends or distributions attributable to
its current taxable year, shall have the effect of distributing to the
shareholders of Municipal Money Market Portfolio substantially all of
Municipal Money Market Portfolio's investment company taxable income and
all of its net realized capital gain, if any, as of the Closing Date;
(d) That Municipal Money Market Portfolio shall deliver to Tax-Exempt Fund
at the Closing a statement of its assets and liabilities, together with a
list of its portfolio securities showing each such security's adjusted tax
basis and holding period by lot, with values determined as provided in
Section 4 of this Agreement, all as of the Valuation Time, certified on
Municipal Money Market Portfolio's behalf by its Treasurer or Assistant
Treasurer;
(e) That Municipal Money Market Portfolio's custodian shall deliver to
Tax-Exempt Fund a certificate identifying the assets of Municipal Money
Market Portfolio held by such custodian as of the Valuation Time on the
Closing Date and stating that as of the Valuation Time: (i) the assets
held by the custodian will be transferred to Tax-Exempt Fund; (ii)
Municipal Money Market Portfolio's assets have been duly endorsed in proper
form for transfer in such condition as to constitute good delivery thereof;
and (iii) to the best of the custodian's knowledge, all necessary taxes in
conjunction with the delivery of the assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made;
(f) That Municipal Money Market Portfolio's transfer agent shall deliver to
Tax-Exempt Fund at the Closing a certificate setting forth the number of
shares of Municipal Money Market Portfolio outstanding as of the Valuation
Time and the name and address of each holder of record of any such shares
and the number of shares held of record by each such shareholder;
(g) That Municipal Money Market Portfolio calls a meeting of its
shareholders to be held after the effective date of the Registration
Statement, to consider transferring its assets to Tax-Exempt Fund as herein
provided, adopting this Agreement, and authorizing the liquidation and
termination of Municipal Money Market Portfolio;
(h) That Municipal Money Market Portfolio delivers to Tax-Exempt Fund a
certificate of an officer of Daily Money Fund, dated as of the Closing
Date, that there has been no material adverse change in Municipal Money
Market Portfolio's financial position since July 31, 1996, other than
changes in the market value of its portfolio securities, or changes due to
net redemptions of its shares, dividends paid, or losses from operations;
and
(i) That all of the issued and outstanding shares of beneficial interest
of Municipal Money Market Portfolio shall have been offered for sale and
sold in conformity with all applicable state securities laws and, to the
extent that any audit of the records of Municipal Money Market Portfolio or
its transfer agent by Tax-Exempt Fund or its agents shall have revealed
otherwise, Municipal Money Market Portfolio shall have taken all actions
that in the opinion of Tax-Exempt Fund are necessary to remedy any prior
failure on the part of Municipal Money Market Portfolio to have offered for
sale and sold such shares in conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF MUNICIPAL MONEY MARKET PORTFOLIO.
(a) That Tax-Exempt Fund shall have executed and delivered to Municipal
Money Market Portfolio an Assumption of Liabilities, certified by an
officer of Newbury Street Trust, dated as of the Closing Date pursuant to
which Tax-Exempt Fund will assume all of the liabilities of Municipal Money
Market Portfolio existing at the Valuation Time in connection with the
transactions contemplated by this Agreement;
(b) That Tax-Exempt Fund furnishes to Municipal Money Market Portfolio a
statement, dated as of the Closing Date, signed by an officer of Newbury
Street Trust, certifying that as of the Valuation Time and the Closing Date
all representations and warranties of Tax-Exempt Fund made in this
Agreement are true and correct in all material respects, and Tax-Exempt
Fund has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such dates; and
(c) That Municipal Money Market Portfolio shall have received an opinion
of Kirkpatrick & Lockhart LLP, counsel to Municipal Money Market Portfolio
and Tax-Exempt Fund, to the effect that the Capital Reserves Class Shares
are duly authorized and upon delivery to Municipal Money Market Portfolio
as provided in this Agreement will be validly issued and will be fully paid
and nonassessable by Tax-Exempt Fund (except as disclosed in Tax-Exempt
Fund's Statement of Additional Information) and no shareholder of
Tax-Exempt Fund has any preemptive right of subscription or purchase in
respect thereof.
10. CONDITIONS TO OBLIGATIONS OF TAX-EXEMPT FUND AND MUNICIPAL MONEY
MARKET PORTFOLIO.
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of the
holders of the outstanding shares of beneficial interest of Municipal Money
Market Portfolio;
(b) That all consents of other parties and all other consents, orders, and
permits of federal, state, and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities authorities,
including "no action" positions of such federal or state authorities)
deemed necessary by Tax-Exempt Fund or Municipal Money Market Portfolio to
permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain any such consent, order, or permit would not involve a risk of a
material adverse effect on the assets or properties of Tax-Exempt Fund or
Municipal Money Market Portfolio, provided that either party hereto may for
itself waive any of such conditions;
(c) That all proceedings taken by either Fund in connection with the
transactions contemplated by this Agreement and all documents incidental
thereto shall be satisfactory in form and substance to it and its counsel,
Kirkpatrick & Lockhart LLP;
(d) That there shall not be any material litigation pending with respect
to the matters contemplated by this Agreement;
(e) That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of Tax-Exempt Fund and Municipal Money
Market Portfolio, threatened by the Commission; and
(f) That Tax-Exempt Fund and Municipal Money Market Portfolio shall have
received an opinion of Kirkpatrick & Lockhart LLP satisfactory to
Tax-Exempt Fund and Municipal Money Market Portfolio that for federal
income tax purposes:
(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and Municipal Money Market Portfolio and
Tax-Exempt Fund will each be parties to the Reorganization under section
368(b) of the Code;
(ii) No gain or loss will be recognized by Municipal Money Market
Portfolio upon the transfer of all of its assets to Tax-Exempt Fund in
exchange solely for the Capital Reserves Class Shares and the assumption of
Municipal Money Market Portfolio's liabilities followed by the distribution
of those Capital Reserves Class Shares to the shareholders of Municipal
Money Market Portfolio in liquidation of Municipal Money Market Portfolio;
(iii) No gain or loss will be recognized by Tax-Exempt Fund on the
receipt of Municipal Money Market Portfolio's assets in exchange solely for
the Capital Reserves Class Shares and the assumption of Municipal Money
Market Portfolio's liabilities;
(iv) The basis of Municipal Money Market Portfolio's assets in the hands
of Tax-Exempt Fund will be the same as the basis of such assets in
Municipal Money Market Portfolio's hands immediately prior to the
Reorganization;
(v) Tax-Exempt Fund's holding period in the assets to be received from
Municipal Money Market Portfolio will include Municipal Money Market
Portfolio's holding period in such assets;
(vi) A Municipal Money Market Portfolio shareholder will recognize no
gain or loss on the exchange of his or her shares of beneficial interest in
Municipal Money Market Portfolio for the Capital Reserves Class Shares in
the Reorganization;
(vii) A Municipal Money Market Portfolio shareholder's basis in the
Capital Reserves Class Shares to be received by him or her will be the same
as his or her basis in the Municipal Money Market Portfolio shares
exchanged therefor; and
(viii) A Municipal Money Market Portfolio shareholder's holding period
for his or her Capital Reserves Class Shares will include the holding
period of Municipal Money Market Portfolio shares exchanged, provided that
those Municipal Money Market Portfolio shares were held as capital assets
on the date of the Reorganization.
Notwithstanding anything herein to the contrary, each of Municipal Money
Market Portfolio and Tax-Exempt Fund may not waive the conditions set forth
in this subsection 10(f).
11. COVENANTS OF TAX-EXEMPT FUND AND MUNICIPAL MONEY MARKET PORTFOLIO.
(a) Tax-Exempt Fund and Municipal Money Market Portfolio each covenants to
operate its respective business in the ordinary course between the date
hereof and the Closing Date, it being understood that such ordinary course
of business will include the payment of customary dividends and
distributions;
(b) Municipal Money Market Portfolio covenants that it is not acquiring
the Capital Reserves Class Shares for the purpose of making any
distribution other than in accordance with the terms of this Agreement;
(c) Municipal Money Market Portfolio covenants that it will assist
Tax-Exempt Fund in obtaining such information as Tax-Exempt Fund reasonably
requests concerning the beneficial ownership of Municipal Money Market
Portfolio's shares; and
(d) Municipal Money Market Portfolio covenants that its liquidation and
termination will be effected in the manner provided in its Trust Instrument
in accordance with applicable law and after the Closing Date, Municipal
Money Market Portfolio will not conduct any business except in connection
with its liquidation and termination.
12. TERMINATION; WAIVER.
Tax-Exempt Fund and Municipal Money Market Portfolio may terminate this
Agreement by mutual agreement. In addition, either Tax-Exempt Fund or
Municipal Money Market Portfolio may at its option terminate this Agreement
at or prior to the Closing Date because:
(i) of a material breach by the other of any representation, warranty, or
agreement contained herein to be performed at or prior to the Closing Date;
or
(ii) a condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it
will not or cannot be met.
In the event of any such termination, there shall be no liability for
damages on the part of Municipal Money Market Portfolio or Tax-Exempt Fund,
or their respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter hereof,
constitutes the only understanding with respect to such subject matter, may
not be changed except by a letter of agreement signed by each party hereto
and shall be construed in accordance with and governed by the laws of the
State of Delaware.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Tax-Exempt Fund or Municipal
Money Market Portfolio; provided, however, that following the shareholders'
meeting called by Municipal Money Market Portfolio pursuant to Section 7 of
this Agreement, no such amendment may have the effect of changing the
provisions for determining the number of Capital Reserves Class Shares to
be paid to Municipal Money Market Portfolio shareholders under this
Agreement to the detriment of such shareholders without their further
approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on the
interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the Agreement,
or in any document delivered pursuant hereto or in connection herewith,
shall survive the consummation of the transactions contemplated hereunder.
14. TRUST INSTRUMENTS.
A copy of the Trust Instrument of each Trust is on file with the Secretary
of State of the State of Delaware, and notice is hereby given that this
instrument is executed on behalf of the Trustees of each Fund as trustees
and not individually and that the obligations of each Fund under this
instrument are not binding upon any of such Fund's Trustees, officers, or
shareholders individually but are binding only upon the assets and property
of such Fund. Each Fund agrees that its obligations hereunder apply only
to such Fund and not to its shareholders individually or to the Trustees of
such Fund.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
of any rights or obligations hereunder shall be made by any party without
the written consent of the other parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any
person, firm, or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason
of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by an appropriate officer.
SIGNATURE LINES OMITTED
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
a fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated May 30, 1997. The SAI
has been filed with the Securities and Exchange Commission (SEC) and is
available along with other related materials on the SEC's Internet Web site
(http:/www.sec.gov). The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For a free copy of either document,
contact Fidelity Client Services at 1-800-843-3001, or your investment
professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DMFI-pro-0597
TREASURY FUND -
DAILY MONEY CLASS
(FORMERLY U.S. TREASURY PORTFOLIO -
INITIAL CLASS)
(fund number 058)
PRIME FUND -
DAILY MONEY CLASS
(FORMERLY MONEY MARKET PORTFOLIO -
INITIAL CLASS)
(fund number 083)
TAX-EXEMPT FUND -
DAILY MONEY CLASS
(FORMERLY DAILY TAX-EXEMPT MONEY FUND - INITIAL CLASS)
(fund number 084)
PROSPECTUS
DATED MAY 30, 1997
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Initial Class's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's overall
approach to investing.
BREAKDOWN OF EXPENSES How operating costs are
calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and making
additional investments.
HOW TO SELL SHARES Taking money out and closing your
account.
INVESTOR SERVICES Services to help you manage your
account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and the
timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers investors a convenient way to invest in a professionally
managed portfolio of money market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Treasury Fund
offers an added measure of safety with its focus on U.S. Treasury
securities.
These funds do not constitute a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investments. Each fund offers free checkwriting to give you easy access to
your money.
Treasury Fund is composed of two classes of shares. Both classes of the
fund have a common investment objective and investment portfolio. Daily
Money Class shares do not have a sales charge, but do pay a distribution
fee. Advisor B Class shares (Class B) do not have a front-end sales charge,
but do have a contingent deferred sales charge (CDSC) and pay a
distribution fee and a shareholder service fee. Class B shares may be
purchased directly only in connection with the Fidelity Advisor Systematic
Exchange Program (the Program) for purposes of exchanging into Class B of
the Fidelity Advisor Funds. Performance of one class of shares of the fund
may be different from the performance of another class of shares because of
different sales charges and expenses. For example, because Daily Money
Class shares do not have a sales charge, have a lower distribution fee and
do not have a shareholder service fee, Daily Money Class shares are
expected to have a higher total return than Class B shares. You may obtain
more information about Class B shares, which are not offered through this
prospectus, from your investment professional or by calling Fidelity Client
Services at 1-800-843-3001.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or
sell Daily Money Class shares of a fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Maximum sales charge on purchases and reinvested distributions None
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
</TABLE>
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). Each
fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and financial
reports.
12b-1 fees are paid by the Daily Money Class of each fund to the
distributor for services and expenses in connection with the distribution
of Daily Money Class shares of each fund.
Daily Money Class's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page ).
The following figures are based on historical expenses, adjusted to reflect
current fees, of Daily Money Class of each fund and are calculated as a
percentage of average net assets of Daily Money Class of each fund.
TREASURY FUND - DAILY MONEY CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.25
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.65
%
PRIME FUND - DAILY MONEY CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.25
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.65
%
TAX-EXEMPT FUND - DAILY MONEY CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.25
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.65
%
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Daily Money Class shares, assuming a 5% annual return and
full redemption at the end of each time period:
1 Year 3 5 10
Years Years Years
Treasury Fund $ 7 $ 21 $ 36 $ 81
Prime Fund $ 7 $ 21 $ 36 $ 81
Tax-Exempt Fund $ 7 $ 21 $ 36 $ 81
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Daily Money Class of each fund to
the extent that total operating expenses exceed 0.65% of its average net
assets. If these agreements were not in effect, other expenses and total
operating expenses, as a percentage of average net assets, of Daily Money
Class of each fund would have been, 0.19% and 0.69% for Treasury Fund;
0.28% and 0.78% for Prime Fund; and 0.25% and 0.75% for Tax-Exempt Fund.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Treasury Fund and Prime
Fund have been audited by Coopers & Lybrand L.L.P., independent
accountants. The financial highlights table that follows for Tax-Exempt
Fund has been audited by Price Waterhouse LLP., independent accountants.
The funds' financial highlights, financial statements, and reports of the
auditors are included in the funds' Annual Report, and are incorporated by
reference into (are legally a part of) the funds' SAI. Contact Fidelity
Client Services (Client Services) or your investment professional for a
free copy of an Annual Report or the SAI.
TREASURY FUND - DAILY MONEY CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended July 31 1996A 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from
Investment Operations
Net interest income .012 .049 .049 .029 .027 .042 .065 .079 .083 .063 .057
Less Distributions
From net interest (.012) (.049) (.049) (.029) (.027) (.042) (.065) (.079) (.083) (.063) (.057)
income
Net asset value,
end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total returnB 1.19% 5.06% 5.02% 2.89% 2.78% 4.25% 6.69% 8.24% 8.64% 6.45% 5.81%
Net assets, end of $ 1,801 $ 1,801 $ 1,828 $ 2,025 $ 2,949 $ 3,094 $ 1,702 $ 1,177 $ 994 $ 320 $ 240
period
(In millions)
Ratio of expenses to .65%C, .65%C .65%C .60% .57% .59% .59% .59% .64% .64% .58%
average D
net assets
Ratio of net interest 4.66% 4.94% 4.89% 2.81% 2.73% 4.14% 6.42% 7.91% 8.47% 6.26% 5.67%
income to average net D
assets
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D ANNUALIZED
PRIME FUND - DAILY MONEY CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended July 31 1996A 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .012 .050 .050 .029 .028 .041 .067 .080 .085 .066 .057
Investment Operations
Net interest income
Less Distributions (.012) (.050) (.050) (.029) (.028) (.041) (.067) (.080) (.085) (.066) (.057)
From net interest
income
Net asset value,
end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total returnB 1.22% 5.13% 5.16% 2.98% 2.82% 4.21% 6.90% 8.34% 8.81% 6.81% 5.87%
Net assets, end of $ 2,663 $ 2,581 $ 2,139 $ 1,525 $ 1,451 $ 1,531 $ 1,714 $ 1,350 $ 894 $ 561 $ 441
period
(In millions)
Ratio of expenses to .65%C, .65%C .65%C .65%C .61% .59% .60% .61% .64%C .66% .62%
average D
net assets
Ratio of net interest 4.85% 5.00% 5.11% 2.96% 2.76% 4.19% 6.61% 7.99% 8.56% 6.57% 5.78%
income D
to average net assets
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D ANNUALIZED
TAX-EXEMPT FUND - DAILY MONEY CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended October 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
31
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .030 .033 .022 .021 .029 .044 .053 .056 .045 .039
Investment Operations
Net interest income
Less Distributions (.030) (.033) (.022) (.021) (.029) (.044) (.053) (.056) (.045) (.039)
From net interest
income
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total returnA 3.02% 3.36% 2.21% 2.11% 2.93% 4.46% 5.38% 5.72% 4.55% 3.93%
Net assets, end of $ 500,09 $ 559,17 $ 454,25 $ 538,75 $ 484,99 $ 304,14 $ 259,38 $ 203,51 $ 212,02 $ 288,27
period 4 3 9 6 9 7 1 3 9 9
(000 omitted)
Ratio of expenses to .65%B .65%B .65%B .61% .63% .65%B .65%B .64%B .70%B .63%
average
net assets
Ratio of net interest 2.98% 3.31% 2.17% 2.09% 2.86% 4.29% 5.32% 5.64% 4.37% 3.87%
income to average net
assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders. For current performance call
Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
Fidelity Newbury Street Trust (formerly Daily Tax-Exempt Money Fund), an
open-end management investment company organized as a Delaware business
trust December 30, 1991. There is a remote possibility that one fund might
become liable for a misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. The number of
votes you are entitled to is based upon the dollar value of your
investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of March 31, 1997, FMR advised funds having approximately 30 million
shareholder accounts with a total value of more than $438 billion.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company,
Inc. (FIIOC) performs transfer agent servicing functions for the Daily
Money Class shares of each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is Tax-Exempt Fund's transfer agent, although it
employs FIIOC to perform these functions for Daily Money Class of the fund.
UMB is located at 1010 Grand Avenue, Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the funds will maintain
a stable $1.00 share price. The funds follow industry-standard guidelines
on the quality, maturity, and diversification of their investments, which
are designed to help maintain a stable $1.00 share price. The funds will
purchase only high-quality securities that FMR believes present minimal
credit risks and will observe maturity restrictions on securities they buy.
In general, securities with longer maturities are more vulnerable to price
changes, although they may provide higher yields. It is possible that a
major change in interest rates or a default on the funds' investments could
cause their share prices (and the value of your investment) to change.
The funds earn income at current money market rates. Each fund stresses
preservation of capital, liquidity, and income (tax-free income in the case
of Tax-Exempt Fund) and does not seek the higher yields or capital
appreciation that more aggressive investments may provide. Each fund's
yield will vary from day to day and generally reflects current short-term
interest rates and other market conditions. It is important to note that
neither the funds nor their yields are guaranteed by the U.S. Government.
TREASURY FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase agreements
for these securities. The fund does not enter into reverse repurchase
agreements.
PRIME FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. dollar-denominated money market securities of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services, U.S. Government
securities, and repurchase agreements. The fund also may enter into reverse
repurchase agreements.
TAX-EXEMPT FUND seeks to provide individual and institutional investors
with as high a level of current income, exempt from federal income taxes,
as is consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
The fund invests in high-quality municipal money market securities of all
types. The fund normally invests so that at least 80% of its income
distributions is exempt from federal income tax. The fund does not
currently intend to purchase municipal securities whose interest is subject
to the federal alternative minimum tax.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings are detailed in each fund's financial reports, which are sent
to shareholders twice a year. For a free SAI or financial report, call
Client Services at 1-800-843-3001 or your investment professional.
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These securities may carry
fixed, variable, or floating interest rates. Some money market securities
employ a trust or similar structure to modify the maturity, price
characteristics, or quality of financial assets so that they are eligible
investments for money market funds. If the structure does not perform as
intended, adverse tax or investment consequences may result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the United
States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt instruments
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
U.S. Government securities such as those issued by Fannie Mae are supported
by the instrumentality's right to borrow money from the U.S. Treasury under
certain circumstances. Other U.S. Government securities, such as those
issued by the Federal Farm Credit Banks Funding Corporation, are supported
only by the credit of the entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be fully or partially backed by the local government, or by the credit
of a private issuer or the current or anticipated revenues from specific
projects or assets. Because many municipal securities are issued to finance
similar types of projects, especially those relating to education, health
care, housing, transportation, and utilities, the municipal markets can be
affected by conditions in those sectors. In addition, all municipal
securities may be affected by uncertainties regarding their tax status,
legislative changes, or the rights of municipal securities holders. A
municipal security may be owned directly or through a participation
interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of credit
and liquidity enhancement, including letters of credit, guarantees, puts
and demand features, and insurance, provided by foreign or domestic
entities such as banks and other financial institutions. These arrangements
expose a fund to the credit risk of the entity providing the credit or
liquidity support. Changes in the credit quality of the provider could
affect the value of the security and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including foreign
governments, corporations, and banks, and securities issued by U.S.
entities with substantial foreign operations may involve additional risks
and considerations. Likewise, securities for which foreign entities provide
credit or liquidity support may involve different risks than those
supported by domestic entities. Extensive public information about the
foreign entity may not be available, and unfavorable political, economic,
or governmental developments in the foreign country involved could affect
the repayment of principal or payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages, loans,
receivables, or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing the
securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other money market securities, although stripped securities may be
more volatile. U.S. Treasury securities that have been stripped by a
Federal Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or another party. In exchange for this benefit, a fund may accept a lower
interest rate. The credit quality of the investment may be affected by the
creditworthiness of the put provider. Demand features, standby commitments,
and tender options are types of put features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading practices
in which payment and delivery for the security take place at a later date
than is customary for that type of security. The market value of the
security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
RESTRICTIONS: Prime Fund will invest more than 25% of its total assets in
the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income (exempt from federal income tax in the case of a
municipal money market fund) while maintaining a stable $1.00 share price.
A major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTIONS: Tax-Exempt Fund will not invest in a money market fund and
does not currently intend to invest in repurchase agreements. Treasury Fund
and Prime Fund do not currently intend to invest in a money market fund.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: Prime Fund may not invest more than 5% of its total assets in
any one issuer, except that it may invest up to 25% of its total assets in
the highest quality securities of a single issuer for up to three business
days.
With respect to 75% of its total assets, Tax-Exempt Fund may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Fund may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: Prime Fund may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an amount
exceeding 331/3% of its total assets. Each of Treasury Fund and Tax-Exempt
Fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 331/3% of its total assets.
LENDING. A fund may lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets. Treasury Fund and Tax-Exempt Fund do not lend money to other
funds advised by FMR.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Each of Treasury Fund and Prime Fund seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
Tax-Exempt Fund seeks to provide individual and institutional investors
with as high a level of current income, exempt from federal income taxes,
as is consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
The fund normally invests so that at least 80% of its income distributions
is free from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Fund may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer. This limitation does not
apply to U.S. Government securities or to securities of other investment
companies.
Prime Fund will invest more than 25% of its total assets in the financial
services industry.
Prime Fund may borrow only for temporary or emergency purposes, or engage
in reverse repurchase agreements, but not in an amount exceeding 331/3% of
its total assets. Tax-Exempt Fund may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in that
class's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
MANAGEMENT FEE
Each fund pays FMR a monthly management fee at an annual rate of 0.25% of
its average net assets.
FMR Texas is the funds' sub-adviser and has primary responsibility for
managing its investments. FMR is responsible for providing other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements) for FMR Teases services. FMR paid FMR Texas fees equal to
0.11% (annualized) of Treasury Fund's and 0.14% (annualized) of Prime
Fund's average net assets for the three month period ended October 31, 1996
but after payments made by FMR pursuant to the funds' Distribution and
Service Plans. FMR paid FMR Texas a fee equal to 0.12% of Tax-Exempt Fund's
average net assets for the fiscal year ended October 31, 1996.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs certain transfer agency, dividend disbursing and shareholder
services for Daily Money Class shares of Treasury Fund and Prime Fund (the
Taxable Funds). Fidelity Service Company, Inc. (FSC) calculates the NAV and
dividends for each Taxable Fund, and maintains the general accounting
records for each Taxable Fund.
For the three month period ended October 31, 1996, fees paid by Daily Money
Class shares of Treasury Fund and Prime Fund to FIIOC amounted to 0.17%
(annualized) and 0.26% (annualized) of its average net assets,
respectively, and fees paid by each Taxable Fund to FSC amounted to 0.01%
(annualized) of its average net assets.
UMB has entered into a sub-arrangement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder services for the Daily Money
Class shares of Tax-Exempt Fund. UMB has also entered into a
sub-arrangement with FSC. FSC calculates the NAV and dividends for Daily
Money Class shares of Tax-Exempt Fund, and maintains the fund's general
accounting records. All of the fees are paid to FIIOC and FSC by UMB, which
is reimbursed by Daily Money Class or the fund, as appropriate, for such
payments.
For the fiscal year ended October 31, 1996, fees paid by UMB to FIIOC on
behalf of Daily Money Class of Tax-Exempt Fund amounted to 0.18% of average
net assets, and fees paid by UMB to FSC on behalf of the fund amounted to
0.02% of its average net assets.
Daily Money Class of each fund has adopted a DISTRIBUTION AND SERVICE PLAN.
Under the Plans, Daily Money Class of each fund is authorized to pay FDC a
monthly distribution fee as compensation for its services and expenses in
connection with the distribution of Daily Money Class shares. Daily Money
Class of each fund currently pays FDC a monthly distribution fee at an
annual rate of 0.25% of its average net assets throughout the month. FDC
may compensate intermediaries that provide shareholder support services,
engage in the sale of Daily Money Class's shares or pay distribution
expenses at an annual rate of up to 0.25% of average net assets they
maintain.
The Daily Money Class Plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other resources
to FDC for expenses incurred in connection with the distribution of Daily
Money Class shares, including payments made to intermediaries that provide
shareholder support services or engage in the sale of Daily Money Class
shares. The Board of Trustees of each fund has authorized such payments for
certain intermediaries who may be eligible to be compensated at prior
compensation amounts exceeding 0.25% (up to 0.40% of average net assets
they maintain) until January 1, 1998.
Independent of the Daily Money Class Plans, intermediaries that maintain an
average balance of $10 million or more in a single omnibus account may
receive an additional recordkeeping fee of up to 0.15% of the average net
assets they maintain. The recordkeeping fee will be paid by FMR or its
affiliates, not by the fund, and will not be paid for distribution
services.
In total, intermediaries may receive annual compensation of up to 0.40% of
the average net assets they maintain.
Each fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the funds, such as minimum initial or
subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain funds or to
certain retirement accounts. For instance, municipal funds are not
available for purchase in retirement accounts. If you are investing through
a retirement account or if your employer offers a fund through a retirement
program, you may be subject to additional fees. For more information,
please refer to your program materials, contact your employer, or call your
retirement benefits number or Client Services at 1-800-843-3001 or your
investment professional directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age under 701/2 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 401(K) PLANS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
HOW TO BUY SHARES
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted. NAV is normally calculated at the times indicated in
the table below.
NAV Calculation Times
Fund (Eastern Time)
Treasury Fund 2:00 p.m. and 4:00 p.m.
Prime Fund 2:00 p.m. and 4:00 p.m.
Tax-Exempt Fund 12:00 noon and 4:00 p.m.
It is the responsibility of your investment professional to transmit your
order to buy shares to Fidelity before the close of business on the day you
place your order.
Share certificates are not available for Daily Money Class.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Class A or Class
T of a Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional or call Fidelity
Client Services.
BY MAIL. You or your investment professional must send a check payable to
the fund in which you plan to invest. When making subsequent investments by
check, please write your fund account number on the check. All investments
by check should be sent to the above address.
BY WIRE. You must sign up for the wire feature before using it. For wiring
information and instructions, you should call the investment professional
through which you trade or if you trade directly through Fidelity, call
Client Services. There is no fee imposed by the funds for wire purchases.
However, if you buy shares through an investment professional, the
investment professional may impose a fee for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Shareholders of record as of the times indicated in the table below will be
entitled to dividends declared that day.
Fund Dividend
Times
(Eastern
Time)
Treasury Fund 2:00 p.m.
Prime Fund 2:00 p.m.
Tax-Exempt Fund 12:00 noon
Shares purchased after the times indicated in the table above will begin to
earn income dividends on the following business day.
Your wire must be received and accepted by the transfer agent at the
applicable fund's designated wire bank.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Client Services for large purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $100
Through regular investment plans* $100
MINIMUM BALANCE $500
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted. NAV is
normally calculated at the times indicated in the table on page .
It is the responsibility of your investment professional to transmit your
order to redeem shares to Fidelity before the close of business on the day
you place your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to Class A or Class T shares of a Fidelity
Advisor fund or shares of other Fidelity funds, which can be requested by
phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, please leave at least
$500 worth of shares in the account to keep it open.
BY TELEPHONE. Redemption requests may be made by calling Client Services at
1-800-843-3001.
BY MAIL. Send a letter of instruction with signature guarantee(s) to the
address on page . The letter should specify the name of the fund, the
number of shares to be sold, name, account numbers, address, and should
include the additional requirements listed below that apply to each
particular account.
<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Letter of instruction signed by all person(s)
Sole Proprietorship, Custodial, (Uniform Gifts or required to sign for the account exactly as it is
Transfers to Minors Act), General Partners registered, accompanied by signature
guarantee(s).
Corporations, Associations Letter of instruction and a corporate resolution,
signed by person(s) required to sign for the
account accompanied by signature guarantee(s).
Trusts A letter of instruction signed by the Trustee(s) with
signature guarantee(s). (If the Trustee's name is
not registered on the account, also provide a copy
of the trust document, certified within the last 60
days.)
</TABLE>
If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) you should call your
investment professional or Fidelity Client Services for further
instructions.
BY WIRE. Redemptions may be made by calling Client Services at
1-800-843-3001.
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Client Services will then notify you that this feature has been activated
and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Client
Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you sell shares through an investment professional, the
investment professional may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received and
accepted by the transfer agent before the times indicated in the "Dividend
Times" table on page , redemption proceeds will normally be wired on that
day. If your redemption request is received and accepted by the transfer
agent after the times indicated in the "Dividend Times" table on page ,
redemption proceeds will normally be wired on the following business day.
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. The minimum amount for a check is $500. Do not, however, try to
close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday,
8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in a
fund. Call your investment professional or Fidelity Client Services if you
need additional copies of financial reports, prospectuses, or historical
account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
One easy way to pursue your financial goals is to invest money regularly.
The funds offer a convenient service that lets you transfer money between
fund accounts, automatically. While regular investment plans do not
guarantee a profit and will not protect you against loss in a declining
market, they can be an excellent way to invest for retirement, a home,
educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment
professional for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional after
semi-annually, or both accounts are opened.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
</TABLE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of each fund, dividends relating to Daily Money
Class shares redeemed during the month can be distributed on the day of
redemption. Each fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. Daily Money Class offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a check or wire for your dividend and
capital gain distributions, if any.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Dividends will be reinvested at each fund's Daily Money Class NAV on the
last day of the month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution. The
mailing of distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how an investment in the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt Fund earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, income and short-term capital gain distributions
from each Taxable Fund are taxed as dividends; long-term capital gain
distributions, if any, are taxed as long-term capital gains.
For shareholders of Tax-Exempt Fund, gain on the sale of tax-free bonds
results in taxable distributions. Short-term capital gains and a portion of
the gain on bonds purchased at market discount are taxed as dividends;
long-term capital gain distributions, if any, are taxed as long-term
capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
For the three month period ended October 31, 1996, 18.96% of Treasury
Fund's and 6.68% of Prime Fund's income distributions were derived from
interest on U.S. Government securities, which is generally exempt from
state income tax.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
A portion of Tax-Exempt Fund's dividends may be free from state or local
taxes. Income from investments in your state are often tax-free to you.
Each year, Fidelity will send you a breakdown of your fund's income from
each state to help you calculate your taxes.
During the fiscal year ended October 31, 1996, 100% of Tax-Exempt Fund's
income dividends was free from federal income tax.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
the New York Stock Exchange (NYSE) is open. The following holiday closings
have been scheduled for 1997: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects
the same holiday schedule to be observed in the future, the NYSE may modify
its holiday schedule at any time. On any day that the NYSE closes early,
the principal government securities markets close early (such as on days in
advance of holidays generally observed by participants in such markets), or
as permitted by the SEC, the right is reserved to advance the time on that
day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the NYSE is closed, each class's NAV may be affected on days when
investors do not have access to the fund to purchase or redeem shares.
Certain Fidelity funds may follow different holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Daily Money Class
of each fund is computed by adding Daily Money Class's pro rata share of
the value of the fund's investments, cash, and other assets, subtracting
Daily Money Class's pro rata share of the value of the fund's liabilities,
subtracting the liabilities allocated to Daily Money Class, and dividing
the result by the number of Daily Money Class shares of that fund that are
outstanding. Each fund values its portfolio securities on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps each fund maintain a stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Daily Money Class shares is its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations, and certain
fiduciaries.
IF YOU ARE UNABLE TO REACH THE TRANSFER AGENT BY PHONE (for example, during
periods of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) The funds do not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees a fund or the
transfer agent has incurred.
Shareholders of record as of the times indicated in the "Dividend Times"
table on page will be entitled to dividends declared that day.
Shares purchased after the times indicated in the "Dividend Times" table on
page begin to earn income dividends on the following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) Shares redeemed before the times indicated in the
"Dividend Times" table on page do not receive the dividend declared on the
day of redemption. Shares redeemed after the times indicated in the
"Dividend Times" table on page do receive the dividend declared on the day
of redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, a
fund may suspend redemption or postpone payment dates. In cases of
suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 you will be given 30 days' notice
to reestablish the minimum balance. If you do not increase your balance,
Fidelity reserves the right to close your account and send the proceeds to
you. Your shares will be redeemed at the NAV on the day your account is
closed.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds.
If you have purchased Daily Money Class shares of a fund in connection with
the Fidelity Advisor funds program, your Daily Money Class shares may be
exchanged only for Class A or Class T shares, as applicable, of Fidelity
Advisor funds or Daily Money Class shares of any other fund offered through
this prospectus. Other shareholders may not exchange Daily Money Class
shares of a fund for Class A or Class T shares of Fidelity Advisor funds.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Client Services at 1-800-843-3001 between 8:30 a.m. and
4:00 p.m. Eastern time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name, class
name, account number, the number of shares to be redeemed, and the name of
the fund to be purchased. Written requests for exchange should be mailed to
Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Daily Money Class shares will
be redeemed at the next determined NAV after your order is received and
accepted. Shares of the fund to be acquired will be purchased at its next
NAV calculated after redemption proceeds are made available. You should
note that, under certain circumstances, a fund may take up to seven days to
make redemption proceeds available for the exchange purchase of shares of
another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be available for
sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage difference between that fund's sales charge and any
sales charge you have already paid in connection with the shares you are
exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds. This Prospectus and the related SAI do not
constitute an offer by the funds to sell or to buy shares of the funds to
any person to whom it is unlawful to make such offer.
Capital Reserves: U.S. Government Portfolio
(A Fund of Daily Money Fund)
Treasury Fund (formerly Daily Money Fund: U.S. Treasury Portfolio)
(A Fund of Newbury Street Trust (formerly Daily Tax-Exempt Money Fund))
FORM N-14
STATEMENT OF ADDITIONAL INFORMATION
July 21, 1997
This Statement of Additional Information relates to the proposed
reorganization whereby Treasury Fund would acquire all of the assets of
Capital Reserves: U.S. Government Portfolio and assume all of the
liabilities of Capital Reserves: U.S. Government Portfolio in exchange
solely for Capital Reserves Class shares of beneficial interest in Treasury
Fund.
This Statement of Additional Information consists of this cover page and
the following described documents, each of which is incorporated by
reference in this Statement of Additional Information:
The Statement of Additional Information of Treasury Fund dated May 30,
1997, previously filed on EDGAR (Accession Number 0000356173-97-000007).
1. The Prospectus dated November 29, 1996 (as supplemented March 21, 1997)
and the Statement of Additional Information dated November 29, 1996 (as
supplemented January 2, 1997) of Capital Reserves: U.S. Government
Portfolio, previously filed on EDGAR (Accession Numbers
0000028540-96-000081, 0000028540-97-
000044, 0000028540-96-000081, and 0000028540-97-000010, respectively).
2. The audited financial statements of Capital Reserves: U.S. Government
Portfolio included in the Annual Report of Capital Reserves: U.S.
Government Portfolio for the fiscal year ended July 31, 1996, as filed
pursuant to Rule 30d-1 under the Investment Company Act of 1940 on EDGAR
(Accession Number 0000028540-96-000073).
3. The audited financial statements of Treasury Fund included in the
Annual Report of Treasury Fund for the fiscal period ended October 31,
1996, as filed pursuant to Rule 30d-1 under the Investment Company Act of
1940 on EDGAR (Accession Number 0000028540-96-000093).
4. The unaudited financial statements of Capital Reserves: U.S. Government
Portfolio included in the Semi-Annual Report of Capital Reserves: U.S.
Government Portfolio for the fiscal period ended January 31, 1997, as filed
pursuant to Rule 30d-1 under the Investment Company Act of 1940 on EDGAR
(Accession Number 0000028540-97-000026).
5. The unaudited financial statements of Treasury Fund included in the
Semi-Annual Report of Treasury Fund for the fiscal period ended April 30,
1997, as filed pursuant to Rule 30d-1 under the Investment Company Act of
1940 on EDGAR.
6. The pro forma financial statements of Capital Reserves: U.S.
Government Portfolio and Treasury Fund as of January 31, 1997.
This Statement of Additional Information is not a prospectus. A Proxy
Statement and Prospectus dated July 21, 1997, relating to the
above-referenced matter may be obtained from Fidelity Client Services, 82
Devonshire Street, Boston, Massachusetts, 02109. This Statement of
Additional Information relates to, and should be read in conjunction with,
such Proxy Statement and Prospectus.
Capital Reserves: Money Market Portfolio
(A Fund of Daily Money Fund)
Prime Fund (formerly Daily Money Fund: Money Market Portfolio)
(A Fund of Newbury Street Trust (formerly Daily Tax-Exempt Money Fund))
FORM N-14
STATEMENT OF ADDITIONAL INFORMATION
July 21, 1997
This Statement of Additional Information relates to the proposed
reorganization whereby Prime Fund would acquire all of the assets of
Capital Reserves: Money Market Portfolio and assume all of the liabilities
of Capital Reserves: Money Market Portfolio in exchange solely for Capital
Reserves Class shares of beneficial interest in Prime Fund.
This Statement of Additional Information consists of this cover page and
the following described documents, each of which is incorporated by
reference in this Statement of Additional Information:
7. The Statement of Additional Information of Prime Fund dated May 30,
1997, previously filed on EDGAR (Accession Number 0000356173-97-000007).
8. The Prospectus dated November 29, 1996 (as supplemented March 21, 1997)
and the Statement of Additional Information dated November 29, 1996 (as
supplemented January 2, 1997) of Capital Reserves: Money Market Portfolio
previously filed on EDGAR (Accession Numbers 0000028540-96-000081,
0000028540-97-
000044, 0000028540-96-000081, and 0000028540-97-000010, respectively).
9. The audited financial statements of Capital Reserves: Money Market
Portfolio included in the Annual Report of Capital Reserves: Money Market
Portfolio for the fiscal year ended July 31, 1996, as filed pursuant to
Rule 30d-1 under the Investment Company Act of 1940 on EDGAR (Accession
Number 0000028540-96-
000073).
10. The audited financial statements of Prime Fund included in the Annual
Report of Prime Fund for the fiscal period ended October 31, 1996, as filed
pursuant to Rule 30d-1 under the Investment Company Act of 1940 on EDGAR
(Accession Number
0000028540-96-000093).
11. The unaudited financial statements of Capital Reserves: Money Market
Portfolio included in the Semi-Annual Report of Capital Reserves: Money
Market Portfolio for the fiscal period ended January 31, 1997, as filed
pursuant to Rule 30d-1 under the Investment Company Act of 1940 on EDGAR
(Accession Number 0000028540-97-000026).
12. The unaudited financial statements of Prime Fund included in the
Semi-Annual Report of Prime Fund for the fiscal period ended April 30,
1997, as filed pursuant to Rule 30d-1 under the Investment Company Act of
1940 on EDGAR.
13. The pro forma financial statements of Capital Reserves: Money Market
Portfolio and Prime Fund as of January 31, 1997.
This Statement of Additional Information is not a prospectus. A Proxy
Statement and Prospectus dated July 21, 1997, relating to the
above-referenced matter may be obtained from Fidelity Client Services, 82
Devonshire Street, Boston, Massachusetts, 02109. This Statement of
Additional Information relates to, and should be read in conjunction with,
such Proxy Statement and Prospectus.
Capital Reserves: Municipal Money Market Portfolio
(A Fund of Daily Money Fund)
Tax-Exempt Fund (formerly Daily Tax-Exempt Money Fund)
(A Fund of Newbury Street Trust (formerly Daily Tax-Exempt Money Fund))
FORM N-14
STATEMENT OF ADDITIONAL INFORMATION
July 21, 1997
This Statement of Additional Information relates to the proposed
reorganization whereby Tax-Exempt Fund would acquire all of the assets of
Capital Reserves: Municipal Money Market Portfolio and assume all of the
liabilities of Capital Reserves: Municipal Money Market Portfolio in
exchange solely for Capital Reserves Class shares of beneficial interest in
Tax-Exempt Fund.
This Statement of Additional Information consists of this cover page and
the following described documents, each of which is incorporated by
reference in this Statement of Additional Information:
14. The Statement of Additional Information of Tax-Exempt Fund dated May
30, 1997, previously filed on EDGAR (Accession Number
0000356173-97-000007).
15. The Prospectus dated November 29, 1996 (as supplemented March 21,
1997) and the Statement of Additional Information dated November 29, 1996
(as supplemented January 2, 1997) of Capital Reserves: Municipal Money
Market Portfolio, previously filed on EDGAR (Accession Numbers
0000028540-96-000081, 0000028540-97-000044, 0000028540-96-000081, and
0000028540-97-000010, respectively).
16. The audited financial statements of Capital Reserves: Municipal Money
Market Portfolio included in the Annual Report of Capital Reserves:
Municipal Money Market Portfolio for the fiscal year ended July 31, 1996,
as filed pursuant to Rule 30d-1 under the Investment Company Act of 1940 on
EDGAR (Accession Number 0000028540-96-000073).
17. The audited financial statements of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) included in the Annual Report of
Tax-Exempt Fund for the fiscal period ended October 31, 1996, as filed
pursuant to Rule 30d-1 under the Investment Company Act of 1940 on EDGAR
(Accession Number 0000028540-96-000093).
18. The unaudited financial statements of Capital Reserves: Municipal
Money Market Portfolio included in the Semi-Annual Report of Capital
Reserves: Municipal Money Market Portfolio for the fiscal period ended
January 31, 1997, as filed pursuant to Rule 30d-1 under the Investment
Company Act of 1940 on EDGAR (Accession Number 0000028540-97-000026).
19. The unaudited financial statements of Tax-Exempt Fund included in the
Semi-Annual Report of Tax-Exempt Fund for the fiscal period ended April 30,
1997, as filed pursuant to Rule 30d-1 under the Investment Company Act of
1940 on EDGAR.
20. The pro forma financial statements of Capital Reserves: Municipal
Money Market Portfolio and Tax-Exempt Fund as of January 31, 1997.
This Statement of Additional Information is not a prospectus. A Proxy
Statement and Prospectus dated July 21, 1997, relating to the
above-referenced matter may be obtained from Fidelity Client Services, 82
Devonshire Street, Boston, Massachusetts, 02109. This Statement of
Additional Information relates to, and should be read in conjunction with,
such Proxy Statement and Prospectus.
PART C. OTHER INFORMATION
Item 15. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article X, Section 10.02 of the Trust
Instrument states that the Registrant shall indemnify any present trustee
or officer to the fullest extent permitted by law against liability, and
all expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by virtue
of his or her service as a trustee, officer, or both, and against any
amount incurred in settlement thereof. Indemnification will not be provided
to a person adjudged by a court or other adjudicatory body to be liable to
the Registrant or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her duties
(collectively, "disabling conduct"), or not to have acted in good faith in
the reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may be
provided unless there has been a determination, as specified in the Trust
Instrument, that the officer or trustee did not engage in disabling
conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed sub-transfer agent, the
Transfer Agent agrees to indemnify FIIOC for FIIOC's losses, claims,
damages, liabilities and expenses (including reasonable counsel fees and
expenses) (losses) to the extent that the Transfer Agent is entitled to and
receives indemnification from the Portfolio for the same events. Under the
Transfer Agency Agreement, the Registrant agrees to indemnify and hold the
Transfer Agent harmless against any losses, claims, damages, liabilities,
or expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder which names the Transfer Agent
and/or the Registrant as a party and is not based on and does not result
from the Transfer Agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with the
Transfer Agent's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon advice reasonably believed by the Transfer
Agent to have been given by counsel for the Registrant, or as a result of
the Transfer Agent's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Pursuant to the agreement by which FIIOC is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 16. Exhibits
(1) Trust Instrument, dated June 20, 1991, was electronically filed and is
incorporated herein by reference to Exhibit 1(a) to Post-Effective
Amendment No. 20.
(2) By-laws of the Trust, as amended, are incorporated herein by reference
to Exhibit 2(a) to Fidelity Union Street Trust II's Post-Effective
Amendment No. 17 (file No. 33-43757).
(3) Not applicable.
(4)(a) Agreement and Plan of Reorganization among Daily Money Fund:
Capital Reserves: U.S. Government Portfolio and Newbury Street Trust:
Treasury Fund is filed herein as Exhibit 1 to the Capital Reserves: U.S.
Government Portfolio Proxy Statement and Prospectus.
(b) Agreement and Plan of Reorganization among Daily Money Fund: Capital
Reserves: Money Market Portfolio and Newbury Street Trust: Prime Fund is
filed herein as Exhibit 1 to the Capital Reserves: Money Market Portfolio
Proxy Statement and Prospectus.
(c) Agreement and Plan of Reorganization among Daily Money Fund: Capital
Reserves: Municipal Money Market Portfolio and Newbury Street Trust:
Tax-Exempt Fund is filed herein as Exhibit 1 to the Capital Reserves:
Municipal Money Market Portfolio Proxy Statement and Prospectus.
(5) Not applicable.
(6)(a) Form of Management Contract between Newbury Street Trust, on behalf
of Treasury Fund, and Fidelity Management & Research Company was
electronically filed and is incorporated herein by reference to Exhibit
5(a) to Post-Effective Amendment No. 29.
(b) Sub-Advisory Agreement dated December 30, 1991, between Fidelity
Management & Research Co. and FMR Texas Inc. (with respect to Daily
Tax-Exempt Money Fund II (currently known as Tax-Exempt Fund)) was
electronically filed and is incorporated herein by reference to Exhibit
5(b) to Post-Effective Amendment No. 25.
(c) Form of Management Contract between Newbury Street Trust, on behalf of
Prime Fund, and Fidelity Management & Research Company was electronically
filed and is incorporated herein by reference to Exhibit 5(c) to
Post-Effective Amendment No. 29.
(d) Form of Management Contract between Newbury Street Trust, on behalf of
Tax-Exempt Fund, and Fidelity Management & Research Company was
electronically filed and is incorporated herein by reference to Exhibit
5(d) to Post-Effective Amendment No. 29.
(e) Form of Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company, on behalf of Prime Fund, was electronically
filed and is incorporated herein by reference to Exhibit 5(e) to
Post-Effective Amendment No. 29.
(f) Form of Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company, on behalf of Treasury Fund, was
electronically filed and is incorporated herein by reference to Exhibit
5(f) to Post-Effective Amendment No. 29.
(7)(a) General Distribution Agreement dated December 30, 1991, between
Daily Tax-Exempt Money Fund II and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference to Exhibit
6(a) to Post-Effective Amendment No. 25.
(b) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of Daily Tax-Exempt Money
Fund (currently known as Tax-Exempt Fund) was electronically filed and is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 25.
(c) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients" with
respect to shares of Daily Tax-Exempt Money Fund (currently known as
Tax-Exempt Fund) was electronically filed and is incorporated herein by
reference to Exhibit 6(c) to Post-Effective Amendment No. 25.
(d) Amendments to the General Distribution Agreement between Daily
Tax-Exempt Money Fund II on behalf of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) and Fidelity Distributors Corporation,
dated March 14, 1996 and July 15, 1996, was electronically filed and is
incorporated herein by reference to Exhibit 6(a) of Fidelity Court Street
Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(e) Amendment to the General Distribution Agreement between Daily
Tax-Exempt Money Fund II on behalf of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) and Fidelity Distributors Corporation,
dated October 1, 1996, was electronically filed and is incorporated herein
by reference to Exhibit 6(g) of Daily Money Fund's Post-Effective Amendment
No. 40 (File No. 2-77909).
(f) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Money Market Portfolio (currently known as Prime
Fund), and Fidelity Distributors Corporation was electronically filed and
is incorporated herein by reference as Exhibit 6(a) to Daily Money Fund's
Post-Effective Amendment No. 25.
(g) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of U.S. Treasury Portfolio
(currently Treasury Fund) and Money Market Portfolio (currently known as
Prime Fund) was electronically filed and is incorporated herein by
reference as Exhibit 6(g) to Daily Money Fund's Post-Effective Amendment
No. 34.
(h) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients" with
respect to shares of U.S. Treasury Portfolio (currently known as Treasury
Fund) and Money Market Portfolio (currently known as Prime Fund) was
electronically filed and is incorporated herein by reference as Exhibit
6(h) to Daily Money Fund's Post-Effective Amendment No. 34.
(i) Form of Selling Dealer Agreement for Bank Related Transactions (most
recently revised January, 1997) was electronically filed and is
incorporated herein by reference to Exhibit 6(i) to Post-Effective
Amendment No. 28.
(j) Form of Selling Dealer Agreement (most recently revised January, 1997)
was electronically filed and is incorporated herein by reference to Exhibit
6(j) to Post-Effective Amendment No. 28.
(k) Amendments to the General Distribution Agreement between Daily Money
Fund on behalf of U.S. Treasury Portfolio (currently known as Treasury
Fund) and Money Market Portfolio (currently known as Prime Fund) and
Fidelity Distributors Corporation, dated March 14, 1996 and July 15, 1996,
are incorporated herein by reference to Exhibit 6(a) of Fidelity Court
Street Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(l) Form of Bank Agency Agreement (most recently revised January, 1997) was
electronically filed and is incorporated herein by reference to Exhibit
6(l) to Post-Effective Amendment No. 28.
(8)(a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, as amended on November 16, 1995, is incorporated herein
by reference to Exhibit 7(a) of Fidelity Select Portfolio's (File No.
2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and Trustees
of the Fidelity Funds, effective as of September 14, 1995 and amended
through November 14, 1996, is incorporated herein by reference to Exhibit
7(b) of Fidelity Aberdeen Street Trust's (File No. 33-43529) Post-Effective
Amendment No. 19.
(9)(a) Custodian Agreement, Appendix B, and Appendix C, dated December 1,
1994, between UMB Bank, n.a. and Daily Tax-Exempt Money Fund on behalf of
Daily Tax-Exempt Money Fund (currently known as Tax-Exempt Fund) was
electronically filed and is incorporated herein by reference to Exhibit 8
to Fidelity California Municipal Trust's Post-Effective Amendment No. 28
(File No. 2-83367).
(b) Appendix A, dated October 17, 1996, to the Custodian Agreement, dated
December 1, 1994, between UMB Bank, n.a. and Daily Tax-Exempt Money Fund on
behalf of Daily Tax-Exempt Money Fund (currently known as Tax-Exempt Fund)
was electronically filed and is incorporated herein by reference to Exhibit
8(a) to Fidelity Court Street Trust's Post-Effective Amendment No. 61 (File
No. 2-58774).
(c) Custodian Agreement and Appendix C, dated December 1, 1994, between The
Bank of New York and the Fidelity Daily Money Fund Trust on behalf of Money
Market Portfolio (currently known as Prime Fund) and U.S. Treasury
Portfolio (currently known as Treasury Fund) and Money Market Portfolio
(currently known as Prime Fund) is incorporated herein by reference to
Exhibit 8(a) of Fidelity Hereford Street Trust's Post-Effective Amendment
No. 4 (File No. 33-52577).
(d) Appendix A, dated August 31, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Daily Money Fund on
behalf of Money Market Portfolio (currently known as Prime Fund) and U.S.
Treasury Portfolio (currently known as Treasury Fund) was electronically
filed and is incorporated herein by reference to Exhibit 8(b) to Daily
Money Fund's Post-Effective Amendment No. 40.
(e) Appendix B, dated July 31, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Fidelity Daily Money
Fund Trust on behalf of Money Market Portfolio (currently known as Prime
Fund) and U.S. Treasury Portfolio (currently known as Treasury Fund) is
incorporated herein by reference to Exhibit 8(c) of Fidelity Income Fund's
Post-Effective Amendment No. 35 (File No. 2-92661).
(f) Fidelity Group Repo Custodian Agreement among The Bank of New York, J.
P. Morgan Securities, Inc., and the Fidelity Funds, was electronically
filed and is incorporated herein by reference to Exhibit 8(d) to Fidelity
Institutional Cash Portfolio's Post-Effective Amendment No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement among The
Bank of New York, J. P. Morgan Securities, Inc., and the Fidelity Funds was
electronically filed and is incorporated herein by reference to Exhibit
8(e) to Daily Money Fund's Post-Effective Amendment No 31.
(h) Fidelity Group Repo Custodian Agreement among Chemical Bank, Greenwich
Capital Markets, Inc., and the Fidelity Funds was electronically filed and
is incorporated herein by reference to Exhibit 8(f) to Daily Money Fund's
Post-Effective Amendment No. 31.
(i) Joint Trading Account Custody Agreement between the The Bank of New
York and the Fidelity Funds was electronically filed and is incorporated
herein by reference to Exhibit 8(h) to Daily Money Fund's Post-Effective
Amendment No. 31.
(j) First Amendment to Joint Trading Account Custody Agreement between the
The Bank of New York and the Fidelity Funds was electronically filed and is
incorporated herein by reference to Exhibit 8(i) to Daily Money Fund's
Post-Effective Amendment No. 31.
(10)(a) Distribution and Service Plan for Treasury Fund: Daily Money Class
was electronically filed and is incorporated herein by reference to Exhibit
15(a) to Post-Effective Amendment No. 29.
(b) Distribution and Service Plan for Prime Fund: Daily Money Class was
electronically filed and is incorporated herein by reference to Exhibit
15(b) to Post-Effective Amendment No. 29.
(c) Distribution and Service Plan for Tax-Exempt Fund: Daily Money Class
was electronically filed and is incorporated herein by reference to Exhibit
15(c) to Post-Effective Amendment No 29.
(d) Distribution and Service Plan for Treasury Fund: Advisor B Class was
electronically filed and is incorporated herein by reference to Exhibit
15(d) to Post-Effective Amendment No. 29.
(11)(a) Opinion and consent of counsel (K&L) as to the legality of shares
being registered on behalf of Treasury Fund is filed herein as Exhibit
11(a).
(b) Opinion and consent of counsel (K&L) as to the legality of shares being
registered on behalf of Prime Fund is filed herein as Exhibit 11(b).
(c) Opinion and consent of counsel (K&L) as to the legality of shares being
registered on behalf of Tax-Exempt Fund is filed herein as Exhibit 11(c).
(12)(a) Opinion and Consent of counsel (K&L) as to tax matters in
connection with the reorganization of Capital Reserves: U.S. Government
Portfolio is filed herein as Exhibit 12(a).
(b) Opinion and Consent of counsel (K&L) as to tax matters in connection
with the reorganization of Capital Reserves: Money Market Portfolio is
filed herein as Exhibit 12(b).
(c) Opinion and Consent of counsel (K&L) as to tax matters in connection
with the reorganization of Capital Reserves: Municipal Money Market
Portfolio is filed herein as Exhibit 12(c).
(13) Not applicable.
(14)(a) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
14(a).
(b) Consent of Price Waterhouse, LLP. is filed herein as Exhibit 14(b).
(15) Not applicable.
(16) Powers of Attorney, dated December 19, 1996, January 3, 1997, and
March 6, 1997 are filed herein as Exhibit 16.
(17) Rule 24f-2 Notice for Registrant's most recent fiscal year ended
October 31, 1996 is filed herein as Exhibit 17 .
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of the prospectus which is a
part of this Registration Statement by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c) of the Securities Act
of 1933, the reoffering prospectus will contain the information called for
by the applicable registration form for reoffering by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act
of 1933, each Post-Effective Amendment shall be deemed to be a new
Registration Statement for the securities offered therein, and the offering
of securities at that time shall be deemed to be the initial bona fide
offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston, and Commonwealth of
Massachusetts, on the 11th day of June 1997.
NEWBURY STREET TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee June 11, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber * Treasurer June 11, 1997
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee June 11, 1997
J. Gary Burkhead
/s/Ralph F. Cox ** Trustee June 11, 1997
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee June 11, 1997
Phyllis Burke Davis
/s/Robert M. Gates *** Trustee June 11, 1997
Robert M. Gates
/s/E. Bradley Jones ** Trustee June 11, 1997
E. Bradley Jones
/s/Donald J. Kirk ** Trustee June 11, 1997
Donald J. Kirk
/s/Peter S. Lynch ** Trustee June 11, 1997
Peter S. Lynch
/s/Marvin L. Mann ** Trustee June 11, 1997
Marvin L. Mann
/s/William O. McCoy ** Trustee June 11, 1997
William O. McCoy
/s/Gerald C. McDonough ** Trustee June 11, 1997
Gerald C. McDonough
/s/Thomas R. Williams ** Trustee June 11, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J.Gary Burkhead pursuant to a power of
attorney dated January 3, 1997 and filed herewith.
* Signature affixed by John H. Costello pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
*** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated March 6, 1997 and filed herewith.
Kirkpatrick & Lockhart llp
1800 Massachusetts Avenue, N.W.
2nd Floor
Washington, D.C. 20036-1800
June 2, 1997
Daily Money Fund
Newbury Street Trust
82 Devonshire Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
You have requested our opinion regarding certain matters in connection
with the issuance of Capital Reserves Class shares of beneficial interest
of Treasury Fund, a series of Newbury Street Trust (formerly known as Daily
Tax-Exempt Money Fund) ("Trust"), pursuant to a Registration Statement to
be filed by the Trust on Form N-14 ("Registration Statement") under the
Securities Act of 1933 ("1933 Act") in connection with the proposed
acquisition by Treasury Fund of all of the assets of Capital Reserves: U.S.
Government Portfolio, a series of Daily Money Fund, and the assumption by
Treasury Fund of the liabilities of Capital Reserves: U.S. Government
Portfolio solely in exchange for Capital Reserves Class shares of Treasury
Fund.
In connection with our services as counsel for the Trust, we have
examined, among other things, originals or copies of such documents,
certificates and corporate and other records as we deemed necessary or
appropriate for purposes of this opinion. We have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us, the
conformity to original documents of all documents presented to us as copies
thereof and the authenticity of the original documents from which any such
copies were made, which assumptions we have not independently verified. As
to various matters of fact material to this opinion, we have relied upon
statements and certificates of officers of the Trust. Based upon this
examination, we are of the opinion that the shares to be issued pursuant to
the Registration Statement, when issued upon the terms provided in the
Registration Statement, subject to compliance with the 1933 Act, the
Investment Company Act of 1940, and applicable state law regulating the
offer and sale of securities, will be legally issued, fully paid, and
non-assessable, and no shareholder of Treasury Fund has any preemptive
right of subscription or purchase in respect thereof.
The Trust is a business trust established pursuant to the Delaware
Business Trust Act ("Delaware Act"). The Delaware Act provides that a
shareholder of the Trust is entitled to the same limitation of personal
liability extended to shareholders of for-profit corporations. To the
extent that the Trust or any of its shareholders become subject to the
jurisdiction of courts in states that do not have statutory or other
authority limiting the liability of business trust shareholders, such
courts might not apply the Delaware Act and could subject Trust
shareholders to liability.
To guard against this risk, the Trust's Trust Instrument provides that the
Trustees shall have no power to bind any shareholder personally or to call
upon any shareholder for the payment of any sum of money or assessment
whatsoever other than such as the shareholder may at any time personally
agree to pay by way of subscription for any shares or otherwise. The Trust
Instrument also requires that every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating to
the Trust or to a Series shall include a recitation limiting the obligation
represented thereby to the Trust or to one or more Series and its or their
assets (although the omission of such a recitation shall not operate to
bind any shareholder of the Trust). Furthermore, the Trust Instrument
provides that: (i) in case any shareholder or former shareholder of any
Series shall be held to be personally liable solely by reason of his being
or having been a shareholder of such Series and not because of his acts or
omissions or for some other reason, the shareholder or former shareholder
shall be entitled out of the assets belonging to the applicable Series to
be held harmless from and indemnified against all loss and expense arising
from such liability; and (ii) the Trust, on behalf of the affected Series,
shall, upon request by the shareholder, assume the defense of any claim
made against the shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
We consent to your filing a copy of this opinion as an exhibit to the
Registration Statement.
Yours truly,
/s/ Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart llp
1800 Massachusetts Avenue, N.W.
2nd Floor
Washington, D.C. 20036-1800
June 2, 1997
Daily Money Fund
Newbury Street Trust
82 Devonshire Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
You have requested our opinion regarding certain matters in connection
with the issuance of Capital Reserves Class shares of beneficial interest
of Prime Fund, a series of Newbury Street Trust (formerly known as Daily
Tax-Exempt Money Fund) ("Trust"), pursuant to a Registration Statement to
be filed by the Trust on Form N-14 ("Registration Statement") under the
Securities Act of 1933 ("1933 Act") in connection with the proposed
acquisition by Prime Fund of all of the assets of Capital Reserves: Money
Market Portfolio, a series of Daily Money Fund, and the assumption by Prime
Fund of the liabilities of Capital Reserves: Money Market Portfolio solely
in exchange for Capital Reserves Class shares of Prime Fund.
In connection with our services as counsel for the Trust, we have
examined, among other things, originals or copies of such documents,
certificates and corporate and other records as we deemed necessary or
appropriate for purposes of this opinion. We have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us, the
conformity to original documents of all documents presented to us as copies
thereof and the authenticity of the original documents from which any such
copies were made, which assumptions we have not independently verified. As
to various matters of fact material to this opinion, we have relied upon
statements and certificates of officers of the Trust. Based upon this
examination, we are of the opinion that the shares to be issued pursuant to
the Registration Statement, when issued upon the terms provided in the
Registration Statement, subject to compliance with the 1933 Act, the
Investment Company Act of 1940, and applicable state law regulating the
offer and sale of securities, will be legally issued, fully paid, and
non-assessable, and no shareholder of Prime Fund has any preemptive right
of subscription or purchase in respect thereof.
The Trust is a business trust established pursuant to the Delaware
Business Trust Act ("Delaware Act"). The Delaware Act provides that a
shareholder of the Trust is entitled to the same limitation of personal
liability extended to shareholders of for-profit corporations. To the
extent that the Trust or any of its shareholders become subject to the
jurisdiction of courts in states that do not have statutory or other
authority limiting the liability of business trust shareholders, such
courts might not apply the Delaware Act and could subject Trust
shareholders to liability.
To guard against this risk, the Trust's Trust Instrument provides that the
Trustees shall have no power to bind any shareholder personally or to call
upon any shareholder for the payment of any sum of money or assessment
whatsoever other than such as the shareholder may at any time personally
agree to pay by way of subscription for any shares or otherwise. The Trust
Instrument also requires that every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating to
the Trust or to a Series shall include a recitation limiting the obligation
represented thereby to the Trust or to one or more Series and its or their
assets (although the omission of such a recitation shall not operate to
bind any shareholder of the Trust). Furthermore, the Trust Instrument
provides that: (i) in case any shareholder or former shareholder of any
Series shall be held to be personally liable solely by reason of his being
or having been a shareholder of such Series and not because of his acts or
omissions or for some other reason, the shareholder or former shareholder
shall be entitled out of the assets belonging to the applicable Series to
be held harmless from and indemnified against all loss and expense arising
from such liability; and (ii) the Trust, on behalf of the affected Series,
shall, upon request by the shareholder, assume the defense of any claim
made against the shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
We consent to your filing a copy of this opinion as an exhibit to the
Registration Statement.
Yours truly,
/s/ Kirkpatrick & Lockhart llp
Kirkpatrick & Lockhart llp
1800 Massachusetts Avenue, N.W.
2nd Floor
Washington, D.C. 20036-1800
June 2, 1997
Daily Money Fund
Newbury Street Trust
82 Devonshire Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
You have requested our opinion regarding certain matters in connection
with the issuance of Capital Reserves Class shares of beneficial interest
of Tax-Exempt Fund, a series of Newbury Street Trust (formerly known as
Daily Tax-Exempt Money Fund) ("Trust"), pursuant to a Registration
Statement to be filed by the Trust on Form N-14 ("Registration Statement")
under the Securities Act of 1933 ("1933 Act") in connection with the
proposed acquisition by Tax-Exempt Fund of all of the assets of Capital
Reserves: Municipal Money Market Portfolio, a series of Daily Money Fund,
and the assumption by Tax-Exempt Fund of the liabilities of Capital
Reserves: Municipal Money Market Portfolio solely in exchange for Capital
Reserves Class shares of Tax-Exempt Fund.
In connection with our services as counsel for the Trust, we have
examined, among other things, originals or copies of such documents,
certificates and corporate and other records as we deemed necessary or
appropriate for purposes of this opinion. We have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us, the
conformity to original documents of all documents presented to us as copies
thereof and the authenticity of the original documents from which any such
copies were made, which assumptions we have not independently verified. As
to various matters of fact material to this opinion, we have relied upon
statements and certificates of officers of the Trust. Based upon this
examination, we are of the opinion that the shares to be issued pursuant to
the Registration Statement, when issued upon the terms provided in the
Registration Statement, subject to compliance with the 1933 Act, the
Investment Company Act of 1940, and applicable state law regulating the
offer and sale of securities, will be legally issued, fully paid, and
non-assessable, and no shareholder of Tax-Exempt Fund has any preemptive
right of subscription or purchase in respect thereof.
The Trust is a business trust established pursuant to the Delaware
Business Trust Act ("Delaware Act"). The Delaware Act provides that a
shareholder of the Trust is entitled to the same limitation of personal
liability extended to shareholders of for-profit corporations. To the
extent that the Trust or any of its shareholders become subject to the
jurisdiction of courts in states that do not have statutory or other
authority limiting the liability of business trust shareholders, such
courts might not apply the Delaware Act and could subject Trust
shareholders to liability.
To guard against this risk, the Trust's Trust Instrument provides that the
Trustees shall have no power to bind any shareholder personally or to call
upon any shareholder for the payment of any sum of money or assessment
whatsoever other than such as the shareholder may at any time personally
agree to pay by way of subscription for any shares or otherwise. The Trust
Instrument also requires that every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the Trustees relating to
the Trust or to a Series shall include a recitation limiting the obligation
represented thereby to the Trust or to one or more Series and its or their
assets (although the omission of such a recitation shall not operate to
bind any shareholder of the Trust). Furthermore, the Trust Instrument
provides that: (i) in case any shareholder or former shareholder of any
Series shall be held to be personally liable solely by reason of his being
or having been a shareholder of such Series and not because of his acts or
omissions or for some other reason, the shareholder or former shareholder
shall be entitled out of the assets belonging to the applicable Series to
be held harmless from and indemnified against all loss and expense arising
from such liability; and (ii) the Trust, on behalf of the affected Series,
shall, upon request by the shareholder, assume the defense of any claim
made against the shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.
We consent to your filing a copy of this opinion as an exhibit to the
Registration Statement.
Yours truly,
/s/ Kirkpatrick & Lockhart llp
KIRKPATRICK & LOCKHART LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
May 30, 1997
Daily Money Fund
Newbury Street Trust
82 Devonshire Street
Boston, MA 02109
Ladies and Gentlemen:
Daily Money Fund ("DMF"), a Delaware business trust, on behalf of Capital
Reserves: U.S. Government Portfolio ("Acquired"), a series of DMF, and
Newbury Street Trust ("FNST"), a Delaware business trust, on behalf of
Treasury Fund ("Acquiring"), a series of FNST, have requested our opinion
as to certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets and
assume all of the liabilities of Acquired in exchange solely for Capital
Reserve Class shares of beneficial interest in Acquiring ("Acquiring
Shares") pursuant to an Agreement and Plan of Reorganization ("Agreement")
expected to be entered into between Acquired and Acquiring on July 21,
1997.
In rendering this opinion, we have examined a draft of the Agreement
("Draft Agreement"), the prospectus/proxy statement to be filed with the
Securities and Exchange Commission ("SEC") in connection with the
Reorganization, the currently effective prospectuses and statements of
additional information of Acquired and Acquiring, and such other documents
as we have deemed necessary. We have also relied, with your consent, on
certificates of officers of DMF and FNST.
OPINION
Based solely on the facts and representations set forth in the reviewed
documents and the certificates of officers of DMF and FNST, and assuming
that (i) those representations are true on the date of the Reorganization,
(ii) the Reorganization is consummated in accordance with the Agreement,
and (iii) the Agreement does not differ materially from the Draft
Agreement, our opinion with respect to the federal income tax consequences
of the Reorganization is as follows.
1. The Reorganization will be a reorganization under section 368(a)(1)(C)
of the Internal Revenue Code of 1986, as amended ("Code"), and Acquired and
Acquiring will each be parties to the Reorganization under section 368(b)
of the Code.
2. No gain or loss will be recognized by Acquired upon the transfer of all
of its assets to Acquiring in exchange solely for Acquiring Shares and
Acquiring's assumption of Acquired's liabilities followed by the
distribution of those Acquiring Shares to the Acquired shareholders in
liquidation of Acquired.
3. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.
4. The basis of Acquired's assets in the hands of Acquiring will be the
same as the basis of such assets in Acquired's hands immediately prior to
the Reorganization.
5. Acquiring's holding period in the assets to be received from Acquired
will include Acquired's holding period in such assets.
6. The Acquired shareholders will recognize no gain or loss on the
exchange of the shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.
7. The Acquired shareholders' basis in the Acquiring Shares to be received
by them will be the same as their basis in the Acquired Shares to be
surrendered in exchange therefor.
8. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.
The foregoing opinion is based on, and is conditioned on the continued
applicability of, the provisions of the Code and the regulations
thereunder, case law precedent, and the Internal Revenue Service
pronouncements in existence at the date hereof. We express no opinion
other than those contained herein.
We consent to the inclusion of this opinion in the Registration Statement
on Form N-14 filed with the SEC and the inclusion of the name "Kirkpatrick
& Lockhart LLP" in the "Federal Income Tax Consequences of the
Reorganization," "Federal Income Tax Considerations" and "Legal Matters"
sections of that Registration Statement.
Very truly yours,
/s/ Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
KIRKPATRICK & LOCKHART LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
May 30, 1997
Daily Money Fund
Newbury Street Trust
82 Devonshire Street
Boston, MA 02109
Ladies and Gentlemen:
Daily Money Fund ("DMF"), a Delaware business trust, on behalf of Capital
Reserves: Money Market Portfolio ("Acquired"), a series of DMF, and
Newbury Street Trust ("FNST"), a Delaware business trust, on behalf of
Prime Fund ("Acquiring"), a series of FNST, have requested our opinion as
to certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets and
assume all of the liabilities of Acquired in exchange solely for Capital
Reserve Class shares of beneficial interest in Acquiring ("Acquiring
Shares") pursuant to an Agreement and Plan of Reorganization ("Agreement")
expected to be entered into between Acquired and Acquiring on July 21,
1997.
In rendering this opinion, we have examined a draft of the Agreement
("Draft Agreement"), the prospectus/proxy statement to be filed with the
Securities and Exchange Commission ("SEC") in connection with the
Reorganization, the currently effective prospectuses and statements of
additional information of Acquired and Acquiring, and such other documents
as we have deemed necessary. We have also relied, with your consent, on
certificates of officers of DMF and FNST.
OPINION
Based solely on the facts and representations set forth in the reviewed
documents and the certificates of officers of DMF and FNST, and assuming
that (i) those representations are true on the date of the Reorganization,
(ii) the Reorganization is consummated in accordance with the Agreement,
and (iii) the Agreement does not differ materially from the Draft
Agreement, our opinion with respect to the federal income tax consequences
of the Reorganization is as follows.
1. The Reorganization will be a reorganization under section 368(a)(1)(C)
of the Internal Revenue Code of 1986, as amended ("Code"), and Acquired and
Acquiring will each be parties to the Reorganization under section 368(b)
of the Code.
2. No gain or loss will be recognized by Acquired upon the transfer of all
of its assets to Acquiring in exchange solely for Acquiring Shares and
Acquiring's assumption of Acquired's liabilities followed by the
distribution of those Acquiring Shares to the Acquired shareholders in
liquidation of Acquired.
3. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.
4. The basis of Acquired's assets in the hands of Acquiring will be the
same as the basis of such assets in Acquired's hands immediately prior to
the Reorganization.
5. Acquiring's holding period in the assets to be received from Acquired
will include Acquired's holding period in such assets.
6. The Acquired shareholders will recognize no gain or loss on the
exchange of the shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.
7. The Acquired shareholders' basis in the Acquiring Shares to be received
by them will be the same as their basis in the Acquired Shares to be
surrendered in exchange therefor.
8. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.
The foregoing opinion is based on, and is conditioned on the continued
applicability of, the provisions of the Code and the regulations
thereunder, case law precedent, and the Internal Revenue Service
pronouncements in existence at the date hereof. We express no opinion
other than those contained herein.
We consent to the inclusion of this opinion in the Registration Statement
on Form N-14 filed with the SEC and the inclusion of the name "Kirkpatrick
& Lockhart LLP" in the "Federal Income Tax Consequences of the
Reorganization," "Federal Income Tax Considerations" and "Legal Matters"
sections of that Registration Statement.
Very truly yours,
/s/ Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
KIRKPATRICK & LOCKHART LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
May 30, 1997
Daily Money Fund
Newbury Street Trust
82 Devonshire Street
Boston, MA 02109
Ladies and Gentlemen:
Daily Money Fund ("DMF"), a Delaware business trust, on behalf of Capital
Reserves: Municipal Money Market Portfolio ("Acquired"), a series of DMF,
and Newbury Street Trust ("FNST"), a Delaware business trust, on behalf of
Tax-Exempt Fund ("Acquiring"), a series of FNST, have requested our
opinion as to certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets and
assume all of the liabilities of Acquired in exchange solely for Capital
Reserve Class shares of beneficial interest in Acquiring ("Acquiring
Shares") pursuant to an Agreement and Plan of Reorganization ("Agreement")
expected to be entered into between Acquired and Acquiring on July 21,
1997.
In rendering this opinion, we have examined a draft of the Agreement
("Draft Agreement"), the prospectus/proxy statement to be filed with the
Securities and Exchange Commission ("SEC") in connection with the
Reorganization, the currently effective prospectuses and statements of
additional information of Acquired and Acquiring, and such other documents
as we have deemed necessary. We have also relied, with your consent, on
certificates of officers of DMF and FNST.
OPINION
Based solely on the facts and representations set forth in the reviewed
documents and the certificates of officers of DMF and FNST, and assuming
that (i) those representations are true on the date of the Reorganization,
(ii) the Reorganization is consummated in accordance with the Agreement,
and (iii) the Agreement does not differ materially from the Draft
Agreement, our opinion with respect to the federal income tax consequences
of the Reorganization is as follows.
1. The Reorganization will be a reorganization under section 368(a)(1)(C)
of the Internal Revenue Code of 1986, as amended ("Code"), and Acquired and
Acquiring will each be parties to the Reorganization under section 368(b)
of the Code.
2. No gain or loss will be recognized by Acquired upon the transfer of all
of its assets to Acquiring in exchange solely for Acquiring Shares and
Acquiring's assumption of Acquired's liabilities followed by the
distribution of those Acquiring Shares to the Acquired shareholders in
liquidation of Acquired.
3. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.
4. The basis of Acquired's assets in the hands of Acquiring will be the
same as the basis of such assets in Acquired's hands immediately prior to
the Reorganization.
5. Acquiring's holding period in the assets to be received from Acquired
will include Acquired's holding period in such assets.
6. The Acquired shareholders will recognize no gain or loss on the
exchange of the shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.
7. The Acquired shareholders' basis in the Acquiring Shares to be received
by them will be the same as their basis in the Acquired Shares to be
surrendered in exchange therefor.
8. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.
The foregoing opinion is based on, and is conditioned on the continued
applicability of, the provisions of the Code and the regulations
thereunder, case law precedent, and the Internal Revenue Service
pronouncements in existence at the date hereof. We express no opinion
other than those contained herein.
We consent to the inclusion of this opinion in the Registration Statement
on Form N-14 filed with the SEC and the inclusion of the name "Kirkpatrick
& Lockhart LLP" in the "Federal Income Tax Consequences of the
Reorganization," "Federal Income Tax Considerations" and "Legal Matters"
sections of that Registration Statement.
Very truly yours,
/s/ Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Proxy
Statement and Prospectuses (the Proxy/Prospectuses) constituting part of
this Registration Statement on Form N-14 (the Registration Statement) of
Fidelity Newbury Street Trust (formerly Daily Tax-Exempt Money Fund):
Treasury Fund (formerly Daily Money Fund: U.S. Treasury Portfolio) and
Prime Fund (formerly Daily Money Fund: Money Market Portfolio), of our
report dated December 2, 1996 on the financial statements and financial
highlights included in the October 31, 1996 Annual Report to Shareholders
of Daily Money Fund: U.S. Treasury Portfolio (currently known as Treasury
Fund) and Money Market Portfolio (currently known as Prime Fund).
We also consent to the incorporation by reference in the Registration
Statement, of our report dated August 30, 1996 on the financial statements
and financial highlights included in the July 31, 1996 Annual Report to
Shareholders of Daily Money Fund: Capital Reserves: Money Market
Portfolio; Capital Reserves: U.S. Government Portfolio; and Capital
Reserves: Municipal Money Market Portfolio.
We further consent to the references to our Firm under the headings
"Experts" and "Financial Highlights" in the Proxy/Prospectuses and to the
references to our Firm under the headings "Financial Highlights" in the
Prospectuses and "Auditor" in the Statements of Additional Information for
Fidelity Newbury Street Trust: Treasury Fund and Prime Fund and Daily
Money Fund: Capital Reserves: Money Market Portfolio; Capital Reserves:
U.S. Government Portfolio; and Capital Reserves: Municipal Money Market
Portfolio, which are also incorporated by reference into the
Proxy/Prospectuses.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 6, 1997
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Proxy
Statement and Prospectus (the Proxy/Prospectus) constituting part of this
Registration Statement on Form N-14 (the Registration Statement) of
Fidelity Newbury Street Trust (formerly Daily Tax-Exempt Money Fund):
Tax-Exempt Fund (formerly Daily Tax-Exempt Money Fund), of our report dated
December 10, 1996 on the financial statements and financial highlights
included in the October 31, 1996 Annual Report to Shareholders of Daily
Tax-Exempt Money Fund (currently known as Tax-Exempt Fund).
We further consent to the references to our Firm under the headings
"Experts" and "Financial Highlights" in the Proxy/Prospectus and to the
references to our Firm under the headings "Financial Highlights" in the
Prospectuses and "Auditor" in the Statements of Additional Information for
Fidelity Newbury Street Trust: Tax-Exempt Fund and Daily Money Fund:
Capital Reserves: Municipal Money Market Portfolio, which are also
incorporated by reference into the Proxy/Prospectus.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Dallas, Texas
June 6, 1997
Prime Fund (Formerly Daily Money Fund: Money Market Portfolio)
Pro Forma Combining Schedule of Investments as of
January 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Value
Amount
Due Annuall Prime Fund Cap Combined Prime Fund Cap Reserves: Combined
Date ized Reserves: Money Market
Yield at Money
Time of Market
Purchas
e
DOMESTIC
BANKERS'
ACCEPTANCES
Chase 2/10/97 5.42% $2,152,108 $ $2,152,108 $2,149,230 $ $2,149,230
Manhattan
Bank
Chase 3/6/97 5.46 6,002,696 6,002,696 5,972,983 5,972,983
Manhattan
Bank
Chase 3/17/97 5.54 7,516,650 7,516,650 7,466,397 7,466,397
Manhattan
Bank
Chase 3/31/97 5.45 4,519,867 4,519,867 4,480,690 4,480,690
Manhattan
Bank
CERTIFICATES
OF DEPOSIT
DOMESTIC
CERTIFICATES
OF DEPOSIT
Bankers 2/27/97 5.50 5,000,000 5,000,000 4,999,363 4,999,363
Trust
Company
Chase 3/10/97 5.77 10,000,000 10,000,000 10,000,000 10,000,000
Manhattan
Bank (USA)
Chase 3/11/97 5.75 20,000,000 20,000,000 20,000,000 20,000,000
Manhattan
Bank (USA)
Chase 7/28/97 5.55 10,000,000 5,000,000 15,000,000 10,000,000 5,000,000 15,000,000
Manhattan
Bank (USA)
CoreStates 2/10/97 5.46 10,000,000 10,000,000 9,997,436 9,997,436
Capital
Corp.
Mellon 3/4/97 5.82 5,000,000 5,000,000 5,000,000 5,000,000
Bank, N.A.
Morgan 8/12/97 5.78 4,000,000 4,000,000 3,998,805 3,998,805
Guaranty
Trust, NY
Morgan 8/12/97 5.80 5,000,000 5,000,000 4,998,166 4,998,166
Guaranty
Trust, NY
CHICAGO
BRANCH,
YANKEE
DOLLAR,
FOREIGN
BANKS
ABN-AMR 3/10/97 5.40 15,000,000 15,000,000 15,000,000 15,000,000
O Bank
ABN-AMR 3/18/97 5.80 5,000,000 3,000,000 8,000,000 4,997,440 2,998,464 7,995,904
O Bank
ABN-AMR 12/23/9 5.70 4,000,000 4,000,000 3,998,290 3,998,290
O Bank 7
NEW YORK
BRANCH,
YANKEE
DOLLAR,
FOREIGN
BANKS
Bank of 3/19/97 5.48 20,000,000 20,000,000 20,000,000 20,000,000
Scotland
Treasury
Services
Bank of 2/24/97 5.45 6,000,000 3,000,000 9,000,000 6,000,000 3,000,000 9,000,000
Tokyo -
Mitsubishi
Ltd.
Bank of 2/24/97 5.45 3,000,000 3,000,000
Tokyo -
Mitsubishi
Ltd.
Bank of 3/3/97 5.50 9,000,000 9,000,000 9,000,000 9,000,000
Tokyo -
Mitsubishi
Ltd.
Bank of 3/3/97 5.50 17,000,000 17,000,000 17,000,000 17,000,000
Tokyo -
Mitsubishi
Ltd.
Bank of 3/20/97 5.50 2,000,000 2,000,000 2,000,296 2,000,296
Tokyo -
Mitsubishi
Ltd.
Bank of 5/5/97 5.60 7,000,000 4,000,000 11,000,000 7,000,000 4,000,000 11,000,000
Tokyo -
Mitsubishi
Ltd.
Banque 2/24/97 5.40 5,000,000 5,000,000 4,999,829 4,999,829
Nationale de
Paris
Banque 2/26/97 5.40 2,000,000 2,000,000 1,999,940 1,999,940
Nationale de
Paris
Banque 3/3/97 5.38 9,000,000 9,000,000 9,000,000 9,000,000
Nationale de
Paris
Bayerische 4/7/97 5.40 8,000,000 8,000,000 8,000,000 8,000,000
Landesbank
Girozentrale
Bayerische 4/22/97 5.58 18,000,000 8,000,000 26,000,000 18,000,000 8,000,000 26,000,000
Landesbank
Girozentrale
Bayerische 2/3/97 5.57 25,000,000 25,000,000 25,000,000 25,000,000
Vereinsbank
A.G.
Caisse 2/18/97 5.41 30,000,000 8,000,000 38,000,000 30,000,000 8,000,000 38,000,000
Nationale de
Credit
Agricole
Caisse 3/24/97 5.62 30,000,000 30,000,000 30,000,000 30,000,000
Nationale de
Credit
Agricole
Caisse 6/16/97 5.50 5,000,000 5,000,000 5,000,000 5,000,000
Nationale de
Credit
Agricole
Canadian 2/6/97 5.32 10,000,000 10,000,000 10,000,058 10,000,058
Imperial
Bank of
Commerce
Canadian 2/6/97 5.35 10,000,000 10,000,000 10,000,027 10,000,027
Imperial
Bank of
Commerce
Canadian 3/7/97 5.40 25,000,000 25,000,000 25,000,000 25,000,000
Imperial
Bank of
Commerce
Canadian 3/13/97 5.39 20,000,000 20,000,000 20,000,863 20,000,863
Imperial
Bank of
Commerce
Commerzba 3/5/97 5.38 10,000,000 10,000,000 10,000,000 10,000,000
nk, Germany
Den Danske 4/23/97 5.44 5,000,000 5,000,000 5,000,000 5,000,000
Bank A/S
Den Danske 7/28/97 5.52 5,000,000 5,000,000 5,001,175 5,001,175
Bank A/S
Deutsche 2/25/97 5.30 50,000,000 50,000,000 50,000,000 50,000,000
Bank,
Germany
Landesbank 9/5/97 6.20 15,000,000 15,000,000 15,000,847 15,000,847
Hessen -
Thuringen
Landesbank 9/11/97 6.11 16,000,000 16,000,000 15,998,142 15,998,142
Hessen -
Thuringen
National 2/24/97 5.40 9,000,000 5,000,000 14,000,000 9,000,000 5,000,000 14,000,000
Bank of
Canada
National 2/18/97 5.42 5,000,000 5,000,000 5,000,000 5,000,000
Westminster
Bank, PLC
National 2/19/97 5.45 25,000,000 25,000,000 25,000,124 25,000,124
Westminster
Bank, PLC
National 2/24/97 5.42 5,000,000 5,000,000 4,999,995 4,999,995
Westminster
Bank, PLC
National 3/10/97 5.43 15,000,000 15,000,000 30,000,000 15,000,000 15,000,000 30,000,000
Westminster
Bank, PLC
National 5/1/97 5.42 7,000,000 3,000,000 10,000,000 7,000,282 3,000,121 10,000,403
Westminster
Bank, PLC
Norddeutsch 2/28/97 5.55 25,000,000 25,000,000 25,002,861 25,002,861
e
Landesbank
Rabobank 3/19/97 5.46 1,000,000 1,000,000 999,984 999,984
Nederland,
N.V.
Royal Bank 8/13/97 5.80 5,000,000 5,000,000 4,998,157 4,998,157
of Canada
Sanwa 2/28/97 5.50 5,000,000 5,000,000 5,000,018 5,000,018
Bank,Ltd.
Sanwa Bank, 2/28/97 5.50 7,000,000 7,000,000 2,000,000 2,000,000
Ltd.
Sanwa Bank, 2/28/97 5.50 3,000,000 3,000,000 3,000,011 3,000,011
Ltd.
Sanwa Bank, 3/27/97 5.71 5,000,000 2,000,000 7,000,000 5,000,000 2,000,000 7,000,000
Ltd.
Societe 2/6/97 5.35 20,000,000 20,000,000 20,000,056 20,000,056
Generale,
France
Societe 2/7/97 5.42 15,000,000 15,000,000 15,000,054 15,000,054
Generale,
France
Societe 3/28/97 5.44 1,000,000 1,000,000 999,962 999,962
Generale,
France
Societe 4/3/97 5.43 4,000,000 4,000,000 4,000,308 4,000,308
Generale,
France
Societe 4/9/97 5.42 5,000,000 5,000,000 5,000,000 5,000,000
Generale,
France
Societe 5/22/97 5.53 8,000,000 8,000,000 8,000,782 8,000,782
Generale,
France
Societe 6/10/97 5.53 5,000,000 5,000,000 5,006,116 5,006,116
Generale,
France
Societe 7/28/97 5.55 20,000,000 18,000,000 38,000,000 20,000,000 18,000,000 38,000,000
Generale,
France
Sumitomo 2/18/97 5.49 3,000,000 1,000,000 4,000,000 3,000,010 1,000,003 4,000,013
Bank, Ltd.
Sumitomo 2/18/97 5.50 9,000,000 5,000,000 14,000,000 9,000,000 5,000,000 14,000,000
Bank, Ltd.
Sumitomo 2/24/97 5.49 3,000,000 3,000,000 3,000,000 3,000,000
Bank, Ltd.
Sumitomo 3/6/97 5.57 6,000,000 3,000,000 9,000,000 6,000,000 3,000,000 9,000,000
Bank, Ltd.
Sumitomo 4/3/97 5.60 5,000,000 2,000,000 7,000,000 5,000,000 2,000,000 7,000,000
Bank, Ltd.
Swiss Bank 2/3/97 5.33 4,000,000 4,000,000 4,000,003 4,000,003
Corp.
Swiss Bank 2/10/97 5.35 20,000,000 20,000,000 20,000,000 20,000,000
Corp.
Swiss Bank 2/10/97 5.35 5,000,000 5,000,000 5,000,000 5,000,000
Corp.
Swiss Bank 4/21/97 5.41 13,000,000 13,000,000 13,000,000 13,000,000
Corp.
Swiss Bank 4/23/97 5.41 25,000,000 25,000,000 25,000,000 25,000,000
Corp.
Swiss Bank 4/23/97 5.41 12,000,000 12,000,000 12,000,000 12,000,000
Corp.
Swiss Bank 5/19/97 5.40 10,000,000 25,000,000 35,000,000 10,000,000 25,000,000 35,000,000
Corp.
Swiss Bank 7/22/97 5.53 13,000,000 13,000,000 13,000,000 13,000,000
Corp.
Westdeutsch 2/5/97 5.35 10,000,000 10,000,000 10,000,000 10,000,000
e
Landesbank
Westdeutsch 2/5/97 5.40 5,000,000 5,000,000 5,000,000 5,000,000
e
Landesbank
Westdeutsch 2/24/97 5.32 20,000,000 20,000,000 20,000,000 20,000,000
e
Landesbank
Westdeutsch 3/10/97 5.40 5,000,000 3,000,000 8,000,000 5,000,000 3,000,000 8,000,000
e
Landesbank
Westdeutsch 4/9/97 5.45 8,000,000 4,000,000 12,000,000 8,000,000 4,000,000 12,000,000
e
Landesbank
Westdeutsch 4/21/97 5.50 3,000,000 3,000,000 3,000,000 3,000,000
e
Landesbank
Westpac 3/10/97 5.76 25,000,000 25,000,000 25,000,000 25,000,000
Banking
Corp.
Westpac 3/19/97 5.48 15,000,000 15,000,000 15,000,000 15,000,000
Banking
Corp.
Westpac 3/31/97 5.48 10,000,000 10,000,000 10,000,000 10,000,000
Capital
Corp.
PORTLAND
BRANCH,
YANKEE
DOLLAR,
FOREIGN
BANKS
Bank of 3/17/97 5.47 10,000,000 10,000,000 10,000,000 10,000,000
Nova Scotia
SAN
FRANCISCO
BRANCH,
YANKEE
DOLLAR,
FOREIGN
BANKS
Banque 2/3/97 5.62 50,000,000 50,000,000 49,999,930 49,999,930
Nationale de
Paris
LONDON
BRANCH,
EURODOLLAR,
DOMESTIC
BANKS
Abbey 2/14/97 5.40 6,000,000 3,000,000 9,000,000 5,999,921 2,999,961 8,999,882
National,
Treasury
Services
Abbey 2/18/97 5.42 10,000,000 4,000,000 14,000,000 10,000,000 4,000,000 14,000,000
National,
Treasury
Services
Abbey 2/28/97 5.40 5,000,000 2,000,000 7,000,000 4,999,765 1,999,906 6,999,671
National,
Treasury
Services
Abbey 3/17/97 5.43 22,000,000 20,000,000 42,000,000 22,000,000 20,000,000 42,000,000
National,
Treasury
Services
Abbey 4/16/97 5.50 10,000,000 5,000,000 15,000,000 9,998,957 4,999,478 14,998,435
National,
Treasury
Services
Abbey 4/24/97 5.42 25,000,000 25,000,000 24,999,862 24,999,862
National,
Treasury
Services
Abbey 6/10/97 5.51 10,000,000 10,000,000 10,011,784 10,011,784
National,
Treasury
Services
ABN-AMR 3/27/97 5.60 35,000,000 35,000,000 35,000,511 35,000,511
O Bank
Banco 3/6/97 5.40 4,000,000 4,000,000 3,999,908 3,999,908
Bilbao
Vizcaya,
S.A.
Banco 4/21/97 5.42 3,000,000 3,000,000 3,000,114 3,000,114
Bilbao
Vizcaya,
S.A.
Banco 4/30/97 5.43 6,000,000 6,000,000 6,000,144 6,000,144
Bilbao
Vizcaya,
S.A.
Bank of 3/6/97 5.40 10,000,000 10,000,000 10,000,000 10,000,000
Nova Scotia
Bank of 2/18/97 5.46 6,000,000 3,000,000 9,000,000 5,999,991 2,999,995 8,999,986
Tokyo -
Mitsubishi
Ltd.
Bank of 2/25/97 5.46 5,000,000 3,000,000 8,000,000 5,000,000 3,000,000 8,000,000
Tokyo -
Mitsubishi
Ltd.
Bank of 3/3/97 5.48 7,000,000 4,000,000 11,000,000 7,000,058 4,000,033 11,000,091
Tokyo -
Mitsubishi
Ltd.
Banque 2/13/97 5.56 5,500,000 5,500,000 5,500,032 5,500,032
Nationale de
Paris
Banque 3/21/97 5.45 2,000,000 2,000,000 2,000,605 2,000,605
Nationale de
Paris
Bayerische 3/10/97 5.80 4,000,000 4,000,000 4,000,000 4,000,000
Hypotheken
- -und
Weschel
Bayerische 2/28/97 5.37 5,000,000 5,000,000 4,998,081 4,998,081
Landesbank
Girozentrale
Bayerische 7/7/97 5.56 6,000,000 6,000,000 5,998,662 5,998,662
Landesbank
Girozentrale
Bayerische 7/29/97 5.51 15,000,000 15,000,000 15,003,548 15,003,548
Landesbank
Girozentrale
Bayerische 3/3/97 5.38 13,000,000 13,000,000 13,000,090 13,000,090
Vereinsbank
A.G.
Bayerische 3/10/97 5.80 8,000,000 8,000,000 8,000,000 8,000,000
Vereinsbank
A.G.
Bayerische 3/11/97 5.42 7,000,000 7,000,000 7,000,073 7,000,073
Vereinsbank
A.G.
Canadian 3/18/97 5.50 5,000,000 5,000,000 4,999,620 4,999,620
Imperial
Bank of
Commerce
Canadian 3/19/97 5.45 5,000,000 2,000,000 7,000,000 5,000,000 2,000,000 7,000,000
Imperial
Bank of
Commerce
Kredietbank, 2/12/97 5.40 15,000,000 15,000,000 14,999,821 14,999,821
NV
Kredietbank, 3/3/97 5.39 20,000,000 20,000,000 19,999,960 19,999,960
NV
Morgan 3/27/97 5.45 7,000,000 7,000,000 7,001,424 7,001,424
Guaranty
Trust, NY
National 4/22/97 5.41 5,000,000 5,000,000 5,000,054 5,000,054
Westminster
Bank, PLC
Societe 7/18/97 5.55 15,000,000 15,000,000 15,000,097 15,000,097
Generale,
France
Sumitomo 2/21/97 5.49 5,000,000 2,000,000 7,000,000 5,000,027 2,000,011 7,000,038
Bank, Ltd.
Toronto-Do 3/5/97 5.38 25,000,000 25,000,000 25,000,000 25,000,000
minion Bank
Westdeutsch 4/7/97 5.41 10,000,000 10,000,000 10,000,075 10,000,075
e
Landesbank
Westdeutsch 4/7/97 5.40 5,000,000 5,000,000 5,000,089 5,000,089
e
Landesbank
Westpac 3/24/97 5.52 5,000,000 5,000,000 5,001,403 5,001,403
Banking
Corp.
COMMERCIAL
PAPER
A.H. Robins 2/27/97 5.40 1,000,000 1,000,000 996,151 996,151
Company,
Inc.
Abbey 3/10/97 5.76 4,000,000 4,000,000 3,976,978 3,976,978
National,
North
America
ABN-AMR 2/28/97 5.68 12,800,000 12,800,000 12,746,912 12,746,912
O North
America
Finance, Inc.
ABN-AMR 3/6/97 5.47 10,000,000 10,000,000 9,950,408 9,950,408
O North
America
Finance, Inc.
ABN-AMR 3/6/97 5.68 10,541,000 10,541,000 10,487,566 10,487,566
O North
America
Finance, Inc.
American 3/19/97 5.37 50,000,000 50,000,000 49,662,666 49,662,666
Express
Credit Corp.
American 2/5/97 5.38 2,108,000 2,108,000 2,106,744 2,106,744
Home
Products
American 2/24/97 5.40 5,000,000 5,000,000 4,982,990 4,982,990
Home
Products
Asset 2/18/97 5.43 4,000,000 5,000,000 9,000,000 3,989,857 4,987,321 8,977,178
Securitizatio
n Coop.
Corp.
Asset 2/18/97 5.44 3,000,000 3,000,000 2,992,365 2,992,365
Securitizatio
n Coop.
Corp.
Asset 2/25/97 5.45 5,000,000 5,000,000 4,982,033 4,982,033
Securitizatio
n Coop.
Corp.
Asset 2/25/97 5.56 6,000,000 25,000,000 31,000,000 5,978,000 24,908,333 30,886,333
Securitizatio
n Coop.
Corp.
Asset 2/26/97 5.44 1,000,000 1,000,000 996,264 996,264
Securitizatio
n Coop.
Corp.
Asset 2/27/97 5.42 3,000,000 3,000,000 2,988,408 2,988,408
Securitizatio
n Coop.
Corp.
Associates 2/20/97 5.38 15,000,000 15,000,000 14,958,002 14,958,002
Corp. of
North
America
Associates 3/5/97 5.40 25,000,000 25,000,000 24,881,555 24,881,555
Corp. of
North
America
Associates 3/24/97 5.49 10,000,000 10,000,000 9,923,358 9,923,358
Corp. of
North
America
Associates 4/2/97 5.50 10,000,000 10,000,000 9,909,750 9,909,750
Corp. of
North
America
Associates 4/3/97 5.50 15,000,000 15,000,000 14,862,369 14,862,369
Corp. of
North
America
Australian 2/18/97 5.50 8,000,000 8,000,000 7,979,411 7,979,411
Wheat
Board
AVCO 2/10/97 5.39 10,000,000 10,000,000 9,986,725 9,986,725
Financial
Services
Bank of 2/21/97 5.36 50,000,000 50,000,000 49,853,056 49,853,056
Nova Scotia
Bank of 3/17/97 5.40 5,000,000 5,000,000 4,967,489 4,967,489
Nova Scotia
Bank of 2/25/97 5.75 2,000,000 2,000,000 1,992,533 1,992,533
Scotland
Treasury
Services
Bayerische 2/18/97 5.42 5,000,000 5,000,000 4,987,439 4,987,439
Vereinsbank
A.G.
Bear Stearns 2/14/97 5.41 5,000,000 3,000,000 8,000,000 4,990,340 2,994,204 7,984,544
Cos., Inc.
Bear Stearns 2/26/97 5.38 4,000,000 4,000,000 3,985,264 3,985,264
Cos., Inc.
Bear Stearns 3/19/97 5.47 15,000,000 15,000,000 14,896,500 14,896,500
Cos., Inc.
Bear Stearns 3/24/97 5.49 20,000,000 20,000,000 19,846,433 19,846,433
Cos., Inc.
Beneficial 3/17/97 5.48 5,000,000 5,000,000 10,000,000 4,966,939 4,966,939 9,933,878
Corp.
Beneficial 3/18/97 5.46 25,000,000 25,000,000 24,831,563 24,831,563
Corp.
BHF 2/19/97 5.50 4,000,000 4,000,000 3,989,100 3,989,100
Finance
(Delaware),
Inc.
BP America, 2/13/97 5.32 2,000,000 2,000,000 1,996,467 1,996,467
Inc.
Caisse 2/24/97 5.42 25,000,000 10,000,000 35,000,000 24,915,028 9,966,011 34,881,039
d'Amortisse
ment de la
Dette
Sociale
Caisse 2/24/97 5.42 5,000,000 5,000,000 4,983,005 4,983,005
d'Amortisse
ment de la
Dette
Sociale
Caisse 2/24/97 5.43 5,000,000 5,000,000 4,982,973 4,982,973
d'Amortisse
ment de la
Dette
Sociale
Caisse 2/28/97 5.75 11,000,000 11,000,000 10,953,800 10,953,800
d'Amortisse
ment de la
Dette
Sociale
Caisse 6/3/97 6.01 10,000,000 10,000,000 9,805,139 9,805,139
d'Amortisse
ment de la
Dette
Sociale
Caisse des 2/19/97 5.41 5,000,000 2,000,000 7,000,000 4,986,700 1,994,680 6,981,380
Depots et
Consignatio
ns
Caisse des 3/13/97 5.47 30,000,000 30,000,000 29,820,000 29,820,000
Depots et
Consignatio
ns
Caisse des 3/25/97 5.40 1,299,000 1,299,000 1,288,971 1,288,971
Depots et
Consignatio
ns
Chase 4/15/97 5.48 10,000,000 10,000,000 9,890,500 9,890,500
Manhattan
Corp.
Cheltenham 2/28/97 5.41 10,000,000 10,000,000 9,960,100 9,960,100
&
Gloucester
PLC
Cheltenham 3/11/97 5.47 5,000,000 5,000,000 4,971,764 4,971,764
&
Gloucester
PLC
Chrysler 2/24/97 5.60 5,000,000 5,000,000 4,982,303 4,982,303
Financial
Corporation
Chrysler 3/11/97 5.48 3,000,000 3,000,000 2,982,773 2,982,773
Financial
Corporation
Chrysler 3/12/97 5.49 2,000,000 2,000,000 1,988,191 1,988,191
Financial
Corporation
CIESCO, 2/20/97 5.33 10,000,000 10,000,000 9,972,028 9,972,028
L.P.
CIESCO, 3/6/97 5.34 32,000,000 32,000,000 31,844,533 31,844,533
L.P.
CIT Group 3/17/97 5.48 17,000,000 10,000,000 27,000,000 16,887,592 9,933,878 26,821,470
Holdings,
Inc.
Citibank 2/6/97 5.41 1,000,000 1,000,000 999,258 999,258
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 2/13/97 5.40 7,000,000 7,000,000 6,987,540 6,987,540
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 2/20/97 5.38 3,000,000 3,000,000 2,991,529 2,991,529
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 2/20/97 5.42 2,000,000 2,000,000 1,994,364 1,994,364
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 2/21/97 5.40 5,050,000 5,050,000 5,035,047 5,035,047
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 2/26/97 5.51 4,000,000 4,000,000 3,984,861 3,984,861
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 3/7/97 5.38 5,000,000 5,000,000 4,974,736 4,974,736
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Citibank 3/12/97 5.47 5,000,000 5,000,000 4,970,750 4,970,750
Credit Card
Master Trust
I (Dakota
Certificate
Program)
Commercial 2/25/97 5.52 24,000,000 24,000,000 23,912,480 23,912,480
Credit Co.
Commercial 2/26/97 5.52 5,000,000 5,000,000 4,981,007 4,981,007
Credit Co.
CoreStates 2/10/97 5.43 5,000,000 5,000,000 5,000,000 5,000,000
Capital
Corp.
Den Danske 2/18/97 5.34 50,000,000 50,000,000 49,874,625 49,874,625
Corp., Inc.
Den Danske 2/18/97 5.45 10,000,000 10,000,000 9,974,524 9,974,524
Corp., Inc.
Den Danske 4/15/97 5.43 3,000,000 3,000,000 2,967,454 2,967,454
Corp., Inc.
Eiger Capital 2/18/97 5.37 3,392,000 3,392,000 3,383,447 3,383,447
Corp.
Eiger Capital 3/19/97 5.40 25,000,000 25,000,000 50,000,000 24,829,097 24,829,097 49,658,194
Corp.
Electronic 2/14/97 5.58 9,000,000 5,000,000 14,000,000 8,982,028 4,990,015 13,972,043
Data
Systems
Enterprise 2/7/97 5.50 6,519,000 6,519,000 6,513,089 6,513,089
Funding
Corp.
Enterprise 2/19/97 5.43 4,000,000 4,000,000 3,989,260 3,989,260
Funding
Corp.
Enterprise 2/19/97 5.43 2,000,000 2,000,000 1,994,630 1,994,630
Funding
Corp.
Enterprise 2/20/97 5.49 5,000,000 5,000,000 4,985,671 4,985,671
Funding
Corp.
Enterprise 2/21/97 5.55 4,038,000 4,038,000 4,025,662 4,025,662
Funding
Corp.
Enterprise 2/24/97 5.46 10,014,000 2,000,000 12,014,000 9,979,452 1,993,100 11,972,552
Funding
Corp.
Enterprise 2/25/97 5.49 3,000,000 3,000,000 2,989,140 2,989,140
Funding
Corp.
Enterprise 2/27/97 5.40 5,000,000 5,000,000 4,980,789 4,980,789
Funding
Corp.
Fina Oil and 2/24/97 5.56 10,000,000 10,000,000 9,964,861 9,964,861
Chemical
Company
Ford Motor 2/24/97 5.33 50,000,000 50,000,000 49,830,694 49,830,694
Credit Corp.
Ford Motor 3/10/97 5.38 25,000,000 25,000,000 24,863,819 24,863,819
Credit Corp.
Ford Motor 3/11/97 5.38 25,000,000 25,000,000 24,860,139 24,860,139
Credit Corp.
Ford Motor 3/17/97 5.66 10,000,000 10,000,000 9,932,778 9,932,778
Credit Corp.
Ford Motor 7/28/97 5.51 20,000,000 20,000,000 19,472,933 19,472,933
Credit Corp.
General 2/18/97 5.42 30,000,000 30,000,000 29,924,633 29,924,633
Electric
Capital
Corp.
General 2/19/97 5.42 15,000,000 15,000,000 14,960,100 14,960,100
Electric
Capital
Corp.
General 3/6/97 5.53 3,000,000 3,000,000 2,984,957 2,984,957
Electric
Capital
Corp.
General 3/12/97 5.76 17,000,000 7,000,000 24,000,000 16,896,867 6,957,533 23,854,400
Electric
Capital
Corp.
General 3/18/97 5.39 15,000,000 15,000,000 14,900,813 14,900,813
Electric
Capital
Corp.
General 5/6/97 5.42 40,000,000 40,000,000 39,449,578 39,449,578
Electric
Capital
Corp.
General 5/28/97 5.45 25,000,000 25,000,000 24,569,028 24,569,028
Electric
Capital
Corp.
General 5/28/97 5.44 15,000,000 15,000,000 14,743,833 14,743,833
Electric
Capital
Corp.
General 7/28/97 5.52 12,000,000 12,000,000 11,683,170 11,683,170
Electric
Capital
Corp.
General 7/29/97 5.52 10,000,000 10,000,000 9,734,483 9,734,483
Electric
Capital
Corp.
General 3/3/97 5.37 6,000,000 3,000,000 9,000,000 5,973,500 2,986,750 8,960,250
Electric Co
General 2/20/97 5.70 3,000,000 3,000,000 2,991,220 2,991,220
Motors
Acceptance
Corp.
General 2/24/97 5.71 3,000,000 3,000,000 2,989,362 2,989,362
Motors
Acceptance
Corp.
General 2/25/97 5.71 5,000,000 5,000,000 4,981,500 4,981,500
Motors
Acceptance
Corp.
General 3/3/97 5.45 10,000,000 10,000,000 9,955,250 9,955,250
Motors
Acceptance
Corp.
General 3/31/97 5.70 5,000,000 5,000,000 4,955,372 4,955,372
Motors
Acceptance
Corp.
General 4/14/97 5.63 5,000,000 5,000,000 4,945,250 4,945,250
Motors
Acceptance
Corp.
General 4/15/97 5.63 3,000,000 3,000,000 2,966,694 2,966,694
Motors
Acceptance
Corp.
General 5/7/97 5.51 7,000,000 7,000,000 6,900,989 6,900,989
Motors
Acceptance
Corp.
General 6/23/97 5.62 10,000,000 10,000,000 9,784,436 9,784,436
Motors
Acceptance
Corp.
General 6/25/97 5.62 5,000,000 5,000,000 4,890,600 4,890,600
Motors
Acceptance
Corp.
Generale 4/10/97 5.44 6,000,000 6,000,000 5,939,707 5,939,707
Bank
Generale 6/19/97 5.53 10,000,000 10,000,000 9,793,767 9,793,767
Bank
Generale 7/30/97 5.53 5,000,000 5,000,000 4,866,247 4,866,247
Bank
Glaxo 2/5/97 5.37 1,683,000 1,683,000 1,682,000 1,682,000
Wellcome,
PLC
Goldman 4/29/97 5.50 10,000,000 10,000,000 9,870,709 9,870,709
Sachs
Group, L.P.
(The)
Goldman 5/12/97 5.45 16,000,000 8,000,000 24,000,000 15,764,444 7,882,222 23,646,666
Sachs
Group, L.P.
(The)
GTE Corp. 2/3/97 5.37 3,000,000 3,000,000 2,999,107 2,999,107
GTE Corp. 2/13/97 5.40 4,000,000 4,000,000 3,992,840 3,992,840
Halifax 3/13/97 5.40 5,000,000 5,000,000 4,970,556 4,970,556
Building
Society
Household 2/19/97 5.38 6,000,000 6,000,000 5,984,070 5,984,070
Finance
Corp.
IBM Credit 3/3/97 5.39 2,000,000 2,000,000 1,991,167 1,991,167
Corp.
IBM Credit 3/12/97 5.38 3,000,000 3,000,000 2,982,775 2,982,775
Corp.
J.C. Penney 2/10/97 5.50 1,000,000 1,000,000 998,637 998,637
Funding
Corp.
J.C. Penney 2/13/97 5.50 1,000,000 1,000,000 998,183 998,183
Funding
Corp.
Matterhorn 2/18/97 5.40 3,363,000 3,363,000 3,354,472 3,354,472
Capital
Corp.
MCI 2/20/97 5.34 5,000,000 10,000,000 15,000,000 4,985,961 9,971,922 14,957,883
Communicat
ions Corp.
Merrill 2/4/97 5.43 20,000,000 20,000,000 19,991,092 19,991,092
Lynch &
Co., Inc.
Merrill 3/11/97 5.76 9,000,000 3,000,000 12,000,000 8,946,800 2,982,267 11,929,067
Lynch &
Co., Inc.
Merrill 3/12/97 5.68 4,000,000 2,000,000 6,000,000 3,976,058 1,988,029 5,964,087
Lynch &
Co., Inc.
Merrill 5/15/97 5.44 10,000,000 10,000,000 9,848,361 9,848,361
Lynch &
Co., Inc.
Merrill 7/28/97 5.54 10,000,000 10,000,000 9,734,992 9,734,992
Lynch &
Co., Inc.
Morgan 2/4/97 5.40 9,000,000 3,000,000 12,000,000 8,996,010 2,998,670 11,994,680
Stanley
Group, Inc.
Morgan 2/10/97 5.40 17,000,000 5,000,000 22,000,000 16,977,391 4,993,350 21,970,741
Stanley
Group, Inc.
Morgan 2/10/97 5.40 3,000,000 3,000,000 2,996,010 2,996,010
Stanley
Group, Inc.
National 3/13/97 5.60 5,000,000 5,000,000 4,969,888 4,969,888
Australia
Funding,
Inc.
Nationwide 2/25/97 5.45 1,000,000 1,000,000 996,433 996,433
Building
Society
Nationwide 2/27/97 5.35 4,300,000 4,300,000 4,283,478 4,283,478
Building
Society
Nationwide 3/6/97 5.40 10,000,000 10,000,000 9,951,188 9,951,188
Building
Society
New Center 2/19/97 5.63 3,000,000 3,000,000 2,991,780 2,991,780
Asset Trust
New Center 3/11/97 5.79 3,000,000 3,000,000 2,982,188 2,982,188
Asset Trust
New Center 3/17/97 5.39 7,000,000 4,000,000 11,000,000 6,954,656 3,974,089 10,928,745
Asset Trust
Norwest 3/12/97 5.39 5,000,000 5,000,000 4,971,292 4,971,292
Financial
PG&E 2/19/97 5.36 2,500,000 2,500,000 2,493,338 2,493,338
PHH Corp. 2/6/97 5.43 3,000,000 1,000,000 4,000,000 2,997,763 999,255 3,997,018
PHH Corp. 2/7/97 5.43 3,000,000 1,000,000 4,000,000 2,997,315 999,104 3,996,419
PHH Corp. 2/14/97 5.51 5,000,000 5,000,000 4,990,160 4,990,160
PHH Corp. 2/20/97 5.37 2,990,000 2,990,000 2,981,557 2,981,557
Preferred 2/7/97 5.37 7,000,000 4,000,000 11,000,000 6,993,758 3,996,433 10,990,191
Receivables
Funding
Corp.
Preferred 2/20/97 5.55 10,000,000 10,000,000 9,970,972 9,970,972
Receivables
Funding
Corp.
Preferred 2/20/97 5.67 2,100,000 2,100,000 2,093,771 2,093,771
Receivables
Funding
Corp.
Preferred 2/25/97 5.53 5,000,000 3,000,000 8,000,000 4,981,767 2,989,060 7,970,827
Receivables
Funding
Corp.
SBC Finance 3/11/97 5.76 20,000,000 20,000,000 19,881,778 19,881,778
(DE), Inc.
Sears 3/14/97 5.44 15,000,000 15,000,000 14,908,007 14,908,007
Roebuck
Acceptance
Corp.
Southern 3/12/97 5.40 2,000,000 2,000,000 1,988,409 1,988,409
Company
Group
Southern 4/7/97 5.44 3,000,000 3,000,000 2,970,913 2,970,913
Company
Group
Textron, Inc. 2/10/97 5.53 2,000,000 2,000,000 1,997,250 1,997,250
Textron, Inc. 2/12/97 5.50 2,000,000 2,000,000 1,996,658 1,996,658
Textron, Inc. 3/4/97 5.50 1,000,000 1,000,000 995,290 995,290
Toronto 3/5/97 5.80 11,000,000 11,000,000 10,944,853 10,944,853
Dominion
Holdings
USA, Inc.
Unifunding, 2/7/97 5.73 3,500,000 3,500,000 3,496,674 3,496,674
Inc.
Unifunding, 3/6/97 5.41 5,000,000 4,000,000 9,000,000 4,975,433 3,980,347 8,955,780
Inc.
Unifunding, 4/28/97 5.43 5,000,000 3,000,000 8,000,000 4,936,097 2,961,658 7,897,755
Inc.
Westpac 3/13/97 5.70 10,000,000 10,000,000 9,938,444 9,938,444
Capital
Corp.
FEDERAL
AGENCIES
Federal 3/4/97 5.40 10,000,000 5,000,000 15,000,000 9,992,703 4,996,351 14,989,054
Home Loan
Bank -
Agency
Coupons
Federal 2/3/97 5.40 10,000,000 10,000,000 9,996,967 9,996,967
Home Loan
Bank -
Discount
Notes
Federal 2/4/97 5.30 25,000,000 25,000,000 24,989,104 24,989,104
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 2/7/97 5.31 22,765,000 22,765,000 22,745,043 22,745,043
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 2/14/97 5.3 30,000,000 30,000,000 29,943,341 29,943,341
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 2/24/97 5.34 50,000,000 50,000,000 49,832,292 49,832,292
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 2/26/97 5.46 40,000,000 40,000,000 39,849,722 39,849,722
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 3/7/97 5.31 20,000,000 20,000,000 19,901,400 19,901,400
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 3/21/97 5.43 48,323,000 48,323,000 47,977,007 47,977,007
Home Loan
Mortgage
Corp. -
Discount
Notes
Federal 2/1/97 5.40 25,000,000 25,000,000 24,992,043 24,992,043
National
Mortgage
Assoc. -
Agency
Coupons
Federal 2/2/97 5.45 50,000,000 50,000,000 49,990,426 49,990,426
National
Mortgage
Assoc. -
Agency
Coupons
Federal 2/3/97 5.42 25,000,000 25,000,000 24,986,863 24,986,863
National
Mortgage
Assoc. -
Agency
Coupons
Federal 2/4/97 5.30 10,000,000 10,000,000 9,994,255 9,994,255
National
Mortgage
Assoc. -
Agency
Coupons
Federal 3/9/97 5.40 35,000,000 30,000,000 65,000,000 34,974,055 29,977,761 64,951,816
National
Mortgage
Assoc. -
Agency
Coupons
Federal 3/13/97 5.43 25,000,000 10,000,000 35,000,000 24,983,585 9,993,434 34,977,019
National
Mortgage
Assoc. -
Agency
Coupons
Federal 2/4/97 5.30 30,000,000 30,000,000 29,986,925 29,986,925
National
Mortgage
Assoc. -
Discount
Notes
Federal 2/10/97 5.29 25,160,000 25,160,000 25,127,103 25,127,103
National
Mortgage
Assoc. -
Discount
Notes
Federal 4/3/97 5.32 58,000,000 58,000,000 57,488,956 57,488,956
National
Mortgage
Assoc. -
Discount
Notes
BANK NOTES
CoreStates 2/28/97 5.41 25,000,000 25,000,000 25,000,000 25,000,000
Capital
Corp.
First 3/6/97 5.44 13,000,000 13,000,000 13,000,000 13,000,000
National
Bank of
Boston
First of 6/4/97 5.44 5,000,000 5,000,000 4,999,321 4,999,321
America
Bank -
Michigan
Key Bank of 2/3/97 5.21 6,000,000 6,000,000 5,997,986 5,997,986
New York
Morgan 2/14/97 5.45 104,000,000 104,000,000 103,940,594 103,940,594
Guaranty
Trust, NY
Wachovia 2/3/97 5.38 10,000,000 10,000,000 10,000,003 10,000,003
Bank of
North
Carolina,
NA
MASTER
NOTES
Goldman 2/8/97 5.50 7,000,000 7,000,000 7,000,000 7,000,000
Sachs
Group, L.P.
(The)
J.P. Morgan 2/7/97 5.49 10,000,000 10,000,000 10,000,000 10,000,000
Securities
Norwest 2/1/97 5.46 7,000,000 7,000,000 7,000,000 7,000,000
Corp.
Norwest 2/3/97 5.44 7,000,000 7,000,000 7,000,000 7,000,000
Corp.
MEDIUM-TE
RM NOTES
Exxon 2/3/97 5.79 18,100,000 18,100,000 18,100,000 18,100,000
Shipping Co.
Exxon 2/3/97 5.82 25,000,000 25,000,000 25,000,000 25,000,000
Shipping Co.
General 2/1/97 5.50 6,000,000 6,000,000 6,000,000 6,000,000
Motors
Acceptance
Corp.
General 2/13/97 5.41 3,000,000 3,000,000 2,999,934 2,999,934
Motors
Acceptance
Corp.
Merrill 2/18/97 5.45 5,000,000 5,000,000 4,999,465 4,999,465
Lynch &
Co., Inc.
Norwest 4/22/97 5.55 8,000,000 8,000,000 8,000,000 8,000,000
Corp.
SHORT-TERM
NOTES
CSA 2/7/97 5.49 22,000,000 22,000,000 22,000,000 22,000,000
Funding - B
CSA 2/7/97 5.49 23,000,000 23,000,000 23,000,000 23,000,000
Funding - C
Liquid Asset 2/3/97 5.53 8,000,000 8,000,000 8,000,000 8,000,000
Backed
Securities
Trust
(1996-2)
SMM Trust 2/28/97 5.49 10,000,000 10,000,000 10,000,000 10,000,000
(1996-I)
SMM Trust 2/18/97 5.51 7,500,000 7,500,000 7,500,000 7,500,000
(1996-P)
TIME
DEPOSITS
Sumitomo 2/24/97 5.50 10,000,000 10,000,000 10,000,000 10,000,000
Bank, Ltd.
Maturity
Amount
Combined
DMF: DMF:MMkt
Money Cap &
Market Reserves: CapRes:MM
Money kt
Market
REPURCHASE
AGREEMENTS
In a joint
trading
account:
(U.S.
Treasury
Obligations)
dated 9,189,249 9,189,249 9,185,000 9,185,000
1/31/97 due
2/3/97 at
5.55%
dated 17,119,949 17,119,949 17,112,000 17,112,000
1/31/97 due
2/3/97 at
5.57%
(U.S.
Government
Obligations)
dated 17,210,986 17,210,986 17,203,000 17,203,000
1/31/97 due
2/3/97 at
5.57%
TOTAL 2,535,684,331 1,491,414,653 4,027,098,984
INVES
TMENT
S
</TABLE>
PRIME FUND (FORMERLY DAILY MONEY FUND: MONEY MARKET PORTFOLIO)
CAPITAL RESERVES : MONEY MARKET PORTFOLIO
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES AS OF
1/31/97
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CAP RESERVES: PRO-FORMA PRO-FORMA
PRIME FUND MONEY COMBINED ADJUSTMENTS COMBINED
MARKET
ASSETS
Investment in securities, at value
- See accompanying schedule $2,535,684,331 $1,491,414,65 $4,027,098,984 $4,027,098,984
3
Interest receivable 11,484,565 8,836,047 20,320,612 20,320,612
TOTAL ASSETS 2,547,168,896 1,500,250,700 4,047,419,596 0 4,047,419,596
LIABILITIES
Payable for investments purchased $12,000,000 $13,000,000 $25,000,000 $25,000,000
Share transactions in process 4,859,633 3,632,097 8,491,730 8,491,730
Distributions payable 614,874 235,224 850,098 850,098
Accrued management fee 896,191 478,325 1,374,516 1,374,516
Other payables and accrued expenses 566,326 782,639 1,348,965 1,348,965
TOTAL LIABILITIES 18,937,024 18,128,285 37,065,309 0 37,065,309
NET ASSETS $2,528,231,872 $1,482,122,41 $4,010,354,287 0 $4,010,354,287
5
Net Assets consist of :
Paid in capital $2,528,996,656 $1,482,132,80 $4,011,129,457 $4,011,129,457
1
Accumulated undistributed net realized
gain (loss) on investments (764,784) (10,386) (775,170) (775,170)
NET ASSETS $2,528,231,872 $1,482,122,41 $4,010,354,287 0 $4,010,354,287
5
NET ASSET VALUE:
Net Assets $2,528,231,872 1,482,122,415 4,010,354,287 4,010,354,287
Offering price and redemption price per share $1.00 $1.00 $1.00 $1.00
Shares outstanding $2,528,996,656 1,482,132,801 4,011,129,457 4,011,129,457
</TABLE>
PRIME FUND (FORMERLY DAILY MONEY FUND: MONEY MARKET PORTFOLIO)
CAPITAL RESERVES : MONEY MARKET PORTFOLIO
PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED
1/31/97
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CAP RESERVES: PRO-FORMA PRO-FORMA
PRIME FUND MONEY COMBINED ADJUSTMENTS COMBINED
MARKET
INTEREST INCOME $139,487,046 $69,186,008 $208,673,054 $208,673,054
EXPENSES
Management Fee $12,760,179 $6,273,612 $19,033,791 (9,530,268) (a) $9,503,523
Transfer agent fees-Daily Money Class 5,996,881 5,996,881 (67,717) (b) 5,929,164
Transfer agent fees-Capital Reserves Class 3,210,496 3,210,496 (113,484) (b) 3,097,012
Distribution fees-Daily Money Class 0 0 6,371,316 (a) 6,371,316
Distribution fees-Capital Reserves Class 4,389,859 4,389,859 1,874,556 (a) 6,264,415
Accounting fees and expenses 242,537 144,741 387,278 (50,775) (b) 336,503
Non-interested trustees' compensation 8,672 5,992 14,664 0 14,664
Custodian fees and expenses 65,047 29,003 94,050 0 94,050
Registration fees-Daily Money Class 250,632 250,632 0 250,632
Registration fees-Capital Reserves Class 258,343 258,343 280,894 (c) 539,237
Audit 33,974 28,904 62,878 (22,878) (b) 40,000
Legal 18,862 8,786 27,648 0 27,648
Miscellaneous 30,403 9,756 40,159 0 40,159
Total expenses before reductions 19,407,187 14,359,492 33,766,679 (1,258,356) 32,508,323
Expenses reductions (2,819,676) (1,938,606) (4,758,282) 89,746 (d) (4,668,536)
Total expenses 16,587,511 12,420,886 29,008,397 (1,168,610) 27,839,787
NET INTEREST INCOME 122,899,535 56,765,122 179,664,657 1,168,610 180,833,267
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investments (14,196) 55,529 41,333 41,333
Net increase (decrease) in net assets $122,885,339 $56,820,651 $179,705,990 1,168,610 $180,874,600
resulting from operations
</TABLE>
Prime Fund (Formerly Daily Money Fund:Money Market Portfolio)
Capital Reserves: Money Market Portfolio
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of Investments and
Statement of Assets and Liabilities as of January 31, 1997, and the
unaudited Pro Forma Combining Statement of Operations for the twelve months
ended January 31, 1997, are intended to present the financial condition and
related results of operations of Prime Fund (formerly Daily Money Fund:
Money Market Portfolio) as if the reorganization with Capital Reserves:
Money Market Portfolio and the decrease in the expense limitation [see (d)
below] had been consummated at February 1, 1996. Had the pro forma
adjustments not included the effect of the decreased expense limitation,
Pro Forma Combined Expense reductions would have been $3,540,942, resulting
in Pro Forma Combined Net Interest Income and Pro Forma Combined Net
Increase in Net Assets resulting from operations of $179,705,673 and
$179,747,005, respectively.
The pro forma adjustments to these pro forma financial statements are
comprised of:
(a) Reflects the proposed changes in management fee and 12b-1 fee
structures which are
effective subject to shareholder approval. Shareholders of Prime Fund
approved the changes
at a special meeting held on May, 9, 1997. Changes to the fee structure
of Capital Reserves:
Money Market Portfolio will be effective upon commencement of the new
class following the
approval of the proposed reorganization.
(b) Decrease in fees reflects an elimination of duplicate services.
(c) Increase in fees reflects costs incurred as result of reorganization
reduced by elimination of
duplicate services.
(d) Reflects reduction in expenses due to FMR's agreement to temporarily
limit expenses of
Treasury Fund: Capital Reserves Class to 0.90% of average net assets
effective upon
commencement of the new class following the approval of the proposed
reorganization.
The unaudited pro forma combining statements should be read in conjunction
with the separate annual audited financial statements as of October 31,
1996 and the separate semiannual unaudited financial statements as of April
30, 1997 of Prime Fund (formerly Daily Money Fund: Money Market Portfolio),
and the separate annual audited financial statements as of July 30, 1996
and the separate semiannual unaudited financial statements as of January
31, 1997 of Capital Reserves: Money Market Portfolio which are incorporated
by reference in the Statement of Additional Information to this Proxy and
Prospectus.
Tax-Exempt Fund (formerly Daily Tax-Exempt Money Fund)
Capital Reserves: Municipal Money Market Portfolio
Pro Forma Combining Schedule of Investments as of
January 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Principal Value
Amount
Tax-Exempt Cap Reserves: Tax-Exempt Cap Reserves:
Fund Muni MMkt Combined Fund Muni MMkt Combined
Alaska $8,300,000 $8,300,000 $8,300,000 $8,300,000
Valdez
Marine
Terminal Rev.
Rfdg.
(Atlantic
Richfield Co.
Proj.) Series
1994 B,
3.65%,
VRDN
ALABAMA 2,000,000 2,000,000 2,000,000 2,000,000
Alabama Hsg. 3,000,000 3,000,000 3,000,000 3,000,000
Fin. Auth.
Multi-Family
Hsg. Rfdg.
Rev. (Rime
Village
Huntsville)Se
ries 1996 B,
3.55%
(FNMA
Guaranteed)
VRDN
Jefferson 1,000,000 1,000,000 1,000,000 1,000,000
County Swr.
Rev. Series
1995 A,
3.85%, LOC
Bayerische
Landesbank
Girozentale,
VRDN
Phenix City 1,100,000 1,100,000 1,100,000 1,100,000
Envir. Impt.
Rev. Bonds
(Mead Coated
Board Proj.)
Series 1988,
3.50%, tender
2/7/97, LOC
ABN-AMRO
Bank (AMT)
Roanoke Ind. 400,000 400,000 400,000 400,000
Dev. Board
Ind. Dev. Rev.
(Wehadkee/R
ock Mills
Proj.) Series
1992, 3.70%,
LOC
SunTrust
Bank, VRDN
(AMT)
Talladega Ind.
Dev. Rev.
(Wehadkee
Yarn Mills
Proj.) Series
1990, 3.70%,
LOC
SunTrust
Bank,
Atlanta,
VRDN
(AMT)
ARIZONA 900,000 900,000 900,000 900,000
Arizona Ed. 1,510,000 1,510,000 1,510,000 1,510,000
Loan Mktg.
Corp. Series
1991 A,
3.65%, LOC
Dresdner
Bank, A.G.,
Germany,
VRDN
(AMT)
Arizona 200,000 200,000 200,000 200,000
Health Facs.
Auth. Rev.
(Samcor 1986
Loan
Pool-Samarit
an Health
Care) 3.60%
(FGIC
Insured) (BPA
Chase
Manhattan
Bank) VRDN
Coconino 1,000,000 1,000,000 1,000,000 1,000,000
County Poll.
Cont. Corp.
Poll. Cont.
Rev. (Arizona
Pub. Svc. Co.
Navajo Proj.)
Series 1994
A, 3.75%,
LOC Bank of
America,
VRDN
(AMT)
Maricopa 1,600,000 1,600,000 1,600,000 1,600,000
County Poll.
Cont. Rev.
Bonds
(Southern
California
Edison Co.)
Series 1985
E, 3.50%,
tender 4/7/97
Maricopa 1,000,000 1,000,000 1,000,000 1,000,000
Poll. Cont.
Rev. (Arizona
Pub. Svc.)
Series 1994
E, 3.65%,
LOC Bank of
America NT
& SA, VRDN
Maricopa 1,000,000 1,000,000 1,000,000 1,000,000
Poll. Cont.
Rev. Series
1994 B,
3.65% LOC
Morgan
Guaranty
Trust Co.,
VRDN
Mesa Ind. 1,000,000 1,000,000 1,000,000 1,000,000
Dev. Auth.
Participating
VRDN, Series
1997 B,
3.65%
(Liquidity
Faciltiy
Caisse des
Depots et
Consignations
)
Phoenix Civic 900,000 900,000 900,000 900,000
Corp. Arpt.
Impt. Series
1995, 3.65%,
LOC
Landesbank
Hessen-Thuri
ngen, VRDN
(AMT)
Pima County 1,000,000 1,000,000 1,000,000 1,000,000
Ind. Dev.
Auth. (Tucson
Elec. Pwr. Co.
Proj.) Series
1990 A,
3.60%, LOC
Bankers Trust
Company,
VRDN
(AMT)
Pima County 3,400,000 3,400,000 3,400,000 3,400,000
School Dist.
#1 Series
1996 D,
3.75%
(Liquidity
Facility
Norwest Bank
NA,
Minnesota)
Pinal County 1,300,000 1,300,000 1,300,000 1,300,000
Ind. Dev.
Auth. Ind.
Dev.
Rev.(Sunbelt
Refining Co.
LP Proj.)
Series 1988,
3.65%, LOC
Bankers Trust
Company,
VRDN
(AMT)
Pinal County
Ind. Dev. Poll.
Cont. Rev.
(Magna
Copper Co.
Proj.) Series
1984, 3.70%,
LOC Nat'l.
Westminster
Bank PLC,
VRDN
ARKANSAS 1,575,000 1,575,000 1,575,000 1,575,000
Arkansas 2,500,000 2,500,000 2,500,000 2,500,000
Hosp. Equip.
Fin. Auth.
Rev. (Baptist
Health Proj.)
Series 1995,
3.65%, LOC
Credit Suisse
First Boston,
VRDN
Clark County 900,000 900,000 900,000 900,000
Solid Waste
Disp. Rev.
(Reynolds
Metals Co.
Proj.) 3.60%,
LOC
SunTrust
Bank Atlanta,
VRDN
(AMT)
Univ. of
Arkansas
Rev. 3.65%,
LOC Credit
Suisse First
Boston,
VRDN
CALIFORNIA 1,400,000 1,400,000 1,403,023 1,403,023
Alameda 7,850,000 2,300,000 10,150,000 7,868,758 2,305,267 10,174,025
County
TRAN 4.50%
6/30/97
California 2,700,000 2,700,000 2,709,677 2,709,677
Gen. Oblig.
RAN Series
1996-97,
4.50%
6/30/97
California 1,000,000 1,000,000 1,002,356 1,002,356
School Cash
Reserves
Prog. TRAN
Series 1996
A, 4.75%
7/2/97
Fresno TRAN 1,000,000 1,000,000 2,000,000 1,001,973 1,001,973 2,003,946
4.50%
6/30/97
Los Angeles 2,000,000 1,000,000 3,000,000 2,004,291 1,003,052 3,007,343
Commty.
College Dist.
TRAN Series
1996-97,
4.50% 7/1/97
Los Angeles 3,100,000 3,100,000 3,100,000 3,100,000
County
TRAN Series
1996-97,
4.50%
6/30/97
Los Angeles 8,000,000 8,000,000 8,016,228 8,016,228
Reg'l. Arpt.
Impt. Corp.
Lease Rev.
(Los Angeles
Int'l./Air
France)
3.75%, LOC
Societe
Generale
France,
VRDN
Los Angeles 1,500,000 1,500,000 1,505,127 1,505,127
TRAN Series
1996, 4.50%
6/19/97
Oakland 1,300,000 1,000,000 2,300,000 1,303,810 1,002,931 2,306,741
TRAN Series
1996, 4.75%
6/30/97
Ventura
County
TRAN Series
1996, 4.75%
7/2/97
COLORADO 1,250,000 1,250,000 1,250,000 1,250,000
El Paso 1,350,000 1,350,000 1,350,000 1,350,000
County Gen.
Oblig.
Participating
VRDN, Series
1996 D,
3.75%,
(Liquidity
Facility
Norwest Bank
NA,
Minnesota)
Fort Collins 575,000 575,000 575,000 575,000
County Ind.
Dev. Rev.
(Phelps
- -Tointon
Millwork
Proj.) Series
1993, 3.70%,
LOC Bank
One,
Milwaukee,
VRDN
(AMT)
Larimer 3,400,000 3,400,000 3,400,000 3,400,000
County
(Ultimate
Support Sys.)
Series 1995
B, 3.80%,
LOC Bank
One,
Colorado,
N.A., VRDN
(AMT)
Smith Creek
County
Metropolitan
Dist. Series
1995, 3.60%,
LOC
NationsBank
of TX, VRDN
DELAWARE 1,000,000 1,000,000 1,000,000 1,000,000
Delaware 1,150,000 1,150,000 1,150,000 1,150,000
Econ. Dev.
Auth. (Waste
Recovery
Proj.) Series
1996 B,
3.60%, LOC
Canadian
Imperial Bank
of Commerce,
VRDN
(AMT)
Delaware 6,800,000 6,800,000 6,800,000 6,800,000
Econ. Dev.
Auth.
Multi-Family
Rev.
(Schoolhouse
Trust
Prog./Americ
an Mtg.)
3.85%, LOC
Marine
Midland
Bank, VRDN
Delaware 4,710,000 4,710,000 4,710,000 4,710,000
Econ. Dev.
Auth. Rev.
(Hosp. Billing
& Collection
Svcs. Proj.)
Series 1985
B, 3.60%
(MBIA
Insured) (BPA
Morgan
Stanley
Group, Inc.)
VRDN
Delaware
Econ. Dev.
Auth. Rev.
(Peninsula
United
Methodist
Homes Inc.)
Series 1992
B, 3.55%,
LOC
CoreStates
Bank, VRDN
District of 500,000 500,000 500,000 500,000
Columbia
Metro.
Washington
Arpt. Port.
Auth. Bonds,
3.60%, tender
3/26/97, LOC
NationsBank,
N.A. (AMT)
FLORIDA 775,000 775,000 775,000 775,000
Dade County 1,475,000 1,475,000 1,475,000 1,475,000
Hsg. Fin.
Corp.
Participating
VRDN, Series
1991 A,
3.79%
(Liquidity
Facility Bank
One,
Colorado)
(AMT)
Dade County 2,170,000 2,170,000 2,170,000 2,170,000
Multi-Family
Hsg. Rev.
(Biscayne
View Apts.
Proj.) Series
1993, 3.80%
(Commonwea
lth Life
Insurance Co.
Guaranteed)
VRDN
(AMT)
Dade County 2,000,000 2,000,000 2,000,000 2,000,000
Seaport
Participating
VRDN, Series
PA-134,
3.50%
(Liquidity
Facility
Merrill Lynch
& Co.)
Florida Local 1,600,000 500,000 2,100,000 1,600,000 500,000 2,100,000
Gov't. Fin.
Commission.
Rev. Series A,
3.50%
4/11/97, LOC
First Union
Nat'l. Bank,
CP
Florida Local 1,500,000 1,500,000 1,500,000 1,500,000
Gov't. Fin.
Commission.
Rev. Series A,
3.65%
2/26/97, LOC
First Union
Nat'l. Bank,
CP
Florida Muni. 1,000,000 1,000,000 1,000,000 1,000,000
Pwr. Agcy.
(Pooled Loan
Proj.) Series
A, 3.60%
2/21/97, LOC
First Union
Nat'l. Bank,
CP
Hillsborough 2,000,000 1,000,000 3,000,000 2,000,000 1,000,000 3,000,000
County Ind.
Dev. Auth.
Poll. Cont.
Rev. Rfdg.
(Tampa Elec.
County Proj.)
Series 1990,
3.65%,
VRDN
Jacksonville 5,500,000 5,500,000 5,500,000 5,500,000
Health Fac.
Auth.
Participating
VRDN, Series
1996 M,
3.60%
(Liquidity
Facility
Caisse des
Depots et
Cosignations)
Lee County 800,000 800,000 800,000 800,000
Hosp. Board
Hosp. Rev.
Bonds (Lee
Memorial
Hosp. Proj.)
Series 1992
B, 3.40%
tender
2/13/97, LOC
SunTrust
Bank
Okeechobee 2,500,000 2,500,000 2,500,000 2,500,000
County Solid
Waste Rev.
(Chambers
Waste Sys.)
Series 1992,
3.85%, LOC
Morgan
Guaranty
Trust Co. NY,
VRDN
(AMT)
St. Lucie 600,000 600,000 600,000 600,000
County Poll.
Cont. Rev.
Rfdg. Bonds
(Florida Pwr.
& Light Co.
Proj.) Series
1994 A,
3.60%, tender
2/21/97
Sunrise Util. 5,000,000 5,000,000 5,000,000 5,000,000
Sys.
Participating
VRDN, Series
SG-16,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Sunshine 1,400,000 1,000,000 2,400,000 1,400,000 1,000,000 2,400,000
State Gov't.
Fin.
Commission
Series 1994,
3.60%
2/20/97, CP
Sunshine 2,000,000 2,000,000 2,000,000 2,000,000
State Gov't.
Fing.
Commission
Bonds Series
1986, 3.55%,
tender 3/7/97
Sunshine
State Gov't.
Fing.
Commission
Bonds Series
1994, 3.60%,
2/19/97, CP
GEORGIA 2,785,000 2,785,000 2,785,000 2,785,000
Atlanta Gen. 1,000,000 1,000,000 1,000,000 1,000,000
Oblig.
Participating
VRDN, Series
SG-58,
3.60%
(Liquidity
Facility
Societe
Generale,
France)
Brunswick & 2,100,000 2,100,000 2,100,000 2,100,000
Glynn County
Dev. Auth.
(Georgia
Pacific Corp.
Proj.) Series
1996, 3.70%,
LOC
Commerzban
k, Germany,
VRDN
(AMT)
Burke County 1,500,000 1,500,000 1,500,000 1,500,000
Dev. Auth.
Poll. Cont.
Rev. (Georgia
Pwr. Co.)
Series 1994,
3.70%,
VRDN
Burke County 1,495,000 1,495,000 1,495,000 1,495,000
Dev. Auth.
Poll. Cont.
Rev. Bonds
(Oglethorpe
Pwr. Co.
Vogtle Proj.)
Series 1992
A, 3.60%,
tender
2/20/97, LOC
Credit Suisse
First Boston
Cherokee 1,000,000 1,000,000 1,000,000 1,000,000
County Wtr.
& Swr. Auth.
Participating
VRDN, Series
PA47B,
3.55% (MBIA
Insured)
(Liquidity
Facility
Merrill Lynch
& Co.)
Dekalb 1,000,000 1,000,000 1,000,000 1,000,000
County Hsg.
Auth.
Multi-Family
Hsg. Rev.
(Bryton Hill
Apts. Proj.)
Series 1996,
3.65%, LOC
PNC Bank,
Kentucky,
VRDN
Fulton 5,670,000 5,670,000 5,670,000 5,670,000
County Hsg.
Auth. Multi
Family Hsg.
Rev. Rfdg.
(Holcomb's
Landing Apts.
Proj.) 3.65%,
LOC First
Union Nat'l.
Bank, VRDN
Fulton 1,000,000 1,000,000 1,000,000 1,000,000
County Hsg.
Auth.
Multi-Family
Hsg. Rev.
Rfdg.
(Champions
Green Apts.
Proj./Saratoga
Association)
Series 1994
B, 3.60%,
LOC
Southtrust
Bank
Alabama,
VRDN
Fulton 1,000,000 1,000,000 1,000,000 1,000,000
County
Multifamily
Hsg. Rev.
Bonds
(Greenhouse
Holcomb
Bridge Apt)
3.60%
(FNMA Coll.)
VRDN
Georgia Muni 400,000 400,000 400,000 400,000
Elec. Auth.
Bonds (Proj.
One) Series
1994 E,
3.60%, tender
3/10/97, LOC
ABN-AMRO
Bank
Georgia 3,000,000 3,000,000 3,000,000 3,000,000
Muni. Elec.
Auth. Bonds
(Gen.
Resolution
Proj.) Series
1987 A,
3.55%, tender
3/10/97
Georgia 1,500,000 1,500,000 1,500,000 1,500,000
Muni. Elec.
Auth.
Participating
VRDN, Series
SG-40,
3.60%
(Liquidity
Facility
Societe
Generale,
France)
(AMT)
Georgia 145,000 145,000 145,000 145,000
Muni. Elec.
Auth.
Subordinated
Bonds (Proj.
1) Series
1994 E,
3.50%, tender
4/8/97, LOC
ABN-AMRO
Bank
Pierce County 2,700,000 2,700,000 2,700,000 2,700,000
Ind. Dev. &
Bldg. Auth.
Rev.
(American
Egg Prods.
Inc. Proj.)
Series 1989,
3.70%, LOC
SunTrust
Bank Atlanta,
VRDN
(AMT)
Rockdale 1,700,000 1,700,000 1,700,000 1,700,000
County Hosp.
Auth. Rev.
Series 1994,
3.55%, LOC
SunTrust
Bank Atlanta,
VRDN
Savannah 1,400,000 1,400,000 1,400,000 1,400,000
Econ. Dev.
Auth. Rev.
Rfdg. (La
Quinta Motor
Inns) Series
1991, 3.60%,
LOCNationsB
ank, VRDN
Worth County
Ind. Dev.
Auth. Rev.
(Seabrook
Enterprises)
Series 1996
A, 3.55%,
LOC
SunTrust
Bank Atlanta
IDAHO 1,500,000 1,500,000 1,500,000 1,500,000
Caribou 3,000,000 3,000,000 3,000,000 3,000,000
County Poll.
Cont. Rev.
Rfdg.
(Monsanto
Co.) Series
1990, 3.50%,
VRDN
Idaho Health 2,500,000 2,500,000 2,505,890 2,505,890
Facs. Auth.
Rev. (St.
Lukes Reg.
Med. Ctr.)
3.70%, LOC
Credit Suisse
First Boston,
VRDN
Idaho TAN
Series 1996,
4.50%
6/30/97
ILLINOIS 2,800,000 2,800,000 2,800,000 2,800,000
Chicago Tax 3,300,000 3,300,000 3,300,000 3,300,000
Increment
Allocation
Rev.
(Stockyards
Southeast
Quad) Series
1996 B,
3.60%, LOC
Northern
Trust Co.
Chicago,
VRDN
Chicago O' 2,400,000 1,000,000 3,400,000 2,400,000 1,000,000 3,400,000
Hare Int'l.
Arpt. Rev.
Series 1988
A, 3.60%,
LOC
Bayerische
Landesbank
Girozentrale,
VRDN
(AMT)
Chicago 1,800,000 1,800,000 1,800,000 1,800,000
School
Reform
Participating
VRDN, Series
96-BB,
3.68%
(Liquidity
Facility Bank
of America
NT & SA)
Cook County 1,100,000 1,100,000 1,100,000 1,100,000
Rev. (Catholic
Charities
Hosp.) Series
1988 A-1,
3.55%, LOC
Nat'l.
Westminster
Bank, VRDN
Decatur Wtr. 2,945,000 2,945,000 2,945,000 2,945,000
Rev. Bonds
Series 1985,
3.55%, tender
3/12/97, LOC
Sumitomo
Bank Ltd.
Japan
East Hazel 900,000 900,000 900,000 900,000
Crest
Multi-Family
Hsg. Rev.
(I-80 &
Halstead
Proj.) Series
1985 A,
3.85%, LOC
Marine
Midland
Bank, VRDN
Illinois Dev. 1,410,000 1,410,000 1,410,000 1,410,000
Fin. Auth.
(Kindlon
Partners Proj.)
3.75%, LOC
LaSalle
National
Bank, VRDN
(AMT)
Illinois Dev. 10,000,000 10,000,000 10,000,000 10,000,000
Fin. Auth.
Mutil-Family
Hsg. Rev.
Rfdg.
(Garden Glen
Apts.) Series
1993, 3.70%,
VRDN
Illinois Dev. 1,400,000 1,400,000 1,400,000 1,400,000
Fin. Auth.
Poll. Cont.
Rev. Rfdg.
(Commonwea
lth Edison
Proj.) Series
1996 A,
3.65%
(AMBAC
Insured)
(Liquidity
Facility Bank
of New York)
VRDN
Illinois Dev. 1,000,000 1,000,000 1,000,000 1,000,000
Fin. Auth.
Rev.
(Presbyterian
Home Lake
Forest) Series
1996 A,
3.55%, LOC
LaSalle Nat'l.
Bank, VRDN
Illinois Edl. 2,000,000 2,000,000 2,000,000 2,000,000
Fac. Auth.
Rev. (Chicago
Children's
Museum)
Series 1994,
3.50%, LOC
Nat'l. Bank of
Detroit,
VRDN
Illinois Edl. 1,160,000 1,160,000 1,160,000 1,160,000
Facs. Auth.
Rev. (Art
Instiute of
Chicago)
Series 1996,
3.55%
(Liquidity
Facility Bank
of America,
Illinois)
VRDN
Illinois Edl. 400,000 400,000 400,000 400,000
Facs. Auth.
Rev. (Univ.
Pooled Prog.)
Series 1985,
3.50% (FGIC
Insured) (BPA
First Nat'l.
Bank
Chicago)
VRDN
Illinois Health 1,200,000 1,200,000 1,200,000 1,200,000
Facs. Auth.
Rev.
(Methodist
Med. Ctr.
Proj.) Series
1985 B,
3.65%, LOC
Sumitomo
Bank Ltd.
Japan, VRDN
Illinois Health 400,000 400,000 400,000 400,000
Facs. Auth.
Rev. Rfdg.
(Franciscan
Eldercare
Commty.
Svc.) Series
1996 C,
3.60%, LOC
LaSalle Nat'l.
Bank, VRDN
Illinois Hsg. 1,645,000 1,645,000 1,645,000 1,645,000
Dev. Auth.
Multi-Family
Hsg. Rev.
(Williamsburg
Apt. Proj.)
Series 1991,
3.60%, LOC
Landesbank
Hessen-Thuri
ngen, VRDN
Illinois Reg. 1,000,000 1,000,000 1,000,000 1,000,000
Trans. Auth.
Participating
VRDN, Series
SG-10,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Illinois Reg. 1,000,000 1,000,000 1,000,000 1,000,000
Trans. Auth.
Participating
VRDN, Series
SG-19,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
(AMT)
Illinois Reg. 3,375,000 3,375,000 3,375,000 3,375,000
Trans. Auth.
Participating
VRDN, Series
SG-82,
3.60%
(Liquidity
Facility
Societe
Generale)
Lombard Ind. 1,100,000 1,100,000 1,100,000 1,100,000
Proj. Rev.
Rfdg. (B&H
Partnership
Proj.)
3.925%, LOC
Comerica
Bank-Detroit,
VRDN
Mundelein 1,785,000 1,785,000 1,785,000 1,785,000
Ind. Dev. Rev.
Rfdg. (1200
Town Line
Rd. Proj.)
3.50%, LOC
Harris Trust
& Saings
Bank, VRDN
Schaumburg 2,000,000 2,000,000 2,000,000 2,000,000
Ind. Dev. Rev.
Rfdg. (La
Quinta Motor
Inns Inc.
Proj.) 3.60%,
LOC
NationsBank,
VRDN
Schaumburg 1,200,000 1,200,000 1,200,000 1,200,000
Gen. Oblig.
Rev. Series
1996 A,
3.55% (BPA
Credit Suisse
First Boston)
VRDN
Springfield 1,000,000 1,000,000 1,000,000 1,000,000
Commty.
Impt. Rev.
(Kent Family,
Inc. Proj.)
3.55%, LOC
PNC Bank
N.A., VRDN
Winnebago
County Rev.
(Mill Proj.)
Series 1996,
3.60%, LOC
Bank One,
Chicago,
VRDN
INDIANA 1,000,000 1,000,000 1,004,130 1,004,130
Carmel Clay 2,585,000 2,585,000 2,585,000 2,585,000
School Dist.
TAN 4.25%
12/31/97
Indiana Ed. 1,000,000 1,000,000 1,000,000 1,000,000
Facs. Auth.
Rev.
(Tri-State
Univ., Inc.
Proj.) 3.60%,
LOC Bank
One,
Indianapolis,
VRDN
Indiana Trans. 1,500,000 1,500,000 1,500,000 1,500,000
Fin. Auth.
Participating
VRDN, Series
BT-218,
3.65%,
Liquidity
Facility
Bankers Trust
Co.
Indianapolis 3,110,000 3,110,000 3,110,000 3,110,000
Gas Util. Sys.
(Citizens Gas
& Coke)
3.55%
3/27/97
(Liquidity
Facility NBD
Bank, NA
Indiana) CP
Noblesville 650,000 650,000 650,913 650,913
Econ. Dev.
Rev. Rfdg.
(River's Edge
Apt. Proj.)
Series 1992,
3.60%, LOC
Bank One,
VRDN
Portage 2,400,000 2,400,000 2,400,000 2,400,000
Township
School Trans.
TAN 3.86%
12/31/97
Purdue Univ. 5,100,000 5,100,000 5,100,000 5,100,000
Rev. (Student
Fees) Series
H, 3.40%,
VRDN
Sullivan Poll. 700,000 700,000 700,000 700,000
Cont. Rev.
Bonds
(Hoosier
Energy Elec.
Coop.) Series
1985 L-4,
3.50%, tender
3/24/97
Sullivan Poll.
Cont. Rev.
Bonds
(Hoosier
Energy Elec.
Coop.) Series
1985-L 3,
3.50%, tender
3/10/97
IOWA 1,100,000 1,100,000 1,100,000 1,100,000
Iowa Hsg. 1,000,000 1,000,000 1,004,448 1,004,448
Fin. Auth.
Multi-Family
Hsg.
Rev.(Small
Bus. Loan
Prog.) Series
1985 A,
3.60%, LOC
Federal Home
Loan Bank,
VRDN
Iowa School
Corp. TRAN,
Series
1996-97 A,
4.75%
6/27/97 (FSA
Insured)
KANSAS 4,665,000 4,665,000 4,665,000 4,665,000
Burlington 600,000 600,000 600,000 600,000
Poll. Cont.
Bonds
(Kansas Elec.
Pwr.) Series
1985 C-1,
3.60% tender,
2/19/97
Butler County 1,690,000 1,690,000 1,690,000 1,690,000
Solid Waste
Disposal Fac.
(Texaco Inc.)
Series 1994
A, 3.80%,
VRDN
(AMT)
Olathe Edl.
Facs. Rev.
(College
Assoc. Pooled
Ed. Loan
Prog.) Series
1989 A,
3.50%, LOC
Midland Bank
PLC, VRDN
KENTUCKY 700,000 700,000 700,000 700,000
Cynthiana 1,600,000 1,600,000 1,600,000 1,600,000
Ind. Dev. Rev.
(E.D. Bullard
Co. Proj.)
3.75%, LOC
NationsBank,
NA, VRDN
(AMT)
Georgetown 1,200,000 1,200,000 1,200,000 1,200,000
Ed. Inst. Rev.
(Georgetown
College Proj.)
Series 1992,
3.55%, LOC
PNC Bank
N.A., VRDN
Jefferson
County Poll.
Cont. Rev.
Bonds
(Louisville
Gas & Elec.
Co.) Series
1993 A,
3.60%, tender
2/21/97
LOUISIANA 7,320,000 7,320,000 7,320,000 7,320,000
Jefferson 2,185,000 2,185,000 2,185,000 2,185,000
Parish Hosp.
Rev. (W.
Jefferson
Med. Ctr.
Dist. #1)
Series 1986,
3.55%, LOC
Rabobank
Nederland,
N.V., VRDN
Louisiana 1,500,000 1,500,000 1,500,000 1,500,000
Pub. Facs.
Auth. Wtr.
Rev. Rfdg.
(Louisiana
Wtr. Co.
Proj.) Series
1993, 3.60%,
LOC Bank
One Texas,
VRDN
Plaquemines 2,000,000 2,000,000 2,000,000 2,000,000
Parish Envir.
Rev. Rfdg.
(BP
Exploration &
Oil, Inc.)
Series 1995,
3.75%,
VRDN
(AMT)
West Baton 200,000 200,000 200,000 200,000
Rouge Parish
Ind. Dev. Rev.
Bonds (Dow
Chemical #3)
3.50%, tender
4/1/97
West Baton 1,000,000 1,000,000 1,000,000 1,000,000
Rouge Parish
Ind. Dist. #3
Rev. (Dow
Chemical Co.
Proj.) Series
1993, 3.80%,
VRDN
(AMT)
West Baton
Rouge Parish
Ind. Dist. #3
Rev. Bonds
(Dow
Chemical Co.
Proj.) Series
1991, 3.55%,
tender
3/13/97
MARYLAND 1,300,000 1,300,000 1,300,000 1,300,000
Baltimore 570,000 570,000 570,000 570,000
County Hsg.
Mtg. Rev.
(Spring Hill
Apt.) Series
1991, 3.55%,
LOC
Sumitomo
Bank Ltd.
Japan, VRDN
Baltimore 1,500,000 1,500,000 1,500,000 1,500,000
Econ. Dev.
Rev.
(Rock-Tenn
Converting
Co.) Series
1987, 3.70%,
LOC
SunTrust
Bank Atlanta
, VRDN
(AMT)
Baltimore
Rev. Rfdg.
Participating
VRDN, Series
SG-20,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Massachusett 2,000,000 2,000,000 2,002,374 2,002,374
s
Massachusett
s Gen. Oblig.
BAN Series
1996 A,
4.25%
6/10/97
MICHIGAN 3,100,000 1,000,000 4,100,000 3,104,026 1,001,299 4,105,325
Detroit 1,700,000 1,700,000 1,700,000 1,700,000
School Dist.
RAN 4.50%
5/1/97
Michigan 980,000 980,000 980,000 980,000
Hosp. Fin.
Auth. Rev.
(Hosp. Equip.
Loan Prog.)
Series 1995
A, 3.60%,
LOC First of
America
Bank-Michig
an, VRDN
Michigan 1,000,000 1,000,000 1,002,403 1,002,403
Hsg. Dev.
Auth.
Participating
VRDN, Series
PT-58, 3.70%
(Liquidity
Facility Credit
Suisse First
Boston
(AMT)
Michigan 2,500,000 2,500,000 2,500,000 2,500,000
Muni. Auth.
RAN Series
1996 A,
4.50% 7/3/97
Michigan 1,500,000 1,500,000 1,500,000 1,500,000
Strategic
Fund Ind.
Dev. Rev.
(Michigan
Sugar
Co.-Croswell
Proj.) 3.55%,
LOC
SunTrust
Bank Atlanta,
VRDN
Michigan 1,000,000 1,000,000 1,000,000 1,000,000
Strategic
Fund Ltd.
Oblig. Rev.
(Michigan
Sugar
Co.-Caro
Proj.) Series
1991, 3.55%,
LOC
SunTrust
Bank Atlanta,
VRDN
Michigan 3,500,000 3,500,000 3,500,000 3,500,000
Strategic
Fund Poll.
Cont. Rev.
(Dow
Chemcial
Proj.) Series
1986, 3.50%,
tender
2/28/97
Michigan
Strategic
Fund Poll.
Cont. Rev.
Rfdg.
(Consumers
Pwr. Co.
Proj.) Series
1988 A,
3.65%, LOC
Union Bank
of
Switzerland,
VRDN
MINNESOTA 5,000,000 5,000,000 5,000,000 5,000,000
Becker Poll. 2,000,000 2,000,000 2,000,000 2,000,000
Cont. Rev.
Bonds
(Northern
States Pwr.
Co.
Sherbourne
County)
Series1993-B
, 3.60%,
tender
2/25/97
Bloomington 2,335,000 2,335,000 2,335,000 2,335,000
Port Auth.
Spl. Tax Rev.
Rfdg. Bonds
(Mall of
America
Proj.) 3.60%
(FSA Insured)
VRDN
Olmsted 2,000,000 2,000,000 2,000,000 2,000,000
County (COP
Human
Services
Campus
Infrastructure
Proj.) 3.60%,
LOC Toronto
Dominion
Bank, VRDN
Red Wing 1,200,000 1,200,000 1,200,000 1,200,000
Poll. Cont.
Rev.
(Northern
States Pwr.
Co.) 3.65%,
VRDN
Rochester 1,250,000 1,000,000 2,250,000 1,250,000 1,000,000 2,250,000
Health Care
Facs. Rev.
Bonds (Mayo
Med. Center.)
3.60%, tender
2/11/97
St. Paul Hsg.
and Redev.
Auth.
(Children's
Health Care)
Series 1996
E, 3.75%
(FSA Insured)
(Liquidity
Facility
Norwest Bank
NA,
Minnesota)
MISSISSIPPI 1,000,000 1,000,000 1,000,000 1,000,000
Mississippi
Bus. Fin.
Corp. Rev.
(Mississippi
Coll. Proj.)
Series 1996,
3.55%, LOC
NationsBank,
N.A. South,
VRDN
MISSOURI 480,000 480,000 480,000 480,000
Independence 4,000,000 4,000,000 4,000,000 4,000,000
Ind. Dev.
Auth.
(Interlock
Realty Co.
Proj.) 3.80%,
LOC Star
Bank, NA,
VRDN
(AMT)
Missouri 1,800,000 1,800,000 1,800,000 1,800,000
Health & Ed.
Facs.
(Lutheran
Senior Svcs. )
3.60%, LOC
LaSalle
Nat'l.Bank,
VRDN
St. Louis 1,000,000 1,000,000 1,003,336 1,003,336
Planned
Expansion
Auth. Ind.
Dev. Rev.
Rfdg.
(Alumax
Foils Proj.)
Series 1992 ,
3.50%, LOC
PNC Bank
N.A., VRDN
St. Louis 1,000,000 1,000,000 1,003,537 1,003,537
TRAN 4.75%
6/30/97
Univ. of
Missouri
BAN Series
1996-97,
4.75%
6/30/97
NEVADA 4,290,000 4,290,000 4,290,000 4,290,000
Clark County 3,250,000 3,250,000 3,250,000 3,250,000
Ind. Dev. Rev.
(Nevada Pwr.
Co. Proj.)
Series 1995
C, 3.60%,
LOC Barclays
Bank PLC
UK, VRDN
Clark County 2,000,000 2,000,000 2,000,000 2,000,000
Ind. Dev. Rev.
(Nevada Pwr.
Co.) Series
1995 A,
3.70%, LOC
Barclays
Bank PLC
UK, VRDN
(AMT)
Clark County 1,000,000 1,000,000 2,000,000 1,000,000 1,000,000 2,000,000
Poll. Cont.
Rev. Bonds
(Southern
California
Edison)
Series 1987
A, 3.45%,
tender
3/10/97
(AMT)
Clark County 3,200,000 3,200,000 3,200,000 3,200,000
School Dist.
Participating
VRDN, Series
BT 192,
3.70%
(Liquidity
Facility
Bankers Trust
Co.) VRDN
Nevada Muni.
Participating
VRDN, Series
962801,
3.68%
(Liquidity
Facility
Citibank)
NEBRASKA 3,070,000 3,070,000 3,070,000 3,070,000
Omaha Pub.
Pwr. Dist.
Elec. Sys.
Participating
VRDN, Series
1993 D,
3.55%
(Liquidity
Facility
Merrill Lynch
& Co. Inc.)
NEW 1,000,000 1,000,000 1,000,000 1,000,000
HAMPSHIRE
New
Hampshire
Higher Ed. &
Health Facs.
Auth. Rev.
(St. Paul's
School)
3.50%, LOC
State Street
Bank & Trust
Co., Boston,
VRDN
NEW MEXICO 1,000,000 500,000 1,500,000 1,000,000 500,000 1,500,000
New Mexico
State Hwy.
Commission
Tax Rev.
Hwy. Bonds
Series 1996,
3.70%, tender
2/4/97 (FSA
Insured)
(Liquidity
Facility
Canadian
Imperial Bank
of
Commerce)
NEW JERSEY 2,000,000 2,000,000 2,000,000 2,000,000
New Jersey
Gen. Oblig.
Participating
VRDN, Series
943005,
3.63%
(Liquidity
Facility
Citibank)
NEW YORK 1,461,000 1,461,000 1,461,229 1,461,229
Hempstead 1,167,000 1,167,000 1,167,895 1,167,895
BAN 3.50%
2/28/97
Nassau 1,000,000 1,000,000 1,000,000 1,000,000
County BAN
4.50%
3/14/97
New York 15,150,000 4,000,000 19,150,000 15,195,111 4,012,474 19,207,585
City Muni.
Assistance
Corp. Bond
Series
BT-225,
3.30%, tender
2/20/97
(Liquidity
Facility
Bankers Trust
Co)
New York 3,000,000 3,000,000 3,000,000 3,000,000
City RAN
Series
1996-B,
4.50%
6/30/97
New York
State Pwr.
Auth. Bonds
3.70%, tender
3/1/97
NORTH 800,000 800,000 800,000 800,000
CAROLINA
Piedmont
Triad Arpt.
Auth. Spl.
Facs. Rev.
(Triad Int'l.
Maintenance
Corp. Proj.)
Series 1989,
3.75%, LOC
Mellon Bank
NA, VRDN
(AMT)
OHIO 1,000,000 1,000,000 1,001,664 1,001,664
Beavercreek 900,000 900,000 901,683 901,683
City BAN 4%
8/15/97
Chillicothe 1,000,000 1,000,000 1,003,284 1,003,284
Wastewtr.
Treatment
BAN 4.41%
9/19/97
Finneytown 400,000 400,000 400,000 400,000
BAN 4.38%
7/17/97
Hamilton 900,000 900,000 900,000 900,000
Health Sys.
Rev.
(Franciscan
Sisters) Series
1987 A,
3.75%, LOC
Sumitomo
Bank Ltd.
Japan, VRDN
Ohio Hsg. 1,000,000 1,000,000 1,000,883 1,000,883
Fin. Agcy.
Participating
VRDN, Series
96-6, 3.70%
(Liquidity
Facility Bank
of New York)
(AMT)
Toledo BAN
4.25%
5/15/97
OKLAHOMA 3,000,000 3,000,000 3,000,000 3,000,000
Cushing 3,300,000 3,300,000 3,300,000 3,300,000
Muni. Auth.
Correctional
Facs. Rev.
Series 1996,
3.65%, LOC
First Union
Nat'l Bank,
VRDN
Guymon Util.
Auth. Rev.
(Seaboard
Proj.) Series
1995, 3.70%,
LOC
SunTrust
Bank Atlanta
(AMT)
OREGON 500,000 500,000 500,000 500,000
Oregon Hsg.
& Commty.
Svcs. Dept.
Mtg. Bonds
(Single
Family Mtg.
Prog.) Series
K, 3.65%,
tender
12/11/97
(AMT)
PENNSYLVANIA 2,490,000 2,490,000 2,490,000 2,490,000
Allegheny 1,550,000 1,550,000 1,550,000 1,550,000
County Hosp.
Dev. Auth.
Rev. (St.
Margaret
Mem. Hosp.)
Series 1992
A, 3.70%,
LOC Mellon
Bank, VRDN
Allegheny 350,000 350,000 350,000 350,000
County Ind.
Dev. Auth.
Rev. (United
Jewish
Federation)
Series 1996
A, 3.55%,
LOC PNC
Bank N.A.,
VRDN
Berks County 560,000 560,000 560,000 560,000
Ind. Dev.
Auth. Facs.
Rev. (RAM
Industries,
Inc.) Series
1996, 3.95%,
LOC
CoreStates
Bank, VRDN
(AMT)
Berks County 2,235,000 2,235,000 2,235,000 2,235,000
Ind. Dev.
Auth. Rev.
(Construction
Fasteners
Proj.) Series
1996 A,
3.55%, LOC
CoreStates
Bank, VRDN
Bucks County 1,210,000 1,210,000 1,210,000 1,210,000
Ind. Dev.
Auth. Ind.
Dev . Rev.
(Double H
Plastics Inc.
Proj.) Series
1993, 3.95%,
LOC
CoreStates
Bank, VRDN
(AMT)
Bucks County 750,000 750,000 750,000 750,000
Ind. Dev.
Auth.Ind. Dev
. Rev.
(Associates
Proj.) Series
1993, 3.95%,
LOC
CoreStates
Bank, VRDN
(AMT)
Carbon 1,200,000 1,200,000 1,200,000 1,200,000
County Ind.
Dev. Auth.
Resource
Recovery
Rev. Bonds
(Panther
Creek
Partners Proj.)
Series 1991
A, 3.60%,
tender 4/9/97,
LOC Nat'l.
Westminster
PLC (AMT)
Dauphin 2,500,000 2,500,000 2,500,000 2,500,000
County Gen.
Auth. Hosp.
Rev. (Reading
Hosp. & Med.
Ctr.) Series
1994 A,
3.60%,
VRDN
Delaware 1,700,000 1,700,000 1,700,000 1,700,000
Valley Reg.
Fin. Auth.
Local Gov't.
Rev. Series
1985 C,
3.60%, LOC
Midland Bank
PLC, VRDN
Delaware 1,800,000 1,800,000 1,800,000 1,800,000
Valley Reg.
Fin. Auth.
Local Gov't.
Rev. Series
1986, 3.60%,
LOC Marine
Midland
Bank, VRDN
Emmaus Gen. 2,200,000 2,200,000 2,200,000 2,200,000
Auth. Local
Gov't. Rev.
Series 1989
D-10, 3.60%,
LOC
Canadian
Imperial Bank
of Commerce,
VRDN
Montgomery 1,985,000 1,985,000 1,985,000 1,985,000
County
Higher Ed. &
Health Auth.
(Pottstown
Healthcare
Corp. Proj.)
Series 1992,
3.55%, LOC
CoreStates
Bank, VRDN
North 1,030,000 1,030,000 1,030,000 1,030,000
Lebanon
Township
Muni Auth.
Rev. (Grace
Commty. Inc.
Proj.) Series
1992 B,
3.55%, LOC
CoreStates
Bank, VRDN
Northern 5,000,000 5,000,000 5,000,000 5,000,000
Pennsylvania
Wtr. Auth.
Participating
VRDN, Series
SGA-30,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Northeastern 600,000 600,000 600,000 600,000
Hosp. & Ed.
Auth.
(Allhealth
Pool Fing.)
3.65%, LOC
Chase
Manhattan
Bank, VRDN
Pennsylvania 250,000 250,000 250,000 250,000
Econ. Dev.
Fin. Auth.
Econ Dev.
Rev.
(Lutheran
Youth &
Family Serv.)
Series 1993
A, 3.55%,
LOC PNC
Bank NA,
VRDN
Pennsylvania 1,000,000 1,000,000 1,000,000 1,000,000
Econ. Dev.
Fin. Auth.
Rev. (Port
Erie Plastics
Proj.) Series
1989 D-9,
3.70%, LOC
PNC Bank
NA, VRDN
(AMT)
Pennsylvania 435,000 435,000 435,000 435,000
Econ. Dev.
Fin. Auth.
Rev. (Sun
Star, Inc.
Proj.) Series
1994 A-5,
3.70%, LOC
PNC Bank
NA, VRDN
(AMT)
Pennsylvania 1,500,000 1,500,000 1,500,000 1,500,000
Econ. Dev.
Fin. Auth.
Rev. (ASK
Foods, Inc.)
Series A-1,
3.70%, LOC
PNC Bank
NA, VRDN
(AMT)
Pennsylvania 8,100,000 3,000,000 11,100,000 8,123,707 3,008,953 11,132,660
Econ. Dev.
Fin. Auth.
Rev:
(Dodge-Regu
pol, Inc. Proj.)
Series D-4,
3.70%, LOC
PNC Bank
NA, VRDN
(AMT)
Pennsylvania 1,000,000 1,000,000 1,001,965 1,001,965
TAN Series
1996-97,
4.50%
6/30/97
Philadelphia 1,000,000 1,000,000 1,002,157 1,002,157
School Dist.
TRAN Series
1996-97,
4.50%
6/30/97
Philadelphia 1,000,000 1,000,000 1,000,000 1,000,000
TRAN Series
1996-97,
4.50%
6/30/97
Pittsburgh 2,400,000 2,400,000 2,400,000 2,400,000
Wtr. & Swr.
Sys. Rev.
Participating
VRDN, Series
BT-181,
3.70%
(Liquidity
Facility
Bankers Trust
Co.)
Quakertown 2,000,000 2,000,000 2,000,000 2,000,000
Hosp. Auth.
Hosp. Rev.
(HPS Group
Pooled Fing.
Prog.) Series
1985 A,
3.55%, LOC
PNC Bank
NA, VRDN
Schuylkill 1,000,000 1,000,000 1,000,000 1,000,000
County Ind.
Dev. Auth.
Resource
Recovery
Rev.
(Gilberton
Pwr.) 3.55%,
LOC Mellon
Bank NA,
VRDN
Venango Ind.
Dev. Auth.
Resource
Recovery
Rev. Bonds
(Scrubgrass
Proj.) Series
1990 B,
3.50%, tender
3/25/97, LOC
Nat'l.
Westmister
Bank PLC
(AMT)
RHODE ISLAND 1,800,000 1,800,000 1,800,000 1,800,000
Rhode Island
Ind. Fac.
Corp. Ind.
Rev. (NFA
Corp Proj.)
3.90%, LOC
Bank of
Boston,
VRDN
(AMT)
SOUTH 1,000,000 1,000,000 1,002,944 1,002,944
CAROLINA
Cherokee 1,125,000 1,125,000 1,125,000 1,125,000
County
School Dist
#1 BAN 4%
9/10/97
Lexington 700,000 700,000 700,000 700,000
County
School Dist.
Gen. Oblig.
Bonds Series
1996, 5.75%
2/1/97
Marlboro 2,000,000 2,000,000 2,000,000 2,000,000
County Solid
Waste
Disposal Fac.
(Willamette
Ind. Inc.
Proj.) Series
1995, 3.65%,
LOC
Deutsche
Bank,
Germany,
VRDN
(AMT)
South 9,415,000 9,415,000 9,415,000 9,415,000
Carolina
Econ. Dev.
Rev. (Paxar
Corp. Proj.)
Series 1996,
3.70%, LOC
Wachovia
Bank of
Georgia,
VRDN
(AMT)
South 2,796,000 2,796,000 2,796,000 2,796,000
Carolina Hsg.
Fin. & Dev.
Auth.
Multi-Family
Hsg. Rev.
(Spartanburg
Oxford Proj.)
Series 1990
D, 3.75%,
(Continental
Casualty
Insurance Co.
Guaranteed)
VRDN
South 1,242,000 1,242,000 1,242,000 1,242,000
Carolina Pub.
Svc. Auth.
Rev. 3.50%
4/9/97, CP
South 3,000,000 3,000,000 3,000,000 3,000,000
Carolina Pub.
Svc. Auth.
Rev. 3.60%
2/21/97, CP
South 1,000,000 1,000,000 1,000,000 1,000,000
Carolina Pub.
Svc. Auth.
Rev. 3.60%
2/24/97, CP
South 2,400,000 2,400,000 2,400,000 2,400,000
Carolina Pub.
Svc. Auth.
Participating
VRDN Series
96C4001,
3.63%
(Liquidity
Facility
Citibank)
Walhalla Rev. 1,700,000 1,700,000 1,700,000 1,700,000
Rfdg.
(Avondale
Mills Inc.
Proj.) Series
1990, 3.55%,
LOC
SunTrust
Bank Atlanta,
VRDN
York County 4,000,000 4,000,000 4,000,000 4,000,000
Poll. Cont.
Rev.
(Carolina
Elec. Proj.)
Series 1984
N-2, 3.60%,
VRDN
York County
Poll. Cont.
Rev. Bonds
(North
Carolina Elec.
Co.) Series
1984 N-3,
3.80%, tender
3/15/97
SOUTH 520,000 520,000 520,000 520,000
DAKOTA
South Dakota
Hsg. Dev.
Auth.Particip
ating VRDN,
Series
PA-119,
3.70%
(Liquidity
Facility
Merrill Lynch
& Co.)
(AMT)
TENNESSEE 4,000,000 4,000,000 4,000,000 4,000,000
Clarksville 800,000 800,000 800,000 800,000
Pub. Bldg.
Auth. Pooled
Fing. Rev.
Series 1995,
3.55%, LOC
NationsBank,
N.A. South,
VRDN
Cookeville 500,000 500,000 500,000 500,000
Ind. Dev.
Board Ind.
Dev. Rev.
(Delbar
Products Inc.
Proj.) 3.70%,
LOC PNC
Bank NA,
VRDN
(AMT)
Memphis-Sh 4,100,000 4,100,000 4,100,000 4,100,000
elby County
Poll. Cont.
Rev.
(Birmingham
Steel) Series
1996, 3.70%,
LOC PNC
Bank NA,
Kentucky,
VRDN
(AMT)
Metropolitan 1,000,000 1,000,000 1,000,000 1,000,000
Nashville &
Davidson
County
Pooled Loan
Ed. Prog. Rev.
Series A,
3.55%, LOC
NationsBank,
VRDN
Montgomery 1,000,000 1,000,000 1,000,000 1,000,000
County Pub.
Bldg. Auth.
Pooled Fing.
Rev. 3.55%,
LOC
NationsBank
N.A. South,
VRDN
Montgomery 2,000,000 2,000,000 2,000,000 2,000,000
County Pub.
Bldg. Auth.,
3.55%, LOC
NationsBank
N.A.South,
VRDN
Morristown 1,000,000 1,000,000 1,000,000 1,000,000
Ind. Dev.
(Lakeway
Container Inc.
Proj.) Series
1993, 3.65%,
LOC First
Tennessee
Bank, NA,
VRDN
(AMT)
Nashville & 1,800,000 1,800,000 1,800,000 1,800,000
Davidson
Counties
Health & Ed.
Fin. Auth.
(Adventist
Health Sys.
Sunbelt)
Series 1996
A, 3.55%,
LOC
SunTrust
Bank, VRDN
Nashville 1,005,000 1,005,000 1,005,000 1,005,000
Metropolitan
Arpt. Auth.
Spl. Facs.
Rev.
(American
Airlines Proj.)
Series A,
3.65%, LOC
Credit Suisse
First Boston,
VRDN
Rutherford 1,300,000 1,300,000 1,300,000 1,300,000
County
(Cumberland
- -Swan Inc.
Proj.) Series
1987, 3.55%,
LOC Third
Nat'l. Bank,
VRDN
Shelby 2,465,000 2,465,000 2,465,000 2,465,000
County Gen.
Oblig.
Participating
VRDN, Series
SGB-21,
3.65%
(Liqiudity
Facility
Societe
Generale,
France)
Tennessee 1,000,000 1,000,000 1,000,000 1,000,000
Hsg. Dev.
Agcy.
Homeowners
hip Prog.
Bonds Series
1996-1C,
3.25%, tender
2/6/97 (AMT)
Tennessee 995,000 995,000 995,000 995,000
Hsg. Dev.
Agcy.
Participating
VRDN, Series
PT-59B,
3.70%
(Liquidity
Facility Credit
Suisse First
Boston)
(AMT)
Trenton Ind.
Dev. Rev.
(Dyersburg
Fabrics Inc.)
Series 1990,
3.70%, LOC
SunTrust
Bank Atlanta,
VRDN
(AMT)
TEXAS 1,000,000 1,000,000 1,000,000 1,000,000
Austin Hsg. 750,000 750,000 750,000 750,000
Fin. Corp.
Multi-Family
Hsg. Rev.
(Riverchase
Proj.) Series
1985 A,
3.675%, LOC
Household
Finance
Corp., VRDN
Austin 1,000,000 1,000,000 1,000,000 1,000,000
Independent
School Dist.
TRAN
4.016%
8/29/97
Austin Util. 960,000 960,000 960,000 960,000
Sys. Rev.
Series A,
3.50%
3/20/97, LOC
Morgan
Guaranty
Trust Co., NY,
CP
Brazos 1,000,000 1,000,000 1,000,000 1,000,000
Harbor Ind.
Dev. Corp.
Bonds (Dow
Chemical
Corp.) Series
1986, 3.55%,
tender 4/9/97
Brazos River 1,000,000 1,000,000 1,000,000 1,000,000
Harbor
Navigation
Dist. Bonds
(Dow
Chemical
Corp.) Series
1991, 3.55%,
tender 4/9/97
Brazos River 1,100,000 1,100,000 1,100,000 1,100,000
Harbor
Navigation
Dist. Bonds
(Dow
Chemical
Corp.) Series
1991, 3.60%,
tender
3/12/97
Brazos River 1,000,000 1,000,000 1,000,000 1,000,000
Harbor
Navigation
Dist. of
Brazoria
County
Bonds (Dow
Chemical Co.
Proj.) Series
1993, 3.80%,
VRDN
(AMT)
Brazos River 500,000 500,000 500,000 500,000
Harbor
Navigation
Dist. of
Brazoria
County
Bonds (Dow
Chemical Co.
Proj.) Series
1988, 3.50%,
tender 3/6/97
(AMT)
Brazos River 1,000,000 1,000,000 1,000,000 1,000,000
Harbor
Navigation
Dist. of
Brazoria
County
Bonds (Dow
Chemical Co.
Proj.) Series
1988, 3.60%,
tender 5/6/97
(AMT)
Brazos River 2,750,000 2,750,000 2,750,000 2,750,000
Harbor
Navigation
Dist. of
Brazoria
County
Bonds (Dow
Chemical Co.
Proj.) Series
1992, 3.55%,
tender 3/7/97
(AMT)
Brazos River 705,000 705,000 706,098 706,098
Harbor
Navigation
Dist. Bonds
(Dow
Chemcial
Proj.) 3.60%,
tender
2/12/97
Cedar Hill 1,700,000 1,700,000 1,700,000 1,700,000
Independent
School
District Unltd.
Tax School
Bldg. and
Rfdg. Bonds
Series 1996,
4% 8/15/97
Dallas Area 1,000,000 1,000,000 1,000,000 1,000,000
Rapid Transit
Auth. Sales
Tax Rev.
Series A,
3.55%
3/25/97, LOC
CreditSuisse
First
Boston/Swiss
Bank, CP
Dallas Area 2,250,000 2,250,000 2,250,000 2,250,000
Rapid Transit
Auth. Sales
Tax Rev.
Series A,
3.60%
5/13/97, LOC
CreditSuisse
First
Boston/Swiss
Bank, CP
Dallas Area 1,000,000 1,000,000 1,000,000 1,000,000
Rapid Transit
Sales and Tax
Rev. Series A,
3.45%
3/24/97, LOC
Credit Suisse
First Boston,
CP
Denton Util. 1,350,000 1,350,000 1,350,000 1,350,000
Sys. Rev.
Rfdg.
Participating
VRDN, Series
SG-32,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
El Paso Ind. 1,300,000 1,300,000 1,300,000 1,300,000
Dev. Auth.
Rev. Rfdg.
(La Quinta
Motor Inns
Inc. Proj.)
Series 1991,
3.60%, LOC
NationsBank,
VRDN
Farmers 920,000 920,000 920,000 920,000
Branch Ind.
Dev. Corp.
Rev. Rfdg.
(PPG Ind. Inc.
Proj.) Series
1992, 3.65%,
VRDN
Goose Creek 1,500,000 1,500,000 1,500,000 1,500,000
Independent
School Dist.
TRAN
4.016%
8/29/97
Guadalupe-B 1,000,000 1,000,000 1,000,000 1,000,000
lanco River
Auth. Ind.
Dev. Rev.
(BOC Group
Inc. Proj.)
Series 1993,
3.60%, LOC
Wachovia
Bank of GA,
NA, VRDN
Gulf Coast 2,000,000 2,000,000 2,000,000 2,000,000
Waste
Disposal
Auth. Poll.
Cont. Rev.
(Amoco Oil
Co.) Series
1994, 3.75%,
VRDN
(AMT)
Gulf Coast 400,000 400,000 400,000 400,000
Waste
Disposal
Auth. Poll.
Cont. Rev.
Rfdg. Bonds
(Exxon Proj.)
3.45%, tender
3/20/97
Gulf Coast 1,000,000 1,000,000 1,000,000 1,000,000
Waste
Disposal
Auth. Rev.
(Amoco Oil
Co.) 3.75%,
VRDN
(AMT)
Harris County 1,000,000 1,000,000 1,000,036 1,000,036
Dev. Corp.
Rev. (Johann
Haltermann
Ltd.) Series
1996 A
3.60%, LOC
Texas
Commerce
Bank, NA
Houston,
VRDN
Hockley 1,000,000 1,000,000 1,000,000 1,000,000
County Ind.
Dev. Corp.
Poll. Cont.
Rev. Bonds
(Amoco Proj.)
3.75%, tender
3/1/97
Houston Wtr. 1,000,000 1,000,000 1,000,000 1,000,000
& Swr. Sys.
Rev. Series A,
3.65%
2/24/97
(Liqiudity
Facility
Westdeutsche
Landesbank/S
wiss Bank
Corp.) CP
Houston Wtr. 1,000,000 1,000,000 1,000,000 1,000,000
& Swr. Sys.
Participating
VRDN, Series
SG-77,
3.60%
(Liquidity
Facility
Societe
Generale,
France)
Houston Wtr. 2,000,000 2,000,000 2,000,000 2,000,000
& Swr. Sys.
Rev. Series A,
3.50%
2/20/97
(Liquidity
Facility
Westdeutsche
Landesbank/S
wiss Bank)
CP
Houston Wtr. 2,000,000 2,000,000 2,000,000 2,000,000
& Swr. Sys.
Rev. Series A,
3.50%
3/11/97
(Liquidity
Facility
Westdeutsche
Landesbank/S
wiss Bank)
CP
Houston Wtr. 1,200,000 1,200,000 1,200,000 1,200,000
& Swr. Sys.
Rev. Series A,
3.60%
3/10/97
(Liquidity
Facility
Westdeutsche
Landesbank/S
wiss Bank)
CP
Lamarque 1,000,000 1,000,000 1,000,000 1,000,000
Independent
School
District
TRAN Series
1996, 4.167%
8/29/97
Mineral Wells 1,700,000 1,700,000 1,700,000 1,700,000
Ind. Dev. Rev.
(Ameron Inter
Corp.) 3.60%,
LOC
Commerzban
k, Germany,
VRDN
(AMT)
Pantego Ind. 1,000,000 1,000,000 1,000,000 1,000,000
Dev. Corp.
(Minyard
Properties)
Series 1984,
3.75%, LOC
Citibank,
VRDN
Port of 1,000,000 1,000,000 1,000,000 1,000,000
Corpus
Christi Ind.
Dev. Corp.
(Citgo
Petroleum
Proj.) Series
1996, 3.80%,
LOC Banque
Nationale de
Paris, VRDN
(AMT)
Port of 3,200,000 3,200,000 3,200,000 3,200,000
Corpus
Christi Waste
Rev. (Coastal
Refining &
Mktg.)
3.65%, LOC
Banque
Nationale de
Paris, VRDN
(AMT)
San Antonio 1,000,000 1,000,000 1,000,000 1,000,000
Hsg. Fin.
Auth. Rev.
(Braesview
Apts. Proj.)
3.60%, LOC
Swiss Bank
Corp., VRDN
(AMT)
San Antonio 2,100,000 2,100,000 2,100,000 2,100,000
Wtr. Rev.
Participating
VRDN, Series
1996, 3.63%
(Liquidity
Facility
Citibank)
Tarrant 2,240,000 2,240,000 2,240,000 2,240,000
County Hsg.
Fin. Auth.
Multi-Family
Hsg. Rev.
(Windcastle
Proj.) 3.70%,
LOC Swiss
Bank Corp.,
VRDN
Texarkana 16,600,000 4,900,000 21,500,000 16,673,275 4,921,541 21,594,816
Ind. Dev.
Corp. Rev.
Rfdg. (La
Quinta Motor
Inns Inc.
Proj.) 3.60%,
LOC
NationsBank,
VRDN
Texas Gen. 3,000,000 3,000,000 3,000,000 3,000,000
Oblig. TRAN
Series 1996,
4.75%
8/29/97
Texas Muni. 4,100,000 4,100,000 4,100,000 4,100,000
Pwr. Agcy.
BAN 3.45%
4/7/97
Texas Muni. 1,000,000 1,000,000 1,000,000 1,000,000
Pwr. Agcy.
BAN 3.50%
4/8/97
Texas Muni. 2,500,000 2,500,000 2,500,000 2,500,000
Pwr. Agcy.
BAN 3.60%
2/21/97
Texas Muni. 2,000,000 2,000,000 2,000,000 2,000,000
Pwr. Agcy.
BAN 3.60%
2/18/97
Texas Small
Bus. Ind. Dev.
Corp. Rev.
(Pub. Facs.
Cap. Access
Prog.) 3.60%,
LOC
Nat'l.Westmi
nster Bank
PLC/ Credit
Suisse First
Boston,
VRDN
UTAH 5,000,000 5,000,000 5,000,000 5,000,000
Emery 500,000 500,000 500,000 500,000
County Poll.
Cont. Rev.
Rfdg.
(Pacificorp.
Proj.) Series
1994, 3.65%
(AMBAC
Insured)
VRDN
Salt Lake City 1,000,000 1,000,000 1,000,000 1,000,000
Arpt. Rev.
Series 1996
A, 3.60%,
LOC Union
Bank of
Switzerland,
VRDN
(AMT)
Timpanogos 1,000,000 1,000,000 1,000,000 1,000,000
Spl. Svc. Dist.
Participating
VRDN, Series
SG-83,
3.60%
(Liquidity
Facility
Societe
Generale,
France)
Utah Hsg. 1,000,000 1,000,000 1,013,941 1,013,941
Fin. Agcy.
Participating
VRDN, Series
PT-84B,
3.70%
(Liquidity
Facility
Rabobank
Nederland,
NV) (AMT)
Utah
Intermountain
Pwr. Agcy.
Pwr. Supply
Rev. Bond
7% 7/1/97
VIRGINIA 1,000,000 1,000,000 1,000,000 1,000,000
Frederick 3,100,000 3,100,000 3,100,000 3,100,000
County Ind.
Dev. Auth.
Rev. (Nat'l.
Wildlife
Federation
Proj.) Series
1996, 3.70%,
LOC
NationsBank,
VRDN
(AMT)
Louisa 1,000,000 1,000,000 1,000,000 1,000,000
County Ind.
Dev. Auth.
Rev. Series
1995, 3.55%,
LOC
NationsBank
NA, VRDN
Louisa Ind. 1,320,000 1,320,000 1,320,000 1,320,000
Dev. Auth.
Poll. Cont.
Rev. Bonds
(Virginia
Elec. Pwr. Co.
Proj.) Series
1984, 3.50%,
tender
3/20/97
Mecklenburg 7,492,000 7,492,000 7,492,000 7,492,000
County Ind.
Auth. Rev.
(American
Bldg. Co.
Proj.) 3.70%,
LOC LaSalle
Nat'l. Bank,
VRDN
(AMT)
Suffolk 2,500,000 2,500,000 2,500,000 2,500,000
Redev. &
Hsg. Auth.
Multi-Family
Rental Hsg.
Rev.
(Windsor at
Fieldstone
Proj.) 3.55%,
LOC
NationsBank,
VRDN
Virginia
Beach Dev
Auth. Rev.
Rfdg. (La
Quinta Inns)
Series 1993,
3.60%,
LOCNationsB
ank, VRDN
WASHINGTON 2,680,000 2,680,000 2,680,000 2,680,000
Algona Econ. 1,200,000 1,200,000 1,200,000 1,200,000
Dev. Corp.
Ind. Rev.
(Aitchison
Family
Partnership)
Series 1992,
3.70%, LOC
Wells Fargo
Bank, VRDN
(AMT)
Kent Gen. 4,000,000 4,000,000 4,000,000 4,000,000
Oblig.
Participating
VRDN, Series
SGA-27,
3.65%
(Liqudity
Facility
Societe
Generale,
France)
Washington 1,000,000 1,000,000 1,000,000 1,000,000
Gen. Oblig.
Participating
VRDN Series
1993 C-A,
3.68%
(Liquidity
Facility
Citibank)
Washington 2,260,000 2,260,000 2,260,000 2,260,000
Gen. Oblig.
participating
VRDN Series
SGA-35,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Washington 1,000,000 1,000,000 1,000,000 1,000,000
Gen. Oblig.
Participating
VRDN Series
SGA-36,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Washington 900,000 900,000 900,000 900,000
Gen. Oblig.
Participating
VRDN Series
SGB-11,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Washington 2,774,400 2,774,400 2,774,400 2,774,400
Gen. Oblig.
Participating
VRDN Series
SGB-9,
3.65%
(Liquidity
Facility
Societe
Generale,
France)
Washington 10,600,000 10,600,000 10,600,000 10,600,000
Pub. Pwr.
Supply Sys.
(Nuclear Proj.
No.3)
Participating
VRDN Series
BT-126,
3.75% (BPA
Bankers Trust
Co.)
Washington
Pub. Pwr.
Supply Sys.
Participating
VRDN Series
94 B, 3.68%
(Liquidity
Facility
Citibank)
WEST 1,500,000 1,500,000 1,500,000 1,500,000
VIRGINIA
Wood County
Ind. Dev. Rev.
(AGA Gas
Inc. Proj.)
Series 1988,
3.60%, LOC
Svenska
Handelsbanke
n, VRDN
(AMT)
WISCONSIN 840,000 840,000 840,000 840,000
Appleton Ind. 1,000,000 1,000,000 1,000,830 1,000,830
Dev. Rev.
(Pensar Corp.
Proj.) Series
1993, 3.70%
LOC Bank
One
,Milwaukee,
VRDN
(AMT)
Beaver Dam 2,000,000 2,000,000 2,000,000 2,000,000
Unified
School Dist.
BAN 4.10%
10/14/97
City of Eau 1,000,000 1,000,000 1,002,250 1,002,250
Claire Solid
Wst. Disp.
Rev. (Pope &
Talbot Proj.)
Series 1994,
3.70%, LOC
Wachovia
Bank of
Georgia,
VRDN
(AMT)
Kenosha 1,720,000 1,720,000 1,720,000 1,720,000
Unified
School Dist.
TRAN 4.25%
9/26/97
Racine Ind. 1,895,000 1,895,000 1,895,000 1,895,000
Dev. Rev.
(Burlington
Graphic Sys.)
Series 1994,
3.70%, LOC
Bank One,
Milwaukee,
VRDN
(AMT)
River Falls
Ind. Dev. Rev.
(Quadion
Corp. Proj.)
3.70%, LOC
First Bank,
Minnesota,
VRDN
(AMT)
MULTIPLE 1,900,000 1,900,000 1,900,000 1,900,000
STATES
Florida Board 647,500 647,500 647,500 647,500
of Ed.
Participating
VRDN Series
96C0917,
3.68%
(Liquidity
FacilityCitiba
nk)
NCNB 2,782,035 2,782,035 2,782,035 2,782,035
Tax-Exempt
Trust
Participating
VRDN Series
1990 A,
4.125%, LOC
NationsBank
NA
Stephens 1,900,000 1,900,000 1,900,000 1,900,000
Equity Trust I
Participating
VRDN Series
1996, 3.68%,
LOC
Bayerische
Hypotheken
Texas Pub. 2,153,291 2,153,291 2,153,291 2,153,291
Fin. Auth.
Participating
VRDN Series
97C4301,
3.63%
(Liquidity
Facility
Citibank)
Clipper 298,975 298,975 298,975 298,975
Participating
VRDN Series
1995 1,
3.73%
(Liquidity
Facility State
Street Bank &
Trust Co.,
Boston )
(AMT)
Stephens
Equity Trust
#3
Participating
VRDN Series
1996, 3.78%,
LOC
Bayerische
Hypotheken-
und Weschel
OTHER 6,022,151 6,022,151 6,022,151 6,022,151
Municipal
Central Cash
Fund 3.50%
2/7/97
TOTAL $478,091,586 $150,869,508 628,961,094
INVESTMEN
TS
</TABLE>
Tax-Exempt Fund (formerly Daily Tax-Exempt Money Fund)
Capital Reserves: Municipal Money Market Portfolio
Pro Forma Combining Statement of Assets and Liabilities as of
1/31/97
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
TAX-EXEMPT FUND CAP RESERVES: COMBINED PRO-FORMA PRO-FORMA
DAILY MONEY CLASS MUNI. MONEY MKT ADJUSTMENTS COMBINED
ASSETS
Investment in securities, at value
- See accompanying schedule $478,091,586 $150,869,508 $628,961,094 $628,961,094
Cash 395,875 21,837 417,712 417,712
Receivable for investments sold 16,415 16,415 16,415
Interest receivable 3,457,042 1,075,726 4,532,768 4,532,768
TOTAL ASSETS 481,960,918 151,967,071 633,927,989 0 633,927,989
LIABILITIES
Payable for investments purchased $6,291,175 $6,291,175 $6,291,175
Share transactions in process 0 $165,746 165,746 165,746
Distributions payable 115,281 5,548 120,829 120,829
Accrued management fee 154,228 56,371 210,599 210,599
Other payables and accrued expenses 116,540 90,197 206,737 206,737
TOTAL LIABILITIES 6,677,224 317,862 6,995,086 0 6,995,086
NET ASSETS $475,283,694 $151,649,209 $626,932,903 0 $626,932,903
Net Assets consist of :
Paid in capital $475,389,822 $151,671,200 $627,061,022 $627,061,022
Accumulated undistributed net realized
gain (loss) on investments (106,128) (21,991) (128,119) (128,119)
NET ASSETS $475,283,694 $151,649,209 $626,932,903 0 $626,932,903
NET ASSET VALUE:
Net Assets $475,283,694 151,649,209 626,932,903 626,932,903
Offering price and redemption price per share $1.00 $1.00 $1.00 $1.00
Shares outstanding 475,389,822 151,671,200 627,061,022 627,061,022
</TABLE>
Tax-Exempt Fund (formerly Daily Tax-Exempt Money Fund)
Capital Reserves: Municipal Money Market Portfolio
Pro Forma Combining Statement of Operations For the Twelve Months Ended
1/31/97
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Tax-Exempt Fund Cap Reserves: Combined Pro-Forma Pro-Forma
Daily Money Class Muni. Money Mkt Adjustments Combined
$18,116,436 $4,908,950 $23,025,386 $23,025,386
EXPENSES
Management Fee $2,538,433 $675,374 $3,213,807 $(1,608,108) (a) $1,605,699
Transfer agent fees-Daily Money
Class 918,453 918,453 (6,307) (b) 912,146
Transfer agent fees-Capital Reserves
Class 278,457 278,457 (1,677) (b) 276,780
Distribution fees-Daily Money Class 0 1,268,367 (a) 1,268,367
Distribution fees-Capital Reserves Class 474,230 474,230 200,432 (a) 674,662
Accounting fees and expenses 105,038 47,602 152,640 (37,482) (b) 115,158
Non-interested trustees'
compensation 1,142 718 1,860 0 1,860
Custodian fees and expenses 37,004 11,245 48,249 0 48,249
Registration fees-Daily Money Class 193,121 193,121 (34,154) (b) 158,967
Registration fees-Capital Reserves Class 76,206 76,206 (9,083) (b) 67,123
Audit 30,208 24,743 54,951 (24,951) (b) 30,000
Legal 7,518 618 8,136 0 8,136
Miscellaneous 1,027 575 1,602 0 1,602
Total expenses before
reductions 3,831,944 1,589,768 5,421,712 (252,963) 5,168,749
Expenses reductions (536,554) (253,818) (790,372) 127,339 (c) (663,033)
Total expenses 3,295,390 1,335,950 4,631,340 (125,624) 4,505,716
NET INTEREST INCOME 14,821,046 3,573,000 18,394,046 125,624 18,519,670
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on
investments (96,454) (7,673) (104,127) (104,127)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $14,724,592 $3,565,327 $18,289,919 $125,624 $18,415,543
</TABLE>
Tax-Exempt Fund (Formerly Daily Tax Exempt Money Fund)
Capital Reserves: Municipal Money Market Portfolio
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of Investments and
Statement of Assets and Liabilities as of January 31, 1997, and the
unaudited Pro Forma Combining Statement of Operations for the twelve months
ended January 31, 1997, are intended to present the financial condition and
related results of operations of Tax-Exempt Fund (Formerly Daily Tax Exempt
Money Fund) as if the reorganization with Capital Reserves: Municipal Money
Market Portfolio and the decrease in the expense limitation [see (c) below]
had been consummated at February 1, 1996. Had the pro forma adjustments
not included the effect of the decreased expense limitation, Pro Forma
Combined Expense reductions would have been $541,594, resulting in Pro
Forma Combined Net Interest Income and Pro Forma Combined Net Increase in
Net Assets resulting from operations of $18,398,231 and $18,294,104,
respectively.
The pro forma adjustments to these pro forma financial statements are
comprised of:
(a) Reflects the proposed changes in management fee and 12b-1 fee
structures which are
effective subject to shareholder approval. Shareholders of Tax-Exempt
Fund approved the
changes at a special meeting held on May, 9, 1997. Changes to the fee
structure of Capital
Reserves: Municipal Money Market Portfolio will be effective upon
commencement of the
new class following the approval of the proposed reorganization.
(b) Decrease in fees reflects an elimination of duplicate services.
(c) Reflects reduction in expenses due to FMR's agreement to temporarily
limit expenses of
Tax-Exempt Fund: Capital Reserves Class to 0.90% of average net assets
effective upon
commencement of the new class following the approval of the proposed
reorganization.
The unaudited pro forma combining statements should be read in conjunction
with the separate annual audited financial statements as of October 31,
1996 and the separate semiannual unaudited financial statements as of April
30, 1997 of Tax-Exempt Fund (Formerly Daily Tax Exempt Money Fund), and the
separate annual audited financial statements as of July 30, 1996 and the
separate semiannual unaudited financial statements as of January 31, 1997
of Capital Reserves: Municipal Money Market Portfolio which are
incorporated by reference in the Statement of Additional Information to
this Proxy and Prospectus.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Plans Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Union Street Trust II
Fidelity Exchange Fund Fidelity Yen Performance Portfolio, L.P.
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, Form N-8B-2, or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorney-in-fact or
his substitutes may do or cause to be done by virtue hereof. This power of
attorney is effective for all documents filed on or after January 3, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d January 3, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
John H. Costello and John E. Ferris each of them singly my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorneys-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or
after January 1, 1997.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber__________ December 19, 1996
Kenneth A. Rathgeber
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact or their substitutes may
do or cause to be done by virtue hereof. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Director, Trustee, or General Partner
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, my
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for me and in my name in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof. This power of attorney is effective for
all documents filed on or after March 1, 1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
"Rule 24f-2 Notice"
Daily Tax-Exempt Money Fund
(Name of Registrant)
File No. 2-78458
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 24F-2
Annual Notice of Securities Sold
Pursuant to Rule 24f-2
Read instructions at end of Form Before preparing Form.
Please print or type.
1.
Name and address of issuer: Daily Tax-Exempt Money Fund
82 Devonshire Street, Boston, MA, 02109
2.
Name of each series or class of funds for which this notice is filed:
Daily Tax-Exempt Money Fund
3.
Investment Company Act File Number: 811-3518
Securities Act File Number: 2-78458
4.
Last day of fiscal year for which this notice is filed: October 31, 1996
5.
Check box if this notice is being filed more than 180 days after
the close of the issuer's fiscal year for purposes of reporting securities
sold after the close of the fiscal year but before termination of
the issuer's 24f-2 declaration:
[ ]
6.
Date of termination of issuer's declaration under rule 24f-2(a)(1),
if applicable (see Instruction A.6):
7.
Number and amount of securities of the same class or series which
had been registered under the Securites Act of 1933 other than pursuant
to rule 24f-2 in a prior fiscal year, but which remained unsold at
the beginning of the fiscal year:
Number of Shares: 0
Aggregate Price: 0
8.
Number and amount of securities registered during the fiscal year
other than pursuant to rule 24f-2:
Number of Shares: 0
Aggregate Price: 0
9.
Number and aggregate sale price of securities sold during the fiscal
year:
Number of Shares: 1,971,846,743
Aggregate Price: 1,971,846,743
10.
Number and aggregate sale price of securities sold during the fiscal
year in reliance upon registration pursuant to rule 24f-2:
Number of Shares: 1,971,846,743
Aggregate Price: 1,971,846,743
11.
Number and aggregate sale price of securities issued during the fiscal
year in connection with dividend reinvestment plans, if applicable
(see Instruction B.7):
12.
Calculation of registration fee:
(i)
Aggregate sale price of securities sold during the fiscal
year in reliance on rule 24f-2 (from Item 10): 1,971,846,743
(ii)
Aggregate price of shares issued in connection with
dividend reinvestment plans (from Item 11, if applicable): 0
(iii)
Aggregate price of shares redeemed or repurchased during
the fiscal year (if applicable): (1,971,846,743)
(iv)
Aggregate price of shares redeemed or repurchased and previously
applied as a reduction to filing fees pursuant to
rule 24e-2 (if applicable): 0
(v)
Net aggregate price of securities sold and issued during the fiscal
year in reliance on rule 24f-2 [line (i), plus
line (ii), less line (iii), plus line (iv)] (if applicable): 0
(vi)
Multiplier prescribed by Section 6(b) of the Securities Act of 1933
or other applicable law or regulation (see
Instruction C.6): 1/3300
(vii)
Fee due [line (i) or line (v) muliplied by line (vi)]: 0
Instruction: Issuers should complete lines (ii), (iii), (iv), and
(v) only if the form is being filed within 60
days after the close of the issuer's fiscal year. See Instruction
C.3.
13.
Check box if fees are being remitted to the Commission's lockbox
depository as described in section 3a of the Commission's Rules of
Informal and Other Procedures (17 CFR 202.3a).
[n]
Date of mailing or wire transfer of filing fees to the Commission's
lockbox depository:
December 18, 1996
SIGNATURES
This report has been signed below by the following persons on behalf
of the issuer and in the capacities and on the dates indicated.
By (Signature and Title)* John H. Costello
Assistant Treasurer
Date December 20, 1996
* Please print the name and title of the signing officer below the
signature.
Fidelity
Investments
Fidelity Management & Research Co.
82 Devonshire Street
Boston, MA 02109
617 570 7000
December 18, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
RE: Rule 24f-2 Notice
Daily Tax-Exempt Money Fund
File No. 2-78458
Gentlemen:
Pursuant to Rule 24f-2(b)(1) under the Investment Company Act of
1940,
enclosed herewith on behalf of the above fund is a Rule 24f-2 Notice
for
the fiscal year ended October 31, 1996
. In accordance with Rule 24f-2(c), the
required filing fee of $0
was wired to Mellon Bank, in Pittsburgh,
Pennsylvania on December 18, 1996
.
Very truly yours,
Daily Tax-Exempt Money Fund
By John H. Costello
Assistant Treasurer
Enclosures
December 18, 1996
Mr. John Costello, Assistant Treasurer
Daily Tax-Exempt Money Fund (the Trust)
Daily Tax-Exempt Money Fund (the fund)
82 Devonshire Street
Boston, Massachusetts 02109
Dear Mr. Costello:
Daily Tax-Exempt Money Fund is a Delaware business trust created
under a written Trust Instrument dated June 20, 1991.
I am of the opinion that all legal requirements have been complied with
in the creation of the Trust and that said Trust is a duly authorized and
validly existing business trust under the laws of the State of Delaware.
In this regard, I have relied on the opinion of Delaware counsel,
Morris, Nichols, Arsht & Tunnell, contained in a letter dated December
12, 1996 with respect to matters of Delaware law.
I have conducted such legal and factual inquiry as I have deemed
necessary for the purpose of rendering this opinion.
Capitalized terms used herein, and not otherwise herein defined, are
used as defined in the Trust Instrument.
Under Article II, Section 2.01, of the Trust Instrument, the beneficial
interest in the Trust shall be divided into such transferable Shares of
one or more separate and distinct Series or classes of a Series as the
Trustees shall from time to time create and establish. The number of
Shares of each Series, and class thereof, authorized thereunder is
unlimited and each Share shall be without par value and shall be fully
paid and nonassessable.
Under Article II, Section 2.06, the Trust shall consist of one or more
Series and the Trustees of each Series shall have full power and
authority, in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders of any Series of the Trust to
establish and designate (and to change in any manner) any such Series
of Shares with such preferences, voting powers, rights and privileges as
the Trustees may from time to time determine, to divide or combine the
Shares into a greater or lesser number, to classify or reclassify any
issued Shares of any Series, and to take such other action with respect
to the Shares as the Trustees may deem desirable.
Under Article II, Section 2.07, the Trustees are empowered to accept
investments in the Trust in cash or securities from such persons and on
such terms as they may from time to time authorize. Such investments
in the Trust shall be credited to each Shareholder's account in the form
of full Shares at the Net Asset Value per Share next determined after
the investment is received; provided, however, that the Trustees may,
in their sole discretion, fix the initial Net Asset Value per share of the
initial capital contribution, impose a sales charge upon investments in
the Trust in such manner and at such time as determined by the
Trustees, or issue fractional shares.
By a vote adopted on June 20, 1991, the Board of Trustees authorized
the issue and sale, from time to time, of an unlimited number of shares
of beneficial interest of this Trust in accordance with the terms included
in the then current Registration Statement and subject to the limitations
of the Trust Instrument and any amendments thereto.
I understand from you that, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, the Trust has registered an indefinite
amount of shares of beneficial interest under the Securities Act of 1933.
I further understand that, pursuant to the provisions of Rule 24f-2, the
Trust intends to file with the Securities and Exchange Commission a
Notice making definite the registration of 1,971,846,743 shares of the
Trust (the "Shares") sold in reliance upon Rule 24f-2 during the fiscal
year ended October 31, 1996.
I am of the opinion that all necessary Trust action precedent to the
issue of Shares has been duly taken, and that all the Shares were legally
and validly issued, and are fully paid and nonassessable under Delaware
law, Subject to the possibility that a court might not apply such law as
described in the Fund's Statement of Additional Information under the
heading "Shareholder and Trustee Liability." In rendering this opinion,
I rely on the representation by the Trust that it or its agents received
consideration for the Shares in accordance with the Trust Instrument
and I express no opinion as to compliance with the Securities Act of
1933, the Investment Company Act of 1940, or applicable state "Blue
Sky" or securities laws in connection with sales of the Shares.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with a Rule 24f-2 Notice which
you are about to file under the 1940 Act with said commission.
Very truly yours,
/s/ Arthur S. Loring
Arthur S. Loring
December 12, 1996
Arthur S. Loring, Esquire
General Counsel
Fidelity Management & Research Co.
82 Devonshire Street
Boston, Massachusetts 02109
Re: Daily Tax-Exempt Money Fund
Dear Mr. Loring:
We have acted as special Delaware counsel to Daily Tax-Exempt Money
Fund, a Delaware business trust (formerly named Daily Tax-Exempt
Money Fund II) (the "Trust"), in connection with certain matters relating
to
the organization of the Trust and the issuance of Shares therein.
Capitalized terms used herein and not otherwise herein defined are used as
defined in the Trust Instrument of the Trust dated June 20, 1991 (the
"Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of
the
Trust dated as of June 20, 1991 and filed in the Office of the Secretary of
State of the State of Delaware (the "Recording Office") on July 9, 1991
(the "Certificate"), as amended by a Certificate of Amendment dated
January 29, 1992 as filed in the Recording Office on January 30, 1992; the
Governing Instrument; the Bylaws of the Trust; minutes of a meeting of the
Board of Trustees of the Trust, dated June 20, 1991; a Certificate of
Secretary of the Trust, certifying as to the acceptance by certain persons
of
their positions as trustees of the Trust; Post-Effective Amendment No. 17
to the Trust's Registration Statement on Form N-1A as filed with the
Securities and Exchange Commission on December 27, 1991; and a
certification of good standing of the Trust obtained as of a recent date
from
the Recording Office. In such examinations, we have assumed the
genuineness of all signatures, the conformity to original documents of all
documents submitted to us as copies or drafts of documents to be
executed, and the legal capacity of natural persons to complete the
execution of documents. We have further assumed for the purpose of this
opinion: (i) the due authorization, execution and delivery by, or on behalf
of, each of the parties thereto of the above-referenced instruments,
certifi-
cates and other documents, and of all documents contemplated by the
Governing Instrument and applicable resolutions of the Trustees to be
executed by investors desiring to become Shareholders; (ii) the payment of
consideration for Shares, and the application of such consideration, as
provided in the Governing Instrument, and compliance with the other
terms, conditions and restrictions set forth in the Governing Instrument
and
all applicable resolutions of the Trustees in connection with the issuance
of
Shares (including, without limitation, the taking of all appropriate action
by
the Trustees to designate Series of Shares and the rights and preferences
attributable thereto as contemplated by the Governing Instrument); (iii)
that
appropriate notation of the names and addresses of, the number of Shares
held by, and the consideration paid by, Shareholders will be maintained in
the appropriate registers and other books and records of the Trust in
connection with the issuance or transfer of Shares; (iv) that no event has
occurred subsequent to the filing of the Certificate that would cause a
termination or dissolution of the Trust under Section 11.04 or Section
11.05 of the Governing Instrument; (v) that the activities of the Trust
have
been and will be conducted in accordance with the terms of the Governing
Instrument and the Delaware Act; and (vi) that each of the documents
examined by us is in full force and effect and has not been modified,
supple-
mented or otherwise amended except as herein referenced. No opinion is
expressed herein with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. Further, we express no
opinion
on the sufficiency or accuracy of any registration or offering
documentation
relating to the Trust or the Shares. As to any facts material to our
opinion,
other than those assumed, we have relied without independent investigation
on the above-referenced documents and on the accuracy, as of the date
hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters
of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business trust
in
good standing under the laws of the State of Delaware.
2. The Shares, when issued to Shareholders in accordance with the
terms, conditions, requirements and procedures set forth in the Governing
Instrument, will constitute legally issued, fully paid and non-assessable
Shares of beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing
Instrument, each Shareholder of the Trust, in such capacity, will be
entitled
to the same limitation of personal liability as that extended to
stockholders
of private corporations for profit organized under the general corporation
law of the State of Delaware; provided, however, that we express no
opinion with respect to the liability of any Shareholder who is, was or may
become a named Trustee of the Trust. Neither the existence nor exercise
of the voting rights granted to Shareholders under the Governing Instru-
ment will, of itself, cause a Shareholder to be deemed a trustee of the
Trust
under the Delaware Act.
We understand that you wish to rely as to matters of Delaware law on
the opinion set forth above in connection with the rendering by you of
an opinion to be used as an Exhibit to a Rule 24f-2 filing to be made by
the Trust with the Commission, and we hereby consent to such
reliance. Except as provided in the foregoing sentence, the opinion set
forth above is expressed solely for the benefit of the addressee hereof
and may not be relied upon by any other person or entity for any
purpose without our prior written consent.
Sincerely,
MORRIS, NICHOLS, ARSHT & TUNNELL
