<PAGE>
As filed with the Securities and Exchange Commission on April 29, 1998
SEC File Nos. 2-78975
811-3548
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 17 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18 [X]
MAP-GOVERNMENT FUND, INC.
(Exact Name of Registrant as Specified in Charter)
520 Broad Street, Newark, New Jersey 07102-3111
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 1-800-559-5535
Kathleen M. Koerber
President
MAP-Government Fund, Inc.
520 Broad Street
Newark, New Jersey 07102-3111
(Name and Address of Agent for Service)
Please send copies of all communications to:
Paul J. Mason, Esq.
Sutherland, Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2515
This amendment shall become effective on May 1, 1998, pursuant to Rule
485(b) under the Securities Act of 1933.
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<PAGE>
MAP - GOVERNMENT FUND, INC.
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CROSS REFERENCE SHEET
Cross reference sheet showing location in the Prospectus of information
required by the Items in Part A of Form N-1A.
ITEM NUMBER HEADING IN PROSPECTUS
1 Cover Page
2 Fee Table
3 Financial Highlights
Performance Related Information
4 The Fund, Its Investment Objective and Policies.
5 Management of the Fund
6 Capital Stock; Cover Page; Dividends and Capital
Gains Distributions; Tax Considerations
7 How to Purchase Fund Shares; Net Asset Value;
Shareholder Services; Master Account Plan; How
to Exchange Fund Shares; Retirement Plans
8 How to Redeem Fund Shares
9 *
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* Indicates inapplicable or negative.
<PAGE>
MAP-GOVERNMENT FUND, INC.
A MONEY MARKET FUND
MAP-Government Fund, Inc. (the "Fund") is a no-load open-end management
investment company. It seeks to provide as high a level of current income as is
consistent with the preservation of capital and liquidity through investments in
a diversified portfolio of short-term debt securities issued or guaranteed as to
principal and interest by the United States Government, its agencies or
instrumentalities, and in repurchase agreements with banks and securities
dealers relating to such securities.
THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE FUND THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT
THE FUND HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") IN A
STATEMENT OF ADDITIONAL INFORMATION WHICH IS INCORPORATED HEREIN BY REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST AND WITHOUT
CHARGE FROM FIRST PRIORITY INVESTMENT CORPORATION, 520 BROAD STREET, NEWARK, NEW
JERSEY 07102, ATTN: MAP-GOVERNMENT FUND, INC., OR BY TELEPHONING 1-800-559-5535.
SHAREHOLDER INQUIRIES MAY BE MADE TO THE SAME ADDRESS OR TELEPHONE NUMBER.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
FEE TABLE...................................... 2
FINANCIAL HIGHLIGHTS........................... 3
PERFORMANCE RELATED INFORMATION................ 4
THE FUND, ITS INVESTMENT OBJECTIVE AND
POLICIES..................................... 4
United States Government Securities............ 5
Repurchase Agreements.......................... 5
Reverse Repurchase Agreements.................. 5
Other Investment Policies...................... 6
MANAGEMENT OF THE FUND......................... 6
Preparing for the Year 2000.................... 7
HOW TO PURCHASE FUND SHARES.................... 7
Additional Factors............................. 8
HOW TO EXCHANGE FUND SHARES.................... 9
HOW TO REDEEM FUND SHARES...................... 10
NET ASSET VALUE................................ 13
<CAPTION>
PAGE
<S> <C>
SHAREHOLDER SERVICES........................... 13
Automatic Monthly Investment Plan.............. 13
Systematic Withdrawal Plan..................... 13
Retirement Plans............................... 14
Gift Transfer.................................. 14
MASTER ACCOUNT PLAN............................ 14
Automatic Premium and Other Payments........... 14
Accidental Death Benefit....................... 14
Authorizations................................. 15
CAPITAL STOCK.................................. 15
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS...... 15
TAX CONSIDERATIONS............................. 16
STATEMENT OF ADDITIONAL INFORMATION -- Table of
Contents..................................... 17
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY ANY BANK; FURTHER, SUCH SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. PURCHASES
OF THE FUND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL INVESTED.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
THE DATE OF THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION IS MAY
1, 1998.
<PAGE>
MAP-GOVERNMENT FUND, INC.
FEE TABLE
The purpose of the Fee Table below is to help shareholders investing in the
Fund to understand the various Fund expenses that are, in effect, passed on to
the shareholders. The Fee Table, including the Example below, shows expenses
that are deducted from the assets of the Fund. For a description of these
expenses and the services provided to the Fund, see "Management of the Fund".
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Exchange fee*....................................................................... $ 4.50
ANNUAL FUND OPERATING EXPENSES (1997)
(As a Percentage of Average Net Assets)
Management fees..................................................................... .40%
Other expenses**.................................................................... .22%
---------
Total**............................................................................. .62%
---------
---------
</TABLE>
EXAMPLE
A $1,000 investment in the Fund would be subject to the expenses indicated,
assuming (1) a 5% annual return and (2) redemption (no charges imposed upon
redemption) at the end of each time period shown:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C>
$ 6 $ 20 $ 35 $ 77
</TABLE>
This Example should not be considered a representation of past or future
expenses for the Fund. Actual expenses may be greater or less than those shown
above. Similarly, the annual rate of return assumed in the Example is not an
estimate or guarantee of future investment performance.
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* There is a $4.50 fee per exchange in excess of the first four exchanges per
year deducted from the Shareholder's Account in the fund from which the
exchange took place. (See "How to Exchange Fund Shares".)
** Planned redemptions by certain of MBL Life subsidiaries, affiliates, and
rehabilitation-related entities (See "The Fund, Its Investment Objective and
Policies") would increase the percentage of Other expenses and Total expenses
to Average Net Assets. The Fund's Adviser has entered into an arrangement
whereby the Adviser will reimburse the Fund to the extent Total expenses
exceed .75%. The Adviser reserves the right to modify or discontinue this
arrangement at any time after December 31, 1998. Should the Fund's Annual
Operating Expenses as a percentage of Average Net Assets reach this level, a
$1,000 investment would be subject to the following expenses for the one,
three, five and ten year periods, $8, $24, $42, and $93, respectively.
2
<PAGE>
FINANCIAL HIGHLIGHTS
MAP - GOVERNMENT FUND, INC.
Selected data for each share of capital stock outstanding throughout the years
indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income.............. 0.049 0.048 0.052 0.035 0.025 0.034 0.054 0.073 0.084 0.068
Dividends from net investment
income........................... (0.049) (0.048) (0.052) (0.035) (0.025) (0.034) (0.054) (0.073) (0.084) (0.068)
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Year....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Total Return....................... 4.97% 4.87% 5.17% 3.53% 2.49% 3.36% 5.38% 7.32% 8.32% 6.84%
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net Assets, End of Year
(thousands)...................... $80,852 $109,755 $81,025 $89,518 $55,008 $42,850 $38,555 $35,434 $30,493 $30,816
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Ratio of Expenses to Average Net
Assets(1)........................ 0.62% 0.62% 0.69% 0.73% 0.74% 0.75% 0.75% 0.75% 0.75% 0.75%
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Ratio of Net Investment Income to
Average Net Assets............... 4.86% 4.76% 5.17% 3.53% 2.49% 3.36% 5.38% 7.32% 8.32% 6.84%
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
------- -------- ------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
See notes to financial statements, which are incorporated by reference into the
Statement of Additional Information.
(1) Without reimbursement by adviser, the ratio of expenses to average net
assets would have been 0.75% and 0.87%, and the ratio of net investment
income to average net assets would have been 3.51% and 2.36% for the years
ended December 31, 1994 and 1993, respectively. (See Note B of the notes to
financial statements.)
The information for the five years ended December 31, 1997 in the table
above is taken from the Fund's audited financial statements, which have been
incorporated by reference into the Fund's Statement of Additional
Information from the Fund's 1997 Annual Report to Shareholders. Further
information about the Fund's performance is also contained in the Annual
Report. The Fund will furnish without charge an additional copy of the
Annual Report upon request made to First Priority Investment Corporation,
520 Broad Street, Newark, New Jersey 07102, or by telephoning
1-800-559-5535.
3
<PAGE>
PERFORMANCE RELATED INFORMATION
The Fund may from time to time advertise its "yield" and "effective yield".
Both yield figures are based upon the Fund's past performance only and are not
intended to be an indication of future performance. Set forth below is the
manner in which the data contained in such advertisements will be calculated.
The "yield" of the Fund refers to the income (less expenses) generated by an
investment in the Fund over a seven-day period (which period will be stated in
any advertisement). This income is then "annualized". That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment. For an explanation of the calculation of
"yield" and "effective yield", see the Fund's Statement of Additional
Information.
THE FUND, ITS INVESTMENT OBJECTIVE AND POLICIES
The Fund was incorporated under the laws of Maryland on May 27, 1982. The
Fund is registered with the SEC as an open-end, diversified management
investment company under the Investment Company Act of 1940 (the "Act"). The
Mutual Benefit Life Insurance Company ("Mutual Benefit Life") provided the
Fund's initial capital on November 10, 1982, by buying, for investment purposes,
500,000 shares of capital stock at $1.00 per share.
MBL Life Assurance Corporation ("MBL Life") succeeded Mutual Benefit Life as
sponsor of the Fund. Certain MBL Life subsidiaries and affiliates, and entities
involved in the rehabilitation of MBL Life, also invest in the Fund. As of April
1, 1998, the MBL Life subsidiaries' and affiliates' and rehabilitation-related
entities' direct investments in the Fund represented 96% of the Fund. Such a
percentage of ownership may be deemed to constitute "control" of the Fund, as
that term is defined in the Act. The percentage of ownership interest may be
reduced over time. Since May 1, 1994, the stock of MBL Life has been part of a
Stock Trust with the Commissioner of Banking and Insurance of New Jersey as the
sole Trustee.
Planned redemptions by certain of the MBL Life subsidiaries and affiliates
and rehabilitation-related entities could cause the Fund's current total annual
operating expenses, which as of April 1, 1998, was .62% of average net assets,
to increase. However, First Priority Investment Corporation ("First Priority"),
the Fund's investment adviser and distributor, has agreed to bear total annual
operating expenses of the Fund (including the investment advisory fee but
excluding taxes, interest, brokerage commissions, and extraordinary expenses)
that exceed .75% of the Fund's average daily net asset value. First Priority has
agreed to limit the Fund's expenses in this manner through December 31, 1998.
However, there is no assurance that the expense limitation described above would
remain in place after December 31, 1998.
The Fund offers smaller investors the opportunity to participate, on a
pooled basis, in those types of government securities in which the Fund invests,
which are normally available through block purchases and in larger
denominations. An investment in the Fund affords the advantages of
diversification and a high degree of liquidity. Furthermore, the investor is
relieved of many administrative burdens associated with the direct purchase of
short-term Government securities.
The Fund's investment objective is to provide its shareholders as high a
level of current income as is consistent with the preservation of capital and
liquidity through investments in the following securities and repurchase
agreements relating thereto.
4
<PAGE>
UNITED STATES GOVERNMENT SECURITIES
In an effort to achieve this objective, the Fund will invest in obligations
issued or guaranteed as to principal and interest by the United States
Government, or its agencies or instrumentalities ("Government Securities").
However, no obligation having a remaining maturity of greater than 397 days will
be purchased by the Fund. Direct obligations of the United States Government
include Treasury Bills, which may have maturities up to one year; Treasury
Notes, which have maturities of one to seven years; and Treasury Bonds, which
generally have maturities of five years or more.
The Fund may also purchase securities of agencies and instrumentalities of
the United States Government. Federal agencies include, among others, the
Federal Housing Administration, Government National Mortgage Association,
Farmers Home Administration, Export-Import Bank of the United States, Maritime
Administration, General Services Administration and Tennessee Valley Authority.
Instrumentalities include, for example, the Central Bank for Cooperatives,
Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal Farm
Credit System (Banks for Cooperatives, Federal Intermediate Credit Banks, and
Federal Land Banks) and the United States Postal Service. Some of the securities
are backed by the full faith and credit of the United States or guaranteed by
the United States Treasury. Obligations of some of the agencies and
instrumentalities are supported only by the issuing agency's or
instrumentality's right to borrow from the United States Treasury and others are
supported only by the issuer's own credit. The latter two may be no guarantee
against default.
REPURCHASE AGREEMENTS
Repurchase agreements, which may be entered into by the Fund, involve the
purchase of Government Securities with the concurrent agreement by the seller, a
bank or securities dealer, to repurchase the securities at an agreed upon price
and date. The repurchase price exceeds the cost of the securities subject to the
agreement, thereby providing a determinable yield for the holding period. They
are fully collateralized by the purchased securities and are considered loans
under the Act. During the term of a repurchase agreement, the seller will be
required to provide such additional collateral as is necessary to maintain the
value of all the collateral under a repurchase agreement at a level at least
equal to the repurchase price. The Fund will make payment for such securities
only upon delivery or evidence of book entry transfer to the Custodian. If the
seller defaults, the Fund might incur a loss if the value of the collateral
securing the repurchase agreement declines. It might also incur disposition
costs in connection with the liquidation of the collateral. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization upon the collateral by the Fund may be delayed or limited. Although
repurchase agreements are generally short-term investments, the Fund may enter
into such agreements for a longer term, but in no event will the Fund acquire a
repurchase agreement having a repurchase date more than 397 days after the date
of acquisition. Repurchase agreements afford an opportunity for the Fund to earn
a higher return on temporarily available cash than would otherwise be the case.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements, which the Fund may also enter into, involve
the sale of any of the securities held by the Fund, with an agreement to
repurchase at an agreed upon price, date, and interest payment. They are
considered borrowings under the Act and may represent a form of leveraging. The
Fund will use the proceeds of reverse repurchase agreements to make other
investments which either mature or are under an agreement to resell at a date
simultaneous with or prior to the expiration of the reverse repurchase
agreement. The Fund may utilize reverse repurchase agreements only if the
interest income to be earned from the investment of proceeds of the transaction
is greater than the interest expense of the reverse repurchase transaction.
Reverse repurchase agreements will only be entered into with a bank or
securities dealer and only under circumstances where the repurchase date is not
more than 397 days after the date on which the reverse repurchase agreement is
entered.
5
<PAGE>
If prevailing interest rates rise during the term of a reverse repurchase
agreement, the value of the securities to be repurchased by the Fund, as well as
the value of the securities purchased with the proceeds, ordinarily will
decline. In these circumstances, entering into reverse repurchase agreements may
adversely affect the Fund's ability to maintain a net asset value of $1.00 per
share.
OTHER INVESTMENT POLICIES
Although it is the Fund's objective to make investments for income, it may
engage in some short-term trading to take advantage of market variations and
sell any portfolio investment before it matures to protect principal, improve
liquidity or enhance yield.
The value of the Fund's portfolio will vary inversely to changes in
prevailing interest rates. If interest rates increase after the purchase of a
security, its value normally will decline. Conversely, a drop in interest rates
normally will result in an increase in the security's value. These changes,
however, will not generally result in gains or losses for the Fund since it
intends usually to hold its investments until the entire principal and accrued
interest is due. For purposes of sales and redemptions, the Fund expects to
maintain a net asset value of $1.00 per share. (See "Net Asset Value".)
The investment objective and policies stated above may be changed without
shareholder approval. If there is a change in investment objective, shareholders
should consider whether the Fund remains an appropriate investment in light of
their then current financial position and needs.
The Fund is subject to certain investment restrictions which are considered
fundamental policies and which unlike the other investment policies described
herein, cannot be changed without approval of the holders of a majority (as
defined in the Act) of the outstanding shares of the Fund. Among these
restrictions, the Fund will not enter into repurchase agreements if, as a result
thereof, more than 10% of the Fund's total assets would be subject to repurchase
agreements maturing in more than seven days. The Fund also will not enter into
reverse repurchase agreements if the Fund's obligations under all reverse
repurchase agreements would be greater than 20% of the Fund's total assets. The
Fund may borrow money, or mortgage, pledge or hypothecate its assets only in
limited circumstances and never in excess of 5% of its total assets taken at
cost. The Fund's investment restrictions are more fully described in the
Statement of Additional Information, "Investment Restrictions".
MANAGEMENT OF THE FUND
The Fund's Board of Directors and officers are responsible for its
management. The officers carry out the Fund's day-to-day functions, subject to
the supervision of the Fund's Board of Directors, which has final responsibility
for the management of the Fund's affairs and which may exercise such
responsibility between meetings through an Executive Committee.
First Priority Investment Corporation ("First Priority"), a registered
investment adviser under the Investment Advisers Act of 1940, is the Fund's
investment adviser. First Priority became the Fund's investment adviser on May
1, 1994. First Priority, incorporated in 1993 under the laws of New Jersey, is a
wholly-owned indirect subsidiary of MBL Life. First Priority is also a
registered broker/dealer under the Securities Exchange Act of 1934, and a member
of the National Association of Securities Dealers, Inc. First Priority is also
the Fund's distributor. First Priority also engages in the sale of other
investment company securities and other financial products.
Under its Investment Advisory Agreement with the Fund, First Priority
provides the Fund with investment advisory and management services and, subject
to the authority of the Board of Directors, is responsible for overall
management of the Fund's business affairs. A description of the services
provided by First Priority pursuant to the Investment Advisory Agreement appears
in the Fund's Statement of Additional Information, "Investment Advisory and
Other Services". First Priority also serves as investment adviser to MBL
Variable Contract Account-7, a separate account of MBL Life registered under the
Act.
6
<PAGE>
Under the Investment Advisory Agreement, the Fund pays First Priority a
periodic fee at the annual rate of .40% of the first $300,000,000 of the Fund's
net assets, .35% of the next $400,000,000 of such value and .30% of such value
in excess of $700,000,000. The fee is computed and accrued daily and paid
quarterly.
PREPARING FOR THE YEAR 2000
The Fund relies on service providers, including, among others, its
investment adviser, custodian and transfer agent for the systems and resources
necessary to perform the shareholder services described in this prospectus. The
Fund has confirmed with its service providers that they have developed and are
in the process of implementing a Year 2000 transition plan. The resources being
devoted to this effort by these service providers are substantial. It is
difficult to predict with precision whether the amount of resources ultimately
devoted or the outcome of these efforts will have a negative impact on the Fund.
However, as of the date of this prospectus, it is not anticipated that the
shareholders will experience any negative effects on their investment, or on the
services provided in connection therewith, as a result of Year 2000 transition
implementation. The service providers currently anticipate that their systems
will be Year 2000 compliant on or about January 1, 1999, but there can be no
assurance that these service providers will be successful or that interaction
with the service providers will not impair the Fund's ability to meet
shareholder requirements at that time.
HOW TO PURCHASE FUND SHARES
Shares of the Fund are offered at net asset value, with no sales charge. The
minimum initial investment is $1,000; or $250 in the case of an individual
retirement account or payroll deduction plan; or $500 if shares are purchased
under a self-employed persons retirement plan. Each subsequent investment must
be at least $50. However, under the Automatic Monthly Investment Plan described
below, and any payroll deduction plan, subsequent investments may be $25 or
more. The Fund's Board of Directors reserves the right to change or waive the
minimum purchase requirements.
Shares are sold at the net asset value next determined after an order and
Federal Funds are received in Boston by the Transfer Agent. Share purchases will
be effective at that time. (See "Net Asset Value".) Shares will not be purchased
until Federal Funds are received, either directly or by conversion of checks or
bank wire funds, as described below.
Federal Funds are immediately available monies held in a bank's account with
a Federal Reserve Bank. They are required by the Fund in order to settle its
portfolio securities purchases and be as fully invested as practicable in order
to maximize the Fund's yield. Share purchases paid for in other than Federal
Funds will take longer to effect because of the time required to convert
payments into Federal Funds. Shares may be purchased by any of the following
methods:
BY MAIL. An account may be opened and shares purchased by completing the
Application and mailing it together with a check payable to MAP-GOVERNMENT FUND,
INC. OR STATE STREET BANK & TRUST COMPANY, for not less than $1,000 ($250 if
shares are purchased under an individual retirement account or automatic monthly
deduction plan, or $500 in the case of a self-employed persons retirement plan).
All purchases made by check should be in U.S. dollars. Checks made payable to
parties other than MAP-Government Fund, Inc. or State Street Bank which are in
turn endorsed by and used to make a Fund purchase for a shareholder (i.e. "third
party checks") will not be accepted. The Transfer Agent is: STATE STREET BANK &
TRUST COMPANY, P. O. BOX 8500, BOSTON, MASSACHUSETTS 02266-8500.
An Application may be obtained upon request made to: FIRST PRIORITY
INVESTMENT CORPORATION, 520 BROAD STREET, NEWARK, NEW JERSEY 07102, ATTN:
MAP-GOVERNMENT FUND, INC., OR BY TELEPHONING 1-800-559-5535.
7
<PAGE>
Checks must be drawn on a U.S. bank and will be accepted subject to
collection in Federal Funds and clearance. Share purchases will be effective on
the business day that Federal Funds are available to the Transfer Agent, which
generally is the day after receipt of a check for the purchase of shares.
However, the Fund generally will not permit the redemption of shares purchased
by check (including certified or cashier's check) until the check has cleared.
(See "How to Redeem Fund Shares".) Checks returned unpaid will result in the
cancellation of the investment and related dividends. All orders are subject to
acceptance by the Fund, First Priority or State Street Bank.
BY FEDERAL FUNDS WIRE. Investors may open an account and make share
purchases by having their bank wire Federal Funds to the Transfer Agent.
Purchases with Federal Funds received by the Transfer Agent prior to the
determination of net asset value will be effective on the day the Funds are
received. Purchases with Federal Funds received after the determination of net
asset value will be effective the next day the Transfer Agent is open for
business. (See "Net Asset Value".) To invest by Federal Funds wire, you should
take the following steps:
1. Call the Transfer Agent at the following number:
1-800-343-0529
Ask for MAP-Government Fund. The Transfer Agent will request the name,
address and social security number that will appear on the account and
will give you a Shareholder Account Number.
2. Your bank should be instructed to wire transfer Federal Funds in the
specified amount (not less than $1,000) to the Transfer Agent as
follows:
STATE STREET BOS/ABA #011-000028
ATTN.: MUTUAL FUNDS DIVISION
MAP-GOVERNMENT FUND, INC.
SHAREHOLDER NAME
SHAREHOLDER ACCOUNT NUMBER
3. Promptly complete the Application accompanying this Prospectus and mail
it to:
MAP-GOVERNMENT FUND, INC.
C/O STATE STREET BANK AND TRUST COMPANY
P. O. BOX 8500
BOSTON, MA 02266-8500
Be sure to indicate on the Application that funds were previously sent by
Federal Funds wire and include the date and amount of the wire together with all
the information called for by the Application.
Share purchases by Federal Funds wire may only be effected on a day when the
Transfer Agent and the Federal Reserve Bank of Boston are both open for
business.
BY BANK WIRE. Investors should follow the same procedures as are outlined
above (by Federal Funds Wire) to purchase shares by bank wire. It may not be
possible, however, to convert funds received by bank wire into Federal Funds on
the same day. If not, they normally will be converted the next day the Transfer
Agent is open for business, and shares will be purchased at that time, as
described above.
ADDITIONAL FACTORS
Subsequent investments of $50 or more may be made by following any of the
above procedures, except that when purchasing shares by Federal Funds Wire or
Bank Wire, investors need not call the Transfer Agent in advance as when an
initial investment is made. As banks normally charge a fee for wire transfers,
it may be preferable to wire funds only when larger investments are made.
8
<PAGE>
When purchasing additional shares by mail, checks should be made payable to
STATE STREET BANK & TRUST COMPANY OR MAP-GOVERNMENT FUND, INC. and sent to:
MAP-GOVERNMENT FUND, INC.
C/O STATE STREET BANK AND TRUST COMPANY
P. O. BOX 8500
BOSTON, MA 02266-8500
Shareholders will receive confirmations of their purchases and redemptions
and periodic reports furnishing information as to their accounts. These reports
contain forms for the purchase of additional shares which should accompany all
subsequent investments made by mail.
The Fund will not issue certificates for shares purchased unless requested,
but investors will have all rights of ownership. Shares for which a shareholder
is holding stock certificates must be returned before shares can be exchanged.
(See "How To Exchange Fund Shares".) The offering of shares may be suspended or
terminated by the Fund without prior notification to investors, and the Fund
reserves the right to reject any purchase order in its discretion. Sales of
shares will be suspended during any period that the determination of net asset
value is suspended. (See "Net Asset Value".) Investors may purchase shares of
the Fund through registered broker-dealers who may charge a fee for their
services to customers.
Shares of the Fund also may be acquired under certain plans as described
under "Shareholder Services".
HOW TO EXCHANGE FUND SHARES
Shareholders may exchange shares of the Fund for shares of MAP-Equity Fund
("Equity"), a mutual fund investing primarily in equity-type securities, in
accordance with the terms of this Prospectus and the then current Equity
prospectus. Equity Shareholders may also exchange shares of Equity for shares of
the Fund, and reinvest any shares exchanged. Shares of Equity, including shares
acquired through reinvestment of dividends or capital gains distribution, which
have been exchanged for shares of the Fund, may be reinvested in Equity without
an additional sales charge. Shares of the Fund which are exchanged for Equity
shares for the first time are subject to the applicable Equity sales charge. If
a Fund account has a combination of (1) directly-deposited shares and (2) shares
transferred from Equity, any transfer of shares from the Fund to Equity would be
taken first from shares in category (2).
Shares to be exchanged are redeemed at their net asset value as determined
at the close of business on the day that an exchange request is received by
State Street Bank, if such request is received prior to 4:00 p.m. Eastern Time.
Requests received after 4:00 p.m. will be valued as of the close of business on
the next business day. Shares to be purchased will also be valued as of the
close of business on the day that an exchange request is received, if received
prior to 4:00 p.m. Eastern Time. Equity shares are purchased subject to a sales
charge of up to 4.75% of the offering price, reduced for purchases of $50,000 or
more.
Exchanges are subject to the following restrictions:
(a) Exchange requests may be in writing, if in proper form (signed exactly
as the account is registered and with a signature guarantee if the amount to be
exchanged exceeds $25,000); or by telephone, if the shareholder has submitted a
completed Telephone Exchange Authorization Form and gives proper account
identification.
(b) The minimum amount permitted for each exchange between existing accounts
is $50.
(c) The minimum amount permitted for an exchange which establishes a new
Fund account is $1,000. Exchanges establishing a Fund account for investment by
a retirement plan cannot be effected unless the Equity account was established
pursuant to a retirement plan.
9
<PAGE>
(d) A shareholder may exchange shares four times per calendar year free of
charge. For exchanges in excess of four, State Street Bank's service fee of
$4.50, normally borne by the Fund and Equity, will be charged to the
shareholder. The service fee will be deducted from the Shareholder's Account in
the fund from which the exchange took place.
The current prospectus of each fund and current information concerning the
operation of the exchange privilege are available through First Priority or
through any dealer who has executed a selling agreement with First Priority.
Before exchanging shares, investors should review the Equity prospectus, and
consider the differences in investment objectives and policies. EXCHANGES OF
SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX PURPOSES AND
COULD RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
The exchange privilege is not an option or right to purchase shares but is
permitted under the respective policies of the participating funds, and may be
modified or discontinued by either fund upon 60 days' notice except that no
notice will be given under extraordinary circumstances, as permitted by
applicable law.
BY TELEPHONE. Shareholders who wish to exercise the exchange privilege
between the Fund and Equity by telephone must complete the Telephone Exchange
Authorization Form or, when opening a new account, request telephone exchanges
on the application. A Telephone Exchange Authorization Form may be obtained upon
request made to: FIRST PRIORITY INVESTMENT CORPORATION, 520 BROAD STREET,
NEWARK, NEW JERSEY 07102, ATTN: MAP-GOVERNMENT FUND, INC., OR BY TELEPHONING
1-800-559-5535. A shareholder may effect a telephone exchange on a business day,
from 9:00 a.m. to 5:00 p.m. Eastern Time, by calling State Street Bank toll free
at 1-800-343-0529. The toll free number accesses a computerized call direction
system. A shareholder should follow the instructions given by the system to
enable him or her to speak with a service representative. Shareholders will be
asked to provide a form of personal identification. State Street Bank reserves
the right to record all or part of the telephone conversation. Shareholders will
receive confirmations of all telephone exchanges after they are effected.
Shareholders wishing to utilize the telephone exchange privilege should
complete the Telephone Exchange Authorization Form and return it to: STATE
STREET BANK, P.O. BOX 8500, BOSTON, MA 02266-8500.
The Fund has made arrangements with State Street Bank to accept telephone
instructions for the exchange of its shares. State Street Bank reserves the
right to act on all instructions it reasonably believes to be correct. State
Street Bank has represented to the Fund it will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine. A shareholder
who authorizes telephone exchanges will be liable for any loss arising out of
unauthorized or fraudulent instructions which the Fund, acting through its
Transfer Agent, reasonably believes to be genuine if the procedures selected to
guard against unauthorized transactions are followed.
All telephone exchanges are subject to the terms and conditions set forth in
this Prospectus and the Equity Prospectus. The Fund reserves the right to
revoke, modify, postpone, suspend or discontinue telephone exchange privileges
at any time without prior notice.
HOW TO REDEEM FUND SHARES
Shareholders may redeem all or any portion of their Fund shares at no charge
upon request made to the Transfer Agent by any of the means described below.
Shares are redeemed at their net asset value next determined after the receipt
by the Transfer Agent of the redemption request in proper form. (See "Net Asset
Value".) Redemptions may be effected as follows:
BY WRITING A CHECK. Shareholders who have completed the check
authorization form in the Application may write checks made payable to the order
of any person in an amount of not less than $250 or more than
10
<PAGE>
$100,000. Dividends will continue to be credited to the shareholder's account
until the check is presented to the Transfer Agent for payment. Canceled checks
will be returned to the shareholder. Blank checks will be provided by the Fund.
Checks must be signed exactly as the account is registered with the Fund,
except that in the case of joint shareholders, the signature of either
shareholder is sufficient. Checks may be used to pay larger bills, taxes or
mortgage installments, among other purposes. When presented to the Transfer
Agent for payment, a check will be treated like a redemption request and a
sufficient number of shares will be redeemed to cover the check. If insufficient
shares are in the account, the check will be returned marked "insufficient
shares". Checks may also be returned if not properly executed. Checks may not be
used to close an account since its total value changes each day because of the
daily dividend.
The check writing service is not available where share certificates have
been issued. The Fund reserves the right to terminate or modify the check
writing service at any time after notice to shareholders.
BY TELEPHONE. Shareholders who authorize telephone redemptions in the
Application may redeem shares up to $25,000 by telephone instructions to the
Transfer Agent, which will wire, direct deposit, or mail the proceeds of
redemption to the bank for deposit in the bank account referenced in the
Application, except that telephone redemptions of less than $1,000 will be
mailed. Wire redemptions of $1,000 or more will be wired the day following the
redemption request, and a wire fee charged by the Transfer Agent (currently
$8.00 per wire) will be deducted from the proceeds. Any change in the bank
account specified in the Application must be made in writing with a signature
guarantee as described below for redemptions by mail. Shares to be redeemed will
also be valued as of the close of business on the day that a request for
redemption is received, if received prior to 4:00 p.m. Eastern Time.
Redemption instructions may be given by calling the Transfer Agent toll free
at 1-800-343-0529.
Instructions received by the Transfer Agent must include the shareholder's
name and account number. The Transfer Agent has advised the Fund that it employs
procedures selected to provide adequate safeguards against the execution of
unauthorized transactions and reasonably designed to confirm that redemption
instructions received by telephone are genuine, including requiring personal
identification, tape recording calls, sending redemption proceeds only to
pre-authorized shareholder accounts at banks or trust companies, and providing
written confirmation. A shareholder who authorizes telephone redemptions will be
liable for any loss arising out of unauthorized or fraudulent instructions which
the Fund, acting through its Transfer Agent, reasonably believes to be genuine
if the procedures selected to guard against unauthorized transactions are
followed.
The Fund reserves the right to terminate or modify the telephone redemption
service at any time after notice to shareholders.
BY MAIL. You may redeem shares by sending a written redemption request
to:
MAP-GOVERNMENT FUND, INC.
C/O STATE STREET BANK AND TRUST COMPANY
P. O. BOX 8500
BOSTON, MA 02266-8500
The request must: (a) specify the Fund name, the account number and the
number of shares to be redeemed (or the dollar amount to be withdrawn), (b)
include a guarantee of each shareholder's signature, in accordance with
procedures described below, if the proceeds exceed $25,000 or are being sent to
an address other than the address of record (signature guarantees are not
required if the "Expedited Redemptions and Redemptions by Mail" section of the
Application is completed), and (c) furnish such documents as may be required by
the Fund in the case of corporations, trusts, fiduciaries, executors and similar
accounts. Contact the Transfer Agent concerning the requirements for these types
of redemptions.
11
<PAGE>
AUTOMATIC REDEMPTIONS. Shares may be redeemed, automatically on a
pre-authorized basis, pursuant to a Systematic Withdrawal described under
"Shareholder Services", or to make payments and contributions under life
insurance policies and group annuity contracts issued by Mutual Benefit Life and
assumed by MBL Life, as discussed under "Master Account Plan". Automatic
redemptions will be effected at the net asset value per share determined on the
scheduled date of redemptions.
GENERAL. No redemptions by telephone instructions will be made if the
shares to be redeemed are represented by certificates. If the shares to be
redeemed are represented by a certificate, the redemption request also must be
accompanied by the certificate. The reverse side of each certificate or a stock
assignment form must be signed exactly as the shares are registered. In all
cases, certificate signatures must be guaranteed in accordance with written
procedures adopted by the Transfer Agent pursuant to requirements of the
Securities Exchange Act of 1934. These procedures provide that signatures be
guaranteed by a bank (as defined in the Federal Deposit Insurance Act), savings
association (as defined in the Federal Deposit Insurance Act) or credit union
which is listed on the American Bankers Association -- Key to Routing Numbers; a
national securities exchange, registered securities association or clearing
agency; or broker, dealer, municipal securities broker, government securities
broker or government securities dealer which is listed in Standard & Poor's
Security Dealers of North America.
The signature guarantee must appear on the same document as the signature(s)
being guaranteed and as close as possible to the endorsement. The signature
guarantee must contain the name of the firm, the signature of the individual
guarantor with title, if any, and cannot be qualified in any way. If the
guarantee presented does not meet the Transfer Agent's requirements, the
Transfer Agent will notify the presentor and the guarantor of the rejection
within two business days of the rejection.
The signature guarantee procedures are available from the Transfer Agent at
the address and telephone number on the back of this Prospectus.
Payment for redeemed shares ordinarily will be made within one business day,
but not later than seven days, after receipt of a redemption request in proper
form. The Fund generally will not wire or mail redemption proceeds until any
checks (including certified checks or cashier's checks) received as payment for
the purchase of shares to be redeemed have cleared. If checks for the purchase
of shares to be redeemed have not cleared, the redemption request will be
returned as not being in proper form. A partial redemption will be made to the
extent that the shareholder's account includes shares for which full payment has
been received. A determination that a check has cleared can be made through the
passage of time (customarily 10 days). Any delay in payment of redemption
proceeds can be eliminated by purchasing shares by wiring Federal Funds to the
Custodian.
The Fund may suspend the right of redemption or postpone the date of payment
on redemption during any period when (a) the New York Stock Exchange is closed
(for reasons other than holidays and weekends), or trading on the New York Stock
Exchange is restricted, (b) an emergency exists as determined by the SEC, making
disposal of the Fund's assets not reasonably practicable, or (c) the SEC has so
permitted by order for the protection of the Fund's shareholders.
Although the Fund will seek to maintain a constant net asset value of $1.00
per share, the proceeds of any redemption may be more or less than the
shareholder's cost. Redemptions may be made by shareholders through securities
dealers who may charge a fee for their services. Because of the relatively high
cost of administering small accounts, the Fund reserves the right to redeem
shares at net asset value and close any account that has a value of less than
$250. Before any account is closed, the shareholder will be notified that its
value is less than the minimum required and will be allowed at least 30 days to
make the additional investments necessary to increase the account to $250 or
more.
Redemptions may result in adverse tax consequences to shareholders using the
Fund as a funding medium for a tax-favored retirement plan. (See "Shareholder
Services -- Retirement Plans".)
12
<PAGE>
NET ASSET VALUE
The net asset value of Fund shares is computed on each day on which the New
York Stock Exchange is open for trading, as of the close of regular trading of
that Exchange. The net asset value is calculated by dividing the value of the
assets of the Fund, less its liabilities, by the total number of shares then
outstanding. For purposes of this calculation, all portfolio securities will be
valued under the amortized cost method. Under this method, securities are
initially valued at cost on their acquisition date; their subsequent value is
calculated based on such initial value and assuming a constant accretion of
purchase discount or amortization of any purchase premium to maturity. Under the
amortized cost method of valuation, the net asset value is unaffected by any
unrealized appreciation or depreciation of portfolio securities. Since the Fund
ordinarily will hold its investments to maturity, realized or unrealized gains
or losses are not expected to be a significant factor in the calculation of net
asset value. The Fund's method of valuation is monitored by the Board of
Directors on an ongoing basis. The Fund expects to be able to maintain its net
asset value at $1.00 per share by using the amortized cost method of valuation,
but there is no assurance that events affecting debt securities in general, or
particular issuers may not cause an adverse change from $1.00.
SHAREHOLDER SERVICES
The Fund offers the following services to its shareholders. Forms for all of
the plans below are available from First Priority.
AUTOMATIC MONTHLY INVESTMENT PLAN
After the initial investment, shareholders may make regular monthly
investments of $25 or more by establishing an Automatic Monthly Investment Plan.
Monthly investments are made electronically from the shareholder's bank via the
Automated Clearing House. Shareholders may terminate monthly investments at any
time without penalty by proper written request to the Transfer Agent.
Administrative costs of the Plan are borne by the Fund.
Automatic investments in shares of the Fund also may be made on a monthly or
more frequent basis in accordance with payroll deduction plans that may be
established by employers. After the initial investment, the
minimum investment by payroll deduction is $25.
SYSTEMATIC WITHDRAWAL PLAN
Fixed periodic payments may be received by shareholders by establishing a
Systematic Withdrawal Plan. Shareholders may establish a Plan by completing a
form available from First Priority. Under the Plan, shares are redeemed monthly
or quarterly, on the tenth day of the month, to produce the periodic payment
requested. The amount of each withdrawal, or payment, must be at least $50.
However, this is not a recommended amount and may not be suitable in all cases.
The redemption of shares to make payments under the Plan will reduce and
eventually exhaust the account. Dividends on shares held under a Systematic
Withdrawal Plan must be reinvested in additional shares.
Administrative costs of the Plan are borne by the Fund, but the right is
reserved upon notice to the shareholder to make a charge against the
shareholder's account. Systematic withdrawals may be terminated or modified at
any time upon notice to the shareholder.
13
<PAGE>
RETIREMENT PLANS
Shares of the Fund may be used as a funding medium under the following
retirement plans:
1. retirement plans qualified for special tax treatment under Section 401
of the Internal Revenue Code of 1986, as amended ("the Code") and
adopted by corporations or self-employed individuals ("Qualified
Plans");
2. Individual Retirement Accounts ("IRA Plans") qualified under Section
408(a) and Roth IRAs qualified under Section 408A of the Code; and
3. retirement programs qualified under Section 403(b)(7) of the Code and
established for employees of certain educational institutions or
organizations described in 501(c)(3) of the Code.
A more detailed description of such arrangements appears in the Fund's
Statement of Additional Information, "Retirement Plans".
GIFT TRANSFER
Shareholders may donate shares as a gift to an individual or charity. For
information contact First Priority or your financial advisor.
MASTER ACCOUNT PLAN
The Master Account Plan, a service arrangement provided by MBL Life and
First Priority used in conjunction with the Fund, provides holders of certain
insurance policies and persons covered by certain group annuity contracts
assumed by MBL Life with a convenient and efficient means of making payments
under policies and contracts with the proceeds of share redemptions. Also under
the Master Account Plan, shareholders, under the terms described below, are
included in an accidental death insurance policy providing up to $25,000 of
benefits.
AUTOMATIC PREMIUM AND OTHER PAYMENTS
Shareholders may authorize the periodic redemption of their Fund shares with
the automatic transfer of proceeds to MBL Life as payment for (a) premiums under
life insurance and disability income policies assumed by MBL Life, (b) interest
on loans under life insurance policies assumed by MBL Life, or (c) contributions
under group fixed-benefit annuity contracts assumed by MBL Life to fund IRA and
Qualified Plans. Under these arrangements, certificates for shares will not be
issued.
ACCIDENTAL DEATH BENEFIT
Shareholders of the Fund between the ages of 18 and 70, except as noted
below, are automatically included in a group accidental death insurance policy
issued by Fortis Benefits Insurance Company, P.O. Box 27-420, Kansas City,
Missouri 64180, to a trustee for the benefit of the shareholders' beneficiaries
who may be designated in the Application accompanying this Prospectus. Only one
person per Shareholder Account may be insured. In the case of joint owners, only
one owner, who may be named in the Application, will be the insured. In the
event that the insured sustains accidental bodily injury which results, directly
and independently of all other causes, in death within 90 days of the injury,
the beneficiaries will, as provided in the policy, receive a benefit payment
equal to the value (not to exceed $25,000) of the Shareholder Account at the
time the accident occurs. The benefit for
14
<PAGE>
shareholders with more than one account will be determined on the basis of the
earliest Shareholder Account opened and maintained. No benefit is payable under
the policy in the event of accidental death resulting from war, service in the
armed forces, suicide or certain other circumstances set forth in the policy.
The cost of the policy is borne by First Priority. Although it is intended that
the policy be continued as a Master Account Plan feature throughout the
existence of the Fund, it may be terminated by the trustee at any time or by the
failure of First Priority to pay premiums. Each insured shareholder will receive
a certificate evidencing his or her participation under the policy, a copy of
which is filed as an exhibit to the registration statement of which this
Prospectus is a part. The policy is subject to the insurance laws and
regulations of each state in which shareholders reside. Because of state
insurance law restrictions, benefits under the policy are not currently
available for any shareholder residing in California, Delaware, Florida,
Georgia, Hawaii, Indiana, Maryland, New Hampshire, New York, Oregon, South
Carolina, South Dakota, or Texas.
AUTHORIZATIONS
Authorizations with respect to Master Account Plan services may be furnished
in the Application or by separate authorization forms available from First
Priority. Any authorization may be terminated at any time by the shareholder,
First Priority or MBL Life. The cost of providing the Master Account Plan
services is borne by MBL Life and, as described above, by First Priority.
CAPITAL STOCK
The Fund is authorized by its Articles of Incorporation to issue two billion
shares of $.01 par value common stock. Shares, when issued, are fully-paid and
non-assessable and have no preemptive, conversion or exchange rights.
All shares of capital stock have equal rights as to redemption and
participation in dividends, earnings, and assets remaining on liquidation.
Shares may be issued as full or fractional shares, and each fractional share has
proportionately the same rights, including voting rights, as are provided for a
full share. The rights accompanying Fund shares are nominally vested in the
holders of the shares, but where such holders are employee benefit plans or
trusts, an opportunity is afforded the beneficial owners of shares to exercise
their proportionate voting rights through the nominal holders of the shares.
Each share of capital stock is entitled to one vote. The shares have
"non-cumulative" voting rights, which means that the holders of more than 50% of
the shares voting for the election of directors can elect all of the directors
if they choose to do so, and, in such event, the holders of the remaining voting
shares will not be able to elect any directors. The Fund holds shareholder
meetings in any year in which any of the following is required to be acted on by
shareholders: election of a majority of the Fund's Board of Directors, approval
of a new investment advisory or distribution agreement or ratification of a
change of independent public accountants.
Under the Fund's Articles of Incorporation, the Board of Directors is
authorized to classify or reclassify any unissued capital stock from time to
time through the creation of a new class of shares without the necessity of
obtaining further approval of shareholders. The purpose of this provision is to
provide the Board with the authority to act promptly and in the best interests
of existing shareholders if the need should arise as a consequence of future
Government regulation.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's net income is determined each day the net asset value of Fund
shares is computed. (See "Net Asset Value".) Net income includes accrued
interest income plus or minus any amortized purchase discount or
15
<PAGE>
premium, less all accrued expenses. The amount of net income when so determined
is immediately declared as a dividend to shareholders of record at that time.
Shareholders begin earning dividends on the business day immediately following
the day that a purchase of shares is effective. (See "How to Purchase Fund
Shares".)
Dividends declared are accrued throughout the month and paid on the last
business day of the month in additional shares of the Fund at net asset value.
Shareholders may elect to receive dividend payments in cash, instead of
additional shares, by notifying the Transfer Agent in writing at least ten days
prior to the next scheduled dividend payment date. Share redemption payments,
upon the withdrawal of an entire account, will include all dividends through the
date of withdrawal.
Realized gains or losses should not be a significant factor in the
computation of net income in view of the Fund's usual intention to hold its
portfolio securities to maturity. Net realized short-term gains, if any, will be
distributed as part of the Fund's monthly dividend payment. The Fund does not
expect to realize any long-term gains.
TAX CONSIDERATIONS
The Fund has qualified and expects to continue to qualify for the special
tax treatment afforded regulated investment companies under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). As such, the Fund is not
subject to Federal income tax on that part of its investment company taxable
income (consisting generally of net investment income, net gains from certain
foreign currency transactions, and net short-term capital gain, if any) and any
net capital gain (the excess of net long-term capital gain over net short-term
capital loss) that it distributes to its shareholders. It is the Fund's
intention to distribute substantially all such income and gains.
For federal income tax purposes, dividends paid by the Fund from net
investment income, and the excess of net short-term capital gain over net
long-term capital loss will be taxable to shareholders as ordinary income.
Distributions paid by the Fund from the excess of net long-term capital gain
over net short-term capital loss will be taxable as long-term capital gains
regardless of how long the shareholder has held its shares. These tax
consequences will apply regardless of whether the shareholder elects to have
distributions reinvested in additional shares or paid in cash. Since the Fund's
net investment income is derived from interest rather than dividends, no
distributions are eligible for the corporate dividends-received deduction
available to corporations. Each shareholder will receive a statement after each
calendar year setting forth the amount and character of distributions received
from the Fund for federal tax purposes.
For IRAs and pension plans, dividends and capital gains are reinvested and
NOT taxed until a distribution is received from the IRA or pension plan. A 20%
withholding is required on the taxable portion of distributions from certain
retirement plans that are eligible for direct rollover, but which are not
directly rolled into another eligible plan.
Individuals and certain other classes of shareholders may be subject to
back-up withholding of federal income tax on distributions, redemptions, and
exchanges if they fail to furnish their correct taxpayer identification number
(or are otherwise subject to back-up withholding). Individuals, corporations and
other shareholders that are not U.S. persons under the Code are subject to
different tax rules.
In addition to federal taxes, shareholders may be subject to state and local
taxes on payments received from the Fund.
16
<PAGE>
The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting the Fund and its shareholders; see the
Statement of Additional Information for a more detailed discussion. Prospective
investors are urged to consult their tax advisors.
STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C>
TABLE OF CONTENTS
General Information and History........................................................... 1
Investment Restrictions................................................................... 1
Management of the Fund.................................................................... 3
Investment Advisory and Other Services.................................................... 6
Advisory and Management Services........................................................ 6
Distribution Services................................................................... 7
Portfolio Transactions.................................................................. 7
Purchase, Exchange, Redemption and Pricing of Securities.................................. 8
Purchase................................................................................ 8
Exchange................................................................................ 8
Redemption.............................................................................. 9
Net Asset Value......................................................................... 9
Retirement Plans.......................................................................... 10
The Fund's Yield.......................................................................... 11
Taxes..................................................................................... 12
Financial Statements...................................................................... 13
Additional Information.................................................................... 13
</TABLE>
--------------
FOR FURTHER INFORMATION CONCERNING THE FUND, PLEASE CONSULT THE FUND'S STATEMENT
OF ADDITIONAL INFORMATION DATED MAY 1, 1998.
17
<PAGE>
NOTES
18
<PAGE>
NOTES
19
<PAGE>
MAP-GOVERNMENT FUND, INC.
520 BROAD STREET
NEWARK, NEW JERSEY 07102-3111
1-800-559-5535
INVESTMENT ADVISER
AND
DISTRIBUTOR
FIRST PRIORITY INVESTMENT CORPORATION
520 BROAD STREET
NEWARK, NEW JERSEY 07102-3111
1-800-559-5535
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK & TRUST COMPANY
P.O. BOX 8500
BOSTON, MASSACHUSETTS 02266-8500
1-800-343-0529
SPECIAL COUNSEL
SUTHERLAND, ASBILL & BRENNAN LLP
WASHINGTON, D.C.
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
NEW YORK, NEW YORK
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS.
[LOGO] FS-626(5-98)
[LOGO]
<PAGE>
MAP - GOVERNMENT FUND, INC.
- --------------------------------------------------------------------------------
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Statement of Additional
Information of information required by the Items in Part B of Form N-1A.
HEADING IN STATEMENT OF
ITEM NUMBER ADDITIONAL INFORMATION
10 Cover Page
11 Table of Contents
12 General Information and History
13 Investment Restrictions
14 Management of the Fund
15 Management of the Fund
16 Investment Advisory and Other Services
17 *
18 *
19 Purchase, Exchange, Redemption Pricing
of Securities; Retirement Plans
20 Taxes
21 Investment Advisory and Other
Services
22 The Fund's Yield
23 Financial Statements **
- --------------------------------------------------------------------------------
* Indicates inapplicable or negative.
** Financial Statements are incorporated by reference to the
1997 Annual Report to Shareholders.
<PAGE>
MAP-GOVERNMENT FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1998
This Statement of Additional Information is not a prospectus but has been
incorporated by reference into, and should be read in conjunction with, the
Prospectus of MAP-Government Fund, Inc. dated May 1, 1998. A copy of the
Prospectus may be obtained from First Priority Investment Corporation ("First
Priority"), 520 Broad Street, Newark, New Jersey 07102, Attn: MAP-GOVERNMENT
FUND, INC., or by telephoning 1-800-559-5535.
TABLE OF CONTENTS
Cross Reference
to Page in
Page Prospectus
General Information and History . . . . . . . 1 4
Investment Restrictions . . . . . . . . . . . 1 4
Management of the Fund. . . . . . . . . . . . 3 6
Investment Advisory and Other Services. . . . 6 6
Advisory and Management Services . . . . . 6 6
Distribution Services. . . . . . . . . . . 7 -
Portfolio Transactions . . . . . . . . . . 8 -
Purchase, Exchange, Redemption and Pricing
of Securities. . . . . . . . . . . . . . . 8 7
Purchase . . . . . . . . . . . . . . . . . 8 7
Exchange . . . . . . . . . . . . . . . . . 9 9
Redemption . . . . . . . . . . . . . . . . 9 10
Net Asset Value. . . . . . . . . . . . . . 10 13
Retirement Plans. . . . . . . . . . . . . . . 10 14
The Fund's Yield. . . . . . . . . . . . . . . 12 -
Taxes . . . . . . . . . . . . . . . . . . . . 13 16
Financial Statements. . . . . . . . . . . . . 14 -
Additional Information. . . . . . . . . . . . 14 -
GENERAL INFORMATION AND HISTORY
The business history of MAP-Government Fund, Inc. (the "Fund") is described
in its Prospectus.
INVESTMENT RESTRICTIONS
The Fund is subject to the following investment restrictions in addition to
those described in the Prospectus. The following restrictions are considered
fundamental policies and cannot be changed without the approval of the holders
of a majority (as defined in the Investment Company Act of 1940) of the
outstanding shares of the Fund. The Fund may not:
<PAGE>
1. purchase securities other than those in which the Fund is authorized
to invest, as set forth under "The Fund, Its Investment Objective and
Policies" in the Prospectus;
2. borrow money in excess of 5% of its total assets taken at cost, and
then only from banks as a temporary measure for extraordinary or
emergency purposes, such as to facilitate redemption requests which
might otherwise require untimely dispositions of portfolio securities;
the Fund will not borrow to increase income (leveraging), provided
however, that this restriction shall not apply to reverse repurchase
agreements (See Prospectus, "The Fund, Its Investment Objective and
Policies");
3. make loans, except by the purchase of obligations in which the Fund
may invest; provided, however, that this restriction shall not apply
to repurchase agreements (See Prospectus, "The Fund, Its Investment
Objective and Policies");
4. write, or invest in, put, call, straddle, or spread options or invest
in interests in oil, gas or other mineral exploration or development
programs;
5. purchase securities on margin or sell any securities short;
6. mortgage, pledge or hypothecate its assets except in an amount up to
5% of its total assets taken at cost, but only to secure borrowings
for temporary or emergency purposes; provided, however, that this
restriction shall not apply to reverse repurchase agreements (See
Prospectus, "The Fund, Its Investment Objective and Policies");
7. underwrite the securities of other issuers or purchase securities
subject to restrictions on disposition under the Securities Act of
1933 (so-called "restricted securities");
8. invest in real estate, real estate investment trust securities,
commodities or commodity contracts; or
9. invest in securities of other investment companies except as they may
be acquired as part of a merger, consolidation or acquisition of
assets.
<PAGE>
MANAGEMENT OF THE FUND
The directors and officers of the Fund, together with a brief description
of their occupations during the past five years, are as follows:
*+ Kathleen M. Koerber, President and Director
520 Broad Street
Newark, New Jersey 07102-3111
Executive Vice President - Insurance Operations and Chief Operating
Officer, MBL Life since September 1991; Director, First Priority.
* + William G. Clark, Executive Vice President and Director
520 Broad Street
Newark, New Jersey 07102-3111
Senior Vice President - Pension and Investment Products, MBL Life
since 1995, prior thereto Vice President - Group Pension Operations;
Director and President, First Priority.
Horace J. DePodwin, Director
One Gateway Center, Suite 420
Newark, New Jersey 07102
President, Economic Studies, Inc.; Professor and Dean Emeritus,
Graduate School of Management, Rutgers - The State University of New
Jersey.
Herbert M. Groce, Jr., Director
875 Berkshire Valley Road
Wharton, New Jersey 07885
The Most Reverend, Archbishop of the Diocese of St. Paul, Metropolitan
of the Anglican Rite, Synod of the Americas, The Holy Catholic Church
as of November, 1996; prior thereto The Right Reverend, Missionary
Bishop of the Diocese of St. Paul, The American Anglican Church as of
January 8, 1994; prior thereto The Venerable Archdeacon of the East of
the Episcopal Missionary Church from February, 1993 to January, 1994.
Jerome M. Scheckman, Director
P.O. Box 807
Plandome, New York 11030
Formerly Consultant and Managing Director, Salomon Brothers Inc.;
Member of the Corporation, Babson College; Member of the Auxiliary
Board, Mt. Sinai Hospital; Member of the Business Advisory Counsel,
Alfred University.
* David A. James, Vice President and Chief Investment Officer
520 Broad Street
Newark, New Jersey 07102-3111
Senior Vice President - Securities Investments, MBL Life; Portfolio
Manager and Member of the Management Committee, MBL Variable Contract
Account-7.
* Albert W. Leier, Vice President and Treasurer
520 Broad Street
Newark, New Jersey 07102-3111
Vice President and Controller, MBL Life; Director, Vice President and
Treasurer, First Priority.
<PAGE>
* Judith C. Keilp, Vice President and Secretary
520 Broad Street
Newark, New Jersey 07102-3111
Counsel, MBL Life since 1993; Vice President and Secretary, First
Priority.
* Christine M. Dempsey, Assistant Treasurer
520 Broad Street
Newark, New Jersey 07102-3111
Director of Financial Reporting, MBL Life since 1994; prior thereto
Manager of Financial Reporting Department.
* Vicki J. Herbst, Assistant Secretary
520 Broad Street
Newark, New Jersey 07102-3111
Registered Products Compliance Manager, MBL Life since 1994, prior
thereto Legal Assistant.
The above directors and officers, except for Mr. James, hold the same
positions with MAP-Equity Fund and MBL Growth Fund, Inc., which are managed by
Markston Investment Management ("Markston"), and distributed by First Priority,
the investment adviser and principal underwriter, respectively, for these funds.
Markston is a New Jersey partnership between Markston International, Inc. and
MBL Sales Corporation which is an indirect, wholly-owned subsidiary of MBL Life.
Mr. Scheckman also serves as a Member of the Management Committee of MBL
Variable Contract Account-7, a managed separate account sponsored by MBL Life.
- ------------------------
* Interested person of the Fund. Prior to May 1, 1994, each individual
maintained a similar position and/or title with Mutual Benefit Life that he
or she now holds with MBL Life.
+ Member of the Executive Committee.
<PAGE>
The Fund pays no remuneration to directors who also serve as directors,
officers, or employees of MBL Life or First Priority. Aggregate compensation of
other directors, who are not interested persons of MBL Life or First Priority,
paid by the Fund during 1997 is shown below. The Fund does not pay pension or
retirement benefits to the Directors.
TOTAL COMPENSATION
FROM FUND AND FUND
NAME OF PERSON, AGGREGATE COMPEN- COMPLEX PAID TO
POSITION SATION FROM FUND DIRECTORS
Horace J. DePodwin, $2,500 $7,500
Director
Herbert M. Groce, Jr., $2,900 $7,900
Director
Jerome M. Scheckman, $2,900 $10,700
Director
As of April 1, 1998, the directors and officers of the Fund owned of record
approximately .2% of its outstanding shares.
On April 1, 1998, certain MBL Life subsidiaries and affiliates, and
entities involved in the rehabilitation of MBL Life owned, or controlled by, in
the aggregate beneficially and of record 95.60% of the outstanding shares of the
Fund. Certain of MBL Life's subsidiaries and affiliates and
rehabilitation-entities, owned 5% or more of the Fund's shares, as follows:
NAME AND ADDRESS PERCENT OWNED
MBL Life Assurance Corporation 37.16%
Separate Account C
Newark, New Jersey
Participating State Guaranty 39.33%
Associations
c/o National Organization of
Life and Health Guaranty
Association
Herndon, Virginia
The aggregate investments in the Fund made by those subsidiaries and
affiliates and rehabilitation-related entities, noted above, may be deemed to
constitute "control" of the Fund, as that term is defined in the Investment
Company Act of 1940. Such control will dilute the voting rights of other
shareholders.
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
ADVISORY AND MANAGEMENT SERVICES. The Fund's investment adviser is First
Priority, a wholly-owned indirect subsidiary of MBL Life.
Pursuant to an Investment Advisory Agreement dated April 29, 1994, First
Priority became the Fund's investment adviser on May 1, 1994. Prior thereto
Green Hill Financial Service Corporation ("FISCO"), formerly a wholly-owned
indirect subsidiary of Mutual Benefit Life, served as the Fund's adviser. First
Priority provides the Fund with all needed investment advisory and management
services including investment recommendations, placement of orders for the
purchase and sale of investment securities, office space, all necessary office
facilities, all personnel reasonably necessary for the Fund's operations and
ordinary clerical services, and compensation of directors, officers and
employees of the Fund, except for compensation of the Fund's directors who are
not interested persons of MBL Life or First Priority.
Pursuant to a Service Agreement dated April 29, 1994, MBL Life succeeded
Mutual Benefit Life as the Fund's service provider. First Priority, the Fund
and MBL Life are parties to the Service Agreement, under which MBL Life
furnishes, on a cost reimbursement basis, investment advisory and other
personnel, research and statistical facilities, and services required by First
Priority in connection with its performance under the Investment Advisory
Agreement.
For 1995, 1996, and 1997, First Priority reimbursed MBL Life $101,744,
$95,113, and $85,295, respectively, pursuant to its Service Agreement.
For its services, the Fund pays First Priority a periodic fee at the annual
rate of .40% of the first $300 million of the Fund's average daily net assets,
.35% of the next $400 million and .30% of the average daily net assets in excess
of $700 million. The fee is computed and accrued daily and paid quarterly.
During 1995, 1996, and 1997, First Priority received a total advisory fee of
$326,612, $388,276, and $378,340, respectively.
First Priority undertakes to limit the Fund's expenses (other than taxes,
interest charges, brokerage commissions and permitted extraordinary expenses) to
the annual rate of .75% of the Fund's average daily net asset value. During
1995, First Priority reimbursed the Fund $1,844 pursuant to the undertaking.
For the year ended December 31, 1996 and 1997, no reimbursement was required.
The present Investment Advisory Agreement and Service Agreement were
approved on February 13, 1998 by the Fund's Board of Directors, including a
majority of the directors who are not parties to the Agreement, nor interested
persons, as that term is defined in the Investment Company Act of 1940, of such
parties, and were last approved by the Fund's shareholders at a Special Meeting
held April 12, 1995. The Investment Advisory Agreement and the Service
Agreement will continue from year to year, provided that such continuance is
approved at least annually: (a) by the vote, at a meeting, of a majority of the
directors who are not parties to the Agreements nor interested persons (as
defined in the Investment Company Act of 1940) of such parties and (b) by the
Fund's Board of Directors or by the vote of a majority of the outstanding voting
securities of the Fund. Each Agreement may be terminated at any time by any
party on written notice of not more than 60 days, nor less than 30 days, and
automatically terminates in the event of assignment.
<PAGE>
The Fund pays all corporate expenses incurred in its operation and offering
of shares not assumed by First Priority, including brokerage commissions;
interest charges; taxes and governmental fees attributable to transactions for
the Fund; all other applicable taxes arising out of the investment operations of
the Fund, including income and capital gains taxes, if any; administrative
expenses in connection with the issue, sale, or redemption of shares; expenses
of registering or qualifying shares for sale; charges of the Custodian (for
custodial, bookkeeping, and daily share-pricing services), Transfer Agent
(including the cost of printing and mailing reports, proxy statements, and
notices to shareholders), and registrars; and costs of auditing and (to the
extent furnished by outside counsel) legal services.
DISTRIBUTION SERVICES. First Priority also serves as principal distributor
of the Fund's shares pursuant to a Distributor's Agreement with the Fund. As
distributor, First Priority does not act as the Fund's agent, but rather as
principal which purchases shares from the Fund and resells them for its own
account. First Priority has agreed to pay from its own resources certain
expenses in connection with the offering and sale of Fund shares, including the
expenses of printing and distributing Fund prospectuses; preparing, printing and
distributing advertising and sales literature and copies of annual reports used
as sales literature; and all other expenses in connection with offering for sale
and sale of the Fund's shares which are not specifically allocated to the Fund.
First Priority also serves as principal distributor of the shares of MBL Growth
Fund, Inc. and MAP-Equity Fund.
The Distributor's Agreement was approved on February 13, 1998 by the
Fund's Board of Directors, including a majority of the directors who are not
parties to the Agreements nor interested persons, as defined in the Investment
Company Act of 1940, of such parties and who have no financial interest in the
operation of the Distributor's Agreement. The Distributor's Agreement will
continue from year to year, provided the Board of Directors, including directors
who are not interested persons, approves such continuance at least annually.
State Street Bank & Trust Company, P.O. Box 8500, Boston, Massachusetts
02266-8500 serves as Custodian of the Fund's investment securities and other
assets. The Bank also serves as the Fund's Transfer Agent, Shareholder Services
Agent and Dividend Disbursing Agent through an affiliate, Boston Financial Data
Services, Inc., Two Heritage Drive, Quincy, Massachusetts 02171. In carrying
out these functions neither the Bank nor its affiliates perform managerial or
policy making functions for the Fund.
PORTFOLIO TRANSACTIONS. First Priority makes decisions as to buying and
selling investment securities for the Fund, subject to supervision by the Fund's
Executive Committee and Board of Directors. The Fund's portfolio securities
normally will be purchased on a principal basis directly from issuers,
underwriters or dealers. Accordingly, minimal brokerage charges, if any, are
expected to be paid by the Fund on its portfolio transactions. Purchases from
an underwriter generally include a concession paid by the issuer, and
transactions with dealers usually include a dealer's mark-up. During 1996 and
1997, no brokerage commissions were incurred on behalf of the Fund.
<PAGE>
In placing orders for the purchase and sale of the Fund's investment
securities, First Priority seeks the best execution at the most favorable price,
considering all of the circumstances. Where best price and execution may be
obtained from more than one dealer, First Priority may, in its discretion,
purchase and sell securities through dealers who provide research, statistical
and other services to First Priority and the Fund. It is not possible to place
a dollar value on information and services received from dealers. To the extent
that such services enable First Priority to supplement its own efforts, First
Priority will not incur expenses that it otherwise would be required to bear
under its Investment Advisory Agreement with the Fund. During the past year, no
transactions occurred in which the furnishing of research was a factor in the
selection of dealers. No payment was allocated for any products or services
providing a research or non-research function. First Priority does not "pay up"
for research in principal transactions.
In accordance with the Service Agreement among First Priority, MBL Life,
and the Fund, MBL Life furnishes, through its Securities Investment Division,
investment advisory and other personnel, research and statistical facilities,
and services required by First Priority in connection with its performance under
the Investment Advisory Agreement. Such investment advisory personnel also
serve as managers to MBL Life's general account and other accounts of MBL Life
that may or may not be registered investment companies. Securities of the same
issuer may be included, from time to time, in the portfolio of the Fund and the
portfolios of these other entities, where it is consistent with their respective
investment objectives. The same is also possible with respect to First
Priority's other investment advisory client, MBL Variable Contract Account-7
("VCA-7"), a separate account of MBL Life registered as an investment company.
If these entities desire to buy or sell securities of the same issuer at or
about the same time, purchases and sales are made in separate denominations for
each individual account. Such a procedure does not involve the division or
allocation of securities among the Fund, VCA-7, and the general account of MBL
Life or other advisory accounts. It is believed that this procedure generally
contributes to better overall execution of the Fund's portfolio transactions.
PURCHASE, EXCHANGE, REDEMPTION AND PRICING OF SECURITIES
PURCHASE. The methods of purchasing Fund shares, minimum purchase
requirements and the way in which the public offering price is determined, as
well as the variety of special services available to Fund shareholders, are
fully explained in the Fund's Prospectus, "How to Purchase Fund Shares" and
"Shareholder Services".
EXCHANGE. Shares of the Fund may be purchased by exchange of shares of
MAP-Equity Fund ("Equity"), a mutual fund investing primarily in equity-type
securities, by a request in writing or by telephone. Shares to be exchanged are
redeemed at their net asset value as determined at the close of business on the
day that an exchange request is received by State Street Bank, if such request
is received prior to 4:00 p.m. Eastern Time. (Requests received after 4:00 p.m.
will be valued as of the close of business on the next business day.) Shares to
be purchased will also be valued as of the close of business on the day that an
exchange request is received, if received prior to 4:00 p.m. Eastern Time.
Equity shares are purchased subject to a sales charge of up to 4.75% of the
offering price.
<PAGE>
Equity's prospectus and Statement of Additional Information are available
upon request and without charge from First Priority Investment Corporation, 520
Broad Street, Newark, New Jersey 07102-3111, ATTN: MAP-EQUITY FUND, or by
telephoning 1-800-559-5535.
Shares for which the shareholder is holding physical Certificates must be
returned before shares can be exchanged. The exchange must be made between
established accounts having identical registrations and addresses.
A minimum of $250 must be maintained in the shareholder's Fund account.
Withdrawals of any balance below the minimum may be by telephone redemption (if
the shareholder has authorized telephone redemptions in the Application), or by
writing, and will be paid directly to the shareholder. There is no maximum limit
on the amount of Fund shares which can be exchanged into Equity. A maximum
amount of $250,000 of Equity shares can be exchanged into the Fund. (See
Equity's prospectus, "How to Redeem Fund Shares".)
Initial investments in the Fund exchanged for Equity shares can be used to
satisfy a Letter of Intent and are eligible for Rights of Accumulation and
Combination Privileges. The full amount of the purchase price for the shares
being exchanged must have already been received by the Fund. The account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the Fund.
Newly acquired shares (through either an initial or subsequent investment)
may be exchanged ten days after acquisition, and all other shares may be
exchanged after one day. Exchanges in excess of four per year are subject to an
exchange fee. The shares of the fund acquired through exchange must be
qualified for sale in the state in which the shareholder resides.
REDEMPTION. Shareholders may redeem all or any portion of their Fund
shares at no charge upon request made to the Transfer Agent by any of the means
described in the Prospectus, "How to Redeem Fund Shares".
It is not anticipated that shares will be redeemed other than for cash.
However, the Fund reserves the right to limit cash payment on redemption by any
shareholder during a 90 day period to the lesser of $250,000 or 1% of the Fund's
net asset value at the beginning of the period. If the Fund's Board of
Directors determines that it is in the best interests of the remaining
shareholders of the Fund, the Fund may pay or satisfy any balance of the
redemption price, in whole or in part, by a distribution in kind from the Fund's
investment portfolio, in lieu of cash, taking the securities at their value
employed for determining such a redemption price, and selecting the securities
in such manner as the Board of Directors may deem fair and equitable.
Although the Fund will seek to maintain a constant net asset value of $1.00
per share, the proceeds of any redemption may be more or less than the
shareholder's cost. Redemptions may be made by shareholders through securities
dealers who may charge a fee for their services.
Redemptions may result in adverse tax consequences to shareholders using
the Fund as a funding medium for a tax-favored retirement plan.
<PAGE>
NET ASSET VALUE. The net asset value per share of the Fund is determined
by dividing the value of the Fund's assets less any liabilities by the number of
shares outstanding. In calculating the value of the assets of the Fund, its
portfolio securities are valued under the amortized cost method which is
described in the Prospectus, "Net Asset Value".
This method of valuation is permitted under an SEC order and Rule 2a-7 of
the Investment Company Act of 1940 pursuant to which the Fund is required to
take steps to assure: (a) that its Board of Directors will establish procedures
reasonably designed, taking into account market conditions affecting the Fund's
investment objective, to stabilize its net asset value at $1.00 per share; (b)
that it will (i) maintain a dollar-weighted average portfolio maturity
appropriate to its objective of maintaining a stable net asset value per share,
(ii) not purchase any security with a remaining maturity greater than 397 days,
and (iii) maintain a dollar-weighted average portfolio maturity of 90 days or
less and (c) that its Board of Directors will maintain written guidelines for
determining that its purchases of portfolio instruments, including repurchase
agreements, will be limited to U.S. dollar-denominated instruments which produce
minimal credit risks and which are of high quality (as determined by major
rating services, or, in the case of unrated securities, of comparable quality as
determined by the Board of Directors).
Although the Fund expects to be able to maintain its net asset value at
$1.00 per share by using the amortized cost method of valuation, there is no
assurance that events affecting debt securities generally or affecting
particular issuers may not cause an adverse change from $1.00.
RETIREMENT PLANS
Shares of the Fund may be used as a funding medium under the following
retirement plans:
1. retirement plans qualified for special tax treatment under Section 401
of the Internal Revenue Code of 1986, as amended ("Code") and adopted
by corporations or self-employed individuals ("Qualified Plans");
2. Individual Retirement Accounts ("IRA") qualified under Section 408(a)
of the Code and Roth IRA's qualified under Section 408A; and
3. retirement programs qualified under Section 403(b)(7) of the Code and
established for employees of certain educational institutions or
organizations described in Section 501(c)(3) of the Code.
Persons meeting the requirements of the Code may adopt one of these
retirement plans and may fund benefits to be provided under the plan with shares
of the Fund. Under all retirement plans, dividends or other distributions will
be automatically reinvested in additional shares. First Priority
Representatives have further details. Persons desiring to create a retirement
plan should consult an attorney or other qualified adviser regarding applicable
federal and state requirements and related tax consequences, including, among
others, adverse tax consequences that may result from contributions in excess of
specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum
<PAGE>
distribution amount; certain prohibited transactions, such as a sales, exchange,
lease, borrowing, or transfer of assets between a retirement plan account and
the participant; and in other specified circumstances. Neither the Fund nor any
of its affiliates shall have any responsibility for the legal or tax
consequences of a retirement plan purchasing shares of the Fund.
Code Section 401(a) permits employers to establish various types of
Qualified Plans for employees, and permits self-employed individuals to
establish Qualified Plans for themselves and their employees. These retirement
plans may permit the purchase of the Fund shares to accumulate retirement
savings under the plans. Persons desiring to create a Qualified Plan may adopt
a prototype plan provided by First Priority and approved by the Internal Revenue
Service, or may have legal counsel prepare an individual plan document.
Prototype traditional IRA Plans and Roth IRA's, approved by the Internal
Revenue Service, are also available from First Priority. The maximum
contribution for any participant in a traditional IRA Plan is 100% of earned
income, but not greater than $2,000. The IRA deduction is phased-out pro rata
between $30,000 and $40,000 of adjusted gross income for a single taxpayer who
is covered by certain retirement plans and between $50,000 and $60,000 of
adjusted gross income for married taxpayers filing a joint return where either
spouse is covered by certain retirement plans. Individuals who are not eligible
to make deductible IRA contributions because of their adjusted gross income
level and participation in other retirement plans may make non-deductible IRA
contributions. Individuals may also contribute up to $2,000 to an IRA
established for a non-working spouse. Earnings on all IRA contributions
accumulate on a tax-deferred basis. The full initial IRA contribution will be
returned to the purchaser under an IRA Plan upon request received by First
Priority within seven days of the date of application. Otherwise, an account
will be established at the end of the seven day period at the next offering
price then applicable. The Code requires a trustee or custodian for an IRA
account.
Any financial institution meeting the requirements of the Code may serve as
the custodian for a 403(b)(7) Custodial Account pursuant to a Custodial
Agreement. The Custodial Agreement is intended for use by employers and
eligible persons who wish to have contributions made by or on behalf of
employees pursuant to a Section 403(b) Plan held for their benefit in the
Custodial Account, which is invested in shares of the Fund. Any employee
eligible to participate in the Section 403(b) Plan may establish a Custodial
Account by signing a Custodial Account application and, if applicable, a salary
reduction agreement with the employer. In general, the Custodial Account shall
be deemed to have been established for an employee upon acceptance of the
account application by the custodian and payment to the custodian of the initial
contribution in the amount specified pursuant to the agreement. Shares in the
Fund will typically be purchased by the custodian on the business day that
Federal Funds are available to it, which generally is the second day after
receipt by a custodian of a check for the purchase of shares. Contributions
made to the Custodial Account are subject to limitations set forth in the
employer's plan or in the Code.
For shares held under a retirement plan, the Fund will honor redemption
requests only when submitted through the Plan trustee or custodian. Payments of
redemption proceeds to plan participants may be subject to restrictions
contained in the plan documents or in the Code.
<PAGE>
THE FUND'S YIELD
The Fund's yield is its investment income, less expenses, expressed as a
percentage of assets on an annualized basis for a specified period. The yield is
expressed as a current annualized yield and as a compounded effective yield.
From time to time, it may be quoted in sales literature, advertisements and
reports.
The current annualized yield is computed by determining the net change
(exclusive of realized gains and losses from the sale of securities and
unrealized appreciation and depreciation and income other than investment
income) in the value of a hypothetical account having one share at the beginning
of the period, dividing the net change in account value by the value of the
account at the beginning of the period, and annualizing the quotient on a 365-
day basis. The net change in account value reflects the value of additional
shares purchased with dividends from the original shares in the account during
the period, dividends declared on such additional shares during the period, and
expenses accrued during the period. The compounded effective yield is
determined by dividing the current annualized yield by the number of days in the
period to determine the average daily yield over the period and compounding the
average daily yield on a daily basis over a 365-day period. For the seven-day
period ended December 31, 1997 the Fund's current annualized yield was 4.96% and
its effective compounded yield was 5.08%. For the seven-day period ended March
31, 1998, the Fund's "yield" was 4.84% and its "effective yield" was 4.95%.
The Fund's yield may be useful as a basis for comparison with other
investment alternatives. However, it should be noted that the Fund's yield is
not guaranteed. The yield will fluctuate daily and the yield for any previous
period is not indicative of future yields or dividend payments.
Although the calculation of yield does not recognize any realized or
unrealized gains or losses on the Fund's investments, the dividends paid during
a period will include any realized gains or losses and, therefore, may not be
the same on an annualized basis as the yield. (See the Prospectus, "Dividends
and Capital Gains Distributions".)
TAXES
The Fund intends to qualify and to continue to qualify as a regulated
investment company ("RIC") under the Internal Revenue Code of 1986, as amended
(the "Code"). In order to qualify for that treatment, the Fund must distribute
to its shareholders for each taxable year at least 90% of its investment company
taxable income, consisting generally of net investment income, net short-term
capital gain, and net gains from certain foreign currency transactions (the
"Distribution Requirement"). The Fund must also meet the following additional
requirements: (1) The Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities
loans, and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from options, futures, or forward
contracts) derived with respect to its business of investing in securities or
those currencies ("Income Requirement"); (2) At the close of each quarter of
the Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RIC's and other securities that, with respect to any one issuer, do not
exceed 5% of the value of the Fund's total assets and that do not represent more
than 10% of the outstanding voting securities of the
<PAGE>
issuer; and (3) At the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its total assets may be invested in securities
(other than U.S. Government securities or the securities of other RIC's) of any
one issuer.
The Fund will be subject to a nondeductible 4% excise tax on amounts not
distributed to shareholders on a timely basis. The Fund intends to make
sufficient distributions to avoid this 4% excise tax.
Dividends and interest received by the Fund may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and foreign countries generally do not impose taxes on capital gains in
respect to investments by foreign investors.
The foregoing is only a general summary of some of the important Federal
income tax considerations generally affecting the Fund and its shareholders. No
attempt is made to present a complete explanation of the Federal tax treatment
of the Fund's activities. Potential investors are urged to consult their own
tax advisors for more detailed information and for information regarding any
applicable state, local, or foreign taxes.
FINANCIAL STATEMENTS
The Fund incorporates by reference into this Statement of Additional
Information the Financial Statements, including the Schedule of Portfolio
Investments and Financial Highlights and the Report of Independent Accountants
thereon, contained in its 1997 Annual Report to Shareholders.
Copies of the Fund's financial statements are mailed to each shareholder
semiannually. The Fund's annual financial statements are audited by a firm of
independent accountants. The firm of Price Waterhouse LLP has been selected to
audit the Fund's financial statements for the current fiscal year. The Fund
will furnish, without charge, an additional copy of the Annual Report upon
request made to: First Priority Investment Corporation, 520 Broad Street,
Newark, New Jersey 07102-3111, ATTN: MAP-GOVERNMENT FUND, INC., telephone number
1-800-559-5535.
ADDITIONAL INFORMATION
This Statement of Additional Information, and the Prospectus to which it
relates, omit some information contained in the registration statement filed
with the Securities and Exchange Commission, Washington, D.C. Copies of such
information may be obtained from the Commission upon payment of the prescribed
fees.
<PAGE>
MAP - GOVERNMENT FUND, INC.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
The following Financial Statements are incorporated into Part B of this
Registration Statement by reference to the Annual Report to Shareholders
dated December 31, 1997, as filed with the Commission pursuant to Rule
30b2-1 under the Investment Company Act of 1940 on February 23, 1998
(Accession No.0001047469-98-007219).
Report of Independent Accountants
Statement of Assets and Liabilities as of December 31, 1997.
Statement of Operations, Year Ended December 31, 1997.
Statement of Changes in Net Assets, For Each of the Two
Years in the Period Ended December 31, 1997.
Schedule of Portfolio Investments, December 31, 1997.
Financial Highlights for Each of the Five Years in the
Period Ended December 31, 1997.
(b) Exhibits. *
(1) Articles of Incorporation, incorporated by reference to earlier filing on
August 23, 1982, SEC File No. 2-78975, Exhibit #1 of Form N-1 Registration
Statement.
(2) By-Laws, as amended February 7, 1989, incorporated by reference to earlier
filing on April 28, 1989, SEC File No. 2-78975, Exhibit #2 to
Post-Effective Amendment #8 of Form N-1A.
(3) Not applicable.
(4) Specimen Stock Certificate, incorporated by reference to earlier filing on
April 28, 1989, SEC File No. 2-78975, Exhibit #2 to Post-Effective
Amendment #8 of Form N-1A.
(5) (a) Investment Advisory Agreement, dated April 29, 1994, between Registrant
and First Priority Investment Corporation, incorporated by reference to
earlier filing on April 29, 1994, SEC File No 2-778975, Exhibit (5)(a) to
Post-Effective Amendment No 13.
(b) Service Agreement, dated April 29, 1994, among Registrant, First
Priority Investment Corporation, and MBL Life Assurance Corporation,
incorporated by reference to earlier filing on April 29, 1994, SEC File No
2-778975, Exhibit (5)(b) to Post-Effective Amendment No 13.
(6) (a) Distributor's Agreement, dated April 29, 1994, between Registrant and
First Priority Investment Corporation, incorporated by reference to earlier
filing on April 29, 1994, SEC File No 2-778975, Exhibit (6)(a) to
Post-Effective Amendment No 13.
<PAGE>
(6) (b) Form of Selling Group Agreement between First Priority Investment
Corporation and selected dealers, incorporated by reference to earlier
filing on April 29, 1994, SEC File No 2-778975, Exhibit (6)(b) to
Post-Effective Amendment No 13.
(7) Not applicable.
(8) Custodian Fee Schedule, revised December 18, 1992, to the Custodian
Agreement dated March 4, 1988 between Registrant and State Street Bank and
Trust Company, incorporated by reference to earlier filing on April 29,
1988, SEC File No. 2-78975, Exhibit #8 to Post-Effective Amendment #7 of
Form N-1A. Revision dated December 18, 1992, incorporated by reference to
earlier filing on April 30, 1993, SEC File No. 2-78975, Exhibit #8 to
Post-Effective Amendment #10 of Form N-1A.
(9) Fee Information for Services as Plan, Transfer, and Dividend Disbursing
Agent to the Transfer Agent Agreement dated March 4, 1988, amended February
3, 1992, between Registrant and State Street Bank and Trust Company,
incorporated by reference to earlier filing on April 30, 1992, SEC File No.
2-78975, Exhibit #9 to Post-Effective Amendment #11 of Form N-1A.
(10) Opinion and Consent of Special Counsel, incorporated by reference to
earlier filing on December 8, 1982, SEC File No. 2-78975, Exhibit #10 to
Pre-Effective Amendment #1 of Form N-1 Registration Statement.
(11) CONSENT OF PRICE WATERHOUSE LLP, INDEPENDENT ACCOUNTANTS.
(12) Not applicable.
(13) Investment Letter of Mutual Benefit Life dated November 10, 1982,
incorporated by reference to earlier filing on December 8, 1982, SEC File
No. 2-78975, Exhibit #13 to Pre-Effective Amendment #1 of Form N-1
Registration Statement.
(14) (a) Prototype Individual Retirement Account Application and Custodian
Agreement, incorporated by reference to earlier filing on December 8, 1982,
SEC File No. 2-78975, Exhibit #14(a) to Pre-Effective Amendment #1 of Form
N-1 Registration Statement.
(b) Prototype Corporate Pension and Profit Sharing Plans and Trusts,
incorporated by reference to earlier filing on December 8, 1982, SEC File
No. 2-78975, Exhibit #14(b) to Pre-Effective Amendment #1 of Form N-1
Registration Statement.
(c) Prototype Individual Retirement Account Trust sponsored by Mutual
Benefit Trust Company, incorporated by reference to earlier filing on April
24, 1984, SEC File No. 2-78975, Exhibit 14(c) to Post-Effective Amendment
#3 of Form N-1 Registration Statement.
<PAGE>
(14) (d) Prototype Section 403(b)(7) Custodial Account Agreement sponsored by
Mutual Benefit Trust Company, incorporated by reference to earlier filing
on April 30, 1992, SEC File No. 2-78975, Exhibit #14 to Post-Effective
Amendment #11 of Form N-1A.
(15) Not applicable.
(16) SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS IN REGISTRATION
STATEMENT IN RESPONSE TO ITEM 22.
(17) Accidental Death Insurance Policy, incorporated by reference to earlier
filing on December 8, 1982, SEC File No. 2-78975, Exhibit #16 to
Pre-Effective Amendment #1 of Form N-1 Registration Statement.
(18) Price Make-Up Sheet.**
(27) FINANCIAL DATA SCHEDULE.
- -----------------------------------------------
* Page numbers inserted in manually signed copy only.
** Incorporated by reference to the 1997 Annual Report
to Shareholders.
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
As of April 1, 1998, MBL Life Assurance Corporation ("MBL Life") and
certain subsidiaries and affiliates and entities involved in the
rehabilitation of MBL Life owned in the aggregate beneficially and of
record 96% of the Fund. MBL Life may be deemed to "control" the Fund, as
that term is defined in the Investment Company Act of 1940. Such control
will dilute the voting rights of other shareholders.
MBL Life is a stock life insurance company organized under the laws of New
Jersey. The voting stock of MBL Life was transferred to a Stock Trust
established by the Plan of Rehabilitation of Mutual Benefit Life, as
approved by the Superior Court of New Jersey, having the Commissioner of
Banking and Insurance of the State of New Jersey as Trustee. The Trust will
terminate no later than December 31, 1999. Pursuant to a settlement
agreement, an Order was issued on January 9, 1997 ending all Plan-related
litigation, and awarding 30% of the value of the Trust at its termination
to eligible MBL Life policyholders, and 70% to the Class Four Creditors (as
defined in the Plan) of Mutual Benefit Life.
As of April 1, 1998, those persons under common control with MBL Life are
as follows:
MBL LIFE ASSURANCE CORPORATION (NJ)
Hawaiian Macadamia Company, Inc. (HI)
MBLLAC Holding Corporation (NJ)
First Priority Investment Corporation (NJ)
Metro IRB, Inc. (NJ)
Fisher Island Corporation (NJ)
Pelican Apartment Properties, Inc. (NJ)
Metro JV, Inc. (NJ)
Mutual Benefit Marketing Group Inc. (NJ)
MAP Advisors, Inc. (NJ)
MBL Sales Corporation (NJ)
Markston Investment Management (Partnership)
EHC Companies, Inc. (WA)
Infotech Corp.(WA)
Extraspace Inc. (WA)
EDC, Inc.(WA)
NWD Investment Company (WA)
WD Holdings, Inc. (WA)
International Corporate Marketing Group (40%)(CT)
Tong Yang Benefit Life Insurance Company (2%) (Korea)
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
Title of Class Number of Record Holders
Common Stock As of April 1, 1998: 490
ITEM 27. INDEMNIFICATION.
(a) Insurance Policies:
The Registrant maintains investment company errors and omissions insurance
covering those directors who are not interested persons of the Registrant.
This policy, subject to the terms and conditions of the policy, protects
those directors from legal liabilities and expenses which they may incur as
a result of claims for breach of duty, negligent acts, errors, omissions,
misstatements or misleading statements committed or alleged to have been
committed by them in their capacity as directors of the Registrant. The
policy, subject to the terms and conditions of the policy, would also
insure the Registrant. The policy excludes expenses and liabilities based
upon, among other things, any claim alleging dishonesty or fraudulent acts
or omissions, or any criminal or malicious acts or omissions. The limits
on the policy are $3,000,000 each wrongful act and $3,000,000 aggregate.
Notwithstanding any agreement or document to the contrary, the Registrant
undertakes not to insure any director for any liability the insurance of
which has been determined to be prohibited under the federal securities
laws.
The Registrant is the joint owner of the policy with MAP-Equity Fund, MBL
Growth Fund, Inc., and MBL Variable Contract Account-7 and the premiums are
divided based on the proportion of each entity's net assets to the total
net assets of all the joint insureds.
The Registrant also maintains an Investment Companies Blanket Bond covering
the Registrant against larceny and embezzlement committed by any director,
officer or employee of the Registrant or its adviser who may have access to
securities or funds of the Registrant.
(b) Maryland Law and By-Law Provisions:
Set forth below is a composite summary of the general effect of applicable
provisions of Maryland law and the Registrant's By-Laws regarding
indemnification of and advancement of legal expenses to the Registrant's
officers and directors (collectively, "Indemnitees").
The Registrant shall indemnify any Indemnitee who is or is threatened to be
made a party to any legal proceeding by reason of his service to the
Registrant, if the Indemnitee (1) acted in good faith; (2) reasonably
believed (a) that his conduct was in the Registrant's best interests, or
(b), if the conduct was not in an official capacity, that the conduct was
at least not opposed to the best interests of the Registrant; (3) in the
case of any criminal proceeding, had no reasonable cause to believe that
the conduct was unlawful; (4) in any proceeding by or in the right of the
Registrant, is not adjudged to be liable to the Registrant; and (5) in any
proceeding charging improper personal benefit, is not adjudged to be liable
on the basis that personal benefit was improperly received. Such
indemnification shall be made against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by the Indemnitee,
except that in the case
<PAGE>
of an action by or in the right of the Registrant, such indemnification
shall be limited to reasonable expenses only.
The determination whether the Indemnitee has met the foregoing standards
shall be made (1) by a majority vote of a quorum of the Board of Directors
consisting of directors not at the time parties to the proceeding; (2) if
such a quorum cannot be obtained, by a majority vote of a committee of the
Board of Directors consisting solely of two or more directors (a) not at
the time parties to the proceeding and (b) duly designated to act in the
matter by a majority vote of the entire Board of Directors (including any
parties to the proceeding); (3) by special legal counsel selected by a
majority vote of (a) a quorum of the Board of Directors consisting of
directors not at the time parties to the proceeding, (b) a committee of the
Board selected as set forth in (2) above, or (c) if the requisite quorum of
the Board cannot be obtained and the committee cannot be established, the
entire Board, in which directors who are parties may participate; or (4) by
majority vote of all the shares of the capital stock of the Registrant at
the time outstanding and entitled to vote, except that shares held by any
Indemnitees who are parties to the proceeding may not be voted.
In advance of the final disposition of any proceeding, after a
determination as provided in the preceding paragraph that the facts then
known do not show that the Indemnitee has not met the standards of
indemnification set forth above, the Registrant shall pay or reimburse
reasonable expenses incurred by an Indemnitee party to a proceeding upon
receipt of (1) a written affirmation by the Indemnitee of his good faith
belief that he has met the standards for indemnification and (2) a written
undertaking, in the form of an unsecured unlimited general obligation by or
on behalf of the Indemnitee, to repay the amount advanced, if it is
ultimately determined that he did not meet such standards.
The Registrant may also, in its discretion, indemnify or advance expenses
to any officer who is not a director, or any other agent or employee of the
Registrant, in which case the foregoing standards, procedures or
limitations may or may not be observed. Nevertheless, notwithstanding any
of the foregoing, except as provided by the statutory provisions referred
to below, no indemnification shall be made to any director or officer
against any liability to the Registrant or its security holders to which he
or she would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties involved in the
conduct of his or her office ("Disabling Conduct"). The means for
determining whether indemnification shall be made shall be (i) a final
decision on the merits by a court or other body before whom the proceeding
was brought that the Indemnitee was not liable by reason of Disabling
Conduct, or (ii) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the Indemnitee was
not liable by reason of Disabling Conduct, by (a) the vote of a majority of
a quorum of Directors who are neither "interested persons" of the
Registrant nor parties to the proceeding ("Disinterested Non-Party
Directors"), or (b) an independent legal counsel in a written opinion.
Furthermore, no advancement of monies for the defense of a proceeding
brought against a director or officer of the Registrant should be made
unless (1) such advance is limited to attorney's fees or other expenses
incurred or to be incurred in defending the proceeding, (2) an undertaking
is furnished by or on behalf of the Indemnitee to repay the advance unless
it is ultimately determined that he or she is entitled to indemnification,
and (3) the Indemnitee complies with at least one of
<PAGE>
the following conditions: (a) the Indemnitee shall provide a security for
his undertaking, (b) the Registrant shall be insured against losses arising
by reason of any lawful advances, or (c) a majority of a quorum of the
Disinterested Non-Party Directors, or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available
facts (as opposed to a full trial-type inquiry), that there is reason to
believe that the Indemnitee ultimately will be found entitled to
indemnification.
The applicable Maryland statute further provides that an Indemnitee shall
be indemnified (1) against the reasonable expenses of defending any
proceeding which he is wholly successful in defending, and (2) to such
further extent as a court may deem fair and reasonable under the
circumstances, provided that, in the latter case, the indemnification shall
be limited to expenses if the proceeding is by or in the right of the
Registrant or if the Indemnitee has been adjudged liable on the basis of
improper receipt of personal benefit.
(c) Distributor's Agreement:
Under the Distributor's Agreement between the Registrant and First Priority
Investment Corporation ("First Priority"), First Priority agrees to
indemnify the Registrant and its officers and directors and controlling
persons from all liabilities and expenses arising out of certain actual or
alleged material misstatements or other mistakes, negligence or willful
misconduct of First Priority or any of its agents or employees in
connection with sales of the Registrant's shares.
(d) Undertaking:
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
First Priority, the Registrant's investment adviser, is a wholly-owned
indirect subsidiary of MBL Life. First Priority also serves as
investment adviser to MBL Variable Contract Account-7. First Priority
also acts as principal distributor of shares of the Registrant, MBL
Growth Fund, Inc., MAP-Equity Fund, MBL Variable Contract Account-2,
MBL Variable Contract Account-3, MBL Variable Contract Account-7, and
engages in the sale of other investment company securities and other
financial products as described in the Prospectus constituting Part A
of this Registration Statement and in the Statement of Additional
Information constituting Part B. The table below sets forth certain
information as to First Priority's directors and officers.
NAME AND PRINCIPAL POSITIONS WITH POSITION WITH
BUSINESS ADDRESS* FIRST PRIORITY REGISTRANT
William G. Clark Director and Director and
President Executive Vice
President
Robert T. Budwick Director and Chief ----
Investment Officer
Frank D. Casciano Director, Vice President ----
and General Counsel
Alan J. Bowers Director ----
Kathleen M. Koerber Director Director and
President
Albert W. Leier Director, Vice Vice President
President and and Treasurer
Treasurer
Hal R. Rose Senior Vice President
Judith C. Keilp Vice President and Vice President
Secretary and Secretary
Richard C. Allen Vice Presidnet ----
Christopher S. Auda Vice President ----
James Switlyk Second Vice President ----
--------------------------------
* All the individuals named above maintain offices at
520 Broad Street, Newark, New Jersey 07102.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) See Item 28 above.
(b) See Item 28 above.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained at the offices of Registrant and
Registrant's Custodian, State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, or the Registrant's
Distributor, First Priority Investment Corporation, 520 Broad Street,
Newark, New Jersey.
ITEM 31. MANAGEMENT SERVICES.
Other than as set forth under the caption "Management of the Fund" in
the Prospectus constituting Part A of this Registration Statement and
under the caption "Investment Advisory and Other Services" in the
Statement of Additional Information constituting Part B, Registrant is
not a party to any management-related service contract.
ITEM 32. UNDERTAKINGS.
The Registrant undertakes to furnish to each person to whom a
prospectus is delivered, without charge, a copy of the Annual Report
to Shareholders, upon request made to: First Priority Investment
Corporation, 520 Broad Street, Newark, New Jersey 07102, ATTN:
MAP-GOVERNMENT FUND, INC., or by telephoning 1-800-559-5535.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Newark, and State of New
Jersey, on the 28th day of April, 1998.
MAP-GOVERNMENT FUND, INC.
(Registrant)
By: KATHLEEN M. KOERBER
(Kathleen M. koerber, President)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
KATHLEEN M. KOERBER President and Director April 28, 1998
- ---------------------- (Principal Executive
(Kathleen M. Koerber) Officer)
WILLIAM G. CLARK Executive Vice April 28, 1998
- ---------------------- President and Director
(William G. Clark)
HORACE J. DEPODWIN Director April 28, 1998
- ----------------------
(Horace J. DePodwin)
HERBERT M. GROCE, JR. Director April 28, 1998
- ----------------------
(Herbert M. Groce, Jr.)
JEROME M. SCHECKMAN Director April 28, 1998
- ----------------------
(Jerome M. Scheckman)
ALBERT W. LEIER Vice President and April 28, 1998
- ---------------------- Treasurer (Principal
(Albert W. Leier) Financial and Accounting
Officer)
<PAGE>
MAP-GOVERNMENT FUND, INC.
EXHIBIT INDEX
-------------
EXHIBIT
- -------
EXHIBIT (11) - CONSENT OF PRICE WATERHOUSE LLP,
INDEPENDENT ACCOUNTANTS.
EXHIBIT (16) - SCHEDULE FOR COMPUTATION OF
PERFORMANCE QUOTATIONS.
EXHIBIT (27) - FINANCIAL DATA SCHEDULE.
<PAGE>
EXHIBIT (11)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 17 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 9, 1998, relating to the financial
statements and financial highlights appearing in the December 31, 1997 Annual
Report to Shareholders of the MAP-Government Fund, Inc., which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Financial Statements" in the Statement of Additional
Information.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
April 27, 1998
<PAGE>
EXHIBIT (16)
MAP-GOVERNMENT FUND, INC.
SCHEDULE OF COMPUTATION FOR YIELD QUOTATION
As of December 31, 1997
Share Net Asset Net Asset Base
Value - Value = Net --- Value = Period X 365/7 = 7-Day
12/31/97 12/24/97 Change 12/24/97 Return Yield
$1.001 $1.000 .000951625 $1.000 .00095 4.65%
As of March 31, 1998
Share Net Asset Net Asset Base
Value - Value = Net --- Value = Period X 365/7 = 7-Day
3/31/98 3/24/98 Change 3/24/98 Return Yield
$1.001 $1.000 .000927827 $1.000 .00093 4.84%
SCHEDULE OF COMPUTATION FOR EFFECTIVE YIELD QUOTATION
As of December 31, 1997
365/7
Effective Yield = [(Base Period Return + 1) ] - 1
365/7
= [(.00095 + 1) ] - 1
= 5.08%
As of March 31, 1998
365/7
Effective Yield = [(Base Period Return + 1) ] - 1
365/7
= [(.00093 + 1) ] - 1
= 4.95%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF MAP-GOVERNMENT FUND, INC. DATED DECEMBER 31, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000705677
<NAME> MAP-GOVERNMENT FUND, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 78149
<INVESTMENTS-AT-VALUE> 78149
<RECEIVABLES> 2690
<ASSETS-OTHER> 321
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 81161
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 309
<TOTAL-LIABILITIES> 309
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<PAID-IN-CAPITAL-COMMON> 80043
<SHARES-COMMON-STOCK> 80852
<SHARES-COMMON-PRIOR> 109755
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4610
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 86184
<NUMBER-OF-SHARES-REDEEMED> 119676
<SHARES-REINVESTED> 4590
<NET-CHANGE-IN-ASSETS> (28903)
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 590
<AVERAGE-NET-ASSETS> 94799
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.049
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.049
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
