FIRST INVESTORS TAX EXEMPT MONEY MARKET FUND INC, 485APOS, 1999-02-26

FIRST INVESTORS TAX EXEMPT MONEY MARKET FUND INC
485APOS, 1999-02-26

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As filed with the Securities and Exchange Commission on February 26, 1999
1933 Act File No. 2-82572
1940 Act File No.811-3690

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 19 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 19 [ X ]

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
(Exact name of Registrant as specified in charter)

95 Wall Street
New York, New York 10005
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including Area Code): (212) 858-8000

Ms. Concetta Durso
Secretary and Vice President
First Investors Series Fund
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)

Copy to:
Robert J. Zutz, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
Washington, D.C. 20036

It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[X] on April 30, 1999 pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

<PAGE>

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

CONTENTS OF REGISTRATION STATEMENT

This registration document is comprised of the following:

Cover Sheet

Contents of Registration Statement

Prospectus for the First Investors Tax-Exempt Money
Market Fund, Inc.

Combined Statement of Additional Information for the
First Investors Tax-Exempt Money Market Fund, Inc. and
the First Investors Cash Management Fund, Inc.

Part C of Form N-1A

Signature Page

Exhibits

<PAGE>
[FIRST INVESTORS LOGO]

TAX-EXEMPT MONEY MARKET FUND

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.

The date of this prospectus is April 30, 1999

<PAGE>

CONTENTS

OVERVIEW OF THE TAX-EXEMPT MONEY MARKET FUND

o What is the Tax-Exempt Money Market Fund?
oo Objective
oo Primary Investment Strategies
oo Primary Risks
o Who should consider buying the Tax-Exempt Money Market Fund?
o How has the Tax-Exempt Money Market Fund performed?
o What are the fees and expenses of the Tax-Exempt Money Market Fund?

THE TAX-EXEMPT MONEY MARKET FUND IN DETAIL

o What are the Tax-Exempt Money Market Fund's objective, principal
investment strategies and principal risks?
o Who manages the Tax-Exempt Money Market Fund ?

BUYING AND SELLING SHARES

o How and when does the Fund price its shares?
o How do I buy shares?
o Which class of shares is best for me?
o How do I sell shares?
o Can I exchange my shares for the shares of other First Investors Funds?

ACCOUNT POLICIES

o What about dividends?
o What about taxes?
o How do I obtain a complete explanation of all account privileges and
policies?

FINANCIAL HIGHLIGHTS

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<PAGE>

OVERVIEW OF THE TAX-EXEMPT MONEY MARKET FUND

What is the Tax-Exempt Money Market Fund?

Objective The Fund seeks to earn a high rate of current income that is
exempt from Federal income tax, including the Alternative Minimum
Tax ("AMT"), consistent with the preservation of capital and
maintenance of liquidity.

Primary
Investment
Strategies The Fund invests primarily in high quality, short-term
municipal instruments that the Fund determines present minimal
credit risk. The Fund attempts to limit its investments to
instruments which pay interest that is exempt from federal income
tax, including the AMT. The Fund's portfolio is managed to meet
regulatory requirements that permit the Fund to maintain a stable
net asset value ("NAV") of $1.00 per share. These regulatory
requirements include stringent credit quality standards on
investments, limits on the maturity of individual investments and
the dollar-weighted average maturity of the entire portfolio, and
diversification requirements.

Primary
Risks While money market funds are designed to be relatively low risk
investments, they are not entirely free of risk. The following
risks are common to all money market funds:

o The Fund's NAV could decline (below $1.00 per share) if there
is a default by an issuer of one of the Fund's investments, a
credit downgrade of one of the Fund's investments, or an
unexpected change in interest rates.

o The Fund's yield will change daily based upon changes in
interest rates and other market conditions.

AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND
SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.

Who should consider buying the Tax-Exempt Money Market Fund?

The Tax-Exempt Money Market Fund is most appropriately used for
that portion of your investment portfolio that you may need in
the near future. Since the Fund limits its investments to
high-quality, short-term securities, it generally has a lower
risk profile but also a lower yield than funds which invest in

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lower-quality, longer-term debt securities. It may be appropriate
for you if you:

o Are seeking income that is exempt from federal income tax,
including the AMT, and

o Are seeking a conservative investment that provides a high
degree of credit quality.

The Fund is generally not appropriate for retirement accounts or
investors in low tax brackets.

How has the Tax-Exempt Money Market Fund performed?

The bar chart and table below show you how the Fund's performance has varied
from year to year. This information gives you some indication of the risks of
investing in the Fund.

The Fund has two classes of shares, Class A shares and Class B shares. The bar
chart shows changes in the performance of the Fund's Class A shares from year to
year over the life of the Fund. The performance of Class B shares differs from
the performance of Class A shares shown in the bar chart only to the extent that
it does not have the same expenses.

[bar chart]

During the periods shown, the highest quarterly return was ______ (for the
quarter ended ______), and the lowest quarterly return was _____ (for the
quarter ended _____). THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE
HOW THE FUND WILL PERFORM IN THE FUTURE.

The following table shows the average annual total returns for Class A shares
and Class B shares. This table assumes that the maximum contingent deferred
sales charge ("CDSC") on Class B shares was paid.

Inception
Class B Shares
1 Year* 5 Years* 10 Years* (1/12/95)

Class A Shares [ ] [ ] [ ] N/A
Class B Shares [ ] N/A N/A [ ]
* The annual returns are based upon calendar years.

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What are the fees and expenses of the Tax-Exempt Money Market Fund?

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Class A Class B
Shares Shares
-------- -------
SHAREHOLDER FEES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases
(as a percentage of offering price).......... None None
Maximum deferred sales charge (load)
(as a percentage of the lower of purchase
price or redemption price)................... None 4%*

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)

DISTRIBUTION TOTAL
AND SERVICE ANNUAL FUND
MANAGEMENT (12B-1) OTHER OPERATING FEE NET
FEES(1) FEES(2) EXPENSES EXPENSES(3) WAIVER(1) EXPENSES(3)
---------- --------- -------- ----------- --------- -----------

Class A Shares [ ]% 0.00% [ ]% [ ]% [ ]% [ ]%
Class B Shares [ ] 0.75 [ ] [ ] [ ] [ ]

*Class B shares can only be acquired through an exchange from Class B shares of
another First Investors Fund. When shares are so acquired, the CDSC imposed on
the other Fund's Class B shares carries over to the Fund's shares. The CDSC is
4% in the first year and declines to 0% after the sixth year. Class B shares
convert to Class A shares after 8 years.
(1) For the fiscal year ended December 31, 1998, the Adviser waived Management
Fees in excess of _____% for the Fund. The Adviser has contractually agreed
with the Fund to waive the Management Fees in excess of ____% for a period
of twelve months commencing on ___________.
(2) Because the Fund pays Rule 12b-1 fees on its Class B shares, long-term
Class B shareholders could pay more than the economic equivalent of the
maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc. There are currently no Rule 12b-1 fees on Class A
shares of the Fund.
(3) The Fund has an expense offset arrangement that may reduce the Fund's
custodian fee based on the amount of cash maintained by the Fund with its
custodian. Any such fee reductions are not reflected under Total Annual
Fund Operating Expenses or Net Expenses.

EXAMPLE

This example helps you to compare the costs of investing in the Fund with
the cost of investing in other mutual funds. The example assumes that (1) you

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<PAGE>

invest $10,000 in the Fund for the time periods indicated; (2) your investment
has a 5% return each year; and (3) the Fund's operating expenses remain the
same, except for year one, which is net of fees waived. Although your actual
costs may be higher or lower, under these assumptions your costs would be:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
If you redeem your shares:
Class A shares [ ] [ ] [ ] [ ]
Class B shares [ ] [ ] [ ] [ ]*

If you do not redeem your shares:
Class A shares [ ] [ ] [ ] [ ]
Class B shares [ ] [ ] [ ] [ ]*
*Assumes conversion to Class A shares eight years after purchase.

THE TAX-EXEMPT MONEY MARKET FUND IN DETAIL

What are the Tax-Exempt Money Market Fund's objective, principal investment
strategies, and risks?

OBJECTIVE: The Fund seeks to earn a high rate of current income that is exempt
from Federal income tax, including the AMT, consistent with the
preservation of capital and maintenance of liquidity.

PRINCIPAL INVESTMENT STRATEGIES: The Fund invests primarily in high quality
short-term municipal instruments ("municipal securities") that are determined by
the Fund's Adviser to present minimal credit risk. The Fund attempts to limits
its investments to municipal securities which pay interest that is exempt from
federal income tax, including the AMT. Municipal securities are issued by state
and local governments, the District of Columbia and commonwealths, territories
or possessions of the United States (including Guam, Puerto Rico, and the U.S.
Virgin Islands) or their respective agencies, instrumentalities and authorities
to borrow money for various public or private projects. The issuer pays a fixed
or variable rate of interest, and must repay the amount borrowed (the
"principal") at maturity.

The Fund's portfolio is managed to meet regulatory requirements that permit the
Fund to maintain a stable net asset value ("NAV") of $1.00 per share. These
include requirements relating to the credit quality, maturity, and
diversification of the Fund's investments. For example, to be an eligible
investment for the Fund, a security must have a remaining maturity of 397
calendar days or less. The security must be rated in one of the two highest
credit ratings categories for short-term securities by at least two nationally
recognized rating services organizations (or by one, if only one rating service
has rated the security), or if unrated, be determined by the Fund's Adviser to
be of quality equivalent to those in the two highest credit ratings categories.
The Fund must also maintain a dollar-weighted average portfolio maturity of 90
days or less.

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<PAGE>

The Fund invests significantly in variable rate demand notes and bonds. These
investments may have maturities of more than thirteen months, but have demand
features which allow the holder to demand payment of principal plus accrued
interest within a period of 397 days or less. The demand features have the
effect of reducing the maturities of the instruments and qualifying them as
eligible investments for the Fund. The interest rate on a variable rate demand
note is reset at specified intervals at a market rate. While this feature helps
protect against a decline in the security's market price when interest rates go
up, it lowers the Fund's income when interest rates fall.

The Fund also buys investments backed by credit enhancements, such as letters of
credit, which are designed to give additional protection to investors. For
example, if an issuer of a note does not have the credit rating usually required
by the Fund, another company may use its higher credit rating to back up the
credit of the issuer of the note by selling the issuer a letter of credit. The
main risk of investing in investments backed by a letter of credit is that the
company issuing the letter of credit will not be able to fulfill its obligations
to the Fund.

In buying and selling securities, the Fund will consider ratings assigned by
ratings services as well as its own credit analysis. The Fund considers, among
other things, the issuer's earnings and cash flow generating capabilities, the
issuer's yield and relative value, and the outlook for interest rates and the
economy. In the case of instruments with demand features or credit enhancements,
the Fund considers the financial strength of the party providing the demand
feature or credit enhancement, including any ratings assigned to such party.
Information on the Fund's recent holdings can be found in the most recent annual
report (see back cover).

PRINCIPAL RISKS: Any investment carries with it some level of risk. In general,
the greater the potential reward of an investment, the greater the risk.
Although the Fund tries to maintain a $1.00 share price, it may not be able to
do so. It is therefore possible to lose money by investing in the Fund. Here are
the principal risks of owning the Tax-Exempt Money Market Fund:

INTEREST RATE RISK: Like the values of other debt instruments, the market values
of money market instruments are affected by changes in interest rates. When
interest rates rise, the market values of money market instruments decline; when
interest rates decline, the market values of money market instruments increase.
The price volatility of money market instruments also depends on their
maturities and durations. Generally, the shorter the maturity and duration of a
money market instrument, the lesser its sensitivity to interest rates.

Interest rate risk also includes the risk that in a declining interest rate
environment the Fund will have to invest the proceeds of maturing investments in
lower-yielding investments. The yields received by the Fund on some of its
investments will also decline as interest rates decline. For example, the Fund
invests in floating rate and variable rate bonds and notes. When interest rates
decline, the yields paid on these securities may decline.

CREDIT RISK: A money market instrument's credit quality depends upon the
issuer's ability to pay interest on the security and, ultimately, to repay the

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<PAGE>

principal. The lower the rating by one of the independent bond-rating agencies
(for example, Moody's Investors Service, Inc. or Standard & Poor's Ratings
Group), the greater the chance (in the rating agency's opinion) the security's
issuer will default, or fail to meet its repayment obligations. Direct U.S.
Treasury obligations (securities backed by the U.S. government) carry the
highest credit ratings. All things being equal, money market instruments with
greater credit risk offer higher yields. The amount of information about the
financial condition of issuers of tax exempt debt is generally not as extensive
as that which is made available by issuers of taxable debt.

In the case of a money market instrument that is supported by a credit
enhancement, the credit quality of the investment depends upon the credit
quality of the party which provides the enhancement. The Fund's ability to
maintain a stable share price may depend on these credit enhancements, which are
not backed by federal deposit insurance.

TAX RISK: This is the risk that some or all of the interest income the Fund
receives might become taxable or be determined by the Internal Revenue Service
(or the applicable state tax authorities) to be taxable.

YEAR 2000 RISKS: The values of securities owned by the Fund may be negatively
affected by Year 2000 problems. Many computer systems are not designed to
process correctly date-related information after January 1, 2000. The issuers of
securities held by the Fund may incur substantial costs in ensuring that
computer systems on which they rely are Year 2000 ready and may face business
and legal problems if these systems are not ready. If computer systems used by
exchanges, broker-dealers, and other market participants are not Year 2000
ready, valuing and trading securities could be difficult. These problems could
have a negative effect on the Fund's investments and returns.

Who manages the Tax-Exempt Money Market Fund?

First Investors Management Company, Inc. ("FIMCO" or "Adviser") is the
investment adviser to the Fund. Its address is 95 Wall Street, New York, NY
10005. It currently is investment adviser to 51 mutual funds or series of funds
with total net assets of approximately $5 billion. FIMCO supervises all aspects
of the Fund's operations and determines the Fund's portfolio transactions. For
the fiscal year ended December 31, 1998, FIMCO received advisory fees of [ %] of
the Fund's average daily net assets, net of waiver.

In addition to the investment risks of the Year 2000 which are discussed above,
the ability of FIMCO and its affiliates to price the Fund's shares, process
purchase and redemption orders, and render other services could be adversely
affected if the computers or other systems on which they rely are not properly
programmed to operate after January 1, 2000. Additionally, because the services
provided by FIMCO and its affiliates depend on the interaction of their computer
systems with the computer systems of brokers, information services and other
parties, any failure on the part of such third party computer systems to deal
with the Year 2000 may have a negative effect on the services provided to the
Fund. FIMCO and its affiliates are taking steps that they believe are reasonably
designed to address the Year 2000 problem for computer and other systems used by
them and are obtaining assurances that comparable steps are being taken by the

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Fund's other service providers. However, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund. Nor can the
Fund estimate the extent of any impact.

BUYING AND SELLING SHARES

How and when does the Fund price its shares?

The share price (which is called "net asset value" or "NAV" per share) for the
Fund is calculated once each day as of 12 noon, on each day the New York Stock
Exchange ("NYSE") is open for regular trading. These are referred to as "Trading
Days."

To calculate the NAV, the Fund's assets are valued and totaled, liabilities are
subtracted, and the balance, called net assets, is divided by the number of
shares outstanding.

The Fund values its assets using the amortized cost method which is intended to
permit the Fund to maintain a stable NAV of $1.00 per share for each class of
shares.

How do I buy shares?

You may buy shares of the Fund through a First Investors registered
representative or through a registered representative of an authorized
broker-dealer ("Representative"). Your Representative will help you complete and
submit an application. Your initial investment must be at least $1,000. However,
we offer automatic investment plans that allow you to open a Fund account with
as little as $50. Subsequent investments may be made in any amount. As discussed
below, Class B shares may only be purchased by means of an exchange from the
Class B shares of another First Investors Fund.

Money market fund shares will not be purchased until we receive the funds for
the purchase. Funds for a purchase will not be deemed to have been received
until the morning of the next Trading Day following the Trading Day on which
your purchase check is received in our Woodbridge, NJ office. If a check is
received in our Woodbridge, NJ office after the close of regular trading on the
NYSE, the funds for the purchase will not be deemed to have been received until
the morning of the second following Trading Day.

You can arrange to make systematic investments electronically from your bank
account or through payroll deduction. All the various ways you can buy shares

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are explained in the Shareholder Manual. For further information on the
procedures for buying shares, please contact your Representative or call
Shareholder Services at 1-800-423-4026.

The Fund reserves the right to refuse any order to buy shares if the Fund
determines that doing so would be in the best interests of the Fund and its
shareholders.

Which class of shares is best for me?

The Fund has two classes of shares, Class A and Class B. While each class
invests in the same portfolio of securities, the classes have separate expense
structures. Because of the different expense structures, each class of shares
generally will have different dividends.

Class A shares are available through direct investment or an exchange from the
Class A shares of another First Investors Fund. Class A shares are sold at NAV
without any initial or deferred sales charge.

Class B shares are not available for direct investment. They may be acquired
only through an exchange from the Class B shares of another First Investors
Fund. While an exchange will be processed at the relative NAVs of the shares
involved, any CDSC on the shares being exchanged will carry over to the new
shares. The CDSC declines the longer you hold your shares, as illustrated below.
Class B shares convert to Class A shares after eight years.

Class B Shares

Year of Redemption
------------------
CDSC as a Percentage of
Purchase Price or NAV at
Redemption
------------------------

Within the 1st or 2nd year......... 4%
Within the 3rd or 4th year......... 3
In the 5th year.................... 2
In the 6th year.................... 1
Within the 7th year and 8th year... 0

There is no CDSC on Class B shares which are acquired through reinvestment of
dividends or distributions. The CDSC is imposed on the lower of the original
purchase price or the net asset value of the shares being sold. For purposes of
determining the CDSC, all purchases made during a calendar month are counted as
having been made on the first day of that month at the average cost of all
purchases made during that month.

To keep your CDSC as low as possible, each time you place a request to sell
shares, we will first sell any shares in your account that carry no CDSC. If
there is an insufficient number of these shares to meet your request in full, we
will then sell those shares that have the lowest CDSC.

CDSCs may be reduced or waived under certain circumstances and for certain
groups. Consult your Representative or call us directly at 1-800-423-4026 for
details.

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The Fund has adopted a plan pursuant to Rule 12b-1 that allows the Fund to pay
distribution fees for the sale and distribution of its Class B shares. Class B
shares pay Rule 12b-1 fees for the marketing of fund shares and for services
provided to shareholders. The plan provides for payments at an annual rate
(based on average daily net assets) of up to 1.00% on Class B shares. No more
than .25% of these payments may be for service fees. These fees are paid monthly
in arrears. Because the Fund pays Rule 12b-1 fees on its Class B shares,
long-term Class B shareholders could pay more than the economic equivalent of
the maximum front-end sales charge permitted by the National Association of
Securities Dealers, Inc.

FOR ACTUAL PAST EXPENSES OF CLASS A AND CLASS B SHARES, SEE THE SECTION ENTITLED
"WHAT ARE THE FEES AND EXPENSES OF THE FUND?" IN THIS PROSPECTUS.

How do I sell shares?

You may redeem your Fund shares on any day the Fund is open for business by:

. Contacting your Representative who will place a redemption order for
you;

. Sending a written redemption request to Administrative Data
Management Corp., ("ADM") at 581 Main Street, Woodbridge, NJ
07095-1198;

. Telephoning the Special Services Department of ADM at 1-800-342-6221
(if you have elected to have telephone privileges);

. Instructing us to make an electronic transfer to a predesignated bank
(if you have completed an application authorizing such transfers).

There are other ways you may sell your Fund shares such as by writing a check
against your money market fund account or requesting an expedited wire
redemption. You may be charged a fee for certain of these privileges. For
example, each wire under $5,000 is subject to a $10 fee. Consult your
Representative or call ADM at 1-800-423-4026 for details.

Requests for redemptions or exchanges out of or into our money market funds must
be received in writing or by phone prior to 12:00 p.m., EST, on a Trading Day,
to be processed the same day. Redemption or exchange orders received after 12:00
p.m., EST, but before the close of regular trading on the NYSE, will be
processed on the morning of the following Trading Day.

Payment of redemption proceeds generally will be made within 7 days. If you are
redeeming shares which you recently purchased by check, payment may be delayed
to verify that your check has cleared. This may take up to 15 days from the date
of your purchase. You may not redeem shares by telephone or Electronic Fund
Transfer unless you have owned the shares for at least 15 days.

If your account falls below the minimum account balance for any reason other
than market fluctuation, the Fund reserves the right to redeem your account

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without your consent or to impose a low balance account fee of $15 annually on
60 days prior notice. The Fund may also redeem your account or impose a low
balance account fee if you have established your account under a systematic
investment program and discontinue the program before you meet the minimum
account balance. You may avoid redemption or imposition of a fee by purchasing
additional Fund shares during this 60-day period to bring your account balance
to the required minimum. If you own Class B shares, you will not be charged a
CDSC on a low balance redemption.

The Fund reserves the right to make in-kind redemptions. This means that it
could respond to a redemption request by distributing shares of the Fund's
underlying investments rather than distributing cash.

Can I exchange my shares for the shares of other First Investors Funds?

You may exchange shares of the Fund for shares of other First Investors Funds
without paying any additional sales charge. You can only exchange within the
same class of shares (i.e., Class A to Class A). Consult your Representative or
call ADM at 1-800-423-4026 for details.

The Fund reserves the right to reject any exchange request that appears to be
part of a market timing strategy based upon the holding period of the initial
investment, the amount of the investment being exchanged, the funds involved,
and the background of the shareholder or dealer involved.

ACCOUNT POLICIES

What about dividends?

The Fund will declare daily and pay monthly dividends from net investment
income, which generally consists of interest income on investments less
expenses. Any net realized short-term capital gains will be declared and
distributed on an annual basis, usually after the end of the Fund's fiscal year.
The Fund does not expect to realize any long-term capital gains. The Fund may
make an additional distribution in any year if necessary to avoid a Federal
excise tax on certain undistributed taxable income and capital gain, if any.

Dividends paid on both classes of the Fund's shares are calculated at the same
time and in the same manner. Dividends on Class B shares of the Fund are
expected to be lower than those for its Class A shares because of the
distribution fees borne by the Class B shares. Dividends on each class also
might be affected differently by the allocation of other class-specific
expenses. In order to be eligible to receive a dividend, you must own Fund
shares as of the close of business on the record date of the dividend.

You may choose to reinvest all dividends at NAV in additional shares of the same
class of the Fund or certain other First Investors Funds or receive all
dividends in cash. If you do not select an option when you open your account,
all dividends will be reinvested in additional shares of the Fund. If you do not
cash a dividend check and do not notify ADM to issue a new check within 12
months, the dividend may be reinvested in the Fund. If any correspondence sent

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by the Fund is returned as "undeliverable," dividends automatically will be
reinvested in the Fund. No interest will be paid to you while a dividend remains
uninvested.

A dividend paid on a class of shares will only be paid in additional shares of
the distributing class if the total amount of the dividend is under $5 or the
Fund has received notice of your death (until written alternate payment
instructions and other necessary documents are provided by your legal
representative).

What about taxes?

The Fund may make distributions, called "exempt-interest dividends," that are
exempt from Federal income tax. However, exempt-interest dividends will not
necessarily be exempt from state and local income taxes. Distributions by the
Fund of interest income from taxable obligations, if any, and net short-term
capital gains are taxable to you as ordinary income. You are taxed in the same
manner whether you receive your dividends in cash or reinvest them in additional
Fund shares. If the Fund maintains a stable share price of $1.00, your sale or
exchange of Fund shares will not result in recognition of any taxable gain or
loss.

How do I obtain a complete explanation of all account privileges and policies?

The Fund offers a full range of special privileges, including special investment
programs for group retirement plans, systematic investment programs, automatic
payroll investment programs, telephone privileges, check writing privileges, and
expedited redemptions by wire order or Automated Clearing House transfer. The
full range of privileges, and related policies, are described in a special
Shareholder Manual, which you may obtain on request. For more information on the
full range of services available, please contact us directly at 1-800-423-4026.

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FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represents the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). The information has been audited by Tait, Weller & Baker, whose
report, along with the Fund's financial statements, are included in the SAI,
which is available upon request.

- ---------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------

NET ASSET
VALUE DIVIDENDS NET ASSETS,
(UNCHANGED NET FROM NET TOTAL END OF
DURING EACH INVESTMENT INVESTMENT RETURN YEAR
YEAR) INCOME INCOME (%) (THOUSANDS)
- ----------------------------------------------------------------------------------------

CLASS A
- -------
1994................... 1.00 .022 .022 2.24 26,424
1995................... 1.00 .032 .032 3.24 25,045
1996................... 1.00 .028 .028 2.85 22,888
1997................... 1.00 .030 .030 3.00 18,680
1998...................

+ Net of fees waived by the investment adviser and the transfer agent.

CLASS B
-------
1995*.................. $1.00 $.024 $.024 2.40 $ .01
1996................... 1.00 .020 .020 2.04 80
1997................... 1.00 .022 .022 2.20 13
1998...................

+ Net of fees waived or assumed
* For the period January 12, 1995 (date Class B shares were first offered)
to December 31, 1995
(a) Annualized

</TABLE>

14
<PAGE>

- ---------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ---------------------------------------------------

RATIO TO RATIO TO AVERAGE NET
AVERAGE NET ASSETS+ ASSETS PRIOR TO
WAIVER OF FEES
- ---------------------- -----------------------

NET NET
INVESTMENT INVESTMENT
EXPENSES INCOME EXPENSES INCOME
(%) (%) (%) (%)
- ---------------------------------------------------

.70 2.24 1.02 1.92
.71 3.18 1.06 2.84
.71 2.81 1.08 2.44
.75 2.95 1.12 2.58

1.46(a) 2.43(a) 1.81(a) 2.09(a)
1.46 2.06 1.83 1.69
1.50 2.20 1.87 1.83

15
<PAGE>

[FIRST INVESTORS LOGO]

TAX-EXEMPT MONEY MARKET FUND

For investors who want more information about the Fund, the following documents
are available free upon request:

ANNUAL/SEMI-ANNUAL REPORTS: Additional information about the Fund's investments
is available in the Fund's annual and semi-annual reports to shareholders.

STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Fund and is incorporated by reference into this
prospectus.

SHAREHOLDER MANUAL: The Shareholder Manual provides more detailed
information about the purchase, redemption and sale of Fund shares.

You can get free copies of reports, the SAI and the Shareholder Manual, request
other information and discuss your questions about the Fund by contacting the
Fund at:

Administrative Data Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Telephone: 1-800-423-4026

You can review and copy information about the Fund for a fee (including the
Fund's reports, Shareholder Manual and SAI) at the Public Reference Room of the
Securities and Exchange Commission ("SEC") in Washington, D.C. You can also send
your request and a duplicating fee to the Public Reference Room of the SEC,
Washington, DC 20549-6009. You can obtain information on the operation of the
Public Reference Room by calling 1-800-SEC-0330. Text-only versions of Fund
documents can be viewed online or downloaded from the SEC's Internet website at
http://www.sec.gov.

(Investment Company Act File No.:
811-3690 First Investors Tax-Exempt
Money Market Fund, Inc.)

<PAGE>

FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

95 Wall Street
New York, New York 10005 1-800-423-4026

STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 30, 1999

This is a Statement of Additional Information ("SAI") for FIRST INVESTORS
CASH MANAGEMENT FUND, INC. ("CASH MANAGEMENT FUND") and FIRST INVESTORS
TAX-EXEMPT MONEY MARKET FUND, INC. ("TAX-EXEMPT MONEY MARKET FUND"), each of
which is an open-end diversified management investment company. CASH MANAGEMENT
FUND and TAX-EXEMPT MONEY MARKET FUND are referred to herein as "Funds."

This SAI is not a prospectus. It should be read in conjunction with the
Funds' Prospectuses dated April 30, 1999, which may be obtained free of cost
from the Funds at the address or telephone number noted above.

TABLE OF CONTENTS
Page
Investment Strategies and Risks..............................................2
Investment Policies..........................................................3
Investment Restrictions......................................................9
Directors and Officers......................................................12
Management..................................................................14
Underwriter.................................................................15
Distribution Plans..........................................................15
Determination of Net Asset Value............................................17
Allocation of Portfolio Transactions........................................17
Taxes.......................................................................19
Performance Information.....................................................20
General Information.........................................................22
Appendix A..................................................................24
Appendix B..................................................................25
Appendix C..................................................................26
Appendix D..................................................................27
Financial Statements........................................................34
Shareholder Manual: A Guide to your First Investors Mutual Fund Account....35

<PAGE>

INVESTMENT STRATEGIES AND RISKS

CASH MANAGEMENT FUND
- --------------------

CASH MANAGEMENT FUND seeks to earn a high rate of current income consistent
with the preservation of capital and maintenance of liquidity. The Fund invests
primarily in high quality money market obligations, including securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities, bank
obligations and high-grade corporate instruments. The U.S. Government securities
in which the Fund may invest include a variety of U.S. Treasury securities that
differ in their interest rates, maturities and dates of issue. Securities issued
or guaranteed by agencies or instrumentalities of the U.S. Government may be
supported by the full faith and credit of the United States or by the right of
the issuer to borrow from the U.S. Treasury. See "U.S. Government Securities"
below. The Fund may invest in domestic bank certificates of deposit (insured up
to $100,000) and bankers' acceptances (not insured) issued by domestic banks and
savings institutions which are insured by the Federal Deposit Insurance
Corporation ("FDIC") and that have total assets exceeding $500 million. The Fund
also may invest in certificates of deposit issued by London branches of domestic
or foreign banks ("Eurodollar CDs"). The Fund may invest in time deposits and
other short-term obligations, including uninsured, direct obligations bearing
fixed, floating or variable interest rates, issued by domestic banks, foreign
branches of domestic banks, foreign subsidiaries of domestic banks and domestic
and foreign branches of foreign banks. The Fund also may invest in repurchase
agreements with banks that are members of the Federal Reserve System or
securities dealers that are members of a national securities exchange or are
market makers in U.S. Government securities, and, in either case, only where the
debt instrument subject to the repurchase agreement is a U.S. Treasury or agency
obligation. Repurchase agreements maturing in over 7 days are deemed illiquid
securities, and can constitute no more than 10% of the Fund's net assets. See
"Investment Policies" for additional information on repurchase agreements.

The Fund also may purchase high quality, U.S. dollar denominated short-term
bonds and notes, including variable rate and master demand notes issued by
domestic and foreign corporations (including banks). The Fund may invest in
floating and variable rate demand notes and bonds that permit the Fund, as the
holder, to demand payment of principal at any time, or at specified intervals
not exceeding 397 days, in each case upon not more than 30 days' notice. The
Fund may borrow money for temporary or emergency purposes in amounts not
exceeding 5% of its total assets. When market conditions warrant, the Fund may
purchase short-term, high quality fixed and variable rate instruments issued by
state and municipal governments and by public authorities.

Additional restrictions are set forth in the "Investment Restrictions"
section of this SAI.

TAX EXEMPT MONEY MARKET FUND
- ----------------------------

TAX EXEMPT MONEY MARKET FUND seeks to earn a high rate of current income
that is exempt from Federal income tax and is not an item of tax preference for
purposes of the Federal alternative minimum tax ("Tax Preference Item"),
consistent with the preservation of capital and maintenance of liquidity. The
Fund invests primarily in high-grade, short-term tax-exempt obligations issued
by state and municipal governments and by public authorities. See "Municipal
Instruments" below. While the Fund does not intend to buy any instruments whose
interest income is subject to Federal income tax or is a Tax Preference Item, up
to 20% of the Fund's total assets may be invested in high quality fixed-income
obligations, the interest on which is subject to Federal income tax.

The Fund may invest without limit in securities that are related to each
other in such a fashion that economic, political or business changes or

2
<PAGE>

developments would affect more than one security in the Fund's investment
portfolio. Securities or instruments of issuers in the same state or involved in
the same business, or interest paid from similar sources of tax revenues, are
examples of the factors that might have an effect on more than one instrument
purchased by the Fund. The Fund may invest up to 5% of its net assets in
securities issued on a when-issued or delayed delivery basis, that is, for
delivery to the Fund later than the normal settlement date for most securities,
at a stated price and yield. The Fund may borrow money for temporary or
emergency purposes in amounts not exceeding 5% of its total assets.

Additional restrictions are set forth in the "Investment Restrictions"
section of this SAI.

INVESTMENT POLICIES

BANKERS' ACCEPTANCES. Each fund may invest in bankers' acceptances.
Bankers' acceptances are short-term credit instruments used to finance
commercial transactions. Generally, an acceptance is a time drat drawn on a bank
by an exporter or importer to obtain a stted amount of funds to pay for specific
merchandise. The draft is then "accepted by a bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an asset
or it may be sold in the secondary market at the gong rate of interest for a
specific maturity. Although maturities for acceptances can be as long as 270
days, most acceptances have maturities of six months or less.

CERTIFICATES OF DEPOSIT. Each Fund may invest in bank certificates of
deposit ("CDs"). The FDIC is an agency of the U.S. Government which insures the
deposits of certain banks and savings and loan associations up to $100,000 per
deposit. The interest on such deposits may not be insured if this limit is
exceeded. Current Federal regulations also permit such institutions to issue
insured negotiable CDs in amounts of $100,000 or more without regard to the
interest rate ceilings on other deposits. To remain fully insured, these
investments currently must be limited to $100,000 per insured bank or savings
and loan association.

COMMERCIAL PAPER. Commercial paper is a promissory note issued by a
corporation to finance short-term needs, which may either be unsecured or backed
by a letter of credit. Commercial Paper includes notes, drafts or similar
instruments payable on demand or having a maturity at the time of issuance not
exceeding nine months, exclusive of days of grace or any renewal thereof. See
Appendix A to the SAI for a description of commercial paper ratings.

EURODOLLAR CERTIFICATES OF DEPOSIT. Each Fund may invest in Eurodollar
CDs, which are issued by London branches of domestic or foreign banks. Such
securities involve risks that differ from CDs issued by domestic branches of
U.S. banks. These risks include future political and economic developments, the
possible imposition of United Kingdom withholding taxes on interest income
payable on the securities, the possible establishment of exchange controls, the
possible seizure or nationalization of foreign deposits or the adoption of other
foreign governmental restrictions that might adversely affect the payment of
principal and interest on such securities.

MUNICIPAL INSTRUMENTS.
---------------------

MUNICIPAL BONDS. Municipal bonds are debt obligations that generally are
issued to obtain funds for various public purposes and have a time to maturity,
at issuance, of more than one year. The two principal classifications of
municipal bonds are "general obligation" and "revenue" bonds. General obligation
bonds are secured by the issuer's pledge of its full faith and credit for the
payment of principal and interest. Revenue bonds generally are payable only from
revenues derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special tax or other specific revenue source.
There are variations in the security of municipal bonds, both within a
particular classification and between classifications, depending on numerous

3
<PAGE>

factors. The yields on municipal bonds depend on, among other things, general
money market conditions, condition of the municipal bond market, size of a
particular offering, the maturity of the obligation and rating of the issuer.
Generally, the value of municipal bonds varies inversely to changes in interest
rates. See Appendix A for a description of municipal bond ratings.

MUNICIPAL COMMERCIAL PAPER. Issues of commercial paper are short-term
unsecured negotiable promissory notes. Municipal commercial paper is issued
usually to meet temporary capital needs of the issuer or to serve as a source of
temporary construction financing. These obligations are paid from general
revenues of the issuer or are refinanced with long-term debt.

MUNICIPAL NOTES. Municipal notes are principally tax anticipation notes,
bond anticipation notes, revenue anticipation notes and project notes. The
obligations are sold by an issuer prior to the occurrence of another revenue
producing event to bridge a financial gap for such issuer. Municipal notes are
usually general obligations of the issuing municipality. Project notes are
issued by housing agencies, but are guaranteed by the U.S. Department of Housing
and Urban Development and are secured by the full faith and credit of the United
States. Such municipal notes must be rated MIG-1 by Moody's or SP-1 by S&P or
have insurance through the issuer or an independent insurance company. A
description of municipal note ratings is contained in Appendix C.

PRIVATE ACTIVITY BONDS OR INDUSTRIAL DEVELOPMENT BONDS. Certain types of
revenue bonds, referred to as private activity bonds ("PABs") or industrial
development bonds ("IDBs"), are issued by or on behalf of public authorities to
obtain funds to provide for various privately operated facilities, such as
airports or mass transportation facilities. Most PABs and IDBs are pure revenue
bonds and are not backed by the taxing power of the issuing agency or authority.
Consequently, the payment of principal and interest on PABs and IDBs usually
depends entirely on the ability of the owner of the project financed to meet its
financial obligation to repay the bonds. In many instances these financial
obligations of private parties are secured by liens or pledges upon real and
personal property or are backed up by a standby letter of credit issued by a
commercial bank, which letter of credit effectively guarantees payment of
principal and interest on behalf of the party obligated to pay. Banks which
issue standby letters of credit to support the payment of principal and/or
interest on PABs and IDBs are restricted as to the form the letter of credit may
take, the total amount committed by standby letters of credit that may be issued
on behalf of one person or affiliates thereof and will usually only have to
fulfill their obligation when there is little chance of recovery against the
defaulting account party. If, with respect to any security purchased by
TAX-EXEMPT MONEY MARKET FUND, there is a guarantee or letter of credit
supporting that security, the guarantee or letter of credit shall not be deemed
to be a security issued by the guarantor; provided that the value of all
securities issued or guaranteed by the guarantor, and owned by the Fund, does
not exceed 10% of the total assets of the Fund. See "Taxes" for a discussion of
special tax consequences to "substantial users," or persons related thereto, of
facilities financed by PABs or IDBs.

PUT BONDS. Each Fund may invest in put bonds. A "put bond" is a municipal
bond that gives the holder the unconditional right to sell the bond back to the
issuer at a specified price with interest and exercise date, which is typically
well in advance of the bond's maturity date. Each Fund may invest in multi-modal
put (or tender option) bonds. A tender option bond generally allows the
underwriter or issuer, at its discretion over the life of the indenture, to
convert the bond into one of several enumerated types of securities or "modes"
upon 30 days' notice to holders. Within that 30 days, holders must either submit
the existing security to the paying agent to receive the new security, or put
back the security and receive principal and interest accrued up to that time.
TAX-EXEMPT MONEY MARKET FUND will only invest in put bonds as to which it can
exercise the put feature on not more than 7 days' notice if there is no liquid
secondary market available for these obligations. There is no assurance that an

4
<PAGE>

issuer of a put bond acquired by a Fund will be able to repurchase the bond on
the exercise date, if the Fund chooses to exercise its right to put the bond
back to the issuer.

VARIABLE RATE DEMAND INSTRUMENTS. Each fund may invest in variable rate
demand instruments ("VRDIs"). VRDIs generally are revenue bonds, issued
primarily by or on behalf of public authorities, and are not backed by the
taxing power of the issuing authority. The interest on these instruments is
adjusted at various intervals ranging from one day to six months, and the
adjustments are based on market conditions. These instruments allow the holder
to demand payment of all unpaid principal plus accrued interest from the issuer.
The Funds will invest only in VRDIs that have a demand notice period of not more
than seven calendar days in length. Usually, the Funds may also demand payment
from a redemption agent. In either instance, the obligation to pay the holder
upon demand is usually backed by a standby letter of credit issued by a
commercial bank to support the obligation of the party which has the duty to pay
upon demand. Issuers of VRDIs may have the right to prepay the outstanding
principal and interest upon the instrument in their discretion with a notice
period to the holder for prepayment by the issuer usually equal to that for the
demand feature.

Banks issuing standby letters of credit to support VRDIs receive a fee from
or on behalf of the issuer to establish the credit and may charge other fees if
the standby letter of credit is drawn upon. Such banks also enter into a
reimbursement agreement whereby the issuer or the redemption agent agrees to
reimburse the bank for any draw under the standby letter of credit. Such
reimbursement agreement, however, in no way affects the obligation of the bank
issuing the standby letter of credit, and payment of the Funds under a demand
feature backed by a standby letter of credit is not conditioned upon the bank's
likelihood of recovery under the reimbursement agreement. Consequently, the
Adviser will monitor the quality of the bank issuing any standby letter of
credit which supports the demand feature of any VRDI purchased by the Funds.

VRDIs reduce the likelihood of changes in value in the obligations they
represent as is typical with fixed rate instruments. As interest rates change,
fixed rate instruments' values change as the market re-evaluates the price of
the fixed rate of income in light of new market interest rates. If interest
rates rise, the value of an existing fixed rate instrument may fail to provide a
new purchaser with the effective market rate of income then prevailing. If
interest rates fall, the value of such an instrument may rise for similar
reasons. If interest rates change, the value of a VRDI should not change as much
as a fixed rate obligation, to the extent rate adjustments on the variable rate
instrument mirror the market. Therefore, the potential risk of capital
depreciation is much lower on a VRDI than on a fixed rate obligation, although
the potential for capital appreciation is also reduced. VRDIs are not comparable
to long-term fixed-rate securities, and the rates on these instruments may be
higher or lower than simultaneous market rates for fixed rate securities of
similar quality and time to maturity.

To determine time to maturity of VRDIs for the purpose of either the 397-day
maturity maximum for all of the Funds' investments or for computing the Funds'
dollar weighted average portfolio maturity, the maturity of the instrument is
deemed to be the greater of (1) the notice period required before the Funds may
receive payment under the demand feature of the instrument, or (2) the time
remaining until the next interest rate adjustment on the instrument.

PARTICIPATION INTERESTS. Each Fund may acquire any eligible Municipal
Instrument in the form of a participation interest. Under such an arrangement,
the Fund acquires as much as a 100% interest in a Municipal Instrument held by a
bank or other financial institution at a negotiated yield to the Fund. Banks or
other financial institutions may retain a fee, amounting to the excess of
interest paid on an instrument over the negotiated yield to the fund, for
issuing participation interests to the Fund. Each Fund will acquire written
participation interests in Municipal Instruments only if they are issued by
banks or other financial institutions which, in the opinion of the Fund's

5
<PAGE>

investment adviser, First Investors Management Co., Inc. ("FIMCO" or "Adviser"),
present minimal credit risk to the Fund. Participation interests may be
accompanied by a standby commitment by the bank or other financial institution
to repurchase the participations at the option of the Fund. Each Fund purchases
such a participation only if the issuer has a private letter ruling from the
Internal Revenue Service ("IRS") or an opinion of its counsel that interest on
the participation for which standby commitments have been issued is exempt from
Federal income taxation. Participations that are not accompanied by a standby
commitment may not be liquid assets. CASH MANAGEMENT FUND will only purchase
participations accompanied by a standby commitment.

RATING CHANGES. Following acquisition by a Fund, an instrument may no longer
be rated or may have its rating changed to one that is unacceptable to the Fund.
Either of these events will not necessarily cause the Fund to sell such
instrument. Rather, the Adviser or the applicable Fund's Board of Directors, as
appropriate, will consider the change or deletion of a rating in assessing
whether or not the Fund should continue to hold such instrument. Unrated
instruments purchased by a Fund will be re-evaluated periodically.

REPURCHASE AGREEMENTS. A repurchase agreement essentially is a short-term
collateralized loan. The lender (a Fund) agrees to purchase a security from a
borrower (typically a broker-dealer) at a specified price. The borrower
simultaneously agrees to repurchase that same security at a higher price on a
future date (which typically is the next business day). The difference between
the purchase price and the repurchase price effectively constitutes the payment
of interest. In a standard repurchase agreement, the securities which serve as
collateral are transferred to a Fund's custodian bank. In a "tri-party"
repurchase agreement, these securities would be held by a different bank for the
benefit of the Fund as buyer and the broker-dealer as seller. In a "quad-party"
repurchase agreement, the Fund's custodian bank also is made a party to the
agreement. Each Fund may enter into repurchase agreements with banks which are
members of the Federal Reserve System or securities dealers who are members of a
national securities exchange or are market makers in government securities. The
period of these repurchase agreements will usually be short, from overnight to
one week, and at no time will a Fund invest in repurchase agreements with more
than one year in time to maturity. The securities which are subject to
repurchase agreements, however, may have maturity dates in excess of one year
from the effective date of the repurchase agreement. Each Fund will always
receive, as collateral, securities whose market value, including accrued
interest, which will at all times be at least equal to 100% of the dollar amount
invested by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or evidence of book entry transfer to the
account of the custodian. If the seller defaults, a Fund might incur a loss if
the value of the collateral securing the repurchase agreement declines, and
might incur disposition costs in connection with liquidating the collateral. In
addition, if bankruptcy or similar proceedings are commenced with respect to the
seller of the security, realization upon the collateral by a Fund may be delayed
or limited. Neither Fund will enter into a repurchase agreement with more than
seven days to maturity if, as a result, more than 10% of such Fund's net assets
would be invested in such repurchase agreements and other illiquid investments.

RESTRICTED SECURITIES AND ILLIQUID INVESTMENTS. Neither Fund will purchase
or otherwise acquire any security if, as a result, more than 10% of its net
assets (taken at current value) would be invested in securities that are
illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale. This policy includes foreign issuers'
unlisted securities with a limited trading market and repurchase agreements
maturing in more than seven days. This policy does not include restricted
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, as amended ("1933 Act"), which the applicable Fund's Board of Directors or
the Adviser has determined under Board-approved guidelines are liquid.

6
<PAGE>

Restricted securities which are illiquid may be sold only in privately
negotiated transactions or in public offerings with respect to which a
registration statement is in effect under the 1933 Act. Such securities include
those that are subject to restrictions contained in the securities laws of other
countries. Securities that are freely marketable in the country where they are
principally traded, but would not be freely marketable in the United States,
will not be subject to this 10% limit. Where registration is required, a Fund
may be obligated to pay all or part of the registration expenses and a
considerable period may elapse between the time of the decision to sell and the
time the Fund may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market conditions were
to develop, a Fund might obtain a less favorable price than prevailed when it
decided to sell.

In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including private
placements, repurchase agreements, commercial paper, foreign securities and
corporate bonds and notes. These instruments are often restricted securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.

Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Fund, however, could affect adversely the marketability of
such portfolio securities and a Fund might be unable to dispose of such
securities promptly or at reasonable prices.

STANDBY COMMITMENTS. Each Fund may acquire standby commitments from banks
with respect to simultaneous purchases of Municipal Instruments for the Fund's
portfolio. Under this arrangement, a bank agrees to buy a particular Municipal
Instrument from a Fund at a specified price at the Fund's option. A standby
commitment is similar to a put option for a particular Municipal Instrument in a
Fund's portfolio. Standby commitments acquired by a Fund are not added to the
computation of that Fund's net asset value. Standby commitments are subject to
certain risk, including the issuer's ability to pay for the Municipal
Instruments when a Fund decides to sell the Municipal Instrument for which it is
issued and the lack of familiarity with standby commitments in the marketplace.

The Funds' ability to exercise their rights under a standby commitment is
unconditional, without any limitation whatsoever, and non-transferable. The
Funds, however, are permitted to sell a Municipal Instrument covered by a
standby commitment at any time and to any person.

The Funds may pay a consideration to a bank for the issuance of a standby
commitment if necessary and advisable. Such a consideration may take the form of
either a payment in cash, or the payment of a higher price for Municipal
Instruments covered by such a commitment. The effect of the payment of such
consideration is to reduce the yield to maturity for the Municipal Instruments
so covered. The total amount a Fund may pay as consideration in either manner,
on an annual basis, of the issuance of standby commitments may not exceed 0.50%
of that Fund's total assets.

7
<PAGE>

Standby commitments acquired by a Fund are not added to the computation of
that Fund's net asset value and are valued at zero. When a Fund pays a
consideration for the issuance of a standby commitment, the cost is treated as
unrealized depreciation for the time it is held by the Fund. The dollar-weighted
average maturity calculation for the Fund is not affected by standby
commitments.

In the absence of either a favorable ruling of the IRS, or opinion from the
bond issuer's counsel, that the Interest on Municipal Instruments for which
standby commitments have been issued is exempt from Federal income taxation, the
Funds will not acquire standby commitments.

TIME DEPOSITS. Each Fund may invest in time deposits. Time deposits are
non-negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. For the most part, time deposits that
may be held by each Fund would not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
FDIC.

U.S. GOVERNMENT SECURITIES. The Funds may invest in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. These
obligations, including those which are guaranteed by Federal agencies or
instrumentalities, may or may not be backed by the "full faith and credit" of
the United States or by the right of the issuer to borrow from the U.S.
Treasury. In the case of securities not backed by full faith and credit of the
United States, a Fund must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment and may not be able to assert
a claim against the United States itself in the event the agency or
instrumentality does not meet its commitments. Securities in which a Fund may
invest that are not backed by the full faith and credit of the U.S. Government
include, but are not limited to, obligations of the Tennessee Valley Authority,
the Federal National Mortgage Association and the U.S. Postal Service, each of
which has the right to borrow from the U.S. Treasury to meet its obligations,
and obligations of the Federal Farm Credit System and the Federal Home Loan
Banks, both of whose obligations may be satisfied only by the individual credits
of each issuing agency.

Securities which are backed by the full faith and credit of the U.S.
Government include Treasury bills, Treasury notes, Treasury bonds, and
obligations of the Government National Mortgage Association, the Farmers Home
Administration, and the Export-Import Bank. Treasury bills have maturities of
one year or less; Treasury notes have maturities of one to ten years; Treasury
bonds generally have maturities of greater than five years.

VARIABLE RATE AND FLOATING RATE NOTES. Each Fund may invest in derivative
variable rate and floating rate notes. Issuers of such notes include
corporations, banks, broker-dealers and finance companies. Variable rate notes
include master demand notes that are obligations permitting the holder to invest
fluctuating amounts, which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. The interest rates
on these notes fluctuate from time to time. The issuer of such obligations
normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders of such
obligations.

The interest rate on a floating rate obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate obligation is adjusted
automatically at specified intervals. Frequently, such obligations are secured
by letters of credit or other credit support arrangements provided by banks.
Because these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be traded,
and there is generally no established secondary market for these obligations,
although they are redeemable at face value. Accordingly, where these obligations
are not secured by letters of credit or other credit support arrangements, the

8
<PAGE>

right of the Fund to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated by
credit rating agencies. Each Fund will invest in obligations that are unrated
only if the Adviser determines that, at the time of investment, the obligations
are of comparable quality to the other obligations in which the Fund may invest.
The Adviser, on behalf of each Fund, will consider on an ongoing basis the
creditworthiness of the issuers of the floating and variable rate obligations in
the Fund's portfolio.

WHEN-ISSUED SECURITIES. When the TAX-EXEMPT MONEY MARKET FUND enters into a
commitment to purchase securities on a when-issued or delayed delivery basis,
delivery of, and payment for, the instruments occur up to 45 days after the Fund
agrees to purchase the instruments. The purchase price to be paid by the Fund
and the interest rate on the instruments to be purchased are both selected when
the Fund agrees to purchase the securities "when-issued." The Fund is permitted
to sell when-issued securities prior to issuance of such securities, but will
not purchase such securities with that purpose intended. The Fund establishes a
separate account on its books and records or with the Custodian consisting of
cash or liquid debt securities equal to the amount of the Fund's commitment and
valued at their fair market value. If on any day the market value of this
segregated account falls below the value of the Fund's commitment, the Fund must
deposit additional cash or qualified securities into the account until equal to
the value of the Fund's commitment. When the securities to be purchased are
issued, the Fund will pay for the securities from available cash, the sale of
other Municipal Instruments, and, if necessary, from sale of the when-issued
securities themselves, although this is not ordinarily expected.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below have been adopted by the
respective Fund and, unless identified as non-fundamental policies, may not be
changed without the affirmative vote of a majority of the outstanding voting
securities of that Fund. As provided in the Investment Company Act of 1940, as
amended ("1940 Act"), a "vote of a majority of the outstanding voting securities
of the Fund" means the affirmative vote of the lesser of (i) more than 50% of
the outstanding shares of the Fund or (ii) 67% or more of the shares present at
a meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy. Except with respect to borrowing, changes in
values of a particular Fund's assets will not cause a violation of the following
investment restrictions so long as percentage restrictions are observed by such
Fund at the time it purchases any security.

CASH MANAGEMENT FUND. CASH MANAGEMENT FUND will not:
--------------------

(1) Pledge assets, except that the Fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings.

(2) Make loans, except by purchase of debt obligations and through
repurchase agreements referred to under "Investment Objective and Policies" in
the Prospectuses, provided, however, that repurchase agreements maturing in more
than seven days will not exceed 10% of the Fund's net assets (taken at current
value).

(3) Purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the Government of the United States
or any agency or instrumentality thereof) if, as a result thereof more than 25%
of the Fund's total assets (taken at current value) would be invested in the
obligations of one or more issuers having their principal business activities in
the same industry; provided, however, that the Fund may invest more than 25% of
its total assets in the obligations of banks.

9
<PAGE>

(4) With respect to 75% of the Fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than 5%
of the Fund's total assets would be invested in the securities of that issuer,
or (b) the Fund would hold more than 10% of the outstanding voting securities of
that issuer.

(5) Purchase securities on margin (but the Fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities).

(6) Make short sales of securities unless at all times while a short
position is open the Fund maintains a long position in the same security in an
amount at least equal thereto.

(7) Write or purchase any put or call options.

(8) Borrow money, except as a temporary or emergency measure (not for
leveraging or investment) in an amount not to exceed 5% of the value of its
assets.

(9) Purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the Fund's total assets to be
invested in securities of companies, which, including predecessors, have a
record of less than three years' continuous operation.

(10) Purchase the securities of other investment companies or investment
trusts.

(11) Purchase or retain any securities of another issuer if persons
affiliated with the Fund or its Adviser owning individually more than one-half
of one percent of said issuer's outstanding stock own, in the aggregate, more
than five percent of said issuer's outstanding stock.

(12) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.

(13) Invest in companies for the purpose of exercising control or
management.

(14) Issue senior securities.

(15) Buy or sell real estate, commodities, or commodity contracts (unless
acquired as a result of ownership of securities) or interests in oil, gas or
mineral exploration.

The Fund has adopted the following non-fundamental investment restrictions
which may be changed without shareholder approval:

(1) The Fund will not purchase any security if, as a result, more than 10%
of its net assets would be invested in illiquid securities, including repurchase
agreements not entitling the holder to payment of principal and interest within
seven days and any securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily available market.
The Directors, or the Fund's investment adviser acting pursuant to authority
delegated by the Directors, may determine that a readily available market exists
for securities eligible for resale pursuant to Rule 144A under the 1933, Act or
any other applicable rule, and therefore that such securities are not subject to
the foregoing limitation.

(2) Notwithstanding fundamental investment restriction (1) above, the Fund
will not pledge its assets in excess of an amount equal to 10% of its net
assets.

(3) Notwithstanding fundamental investment restriction (4) above, with
respect to 100% of its total assets, the Fund will not purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.

10
<PAGE>

Government, its agencies or instrumentalities) if, as a result, more than 5% of
the Funds total assets would be invested in the securities of that issuer.

TAX-EXEMPT MONEY MARKET FUND. TAX-EXEMPT MONEY MARKET FUND will not:

(1) Borrow money, except as a temporary or emergency measure (not for
leveraging or investment) in an amount to exceed 5% of the value of its assets.

(2) Pledge assets, except that the Fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings made in
accordance with paragraph (1) above.

(3) Make loans, except by purchase of debt obligations and through
repurchase agreements; provided, however, that repurchase agreements maturing in
more than seven days, along with all illiquid assets, will not exceed 10% of the
Fund's total assets (taken at current value).

(4) With respect to 75% of the Fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed as to principal and
interest by the Government of the United States or any agency or instrumentality
thereof) if, as a result thereof, (a) more than 5% of the Fund's total assets
would be invested in the securities of that issuer, or (b) the Fund would hold
more than 10% of the voting securities of that issuer. The Fund will not invest
in securities such that any one bank's letters of credit support more than 10%
of the Fund's total assets.

(5) Invest more than 25% of the Fund's total assets (taken at current value)
in the obligations of one or more issuers having their principal business
activities in the same industry.

(6) Purchase securities on margin (but the Fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities).

(7) Make short sales of securities.

(8) Write or purchase any put or call options, except stand-by commitments.

(9) Knowingly purchase a security which is subject to legal or contractual
restrictions on resale or for which there is no readily available market.

(10) Purchase the securities of other investment companies or investment
trusts, except as they may be acquired as part of a merger, consolidation or
acquisition of assets.

(11) Purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the Fund's total assets to be
invested in securities of companies which, including predecessors, have a record
of less than three years' continuous operation.

(13) Purchase or retain any securities of another issuer if persons
affiliated with the Fund or its Adviser or management owning, individually, more
than one-half of one percent of said issuer's outstanding stock (or securities
convertible into stock) own, in the aggregate, more than 5% of said issuer's
outstanding stock (or securities convertible into stock).

(14) Invest in companies for the purpose of exercising control or
management.

11
<PAGE>

(15) Issue senior securities.

(16) Buy or sell real estate, commodities or commodity contracts (unless
acquired as a result of ownership of securities) or interest in oil, gas or
mineral explorations, provided, however, the Fund may invest in Municipal
Instruments secured by real estate or interests in real estate.

The Fund has adopted the following non-fundamental restrictions which may be
changed without shareholder approval:

(1) Notwithstanding fundamental investment restriction (2) above, the Fund
will not pledge its assets in excess of an amount equal to 10% of its net
assets.

(2) Notwithstanding fundamental investment restriction (4) above, with
respect to 100% of its total assets, the Fund will not purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, more than 5% of
the Funds total assets would be invested in the securities of that issuer.

(3) Notwithstanding fundamental investment restriction (16) above, the Fund will
not invest in real estate limited partnership interests or in interests in real
estate investment trusts that are not readily marketable.

DIRECTORS AND OFFICERS

The following table lists the Directors and executive officers of the Funds,
their business address and principal occupations during the past five years.
Unless otherwise noted, an individual's business address is 95 Wall Street, New
York, New York 10005.

GLENN O. HEAD*+ (73), President and Director. Chairman of the Board and
Director, Administrative Data Management Corp. ("ADM"), FIMCO, Executive
Investors Management Company, Inc. ("EIMCO"), First Investors Corporation
("FIC"), Executive Investors Corporation ("EIC") and First Investors
Consolidated Corporation ("FICC").

KATHRYN S. HEAD*+ (43), Director, 581 Main Street, Woodbridge, NJ 07095.
President and Director, FICC, ADM and FIMCO; Vice President and Director, FIC
and EIC; President EIMCO; Chairman, President and Director, First Financial
Savings Bank, S.L.A.

LARRY R. LAVOIE* (51) Director. Assistant Secretary, ADM, EIC, EIMCO, FICC, and
FIMCO; Secretary and General Counsel, FIC.

REX R. REED** (75), Director, 259 Governors Drive, Kiawah Island, SC 29455.
Retired; formerly Senior Vice President, American Telephone & Telegraph Company.

HERBERT RUBINSTEIN** (77), Director, 695 Charolais Circle, Edwards, CO
81632-1136. Retired; formerly President, Belvac International Industries, Ltd.
and President, Central Dental Supply.

NANCY SCHAENEN** (67), Director, 56 Midwood Terrace, Madison, NJ 07940. Trustee,
Drew University and DePauw University.

JAMES M. SRYGLEY** (66), Director, 33 Hampton Road, Chatham, NJ 07982.
Principal, Hampton Properties, Inc. (property investment company).

JOHN T. SULLIVAN* (66), Director and Chairman of the Board; Director, FIMCO,
FIC, FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.

12
<PAGE>

ROBERT F. WENTWORTH** (69), Director, RR1, Box 217, Upland Downs Road,
Manchester Center, VT 05255. Retired; formerly financial and planning executive
with American Telephone & Telegraph Company.

JOSEPH I. BENEDEK (40), Treasurer and Chief Financial Officer, 581 Main
Street, Woodbridge, NJ 07095. Treasurer, FIC, FIMCO, EIMCO and EIC;
Comptroller and Treasurer, FICC.

CONCETTA DURSO (63), Vice President and Secretary. Vice President, FIMCO, EIMCO
and ADM; Assistant Vice President and Assistant Secretary, FIC and EIC.

MICHAEL J. O'KEEFE (32), Vice President. Portfolio Manager from December
1995; Assistant Portfolio Manager from 1985-1995.

- ------------------------

* These Directors may be deemed to be "interested persons," as defined in
the 1940 Act.
** These Directors are members of the Board's Audit Committee.
+ Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.

The Directors and officers, as a group, owned less than 1% of the shares of
either Fund.

All of the officers and Directors, except for Mr. O'Keefe, hold identical or
similar positions with 14 other registered investment companies in the First
Investors Family of Funds. Mr. Head is also an officer and/or Director of First
Investors Asset Management Company, Inc., First Investors Credit Funding
Corporation, First Investors Leverage Corporation, First Investors Realty
Company, Inc., First Investors Resources, Inc., N.A.K. Realty Corporation, Real
Property Development Corporation, Route 33 Realty Corporation, First Investors
Life Insurance Company, First Financial Savings Bank, S.L.A., First Investors
Credit Corporation and School Financial Management Services, Inc. Ms. Head is
also an officer and/or Director of First Investors Life Insurance Company, First
Investors Credit Corporation, School Financial Management Services, Inc., First
Investors Credit Funding Corporation, N.A.K. Realty Corporation, Real Property
Development Corporation, First Investors Leverage Corporation and Route 33
Realty Corporation.

The following table lists compensation paid to the Directors of CASH
MANAGEMENT FUND AND TAX-EXEMPT MONEY MARKET FUND for the fiscal year ended
December 31, 1998.

AGGREGATE
COMPENSATION AGGREGATE TOTAL COMPENSATION
FROM CASH COMPENSATION FROM FROM FIRST INVESTORS
MANAGEMENT TAX-EXEMPT MONEY FAMILY OF FUNDS PAID
DIRECTOR FUND* MARKET FUND* TO DIRECTOR++
- -------- ---------- ---------------- --------------------

James J. Coy** $[ ] $-0- $[ ]
Roger L. Grayson*** -0- -0- -0-
Glenn O. Head -0- -0- -0-
Kathryn S. Head -0- -0- -0-
Larry R. Lavoie+ -0- -0- -0-
Rex R. Reed [ ] -0- [ ]
Herbert Rubinstein [ ] -0- [ ]
James M. Srygley [ ] -0- [ ]
John T. Sullivan -0- -0- -0-
Robert F. Wentworth [ ] -0- [ ]
Nancy Schaenen [ ] -0- [ ]

</TABLE>

13
<PAGE>

* Compensation to officers and interested Directors of the Funds is paid by
the Adviser.

** On March 27, 1997, Mr. Coy resigned as a Director of the Funds.

*** On August 20, 1998, Mr. Grayson resigned as a Director of the Funds.

+ On September 17, 1998, Mr. Lavoie was elected by the Board of Directors to
serve as Director.

++ The First Investors Family of Funds consists of 15 separate registered
investment companies.

MANAGEMENT

Investment advisory services to each Fund are provided by First Investors
Management Company, Inc. pursuant to separate Investment Advisory Agreements
(each, an "Advisory Agreement") dated June 13, 1994. Each Advisory Agreement was
approved by the Board of Directors of the applicable Fund, including a majority
of the Directors who are not parties to such Fund's Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of any such party
("Independent Directors"), in person at a meeting called for such purpose and by
a majority of the public shareholders of the applicable Fund.

Pursuant to each Advisory Agreement, FIMCO shall supervise and manage each
Fund's investments, determine each Fund's portfolio transactions and supervise
all aspects of each Fund's operations, subject to review by the applicable
Fund's Directors. Each Advisory Agreement also provides that FIMCO shall provide
the applicable Fund with certain executive, administrative and clerical
personnel, office facilities and supplies, conduct the business and details of
the operation of such Fund and assume certain expenses thereof, other than
obligations or liabilities of such Fund. Each Advisory Agreement may be
terminated at any time without penalty by the applicable Fund's Directors or by
a majority of the outstanding voting securities of such Fund, or by FIMCO, in
each instance on not less than 60 days' written notice, and shall automatically
terminate in the event of its assignment (as defined in the 1940 Act). Each
Advisory Agreement also provides that it will continue in effect, with respect
to the applicable Fund, for a period of more than two years only if such
continuance is approved annually either by such Fund's Directors or by a
majority of the outstanding voting securities of such Fund, and, in either case,
by a vote of a majority of such Fund's Independent Directors voting in person at
a meeting called for the purpose of voting on such approval.

Under each Advisory Agreement, each Fund pays the Adviser an annual fee,
payable monthly, of 0.50% of its average daily net assets.

For the fiscal years ended December 31, 1996, 1997 and 1998, CASH MANAGEMENT
FUND paid $625,485, $669,184 and $_____, respectively, in advisory fees. For the
fiscal years ended December 31, 1996, 1997 and 1998, TAX-EXEMPT MONEY MARKET
FUND paid $123,037and $105,807 and $______, respectively, in advisory fees. For
the fiscal year ended December 31, 1997, the Adviser voluntarily assumed
expenses for CASH MANAGEMENT FUND and TAX-EXEMPT MONEY MARKET FUND in the
amounts of $379,265 and $57,762, respectively. For the fiscal year ended
December 31, 1998, the Adviser voluntarily assumed expenses for CASH MANAGEMENT
FUND and TAX EXEMPT MONEY MARKET FUND in the amount of $______ and $_______,
respectively.

Each Fund bears all expenses of its operations other than those incurred by
the Adviser or the Underwriter under the terms of its advisory or underwriting
agreements. Fund expenses include, but are not limited to: the advisory fee;
shareholder servicing fees and expenses; custodian fees and expenses; legal and

14
<PAGE>

auditing fees; expenses of preparing and printing prospectuses and shareholder
reports; and proxy and shareholder meeting expenses.

The Adviser has an Investment Committee composed of George V. Ganter,
Margaret Haggerty, Glenn O. Head, Nancy W. Jones, Patricia D. Poitra, Michael
O'Keefe, Clark D. Wagner and Richard Guinnessey. The Committee usually meets
weekly to discuss the composition of the portfolio of each Fund and to review
additions to and deletions from the portfolios.

First Investors Consolidated Corporation ("FICC") owns all of the voting
common stock of the Adviser and all of the outstanding stock of First Investors
Corporation and the Funds' transfer agent. Mr. Glenn O. Head controls FICC and,
therefore, controls the Adviser.

UNDERWRITER

Each Fund has entered into an Underwriting Agreement ("Underwriting
Agreement") with First Investors Corporation ("Underwriter" or "FIC") which
requires the Underwriter to use its best efforts to sell shares of the Funds.
Each Underwriting Agreement was approved by the applicable Fund's Board of
Directors, including a majority of the Independent Directors. Each Underwriting
Agreement provides that it will continue in effect from year to year only so
long as such continuance is specifically approved at least annually by the
applicable Fund's Board of Directors or by a vote of a majority of the
outstanding voting securities of such Fund, and in either case by the vote of a
majority of such Fund's Independent Directors, voting in person at a meeting
called for the purpose of voting on such approval. Each Underwriting Agreement
will terminate automatically in the event of its assignment.

DISTRIBUTION PLANS

As stated in each Fund's Prospectus, pursuant to a separate plan of
distribution for Class B shares adopted by each Fund pursuant to Rule 12b-1
under the 1940 Act ("Class B Plan"), each Fund may compensate the Underwriter
for certain expenses incurred in the distribution of that Fund's Class B shares
and the servicing or maintenance of existing Fund Class B shareholder accounts.

Each Class B Plan was approved by the applicable Fund's Board of Directors,
including a majority of the Independent Directors, and by a majority of the
outstanding Class B voting securities of such Fund. Each Class B Plan will
continue in effect from year to year as long as its continuance is approved
annually by either the applicable Fund's Board of Directors or by a vote of a
majority of the outstanding Class B voting securities of such Fund. In either
case, to continue, each Class B Plan must be approved by the vote of a majority
of the Independent Directors of the applicable Fund. Each Fund's Board reviews
quarterly and annually a written report provided by the Treasurer of the amounts
expended under the each Class B Plan and the purposes for which such
expenditures were made. While each Class B Plan is in effect, the selection and
nomination of the applicable Fund's Independent Directors will be committed to
the discretion of such Independent Directors then in office.

In adopting each Class B Plan, the Board of Directors of each Fund
considered all relevant information and determined that there is a reasonable
likelihood that each Class B Plan will benefit each Fund and their Class B
shareholders. The Board of Directors of each Fund believes that amounts spent
pursuant to each Class B Plan have assisted each Fund in providing ongoing
servicing to shareholders, in competing with other providers of financial
services and in promoting sales, thereby increasing the net assets of each Fund.

15
<PAGE>

Each Class B Plan can be terminated at any time by a vote of a majority of
the applicable Fund's Independent Directors or by a vote of a majority of the
outstanding Class B voting securities of such Fund. Any change to the Class B
Plan that would materially increase the costs to that class of shares of a Fund
may not be instituted without the approval of the outstanding Class B voting
securities of such Fund. Such changes also require approval by a majority of the
applicable Fund's Independent Directors.

In reporting amounts expended under the Class B Plans to the Directors,
FIMCO will allocate expenses attributable to the sale of each class of a Fund's
shares to such class based on the ratio of sales of such class to the sales of
both classes of shares. The fees paid by a Fund's Class B shares will not be
used to subsidize the sale of any other class of the Fund's shares.

For the fiscal year ending December 31, 1998, CASH MANAGEMENT FUND and
TAX-EXEMPT MONEY MARKET FUND paid $____ and $___, respectively, in fees pursuant
to their respective Class B Plan, all of which was paid as compensation to sales
personnel as distribution fees.

TAX-EXEMPT MONEY MARKET FUND has adopted a so-called "defensive" plan of
distribution for Class A shares pursuant to Rule 12b-1 under the 1940 Act
("Class A Plan"). No fees are paid by the Fund under this Plan. The Underwriter
of the Fund may, at its discretion, pay a fee to certain Dealers for
distribution services and administrative support services. These fees (if any)
are covered by the Plan only if they are deemed to be paid indirectly by the
Fund. The services covered by the defensive Class A Plan may include, but shall
not be limited to, providing office space, equipment, telephone facilities and
various personnel including clerical, supervisory and possibly computer, as is
necessary or beneficial to establish and maintain Class A shareholder accounts
and records, process purchase and redemption transactions, process automatic
investments of client account cash balances, answer routine client inquiries
regarding the Fund, assist clients in changing dividend options, account
designations and addresses and providing such other services as the Fund may
reasonably request. The schedules of fees (if any) and the basis upon which such
fees will be paid is determined from time to time by the Underwriter.

The Underwriter has the right to select, in its sole discretion, Dealers to
participate in the Class A Plan and has the right to terminate with or without
cause and in its sole discretion any agreement with a Dealer. Any agreement may
be terminated, without penalty, at any time, by a vote of a majority of the
Independent Directors upon not more than 60 days' written notice to any Dealer,
or by vote of a majority of the outstanding Class A voting securities of
TAX-EXEMPT MONEY MARKET FUND, or upon notice by the Underwriter.

The Class A Plan was adopted by TAX-EXEMPT MONEY MARKET FUND'S Directors,
including a majority of the Independent Directors. In adopting the Class A Plan,
the Fund's Board considered all relevant information and determined that there
is a reasonable likelihood that the Class A Plan will benefit TAX-EXEMPT MONEY
MARKET FUND and its shareholders.

The Class A Plan will continue in effect from year to year as long as its
continuance is approved annually by either TAX-EXEMPT MONEY MARKET FUND'S Board
of Directors or by a vote of a majority of the outstanding Class A voting
securities of the Fund. In either case, to continue, the Class A Plan must be
approved by the vote of a majority of the Independent Directors. The Board
reviews promptly after the end of each fiscal quarter and fiscal year, a written
report provided by the Treasurer of the amounts expended under the Class A Plan
and the purposes for which such expenditures were made. While the Class A Plan
is in effect, the selection and nomination of the Independent Directors of
TAX-EXEMPT MONEY MARKET FUND will be committed to the discretion of such
Independent Directors then in office.

16
<PAGE>

The Class A Plan can be terminated at any time by a vote of a majority of
the Independent Directors or by a vote of a majority of the outstanding Class A
voting securities of the Fund. Any material change to the Class A Plan or any
change that would materially increase the costs to the Class A shareholders of
the Fund may not be instituted without the approval of the outstanding Class A
voting securities of the Fund. Such changes also require approval by a majority
of the Fund's Independent Directors.

DETERMINATION OF NET ASSET VALUE

Each Fund values its portfolio securities in accordance with the amortized
cost method of valuation under Rule 2a-7 under the 1940 Act. To use amortized
cost to value its portfolio securities, a Fund must adhere to certain conditions
under that Rule relating to the Fund's investments, some of which are discussed
in the Prospectuses. Amortized cost is an approximation of market value of an
instrument, whereby the difference between its acquisition cost and value at
maturity is amortized on a straight-line basis over the remaining life of the
instrument. The effect of changes in the market value of a security as a result
of fluctuating interest rates is not taken into account and thus the amortized
cost method of valuation may result in the value of a security being higher or
lower than its actual market value. In the event that a large number of
redemptions take place at a time when interest rates have increased, a Fund
might have to sell portfolio securities prior to maturity and at a price that
might not be desirable.

The Board of Directors of each Fund has established procedures for the
purpose of maintaining a constant net asset value of $1.00 per share, which
include a review of the extent of any deviation of net asset value per share,
based on available market quotations, from the $1.00 amortized cost per share.
Should that deviation exceed 1/2 of 1% for any Fund, the Board of Directors will
promptly consider whether any action should be initiated to eliminate or reduce
material dilution or other unfair results to shareholders. Such action may
include selling portfolio securities prior to maturity, reducing or withholding
dividends and utilizing a net asset value per share as determined by using
available market quotations. Each Fund maintains a dollar weighted average
portfolio maturity of 90 days or less and does not purchase any instrument with
a remaining maturity greater than 13 months, limits portfolio investments,
including repurchase agreements, to those U.S. dollar-denominated instruments
that are of high quality and that the Directors determine present minimal credit
risks as advised by the Adviser, and complies with certain reporting and
recordkeeping procedures. There is no assurance that a constant net asset value
per share will be maintained. In the event amortized cost ceases to represent
fair value per share, the Board will take appropriate action.

Each Fund's Board of Directors may suspend the determination of the
applicable Fund's net asset value for the whole or any part of any period (1)
during which trading on the New York Stock Exchange ("NYSE") is restricted as
determined by the Securities and Exchange Commission ("SEC") or the NYSE is
closed for other than weekend and holiday closings, (2) when an emergency
exists, as defined by the SEC, that makes it not reasonably practicable for such
Fund to dispose of securities owned by it or fairly to determine the value of
its net assets, or (3) for such other period as the SEC has by order permitted.

ALLOCATION OF PORTFOLIO TRANSACTIONS

Purchases and sales of portfolio securities by a Fund generally are
principal transactions. In principal transactions, portfolio securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage commissions paid by
a Fund for such purchases. Purchases from underwriters will include the
underwriter's commission or concession and purchases from dealers serving as
market makers will include the spread between the bid and asked price. Certain
money market instruments may be purchased by the Funds directly from an issuer,

17
<PAGE>

in which no commissions or discounts are paid. A Fund may purchase fixed income
securities on a "net" basis with dealers acting as principal for their own
accounts without a stated commission, although the price of the security usually
includes a profit to the dealer.

If any transactions are effected on an agency basis, the Adviser will seek
best execution of trades either (1) at the most favorable and competitive rate
of commission charged by any broker or member of an exchange, or (2) with
respect to agency transactions, at a higher rate of commission if reasonable in
relation to brokerage and research services provided to a Fund or the Adviser by
such member or broker. In addition, upon the instruction of each Fund's Board of
Directors, the Adviser may use dealer concessions available in fixed price
underwritings to pay for such research services. Such services may include, but
are not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale and statistical or factual
information or opinions pertaining to investments. The Adviser may use research
and services provided to it by brokers in servicing all the funds in the First
Investors Group of Funds; however, not all such services may be used by the
Adviser in connection with a Fund. No portfolio orders are placed with an
affiliated broker, nor does any affiliated broker-dealer participate in these
commissions.

The Adviser may combine transaction orders placed on behalf of a Fund and
any other Fund in the First Investors Group of Funds, any series of Executive
Investors Trust and First Investors Life Insurance Company, affiliates of the
Funds, for the purpose of negotiating brokerage commissions or obtaining a more
favorable transaction price; and where appropriate, securities purchased or sold
may be allocated in accordance with written procedures approved by each Fund's
Board of Directors.

PURCHASE, REDEMPTION AND EXCHANGE OF SHARES

Information regarding the purchase, redemption and exchange of fund shares
is contained in the Shareholder Manual, a separate section of the SAI that is a
distinct document and may be obtained free of charge by contacting your Fund.

REDEMPTIONS-IN-KIND. If each Fund's Board should determine that it would be
detrimental to the best interests of the remaining shareholders of a Fund to
make payment wholly or partly in cash, the Fund may pay redemption proceeds in
whole or in part by a distribution in kind of securities from the portfolio of
the Fund. If shares are redeemed in kind, the redeeming shareholder will likely
incur brokerage costs in converting the assets into cash. The method of valuing
portfolio securities for this purpose is described under "Determination of Net
Asset Value."

SUPER CHECKING PROGRAM. Class A shareholders may establish Super Checking.
Super Checking links your Fund account with a non-interest bearing checking
account at First Financial Savings Bank, S.L.A. ("FFS"), an affiliate of the
Funds. Each day, the Fund automatically "sweeps," or transfers, funds to your
FFS account to cover your withdrawals, in increments of $100 ($1,000 for
Business Super Checking) to maintain a balance of $1,000 ($3,000 for Business
Super Checking). FFS will accept deposits into the FFS account only by an
electronic direct deposit, a federal funds wire transfer or by "sweep" from your
Fund account. You will receive a consolidated monthly reconciliation statement
summarizing all transactions. The Federal Deposit Insurance Corporation ("FDIC")
insures your funds in your FFS account up to $100,000. SHARES OF YOUR FUND ARE
NOT INSURED BY THE FDIC, ARE NOT OBLIGATIONS OF OR GUARANTEED BY FFS, AND ARE
SUBJECT TO RISK OF LOSS OF PRINCIPAL. For more information on the Super Checking
Program, see the Super Checking Account and Sweep Agreement or call FFS at
1-800-304-7748.

CHECK REDEMPTION PRIVILEGE. You may obtain checks for non-retirement Fund
accounts ("Redemption Checks"). Dividends are earned on Fund shares until a

18
<PAGE>

Redemption Check clears. You are subject to the rules and regulations of the
Custodian covering checking accounts. Neither the Funds nor the Custodian
charges you for the use of such Redemption Checks. On presentation of a
Redemption Check to the Custodian for payment, the Fund determines that a
sufficient number of full and fractional shares are available in your account to
cover the amount of the Redemption Check. Shares are considered available after
a fifteen day clearing period. The Funds return all cancelled checks to you once
a month. Neither the Fund nor the Custodian can certify or directly cash
Redemption Checks. Any "stop payment" requests must be directed to the Transfer
Agent and not to the Custodian. However, there is no guarantee that a "stop
payment" request will stop the payment of a Redemption Check. You cannot use the
Check Redemption Privilege for the redemption of shares for which certificates
have been issued, for redemptions from retirement accounts or for redemptions of
shares which are subject to a contingent deferred sales charge ("CDSC"). A CDSC
may be imposed on the redemption of Fund shares acquired through an exchange of
Class A shares from another Eligible Fund which were originally purchased at net
asset value. Because each Fund accrues dividends on a daily basis, you may not
redeem your Fund account in its entirety by the use of the check redemption
privilege. The Check Redemption Privilege is not available for Super Checking.

It is your responsibility to be certain that sufficient shares are in your
account and available to cover the amount of the Redemption Check since, if
there are insufficient shares, the Redemption Check will be returned through
banking channels marked "insufficient funds." It is also your responsibility to
ensure that such Redemption Checks are not made available to unauthorized
individuals and to promptly notify the Funds of any lost or stolen Redemption
Checks. Either the funds or the Custodian may at any time amend or terminate the
Check Redemption Privilege. The Funds bear all expenses relating to this Check
Redemption Privilege.

TAXES

GENERAL

In order to continue to qualify for treatment as a regulated investment
company ("RIC") under the Code, a Fund must distribute to its shareholders for
each taxable year at least 90% of the sum of its investment company taxable
income (consisting generally of taxable net investment income and net short-term
capital gain, if any) plus, in the case of TAX-EXEMPT MONEY MARKET FUND, its net
interest income excludable from gross income under section 103(a) of the Code
("Distribution Requirement"), and must meet several additional requirements. For
each Fund, these requirements include the following: (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 certain other income derived with respect to its
business of investing in securities ("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 RICs and other securities, with those other securities
limited, in respect of any one issuer, to an amount that does not exceed 5% of
the value of the Fund's total assets; 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 RICs) of any one issuer.

Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to
the extent it fails to distribute by the end of any calendar year substantially
all of its ordinary (taxable) income for that year and capital gain net income
for the one-year period ending on October 31 of that year, plus certain other
amounts.

Dividends declared by a Fund in December of any year and payable to
shareholders of record on a date in that month are deemed to have been paid by

19
<PAGE>

the Fund and received by the shareholders on December 31 if the dividends are
paid by the Fund during the following January. Accordingly, those dividends will
be reported to shareholders of TAX-EXEMPT MONEY MARKET FUND and taxed to
shareholders of CASH MANAGEMENT FUND for the year in which that December 31
falls.

TAX-EXEMPT MONEY MARKET FUND

Dividends paid by TAX-EXEMPT MONEY MARKET FUND will qualify as
"exempt-interest dividends" as defined in the Prospectuses, and thus will be
excludable from gross income by its shareholders, if the Fund satisfies the
additional requirement that, at the close of each quarter of its taxable year,
at least 50% of the value of its total assets consists of securities the
interest on which is excludable from gross income under section 103(a). The Fund
intends to continue to satisfy this requirement. The aggregate dividends
excludable from the Fund's shareholders' gross income may not exceed its net
tax-exempt income. Shareholders' treatment of dividends from the Fund under
local and state income tax laws may differ from the treatment thereof under the
Code. Investors should consult their tax adviser concerning this matter.

Tax-exempt interest attributable to certain PABs (including, to the extent
TAX-EXEMPT MONEY MARKET FUND receives interest on those bonds, a proportionate
part of the exempt-interest dividends it pays) is a Tax Preference Item.
Exempt-interest dividends received by a corporate shareholder also may be
indirectly subject to the Federal alternative minimum tax without regard to
whether the Fund's tax-exempt interest is attributable to those bonds. Entities
or other persons who are "substantial users" (or persons related to "substantial
users") of facilities financed by PABs or IDBs should consult their tax advisers
before purchasing shares of the Fund because, for users of certain of these
facilities, the interest on those bonds is not exempt from Federal income tax.
For these purposes, the term "substantial user" is defined generally to include
a "non-exempt person" who regularly uses in trade or business a part of a
facility financed from the proceeds of PABs or IDBs.

Up to 85% of social security and railroad retirement benefits may be
included in taxable income for recipients whose modified adjusted gross income
(including income from tax-exempt sources such as the TAX-EXEMPT MONEY MARKET
FUND) plus 50% of their benefits exceeds certain base amounts. Exempt-interest
dividends from the Fund still are tax-exempt to the extent described in the
Prospectus; they are only included in the calculation of whether a recipient's
income exceeds the established amounts.

If TAX-EXEMPT MONEY MARKET FUND invests in any instruments that generate
taxable income, under the circumstances described in the Prospectuses,
distributions of the interest earned thereon will be taxable to the Fund's
shareholders as ordinary income to the extent of its earnings and profits.
Moreover, if the Fund realizes capital gain as a result of market transactions,
any distribution of that gain will be taxable to its shareholders. There also
may be collateral Federal income tax consequences regarding the receipt of
tax-exempt dividends by shareholders such as S corporations, financial
institutions and property and casualty insurance companies. A shareholder
falling into any such category should consult his or her tax adviser concerning
its investment in shares of the Fund.

PERFORMANCE INFORMATION

The Funds provide current yield quotations based on their daily dividends.
Each Fund declares dividends daily and pays dividends monthly from net
investment income.

For purposes of current yield quotations, dividends per share for a
seven-day period are annualized (using a 365-day year basis) and divided by the

20
<PAGE>

Fund's average net asset value per share for the seven-day period. The current
yield quoted will be for a recent seven day period. Current yields will
fluctuate from time to time and are not necessarily representative of future
results. You should remember that yield is a function of the type and quality of
the instruments in the portfolio, portfolio maturity and operating expenses.
Current yield information is useful in reviewing a Fund's performance but,
because current yield will fluctuate, such information may not provide a basis
for comparison with bank deposits or other investments which may pay a fixed
yield for a stated period of time, or other investment companies, which may use
a different method of calculating yield.

In addition to providing current yield quotations, each Fund provides
effective yield quotations for a base period return of seven days. The Funds may
also advertise yield for periods other than seven days, such as thirty days or
twelve months. In such cases, the formula for calculating seven-day effective
yield will be used, except that the base period will be thirty days or 365 days
rather than seven days. An effective yield quotation is determined by a formula
that requires the compounding of the unannualized base period return.
Compounding is computed by adding 1 to the annualized base period return,
raising the sum to a power equal to 365 divided by 7 and subtracting 1 from the
result.

The following is an example, for purposes of illustration only, of the
current and effective yield (and for TAX-EXEMPT MONEY MARKET FUND, the
tax-equivalent yield) calculation for Class A and Class B shares for the seven
day period ended December 31, 1998.

TAX-EXEMPT MONEY
CASH MANAGEMENT FUND MARKET FUND
-------------------- ----------------
CLASS A CLASS B CLASS A CLASS B
SHARES SHARES SHARES SHARES
------- ------- ------- -------

Dividends per share from net $._________ $.__________ $.__________ $.__________
investment income (seven calendar
days ended December 31, 1998) (Base
Period)
Annualized (365 day basis)* $.__________ $.__________ $.__________ $.__________
Average net asset value per share $1.00 $1.00 $1.00 $1.00
of the seven calendar days ended
December 31, 1998
Annualized historical yield per ____% ____% ____% ____%
share for the seven calendar days
ended December 31, 1998
Effective Yield** ____% ____% ____% ____%
Tax Equivalent Yield*** N/A N/A ____% ____%
Weighted average life to maturity
of the portfolio on December 31,
1998 as __ days for CASH
MANAGEMENT FUND and __ days for
TAX-EXEMPT MONEY MARKET FUND

</TABLE>

- ---------------------

* This represents the average of annualized net investment income per share
for the seven calendar days ended December 31, 1997.
** Effective Yield = [(Base Period Return+1)365/7] - 1
*** Tax Equivalent Yield = (Effective Yield/(1-Tax Rate). For the purpose
of this illustration, the tax rate was assumed to be 28%. The maximum
Federal tax rate during this period was 39.6%.

21
<PAGE>

The Funds may include in advertisements and sales literature information,
examples and statistics to illustrate the effect of compounding income at a
fixed rate of return to demonstrate the growth of an investment over a stated
period of time resulting from the payment of dividends in additional Fund
shares. Examples for the CASH MANAGEMENT FUND may also include hypothetical
returns comparing taxable versus tax-deferred growth which would pertain to an
IRA, Code section 403(b) or other qualified retirement program. The examples
used are for illustrative purposes only and are not representations by a Fund of
past or future yield or return. Examples of typical graphs and charts depicting
such historical performances, compounding and hypothetical returns are included
in Appendix D.

From time to time, in reports and promotional literature, each Fund may
compare its performance to, or cite the historical performance of the relevant
Donoghue's Money Fund Average, a published statistic indicating the performance
of money market mutual funds, and the Bank Rate Monitor Index, a published
statistic indicating a composite interest rate available through banks on their
money market deposit accounts. Additionally, performance rankings and ratings
reported periodically in national financial publications such as MONEY, FORBES,
BUSINESS WEEK, BARRON'S, FINANCIAL TIMES, CHANGING TIMES, FORTUNE, etc., may
also be used. Quotations from articles appearing in daily newspaper publications
such as THE NEW YORK TIMES, THE WALL STREET JOURNAL and THE NEW YORK DAILY NEWS
may be cited.

GENERAL INFORMATION

ORGANIZATION. CASH MANAGEMENT FUND and TAX-EXEMPT MONEY MARKET FUND were
incorporated in the state of Maryland on July 17, 1978 and March 11, 1983,
respectively. Each Fund's authorized capital stock consists of 5 billion shares
of common stock, all of one series, with a par value per share of $0.01. Each
Fund is authorized to issue shares of common stock in such separate and distinct
series and classes of series as the particular Fund's Board of Directors shall
from time to time establish. The shares of common stock of each Fund are
presently divided into two classes, designated Class A shares and Class B
shares. The Funds do not hold annual shareholder meetings. If requested to do so
by the holders of at least 10% of a Fund's outstanding shares, the Fund's Board
of Directors will call a special meeting of shareholders for any purpose,
including the removal of Directors. Each share of each Fund has equal voting
rights except as noted above.

CUSTODIAN. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund.

AUDITS AND REPORTS. The accounts of each Fund are audited twice a year by
____________________, independent certified public accountants, 8 Penn Center
Plaza, Philadelphia, PA 19103. Shareholders of each Fund receive semi-annual and
annual reports, including audited financial statements, and a list of securities
owned.

LEGAL COUNSEL. Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W.,
Washington, D.C. 20036 serves as counsel to each Fund.

TRANSFER AGENT. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer agent
for the Funds and as redemption agent for regular redemptions. The fees charged
to each Fund by the Transfer Agent are $5.00 to open an account; $3.00 for each
certificate issued; $.75 per account per month; $10.00 for each legal transfer
of shares; $.45 per account per dividend declared; $5.00 for each exchange of
shares into a Fund; $5.00 for each partial withdrawal or complete liquidation;
$1.00 for each Systematic Withdrawal Plan check; $4.00 for each shareholder
services call; $20.00 for each item of correspondence; and $1.00 per account per

22
<PAGE>

report required by any governmental authority. Additional fees charged to the
Funds by the Transfer Agent are assumed by the Underwriter. The Transfer Agent
reserves the right to change the fees on prior notice to the Funds. Upon request
from shareholders, the Transfer Agent will provide an account history. For
account histories covering the most recent three year period, there is no
charge. The Transfer Agent charges a $5.00 administrative fee for each account
history covering the period 1983 through 1994 and $10.00 per year for each
account history covering the period 1974 through 1982. Account histories prior
to 1974 will not be provided. If any communication from the Transfer Agent to a
shareholder is returned from the U.S. Postal Service marked as "Undeliverable"
two consecutive times, the Transfer Agent will cease sending any further
materials to the shareholder until the Transfer Agent is provided with a correct
address. Efforts to locate a shareholder will be conducted in accordance with
SEC rules and regulations prior to escheatment of funds to the appropriate state
treasury. The Transfer Agent may deduct the costs of its efforts to locate a
shareholder from the shareholder's account. These costs may include a percentage
of the account if a search company charges such a fee in exchange for its
location services. The Transfer Agent is not responsible for any fees that
states and/or their representatives may charge for processing the return of
funds to investors whose funds have been escheated. For the fiscal year ended
December 31, 1997, CASH MANAGEMENT FUND paid $384,547 in transfer agency fees
and expenses. For the same period, an additional $180,595 in transfer agency
fees and expenses was voluntarily waived by the Transfer Agent. For the fiscal
year ended December 31, 1997, TAX-EXEMPT MONEY MARKET FUND paid $63,432 in
transfer agency fees. For the same period, an additional $21,134 in transfer
agency fees. and expenses was voluntarily waived by the Transfer Agent. The
Transfer Agent's telephone number is 1-800-423-4026.

5% SHAREHOLDERS. As of April 1, 1999, the following owned of record or
beneficially 5% or more of the outstanding shares of each class of each FUND:

TRADING BY PORTFOLIO MANAGERS AND OTHER ACCESS PERSONS. Pursuant to Section
17(j) of the 1940 Act and Rule 17j-1 thereunder, the Funds and the Adviser have
adopted Codes of Ethics restricting personal securities trading by portfolio
managers and other access persons of the Funds. Among other things, such
persons, except the Directors: (a) must have all non-exempt trades pre-cleared;
(b) are restricted from short-term trading; (c) must provide duplicate
statements and transactions confirmations to a compliance officer; and (d) are
prohibited from purchasing securities of initial public offerings.

23
<PAGE>

APPENDIX A
DESCRIPTION OF CORPORATE AND MUNICIPAL COMMERCIAL PAPER RATINGS

STANDARD & POOR'S RATINGS GROUP
- -------------------------------

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market. Ratings are
graded into several categories, ranging from "A-1" for the highest quality
obligations to "D" for the lowest.

A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."

MOODY'S INVESTORS SERVICE, INC.
- -------------------------------

Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations which have an original maturity not
exceeding one year. Obligations relying upon support mechanisms such as
letters-of-credit and bonds of indemnity are excluded unless explicitly rated.

PRIME-1 Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability for repayment of senior short-term debt obligations. P-1
repayment ability will often be evidenced by many of the following
characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- Well-established access to a range of financial markets and assured
sources of alternate liquidity.

PRIME-2 Issuers (or supporting institutions) rated Prime-2 (P-2) have a
strong ability for repayment of senior short-term obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

24
<PAGE>

APPENDIX B

DESCRIPTION OF CORPORATE AND MUNICIPAL BOND RATINGS

STANDARD & POOR'S RATINGS GROUP
- -------------------------------

The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not perform
any audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information, or based on other
circumstances.

The ratings are based, in varying degrees, on the following considerations:

1. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation;

2. Nature of and provisions of the obligation;

3. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
categories.

MOODY'S INVESTORS SERVICE, INC.
- -------------------------------

Aaa Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa securities.

Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

25
<PAGE>

APPENDIX C

DESCRIPTION OF MUNICIPAL NOTE RATINGS

STANDARD & POOR'S RATINGS GROUP
- -------------------------------

S&P's note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note rating.
Notes maturing beyond 3 years will most likely receive a long-term debt rating.
The following criteria will be used in making that assessment.

- Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).

- Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).

Note rating symbols are as follows:

SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.

SP-2 Satisfactory capacity to pay principal and interest.

MOODY'S INVESTORS SERVICE, INC.
- -------------------------------

Moody's ratings for state and municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the difference between short-term credit risk and long-term risk.

MIG-1. Loans bearing this designation are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.

MIG-2. Loans bearing this designation are of high quality, with margins of
protection ample although not as large as the preceding group.

26
<PAGE>

APPENDIX D

[The following tables are represented as graphs in the printed document.]

The following graphs and chart illustrate hypothetical returns:

INCREASE RETURNS

This graph shows over a period of time even a small increase in returns can make
a significant difference. This assumes a hypothetical investment of $10,000.

Years 10% 8% 6% 4%
----- ------- ------ ------ ------
5 16,453 14,898 13,489 12,210
10 27,070 22,196 18,194 14,908
15 44,539 33,069 24,541 18,203
20 73,281 49,268 33,102 22,226
25 120,569 73,402 44,650 27,138

INCREASE INVESTMENT

This graph shows the more you invest on a regular basis over time, the more you
can accumulate. this assumes monthly installment with a constant hypothetical
return rate of 8%.

Years $100 $250 $500 $1,000
----- ------ ------- ------- -------
5 7,348 18,369 36,738 73,476
10 18,295 43,736 91,473 182,946
15 34,604 86,509 173,019 346,038
20 58,902 147,255 294,510 589,020
25 95,103 237,757 475,513 951,026

27
<PAGE>

[The following table is represented as a graph in the printed document.]

This chart illustrates the time value of money based upon the following
assumptions:

If you invested $2,000 each year for 20 years, starting at 25, assuming a 9%
investment return, you would accumulate $573,443 by the time you reach age 65.
However, had you invested the same $2,000 each year for 20 years, at that rate,
but waited until age 35, you would accumulate only $242,228 - a difference of
$331,215.

25 years old .............. 573,443
35 years old .............. 242,228
45 years old .............. 103,320

For each of the above graphs and chart it should be noted that systematic
investment plans do not assume a profit or protect against loss in declining
markets. Investors should consider their financial ability to continue purchases
through periods of both high and low price levels. Figures are hypothetical and
for illustrative purposes only and do not represent any actual investment or
performance. The value of a shareholder's investment and return may vary.

<PAGE>

[The following table is represented as a chart in the printed document.]

The following chart illustrates the historical performance of the Dow Jones
Industrial Average from 1928 through 1996.

1928 .................. 300.00
1929 .................. 248.48
1930 .................. 164.58
1931 .................. 77.90
1932 .................. 59.93
1933 .................. 99.90
1934 .................. 104.04
1935 .................. 144.13
1936 .................. 179.90
1937 .................. 120.85
1938 .................. 154.76
1939 .................. 150.24
1940 .................. 131.13
1941 .................. 110.96
1942 .................. 119.40
1943 .................. 136.20
1944 .................. 152.32
1945 .................. 192.91
1946 .................. 177.20
1947 .................. 181.16
1948 .................. 177.30
1949 .................. 200.10
1950 .................. 235.40
1951 .................. 269.22
1952 .................. 291.89
1953 .................. 280.89
1954 .................. 404.38
1955 .................. 488.39
1956 .................. 499.46
1957 .................. 435.68
1958 .................. 583.64
1959 .................. 679.35
1960 .................. 615.88
1961 .................. 731.13
1962 .................. 652.10
1963 .................. 762.94
1964 .................. 874.12
1965 .................. 969.25
1966 .................. 785.68
1967 .................. 905.10
1968 .................. 943.75
1969 .................. 800.35
1970 .................. 838.91
1971 .................. 890.19
1972 .................. 1,020.01
1973 .................. 850.85
1974 .................. 616.24
1975 .................. 858.71
1976 .................. 1,004.65
1977 .................. 831.17
1978 .................. 805.01
1979 .................. 838.74
1980 .................. 963.98
1981 .................. 875.00
1982 .................. 1,046.55
1983 .................. 1,258.64
1984 .................. 1,211.56
1985 .................. 1,546.67
1986 .................. 1,895.95
1987 .................. 1,938.80
1988 .................. 2,168.60
1989 .................. 2,753.20
1990 .................. 2,633.66
1991 .................. 3,168.83
1992 .................. 3,301.11
1993 .................. 3,754.09
1994 .................. 3,834.44
1995 .................. 5,000.00
1996 .................. 6,000.00

The performance of the Dow Jones Industrial Average is not indicative of
the performance of any particular investment. It does not take into account fees
and expenses associated with purchasing mutual fund shares. Individuals cannot
invest directly in any index. Please note that past performance does not
guarantee future results.

<PAGE>

[The following table is represented as a chart in the printed document.]

The following chart shows that inflation is constantly eroding the value of your
money.

THE EFFECTS OF INFLATION OVER TIME

1966 ....................... 96.61836
1967 ....................... 93.80423
1968 ....................... 89.59334
1969 ....................... 84.36285
1970 ....................... 79.88906
1971 ....................... 77.33694
1972 ....................... 74.79395
1973 ....................... 68.80768
1974 ....................... 61.27131
1975 ....................... 57.31647
1976 ....................... 54.63915
1977 ....................... 51.20820
1978 ....................... 46.98000
1979 ....................... 41.46514
1980 ....................... 36.85790
1981 ....................... 33.84564
1982 ....................... 32.60659
1983 ....................... 31.41290
1984 ....................... 30.23378
1985 ....................... 29.12696
1986 ....................... 28.81005
1987 ....................... 27.59583
1988 ....................... 26.43279
1989 ....................... 25.27035
1990 ....................... 23.81748
1991 ....................... 23.10134
1992 ....................... 22.45028
1993 ....................... 21.86006
1994 ....................... 21.28536
1995 ....................... 20.76620
1996 ....................... 20.16135

1996 ....................... 100.00
1997 ....................... 103.00
1998 ....................... 106.00
1999 ....................... 109.00
2000 ....................... 113.00
2001 ....................... 116.00
2002 ....................... 119.00
2003 ....................... 123.00
2004 ....................... 127.00
2005 ....................... 130.00
2006 ....................... 134.00
2007 ....................... 138.00
2008 ....................... 143.00
2009 ....................... 147.00
2010 ....................... 151.00
2011 ....................... 156.00
2012 ....................... 160.00
2013 ....................... 165.00
2014 ....................... 170.00
2015 ....................... 175.00
2016 ....................... 181.00
2017 ....................... 186.00
2018 ....................... 192.00
2019 ....................... 197.00
2020 ....................... 203.00
2021 ....................... 209.00
2022 ....................... 216.00
2023 ....................... 222.00
2024 ....................... 229.00
2025 ....................... 236.00
2026 ....................... 243.00

Inflation erodes your buying power. $100 in 1966, could purchase five times the
goods and service as in 1996 ($100 vs. $20).* Projecting inflation at 3%, goods
and services costing $100 today will cost $243 in the year 2026.

* Source: Consumer Price Index, U.S. Bureau of Labor Statistics.

<PAGE>

[The following tables are represented as graphs in the printed document.]

This chart illustrates that historically, the longer you hold onto stocks, the
greater chance that you will have a positive return.

1926 through 1996*

Total Number of Percentage of
Number of Positive Positive
Rolling Period Periods Periods Periods
-------------- ------- ------- -------
1-Year 71 51 72%
5-Year 67 60 90%
10-Year 62 60 97%
15-Year 57 57 100%
20-Year 52 52 100%

The following chart shows the compounded annual return of large company stocks
compared to U.S. Treasury Bills and inflation over the most recent 15 year
period. **

Compound Annual Return from 1982 -- 1996*

Inflation ..................... 3.55
U.S. Treasury Bills ........... 6.50
Large Company Stocks .......... 16.79

The following chart illustrates for the period shown that long-term corporate
bonds have outpaced U.S. Treasury Bills and inflation.

Compound Annual Return from 1982 -- 1996*

Inflation ..................... 3.55
U.S. Treasury Bills ........... 6.50
Long-Term Corp. bonds ......... 13.66

* Source: Used with permission. (c)1997 Ibbotson Associates, Inc. All rights
reserved. [Certain provisions of this work were derived from copyrighted
works of Roger G. Ibbotson and Rex Sinquefield.]

** Please note that U.S. Treasury bills are guaranteed as to principal and
interest payments (although the funds that invest in them are not), while
stocks will fluctuate in share price. Although past performance cannot
guarantee future results, returns of U.S. Treasury bills historically have
not outpaced inflation by as great a margin as stocks.

<PAGE>

The accompanying table illustrates that if you are in the 36% tax bracket, a
tax-free yield of 3% is actually equivalent to a taxable investment earning
4.69%.

Your Taxable Equivalent Yield

Your Federal Tax Bracket
---------------------------------------------

28.0% 31.0% 36.0% 39.6%
your tax-free yield
3.00% 4.17% 4.35% 4.69% 4.97%
3.50% 4.86% 5.07% 5.47% 5.79%
4.00% 5.56% 5.80% 6.25% 6.62%
4.50% 6.25% 6.52% 7.03% 7.45%
5.00% 6.94% 7.25% 7.81% 8.25%
5.50% 7.64% 7.97% 8.59% 9.11%

This information is general in nature and should not be construed as tax advice.
Please consult a tax or financial adviser as to how this information affects
your particular circumstances.

<PAGE>

[The following table is represented as a graph in the printed document.]

The following graph illustrates how income has affected the gains from stock
investments since 1965.

S&P 500 Dividends Reinvested S&P 500 Principal Only

12/31/64 10,000 10,000
12/31/65 11,269 10,906
12/31/66 10,115 9,478
12/31/67 12,550 11,383
12/31/68 13,948 12,255
12/31/69 12,795 10,863
12/31/70 13,299 10,873
12/31/71 15,200 12,046
12/31/72 18,088 13,929
12/31/73 15,431 11,510
12/31/74 11,346 8,090
12/31/75 15,570 10,642
12/31/76 19,296 12,680
12/31/77 17,915 11,221
12/31/78 19,092 11,340
12/31/79 22,645 12,736
12/31/80 30,004 16,019
12/31/81 28,528 14,460
12/31/82 34,674 16,595
12/31/83 42,496 19,461
12/31/84 45,161 19,733
12/31/85 59,489 24,930
12/31/86 70,594 28,575
12/31/87 74,301 29,154
12/31/88 86,641 32,769
12/31/89 114,093 41,699
12/31/90 110,549 38,964
12/31/91 144,230 49,214
12/31/92 155,218 51,411
12/31/93 170,863 55,039
12/31/94 173,120 54,191
12/31/95 238,175 72,676
12/31/96 292,863 87,403
11/30/97 383,977 112,732

Source: First Investors Management Company, Inc. Standard & Poor's is a
registered trademark. The S&P 500 is an unmanaged index comprising 500 common
stocks spread across a variety of industries. The total returns represented
above compare the impact of reinvestment of dividends and illustrates past
performance of the index. The performance of any index is not indicative of the
performance of a particular investment and does not take into account the
effects of inflation or the fees and expenses associated with purchasing mutual
fund shares. Individuals cannot invest directly in any index. Mutual fund shares
will fluctuate in value, therefore, the value of your original investment and
your return may vary. Moreover, past performance is no guarantee of future
results.

<PAGE>

Financial Statements
as of December 31, 1998

First Investors Cash Management Fund, Inc. (2-62347) incorporates by reference
the financial statements and report of independent auditors contained in the
Annual Report to shareholders for the fiscal year ended December 31, 1998
electronically filed with the Securities and Exchange Commission on
_____________, 1999 (Accession Number: ________________).

First Investors Tax-Exempt Money Market Fund, Inc. (2-82572) incorporates by
reference the financial statements and report of independent auditors contained
in the Annual Report to shareholders for the fiscal year ended December 31, 1998
electronically filed with the Securities and Exchange Commission on
_____________, 1999 (Accession Number: _________________).

<PAGE>
FIRST INVESTORS LOGO

Shareholder Manual

A Guide to Your
First Investors
Mutual Fund Account

as of February 19, 1999

<PAGE>

INTRODUCTION

Investing in mutual funds doesn't have to be complicated. In addition to a wide
variety of mutual funds, First Investors offers personalized service. Your
registered representative is available to answer your questions and help you
process your transactions. In the event you wish to process a transaction
directly, the material provided in this easy-to-follow guide tells you how to
contact us and explains our policies and procedures. Please note that there are
special rules for money market funds. Please read this manual completely to gain
a better understanding of how shares are bought, sold, exchanged, and
transferred. In addition, the manual provides you with a description of the
services we offer to simplify investing. The services, privileges and fees
referenced in this manual are subject to change. You should call our Shareholder
Services Department at 1 (800) 423-4026 before initiating any transaction. This
manual must be preceded or accompanied by a First Investors mutual fund
prospectus. For more complete information on any First Investors Fund, including
charges and expenses, refer to the prospectus. Read the prospectus carefully
before you invest or send money.

Principal Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095
1-800-423-4026
<PAGE>

TABLE OF CONTENTS

HOW TO BUY SHARES

To Open An Account ......................................................... 5
To Open a Retirement Account ............................................... 6
Minimum Initial Investment ................................................. 6
Additional Investments ..................................................... 6
Acceptable Forms of Payment ................................................ 6
Share Classes .............................................................. 6
Share Class Specification .................................................. 7
Class A Shares ............................................................. 7
Sales Charge Waivers & REductions on Class A Shares ........................ 7
Class B Shares ............................................................. 9
How To Pay ................................................................. 10
Wire Transfers ............................................................. 11
Distribution Cross-Investment .............................................. 12

HOW TO SELL SHARES
REDEMPTION OPTIONS ......................................................... 13
Written Redemptions ........................................................ 13
Telephone Redemptions ...................................................... 13
Electronic Funds Transfer .................................................. 13
Systematic Withdrawal Plans ................................................ 14
Expedited Wire Redemptions ................................................. 14

HOW TO EXCHANGE SHARES
Exchange Methods ........................................................... 15
Exchange Conditions ........................................................ 16
Exchanging Funds With.
Automatic Investments or
Systematic Withdrawals ..................................................... 16

WHEN AND HOW ARE FUND SHARES PRICED? ....................................... 17

HOW ARE PURCHASE, REDEMPTION, AND EXCHANGE ORDERS PROCESSED AND PRICED? .... 17
Purchases .................................................................. 17
Redemptions ................................................................ 18
Exchanges .................................................................. 18
Orders Placed Via First Investors Registered Representatives ............... 18
Special Rules for Money Market Funds ....................................... 19

SPECIAL RULES FOR MONEY MARKET ACCOUNTS .................................... 18

RIGHT TO REJECT PURCHASE OR EXCHANGE ORDERS ................................ 19

SIGNATURE GUARANTEE ARE REQUIRED............................................ 19

TELEPHONE SERVICES TELEPHONE EXCHANGES AND REDEMPTIONS ..................... 20
Security MEasures .......................................................... 20
Eligibility ................................................................ 20

NON-RETIREMENT ACCOUNTS .................................................... 20

RETIREMENT ACCOUNTS ........................................................ 20

Shareholder Services ....................................................... 21

OTHER SERVICES ............................................................. 22
Reinvestment Privilege ..................................................... 22
Certificate Shares ......................................................... 22
Money Market Fund Draft Checks ............................................. 22
Return Mail ................................................................ 23
Transferring Shares ........................................................ 23

ACCOUNT STATEMENTS
Transaction Confirmation Statements ........................................ 24
Master Account Statements .................................................. 24
Annual and Semi-Annual Reports ............................................. 24

DIVIDENDS AND DISTRIBUTIONS
Dividends and Distributions ................................................ 25
Buying a Dividend .......................................................... 25

TAX FORMS .................................................................. 26

4
<PAGE>

HOW TO BUY SHARES

First Investors offers a wide variety of mutual funds to meet your financial
needs ("FI Funds"). Your First Investors registered representative will review
your financial objectives and risk tolerance, explain our product line and
services, and help you select the right investments. Call our Shareholder
Services Department at 1 (800) 423-4026 for the number of the First Investors
office near you or visit us on-line at www.firstinvestors.com

o TO OPEN AN ACCOUNT
Before investing, you must establish an account with your broker/dealer. At
First Investors Corporation ("FI") you do this by completing and signing a
Master Account Agreement ("MAA"). After you determine the fund(s) you want to
purchase, deliver your completed MAA and your check, made payable to First
Investors Corporation, to your registered representative. New client accounts
must be established through your registered representative. You need to tell us
how you want your shares registered when you open a new Fund account. Please
keep the following information in mind:

- -JOINT ACCOUNTS. For any account with two or more owners, all owners must sign
requests to process transactions. Telephone privileges allow any one of the
owners to process transactions independently.

- -GIFTS AND TRANSFERS TO MINORS. Custodial accounts for a minor may be
established under your state's Uniform Gifts/Transfers to Minors Act. Custodial
accounts are registered under the minor's social security number.

TRUSTS. A trust account may be opened only if you have a valid written trust
document.

- -TRANSFER ON DEATH (TOD). TOD registrations, available on all FI Funds in all
states, allow individual and joint account owners to name one or more
beneficiaries. The ownership of the account automatically passes to the named
beneficiaries in the event of the death of all account owners.

- -DIVIDENDS AND CAPITAL GAINS. Fund distributions will be automatically
reinvested in your account unless you request otherwise.

_______________________________________________________________________________
SOME REGISTRATIONS REQUIRE ADDITIONAL PAPERWORK.
_______________________________________________________________________________
TYPE OF ACCOUNT ADDITIONAL DOCUMENTS REQUIRED

Corporations
Partnership
& Trusts First Investors Certificate of Authority

Transfer On Death First Investors TOD Registration Request Form
(TOD)

Estates Original or Certified Copy of Death Certificate
Certified Copy of Letters Testamentary/Administration
First Investors Executor's Certification &
Indemnification Form

Conservatorships Copy of court document appointing Conservator/Guardian
& Guardianships
_______________________________________________________________________________

5
<PAGE>

oTO OPEN A RETIREMENT ACCOUNT

Fund shares may be purchased for your retirement account by completing the MAA
and the appropriate retirement plan application. First Investors offers
retirement plans for both individuals and employers as follows:

INDIVIDUAL RETIREMENT ACCOUNTS
including Roth, Traditional, and Rollover IRAs.

SIMPLE IRAS offered by employers.

SEP-IRAS (SIMPLIFIED EMPLOYEE PENSION PLANS) for small business owners or people
with income from self-employment, including SARSEP IRAs.

403(B)(7) accounts for employees of eligible tax-exempt organizations such as
schools, hospitals and charitable organizations.

401(K) plans for employers.

MONEY PURCHASE PENSION & PROFIT SHARING plans for sole proprietors.

For more information about these plans call your registered representative or
our Shareholder Services Department at 1 (800) 423-4026.

oMINIMUM INITIAL INVESTMENT

You can open a non-retirement account with a check made payable to First
Investors Corporation for as little as $1,000. The minimum is waived if you open
an account through one of our Automatic Investment Programs (see "How to Pay")
or through a full exchange from another FI Fund. You can open a First Investors
Traditional IRA or Roth IRA with as little as $500 (except for the Cash
Management Fund which requires a $1,000 investment). Other retirement accounts
may have lower initial investment requirements at the Fund's discretion.

oADDITIONAL INVESTMENTS

Once you have established an account, you can add to it through your registered
representative or by sending us a check directly. There is no minimum
requirement on additional purchases into existing fund accounts. Remember to
include your FI Fund account number on your check made payable to First
Investors Corporation. Mail checks to: First Investors Corporation Attn: Dept.
Cp 581 Main Street Woodbridge, NJ 07095-1198

oACCEPTABLE FORMS OF PAYMENT

The following forms of payment are acceptable:

- -checks made payable to First Investors Corporation
- -Money Line electronic funds transfers
- -federal funds wire transfers For your protection, never give your registered
representative cash or a check made payable to your registered representative.

We do not accept:
- -Third party checks

- -Traveler's checks

- -Checks drawn on non-US banks

- -Money orders

- -Cash

oSHARE CLASSES

All FI Funds are available in Class A and Class B shares. Direct purchases into
Class B share money market accounts are not accepted. Class B money market fund
shares may only be acquired through an exchange from another Class B share
account or through Class B share dividend cross-reinvestment.

Each class of shares has its own cost structure. As a result, different classes

6
<PAGE>

of shares in the same fund generally have different prices. Class A shares have
a front-end sales charge. Class B shares have a contingent deferred sales charge
("CDSC"). While both classes have a Rule 12b-1 fee, the fee on Class B shares is
generally higher. The principal advantages of Class A shares are that they have
lower overall expenses, the availability of quantity discounts on sales charges,
and certain account privileges that are not offered on Class B shares. The
principal advantage of Class B shares is that all your money is put to work from
the outset. Your registered representative can help you decide which class of
shares is best for you.

oSHARE CLASS SPECIFICATION

It's very important to specify which class of shares you wish to purchase when
you open a new account. All First Investors account applications have a place to
designate your preference. If you do not specify which class of shares you want
to purchase, Class A shares will automatically be purchased.

oCLASS A SHARES

When you buy Class A shares, you pay the offering price - the net asset value of
the fund plus a front-end sales charge. The front-end sales charge declines with
larger investments.

_______________________________________________________________________________
CLASS A SALES CHARGES
_______________________________________________________________________________
As a % OF AS a % of your
Investment offering price investment
up to $24,999 6.25% 6.67%
$25,000 - $49,999 5.75% 6.10%
$50,000 - $99,999 5.50% 5.82%
$100,000 - $249,999 4.50% 4.71%
$250,000 - $499,999 3.50% 3.63%
$500,000 - $999,999 2.50% 2.56%

Investments of $1 million or more will only be made in Class A shares at the
Fund's net asset value.

Generally, you should consider purchasing Class A shares if you plan to invest
$250,000 or more either initially or over time.
_______________________________________________________________________________
_______________________________________________________________________________

oSALES CHARGE WAIVERS & REDUCTIONS ON CLASS A SHARES

If you qualify for one of the sales charge reductions or waivers, it is very
important to let us know at the time you place your order. Include a written
statement with your check explaining which privilege applies. If you do not
include this statement we cannot guarantee that you will receive the reduction
or waiver.

CLASS A SHARES MAY BE PURCHASED WITHOUT A SALES CHARGE:

1: By an officer, trustee, director, or employee of the Fund, the Fund's adviser
or subadviser, First Investors Corporation, or any affiliates of First Investors
Corporation.

2: By a former officer, trustee, director, or employee of the Fund,
First Investors Corporation, or their affiliates provided the person worked for
the company for at least 5 years and retired or terminated employment in good
standing.

7
<PAGE>

3: By a FI registered representative or an authorized dealer, or by his/her
spouse, child (under age 21) or grandchild (under age 21).

4: When fund distributions are reinvested in Class A shares.

5: When Systematic Withdrawal Plan payments are reinvested in Class A shares.

6: When qualified retirement plan loan repayments are reinvested in Class A
shares.

7: With the liquidation proceeds from a First Investors Life Variable Annuity
Fund A, C, or D contract within one year of the contract's maturity date.

8:When dividends (at least $50 a year) from a First Investors Life Insurance
Company policy are invested into an EXISTING account.

9: When a group qualified plan (401(k) plans, money purchase pension plans,
profit sharing plans and 403(b) plans that are subject to Title I of ERISA) is
reinvesting redemption proceeds from another fund on which a sales charge or
CDSC was paid.

10: With distribution proceeds from a First Investors group qualified plan
account into an IRA.

11: By participant directed group qualified plans with 100 or more eligible
employees or $1,000,000 or more in assets.

12: In amounts of $1 million or more.

13: By individuals under a Letter of Intent or Cumulative Purchase Privilege of
$1 million or more.

FOR ITEMS 9 THROUGH 13 ABOVE: A CDSC OF 1.00% WILL BE
DEDUCTED IF SHARES ARE REDEEMED WITHIN 2 YEARS OF PURCHASE.

SALES CHARGES ON CLASS A SHARES MAY BE REDUCED FOR:

1: Participant directed group qualified retirement plans with 99 or fewer
eligible employees. The initial sales charge is reduced to 3.00% of the offering
price.

2: Certain unit trust holders ("unitholders") who elect to invest the entire
amount of principal, interest, and/or capital gains distributions from their
unit investment trusts in Class A shares. Unitholders of various series of New
York Insured Municipals-Income Trust sponsored by Van Kampen Merrit, Inc.,
unitholders of various series of the Multistate Tax Exempt trust sponsored by
Advest Inc., and unitholders of various series of the Insured Municipal Insured
National Trust, J.C. Bradford & Co. as agent, may buy Class A shares of a FI
Fund with unit trust distributions at the net asset value plus a sales charge of
1.5%. Unitholders of various tax-exempt trusts, other than the New York Trust,
sponsored by Van Kampen Merritt Inc. may buy Class A shares of a FI Fund at the
net asset value plus a sales charge of 1.0%.

Unitholders may make additional purchases, other than those made by unit trust
distributions, at the Fund's regular offering price.

CUMULATIVE PURCHASE PRIVILEGE The Cumulative Purchase Privilege lets you add the
value of all your existing FI Fund accounts (Class A and Class B shares) to the
amount of your next Class A share investment to reach sales charge discount
breakpoints. For example, if the combined value of your existing FI Fund
accounts is $25,000, your next purchase will be eligible for a sales charge
discount at the $25,000 level. Cumulative Purchase discounts are applied to
purchases as indicated in the first column of the Class A Sales Charge table.

All your accounts registered with the same social security number will be linked
together under the Cumulative Purchase Privilege. In addition, your spouse's
accounts and custodial accounts held for minor children residing at your home
can also be linked to your accounts upon request.

8
<PAGE>

- -Conservator accounts are linked to the social security number of the ward, not
the conservator.

- -Sole proprietorship accounts are linked to personal/family accounts only if the
account is registered with a social security number, not an employer
identification number ("EIN").

- -Testamentary trusts and living trusts may be linked to other accounts
registered under the same trust EIN, but not to the personal accounts of the
trustee(s).

- -Estate accounts may only be linked to other accounts registered under the same
EIN of the estate or social security number of the decedent.

- -Church and religious organizations may link accounts to others registered with
the same EIN but not to the personal accounts of any member.

LETTER OF INTENT

A Letter of Intent ("LOI") lets you purchase at a discounted sales charge level
even though you do not yet have sufficient investments to qualify for that
discount level. An LOI is a commitment by you to invest a specified dollar
amount during a 13-month period. The amount you agree to invest determines the
sales charge you pay. Under an LOI, you can reduce the initial sales charge on
Class A share purchases based on the total amount you agree to invest in both
Class A and Class B shares during the 13 month period. Purchases made up to 90
days before the date of the LOI may be included.

Your LOI can be amended in two ways. First, you may file an amended LOI to raise
or lower the LOI amount during the 13 month period. Second, your LOI will be
automatically amended if you invest more than your LOI amount during the
13-month period and qualify for an additional sales charge reduction.

By purchasing under an LOI, you acknowledge and agree to the following:

- -You authorize First Investors to reserve 5% of your total intended investment
in shares held in escrow in your name until the LOI is completed.

- -First Investors is authorized to sell any or all of the escrow shares to
satisfy any additional sales charges owed in the event you do not fulfill the
LOI.

- -Although you may exchange all your shares, you may not sell the reserve shares
held in escrow until you fulfill the LOI or pay the higher sales charge.

oCLASS B SHARES

Class B shares are sold without an initial sales charge, putting all your money
to work for you immediately. If you redeem Class B shares within 6 years of
purchase, a CDSC will be imposed. The CDSC declines from 4% to 0% over a 6-year
period, as shown in the chart below. Class B share money market fund shares are
not sold directly. They can only be acquired through an exchange from another
Class B fund account. Class B shares, and the dividend and distribution shares
they earn, automatically convert to Class A shares after 8 years, reducing
future annual expenses.

Generally, you should consider purchasing Class B shares if you intend to invest
less than $250,000 and you would rather pay higher ongoing expenses than an
initial sales charge.

CLASS B SALES CHARGES

THE CDSC DECLINES OVER TIME AS SHOWN IN THE TABLE BELOW:
________________________________________________________________
Year 1 2 3 4 5 6 7+
________________________________________________________________
CDSC 4% 4% 3% 3% 2% 1% 0%
________________________________________________________________

9
<PAGE>

If shares redeemed are subject to a CDSC, the CDSC will be based on the lesser
of the original purchase price or redemption price. There is no CDSC on shares
acquired through dividend and capital gains reinvestment. We call these "free
shares."

Anytime you sell shares, your shares will be redeemed in the following manner to
ensure that you pay the lowest possible CDSC:

FIRST-Class B shares representing dividends and capital gains that are not
subject to a CDSC.

SECOND-Class B shares held more than six years which are not subject to a CDSC.

THIRD-Class B shares held longest which will result in the lowest CDSC.

For purposes of calculating the CDSC, all purchases made during the calendar
month are deemed to have been made on the first business day of the month at the
average cost of the shares purchased during that period.

SALES CHARGE WAIVERS ON CLASS B SHARES

The CDSC on Class B shares does not apply to:

1: Appreciation on redeemed shares above their original purchase price.

2: Redemptions due to death or disability (as defined in section 72(m)(7) of the
Internal Revenue Code) requested within one year of death. Additional
documentation is required.

3: Distributions from employee benefit plans due to termination or plan
transfer.

4: Redemptions to remove an excess contribution from an IRA or qualified
retirement plan.

5: Distributions upon reaching required minimum age 70 1/2 provided you have
held the shares for at least three years.

6: Annual redemptions of up to 8% of your account's value redeemed by a
Systematic Withdrawal Plan. Free shares not subject to a CDSC will be redeemed
first and will count towards the 8% limit.

7: Shares redeemed from advisory accounts managed by or held by the Fund's
investment advisor or any of its affiliates.

8: Tax-free returns of excess contributions from employee benefit plans.

9: Redemptions of non-retirement shares purchased with proceeds from the sale of
shares of another fund group between April 29, 1996 and June 30, 1996 that did
not pay a sales charge (other than money market fund accounts or retirement plan
accounts).

10: Redemptions by the Fund when the account falls below the minimum.

11: Redemptions to pay account fees.

Include a written statement with your redemption request explaining which
exemption applies. If you do not include this statement we cannot guarantee that
you will receive the waiver.

oHOW TO PAY

You can invest using one or more of the
following options:

- -CHECK:
You can buy shares by writing a check payable to
First Investors Corporation. If you are opening a new fund account, your check
must meet the fund minimum. When making purchases to an existing account,
remember to include your fund account number on your check.

- -AUTOMATIC INVESTMENT PROGRAMS:

We offer several automatic investment programs to simplify
investing.

- -MONEY LINE:

With our Money Line program, you can open an account with as little as $50 a
month or $600 each year in a FI Fund account by transferring funds
electronically from your bank account. You can invest up to $10,000 a month
through Money Line.

10
<PAGE>

Money Line allows you to select the payment amount and frequency that is best
for you. You can make automatic investments bi-weekly, semi-monthly, monthly,
quarterly, semi-annually, or annually. The date you select as your Money Line
investment date is the date on which shares will be purchased. THE PROCEEDS MUST
BE AVAILABLE IN YOUR BANK ACCOUNT TWO BUSINESS DAYS PRIOR TO THE INVESTMENT
DATE.

HOW TO APPLY:

1: Complete the Electronic Funds Transfer ("EFT") section of the application to
provide complete bank information and authorize EFT fund share purchases. Attach
a voided check. A signature guarantee of all shareholders and bank account
owners is required.

PLEASE ALLOW AT LEAST 10 BUSINESS DAYS FOR INITIAL PROCESSING.

2: Complete the Money Line section of the application to specify the amount,
frequency and date of the investment.

3: Submit the paperwork to your registered representative or send it to:
ADMINISTRATIVE DATA MANAGEMENT CORP., ATTN: CONTROL DEPT., 581 MAIN STREET,
WOODBRIDGE, NJ 07095-1198.

HOW TO CHANGE:

Provided you have telephone privileges, you may call Shareholder Services at 1
(800) 423-4026 to:

- -Increase the payment up to $999.99.

- -Decrease the payment.

- -Discontinue the service.

To change investment amounts, reallocate or cancel Money Line, you must notify
us at least 3 business days prior to the investment date.

You must send a signature guaranteed written request to Administrative Data
Management Corp. to:

- -Increase the payment to $1,000 or more.

- -Change bank information.

A medallion signature guarantee (see Signature Guarantee Policy) is required to
increase a Money Line payment to $2,500 or more. Changing banks or bank account
numbers requires 10 days notice. Money Line service will be suspended upon
notification that all account owners are deceased.

AUTOMATIC PAYROLL INVESTMENT: With our Automatic Payroll Investment service
("API") you can systematically purchase shares by salary reduction. To
participate, your employer must offer direct deposit and permit you to
electronically transfer a portion of your salary. Contact your company payroll
department to authorize the salary reductions. If not available, you may
consider our Money Line program.

Shares purchased through API are bought at the offering price on the day the
electronic transfer is received by the Fund.

HOW TO APPLY:

1: Complete an API Application.

2: Complete an API
Authorization Form.

3: Submit the paperwork to your registered representative or send it to:
ADMINISTRATIVE DATA MANAGEMENT CORP., ATTN: CONTROL DEPT., 581 MAIN STREET,
WOODBRIDGE, NJ 07095-1198.

oWire Transfers:

You may purchase shares via a federal funds wire transfer from your bank account
into your EXISTING First Investors account. Federal fund wire transfer proceeds
are not subject to a holding period and are available to you immediately upon
receipt, as long as we have been notified properly.

YOU MUST CALL US AT 1 (800) 423-4026 TO ADVISE US OF AN INCOMING FEDERAL FUNDS
WIRE and provide us with the federal funds wire transfer confirmation number,
the amount of the wire, and the fund account number to receive same day credit.

11
<PAGE>

There are special rules for money market fund accounts. To wire federal funds to
an existing First Investors account (other than money markets), instruct your
bank to wire your investment to: FIRST FINANCIAL SAVINGS BANK, S.L.A. ABA #
221272604 ACCOUNT # 0306142 YOUR NAME YOUR FIRST INVESTORS FUND ACCOUNT#

oDISTRIBUTION CROSS-INVESTMENT:

You can invest the dividends and capital gains from one fund account, excluding
the money market funds, into another fund account in the same class of shares.
The shares will be purchased at the net asset value on the day after the record
date of the distribution.

- -You must invest at least $50 a month or $600 a year into a NEW account.

- -A signature guarantee is required if the ownership on both accounts is not
identical.

You may establish a Distribution Cross-Investment service by contacting your
registered representative or calling Shareholder Services at 1 (800) 423-4026.

oSYSTEMATIC WITHDRAWAL PLAN PAYMENT INVESTMENTS:

You can invest Systematic Withdrawal Plan payments (see How to Sell Shares) from
one fund account in shares of another fund account.

- -Payments are invested without a sales charge.

- -A signature guarantee is required if the ownership on both accounts is not
identical.

- -Both accounts must be in the same class of shares.

- -You must invest at least $600 a year if into a new account.

- -You can invest on a monthly, quarterly, semi-annual, or annual basis.

Redemptions are suspended upon notification that all account owners are
deceased. Service will recommence upon receipt of written alternative payment
instructions and other required documents from the decedent's legal
representative.

HOW TO SELL SHARES

You can sell your shares on any day the New York Stock Exchange is open for
regular trading. In the mutual fund industry, a sale is referred to as a
"redemption." Redemption proceeds are generally mailed within three days. If the
shares being redeemed were purchased by check, payment may be delayed to verify
that the check has been honored, which may take up to 15 days from the date of
purchase. Shareholders may not redeem shares by telephone or electronic funds
transfer unless the shares have been owned for at least 15 days.

Redemptions of shares are not subject to the 15 day verification period if the
shares were purchased via:

- -Automatic Payroll Investment

- -FIC registered representative payroll checks -First Investors Life Insurance
Company checks

- -Federal funds wire payments

12
<PAGE>

oREDEMPTION OPTIONS

For trusts, estates, attorneys-in-fact, corporations, partnerships, and other
entities, additional documents are required to redeem shares. Call Shareholder
Services at 1 (800) 423-4026 for more information.

WRITTEN REDEMPTIONS

You can write a letter of instruction or contact your First Investors registered
representative for a liquidation request form. A written liquidation request in
good order must include:

1: The name of the fund;

2: Your account number;

3: The dollar amount, number of shares or percentage of the account you want to
redeem;

4: Share certificates (if they were issued to you);

5: Original signatures of all owners exactly as your account is registered;

6: Signature
guarantees, if required (see Signature Guarantee Policy).

Written redemption requests should be mailed to:

ADMINISTRATIVE DATA MANAGEMENT CORP.
581 MAIN STREET
WOODBRIDGE, NJ 07095-1198

TELEPHONE REDEMPTIONS

You, or any person we believe is authorized to act on your behalf, may redeem
shares which have been owned for at least 15 days by calling our Special
Services Department at 1 (800) 342-6221 from 9:00 a.m. to 5:00 p.m., EST,
provided:

- -Telephone privileges are available for your account registration (see Telephone
Privileges);

- -You have telephone privileges (see Telephone Privileges);

- -You do not hold share certificates (issued shares);

- -The redemption check is made payable to the registered owner(s) or
pre-designated bank;

- -The redemption check is mailed to your address of record;

- -Your address of record has not changed within the past 60 days;

- -The redemption amount is $50,000 or less; AND -The redemption amount, combined
with the amount of all telephone redemptions made within the previous 30 days
does not exceed $100,000.

ELECTRONIC FUNDS TRANSFER

The Electronic Funds Transfer ("EFT") service allows you to redeem shares and
electronically transfer proceeds to your bank account.

YOU MUST ENROLL IN THE ELECTRONIC FUNDS TRANSFER SERVICE AND PROVIDE COMPLETE
BANK ACCOUNT INFORMATION BEFORE USING THE PRIVILEGE. Signature guarantees of all
shareholders and all bank account owners are required. Please allow at least 10
business days for initial processing. We will send any proceeds during the
processing period to your address of record. Call your registered representative
or Shareholder Services at 1 (800) 423-4026 for an application.

You may call Shareholder Services or send written instructions to Administrative
Data Management Corp. to request an EFT redemption of shares which are held at
least 15 days. Each EFT redemption:

1: Must be electronically transferred to your pre-designated bank account;

2: Must be at least $500;

3: Cannot exceed $50,000;

4: Cannot exceed $100,000 when added to the total amount of all EFT
redemptions made within the previous 30 days.

13
<PAGE>

If your redemption does not qualify for an EFT redemption, you may request to
have the redemption proceeds mailed to you.

The Electronic Funds Transfer service may also be used to purchase shares (see
Money Line) and transfer systematic withdrawal payments (see Systematic
Withdrawal Plans) and dividend distributions (see Other Services) to your bank
account.

SYSTEMATIC WITHDRAWAL PLANS

Our Systematic Withdrawal Plan allows you to redeem a specific dollar amount or
percentage from your account on a regular basis. Your payments can be mailed to
you or a pre-authorized payee by check, transferred to your bank account
electronically (if you have enrolled in the EFT service) or invested in shares
of another FI fund in the same class of shares through our Systematic Withdrawal
Plan Payment investment service (see How to Buy Shares).

You can receive payments on a monthly, quarterly, semi-annual, or annual basis.
Your account must have a value of at least $5,000 in non-certificated shares
("unissued shares"). The $5,000 minimum account balance is waived for required
minimum distributions from retirement plan accounts. The minimum Systematic
Withdrawal Plan payment is $25 (waived for Required Minimum Distributions on
retirement accounts or FIL premium payments).

Once you establish the Systematic Withdrawal Plan, you should not make
additional investments into this account (except money market funds). Buying
shares during the same period as you are selling shares is not advantageous to
you because of sales charges.

If you own Class B shares, you may establish a Systematic Withdrawal Plan and
redeem up to 8% of the value of your account annually without a CDSC.

If you own Class B shares of a retirement account and you are receiving your
Required Minimum Distribution through a Systematic Withdrawal Plan, up to 8% of
the value of your account may be redeemed annually without a CDSC. However, if
your Required Minimum Distribution exceeds the 8% limit, the applicable CDSC
will be charged if the additional shares were held less than 3 years and you
have not reached age 70-1/2.

To establish a Systematic Withdrawal Plan, complete the appropriate section of
the account application or contact your registered representative or call
Shareholder Services at 1 (800) 423-4026.

oEXPEDITED WIRE REDEMPTIONS (MONEY MARKET FUNDS ONLY)

Enroll in our Expedited Redemption service to wire proceeds from your FI money
market account to your bank account. Call Shareholder Services at 1 (800)
423-4026 for an application or to discuss specific requirements.

- -Each wire under $5,000 is subject to a $10 fee. -Six wires of $5,000 or more
are permitted without charge each month. Each additional wire is $10.00.

- -Wires must be directed to your pre-authorized bank account.

14
<PAGE>

HOW TO EXCHANGE SHARES

The exchange privilege gives you the flexibility to change investments as your
goals change without incurring a sales charge. Since an exchange is a redemption
and a purchase, it creates a gain or loss which is reportable for tax purposes.
You should consult your tax advisor before requesting an exchange. Read the
prospectus of the FI Fund you are purchasing carefully. Review the differences
in objectives, policies, risk, privileges and restrictions.

<TABLE>
<CAPTION>
______________________________________________________________________________
EXCHANGE METHODS
_______________________________________________________________________________

METHOD STEPS TO FOLLOW
<S> <C>

Through Your FI
Registered Representative Call your registered representative.
___________________________________________________________________________________
By Phone Call Special Services from 9:00 a.m. to 5:00 p.m., EST
(800) 342-6221 Orders received after the close of the New York Stock
Exchange, usually 4:00 p.m., est, are processed the following business day.

1.You must have telephone privileges
(see Telephone Transactions)

2.Certificate shares cannot be exchanged by phone.

3.For trusts, estates, attorneys-in-fact, corporations,
partnerships, and other entities, additional documents
are required.
____________________________________________________________________________________
By Mail to: 1.Send us written instructions signed by all account
ADM exactly as the account is registered.
owners 2. Include your fund account number.
ATTN: EXCHANGE DEPT. 3. Indicate either the dollar amount, number of shares
581 MAIN STREET or percent of the account you want to exchange.
WOODBRIDGE, NJ 07095-119 4. Specify the existing account number or the name of
the new Fund you are exchanging into.

5. Include any outstanding share certificates for the
shares you want to exchange.

6. For trusts, estates, attorneys-in-fact, corporations,
partnerships, and other entities, additional documents
are required. Call Shareholder Services at 1 (800)
423-4026.
____________________________________________________________________________________
</TABLE>

15
<PAGE>

oEXCHANGE CONDITIONS

1: You may only exchange shares within the same Class.

2: Exchanges can only be
made into identically owned accounts.

3: Partial exchanges into a new fund account must meet the new fund's minimum
initial investment.

4: The fund you are exchanging into must be eligible for
sale in your state.

5: If your request does not clearly indicate the amount to
be exchanged or the accounts involved, no shares will be exchanged.

6: Amounts
exchanged from a non-money market fund to a money market fund may be exchanged
back at net asset value. Dividends earned from money market fund shares will be
subject to a sales charge.

7: If you are exchanging from a money market fund to
a fund with a sales charge, there will be a sales charge on any shares that were
not previously subject to a sales charge. Your request must be in writing and
include a statement acknowledging that a sales charge will be paid. If you
exchange Class B shares of a fund for shares of a Class B money market fund, the
CDSC will not be imposed and the holding period used to calculate the CDSC will
carry over to the acquired shares.

8: FI Funds reserve the right to reject any
exchange order which in the opinion of the Fund is part of a market timing
strategy. In the event that an exchange is rejected, neither the redemption nor
the purchase side of the exchange will be processed.

oEXCHANGING FUNDS WITH AUTOMATIC INVESTMENTS OR SYSTEMATIC WITHDRAWALS

Let us know if you want to continue automatic investments into the original fund
or the fund you are exchanging into ("receiving fund") or if you want to change
the amount or allocation into both. Also inform us if you wish to continue,
terminate, or change a preauthorized systematic withdrawal. Without specific
instructions, we will amend account privileges as outlined below:

________________________________________________________________________________
EXCHANGE EXCHANGE EXCHANGE A
ALL SHARES TO ALL SHARES TO PORTION OF
ONE FUND MULTIPLE SHARES TO ONE OR
FUNDS MULTIPLE FUNDS
________________________________________________________________________________
MONEY LINE ML moves to ML stays with ML stays with
(ML) Receiving Fund Original Fund Original Fund

AUTOMATIC PAYROLL API moves to API Stays with API stays with
INVESTMENT (API) Receiving Fund Original Fund Original Fund

SYSTEMATIC SWP moves to SWP SWP stays
WITHDRAWALS Receiving Fund Canceled with Original Fund (SWP)
________________________________________________________________________________

16
<PAGE>

WHEN AND HOW ARE FUND SHARES PRICED?

Each FI Fund prices its shares each day that the New York Stock Exchange
("NYSE") is open for trading. The share price is calculated as of the close of
trading on the NYSE (generally 4:00 p.m., EST) except for shares of the money
market funds which are priced as of 12:00 noon. These days are referred to as
"Trading Days" in this Manual.

Each Fund calculates the net asset value of each class of its shares separately
by taking the total value of class assets, subtracting class expenses, and
dividing the difference by the total number of shares in the class. The price
that you will pay for a share is the NAV plus any applicable front-end sales
charge. You receive the NAV price if you redeem or exchange your shares, less
any applicable CDSC.

Fund prices are on our website (www.firstinvestors.com) the next day. The prices
for our larger funds are also reported in many newspapers, including The Wall
Street Journal and The New York Times. Special pricing procedures are employed
during emergencies. For a description of these procedures you can request, free
of charge, a copy of a Statement of Additional Information.

HOW ARE PURCHASE, REDEMPTION, AND EXCHANGE ORDERS PROCESSED AND PRICED?

The processing and price for a purchase, redemption or exchange depends upon how
your order is placed. As indicated below, special rules apply to money market
transactions.

oPURCHASES

Purchases that are made by written application or order are processed when they
are received in "good order" by our Woodbridge, NJ office. To be in good order,
all required paperwork must be completed and payment received. If your order is
received prior to the close of trading on the NYSE, it will receive that day's
price (except in the case of the money market funds which are discussed below).
This procedure applies whether your purchase order is given to your registered
representative or mailed directly by you to our Woodbridge, NJ office.

As described previously in "How to Buy Shares," certain types of purchases can
only be placed by written application. For example, purchases in connection with
the opening of retirement accounts may only be made by written application.
Furthermore, rollovers of retirement accounts will be processed only when we
have received both written application and the proceeds of the rollover. Thus,
for example, if it takes 30 days for another fund group to send us the proceeds
of a retirement account, your purchase of First Investors funds will not occur
until we receive the proceeds.

Some types of purchases may be phoned or electronically transmitted to us by
your broker/dealer. If you give your order to a First Investors registered

17
<PAGE>

representative before the close of trading on the NYSE and the order is phoned
to our Woodbridge, NJ office prior to 5:00 p.m., EST, your shares will be
purchased at that day's price (except money market funds which are discussed
below). If you are buying a First Investors Fund through a broker-dealer other
than First Investors, other requirements may apply. Consult with your
broker-dealer about its requirements. Payment is due within three business days
of placing an order by phone or electronic means or the trade may be cancelled.
(In such event, you will be liable for any loss resulting from the
cancellation.) To avoid cancellation of your orders, you may arrange to open a
money market account and use it to pay for subsequent purchases.

Purchases made pursuant to our Automatic Investment Programs are processed as
follows:

- -Money Line purchases are processed on the dates you select on your application.

- -Automatic Payroll Investment Service purchases are processed on the dates that
we receive funds from your employer.

oREDEMPTIONS

As described previously in "How To Sell Shares", certain redemption orders may
only be made by written instructions or application. Unless you have declined
Telephone Privileges, most redemptions can be made by phone by you or your
registered representative.

Written redemption orders will be processed when received in good order in our
Woodbridge, NJ office. Phone redemption orders will be processed when received
in our Woodbridge, NJ office.

If your redemption order is received prior to the close of trading on the NYSE,
you will receive that day's price (except in the case of money market funds
which are discussed below). If you are redeeming through a broker-dealer other
than First Investors, other requirements may apply. Consult with your
broker-dealer about its requirements.

oEXCHANGES

Exchanges can generally be made by written instructions or, unless you have
declined Telephone Privileges, by phone by you or your registered
representative. Exchange orders are processed when we receive them in good order
in our Woodbridge, NJ office.

Exchange orders received prior to the close of trading on the NYSE will be
processed at that day's prices (except in the case of exchanges into or out of
money market funds which are discussed below).

oORDERS PLACED VIA FIRST INVESTORS REGISTERED REPRESENTATIVES

All orders placed through a First Investors registered representative must be
reviewed and approved by a principal officer of the branch office before being
mailed or transmitted to the Woodbridge, NJ office.

oORDERS PLACED VIA DEALERS

It is the responsibility of the Dealer to forward or transmit orders to the Fund
promptly and accurately. A fund will not be liable for any change in the price
per share due to the failure of the Dealer to place the order in a timely
fashion. Any such disputes must be settled between you and the Dealer.

18
<PAGE>

oSPECIAL RULES FOR MONEY MARKET FUNDS

A money market fund share purchase will not be made until we receive the funds
for the purchase. The funds for the purchase will not be deemed to have been
received until the morning of the next Trading Day following the Trading Day on
which your purchase check is received in our Woodbridge, NJ office. If a check
is received in our Woodbridge, NJ office after the close of regular trading on
the NYSE, the funds for the purchase will not be deemed to have been received
until the morning of the second following Trading Day.

If you make your purchase by wire transfer prior to 12:00 p.m., EST, and you
have previously advised us that the wire is on the way, the funds for the
purchase will be deemed to have been received on that same day. You must call
beforehand and give us your name, account number, the amount of the wire, and a
federal reference number documenting the transfer. If we fail to receive such
advance notification, the funds for your purchase will not be deemed to have
been received until the morning of the next Trading Day following receipt of the
federal wire and your account information. To wire funds to an existing First
Investors money market account, instruct your bank to wire your investment, as
applicable, to: CASH MANAGEMENT FUND BANK OF NEW YORK ABA #021000018 ACCOUNT
8900005696 YOUR NAME YOUR FIRST INVESTORS ACCOUNT # TAX-EXEMPT MONEY MARKET FUND
BANK OF NEW YORK ABA #021000018 ACCOUNT 8900023198 YOUR NAME YOUR FIRST
INVESTORS ACCOUNT #

Purchases by Money Line and Automatic Payroll Investment are processed in the
same manner as those in other Funds.

RIGHT TO REJECT PURCHASE OR EXCHANGE ORDERS

A fund reserves the right to reject or restrict any specific purchase request if
the fund determines that doing so is in the best interest of the fund and its
shareholders. Investments in a fund are designed for long-term purposes and are
not intended to provide a vehicle for short-term market timing. The funds also
reserve the right to reject any exchange that in the funds' opinion is part of a
market timing strategy. In the event that a fund rejects an exchange request,
neither the redemption nor the purchase side of the exchange will be processed.

SIGNATURE GUARANTEE POLICY

A signature guarantee protects you from the risk of a
fraudulent signature and is generally required for non-standard and large dollar
transactions. A signature guarantee may be obtained from your First Investors
registered representative or eligible guarantor institutions including banks,
savings associations, credit unions and brokerage firms which are members of the
Securities Transfer Agents Medallion Program ("STAMP"), the New York Stock
Exchange Medallion Signature Program ("MSP"), or the Stock Exchanges Medallion
Program ("SEMP"). Please note that a notary public stamp or seal is not
acceptable. The words "Signature Guaranteed" must appear beside the signature of
the guarantor.

- -SIGNATURE GUARANTEES ARE REQUIRED:

1: For redemptions over $50,000.

2: For redemption checks made payable to any person(s) other than the registered
shareholder(s) or a major financial institution for the benefit of the
registered shareholder(s).

3: For redemption checks mailed to an address other than the address of record
(unless the check is mailed to a financial institution on your behalf).

4: For redemptions when the address of record has changed within 60 days of the
request.

5: When a stock certificate is mailed to an address other than the address of
record or to the dealer on the account.

6: When shares are transferred to a new registration.

7: When issued shares are redeemed.

8: To establish any EFT service.

19
<PAGE>

9: For requests to change the address of record to a P.O. box or a "c/o" street
address.

10: If multiple account owners of one account give inconsistent instructions.

11: When a transaction requires additional legal documentation.

12: When the authority of a representative of a corporation, partnership, trust,
or other entity has not been satisfactorily established.

13: When an address on an account which was coded "Do Not Mail" to suppress
check and dividend mailings due to a previously unknown address is updated.

14: Any other instance whereby a fund or its transfer agent deems it necessary
as a matter of prudence.

TELEPHONE SERVICES TELEPHONE EXCHANGES AND REDEMPTIONS 1 (800) 342-6221

You automatically receive telephone privileges when you open a First Investors
individual, joint, or custodial account unless you decline the option on your
account application or send the Fund written instructions. For trusts, estates,
attorneys-in-fact, corporations, partnerships, and other entities, additional
documents are required. Call Shareholder Services at 1 (800) 423-4026 for
assistance.

Telephone privileges allow you to exchange or redeem shares and authorize other
transactions by calling Special Services at 1 (800) 342-6221 from 9:00 a.m. to
5:00 p.m., EST, on any day the NYSE is open. Your First Investors registered
representative may also use telephone privileges to execute your transactions.

oSECURITY MEASURES For your protection, the following security measures are
taken:

1: Telephone requests are recorded to verify accuracy.

2: Some or all of
the following information is obtained:

- -Account number -Address -Social security
number

- -Other information as deemed necessary

3: A written confirmation of each
transaction is mailed to you.

We will not be liable for following instructions
if we reasonably believe the instructions are genuine based on our verification
procedures.

oELIGIBILITY

NON-RETIREMENT ACCOUNTS:

You can exchange or redeem shares of any non-retirement account by phone. Shares
must be owned for 15 days for telephone redemption. Telephone exchanges and
redemptions are not available on guardianship and conservatorship accounts.

RETIREMENT ACCOUNTS:

You can exchange between shares of any participant directed IRA, 403(b) or
401(k) Simplifier plan where First Financial Savings Bank, S.L.A. is Custodian.
You may also exchange shares from an individually registered non-retirement
account to an IRA account registered to the same owner (provided an IRA
application is on file). Telephone exchanges are permitted on 401(k) Flexible
plans, money purchase pension plans and profit sharing plans if a First
Investors Qualified Retirement Plan Application is on file with the fund.
Contact your First Investors registered representative or call Shareholder
Services at 1 (800) 423-4026 to obtain a Qualified Retirement Plan Application.
Telephone redemptions are not permitted on First Investors retirement accounts.

20
<PAGE>

SHAREHOLDER SERVICES:
1 (800) 423-4026

PROVIDED YOU HAVE NOT DECLINED TELEPHONE PRIVILEGES, CALL US TO UPDATE OR
CORRECT:

- -Your address or phone number.

- -Your birth date (important for retirement distributions).

- -Your distribution option to reinvest or pay in cash (non-retirement accounts
only) or initiate cross reinvestment of dividends.

- -The amount of your Money Line or Automatic Payroll Investment payment.

- -The allocation of your Money Line or Automatic Payroll Investment payment.

- -The amount of your Systematic Withdrawal payment.

TO REQUEST:

- -A duplicate copy of a statement or tax form.

- -A history of your account (the fee can be debited from your non-retirement
account).

- -A share certificate to be mailed to your address of record.

- -A stop payment on a dividend, redemption or money market check.

- -Suspension (up to six months) or cancellation of Money Line.

- -Cancellation of your Systematic Withdrawal Plan.

- -Cancellation of cross-reinvestment of dividends.

- -Money market fund draft checks.

21
<PAGE>

OTHER SERVICES

oREINVESTMENT PRIVILEGE

If you sell some or all of your Class A or Class B shares, you may be entitled
to reinvest all or a portion of the proceeds in the same class of shares of a FI
fund within six months of the redemption without a sales charge.

If you reinvest proceeds into a new fund account, you must meet the fund's
minimum initial investment requirement.

If you reinvest all the proceeds from a Class B share redemption, you will be
credited, in additional shares, for the full amount of the CDSC. If you reinvest
a portion of a Class B share redemption, you will be credited with a pro-rated
percentage of the CDSC.

The reinstatement privilege does not apply to automated purchases, automated
redemptions, or reinvestments in Class B shares of less than $1,000. Please
notify us if you qualify for this privilege. For more information, call
Shareholder Services at 1 (800) 423-4026.

oCERTIFICATE SHARES

Every time you make a purchase of Class A shares, we will credit shares to your
fund account. We do not issue shares certificates unless you specifically
request them. Certificates are not issued on any Class B shares or on Class A
money market funds.

Having us credit shares on your behalf eliminates the expense of replacing lost,
stolen, or destroyed certificates. If a certificate is lost, stolen, or damaged,
you will be charged a replacement fee of the greater of 2% of the current value
of the certificated shares or $25.

In addition, certificated shares cannot be redeemed or exchanged until they are
returned with your transaction request. The share certificate must be properly
endorsed and signature guaranteed.

oMoney Market Fund Draft Checks

Free draft check writing privileges are available when you open a First
Investors Cash Management Fund or a First Investors Tax Exempt Money Market Fund
account. Checks may be written for a minimum of $500. Draft checks are not
available for Class B share accounts, retirement accounts, guardianships and
conservatorships. Complete the Money Market Fund Check Redemption section of the
account application to apply for draft checks. To order additional checks, call
Shareholder Services at 1 (800) 423-4026.

Additional documentation is required to establish check writing privileges for
trusts, corporations, partnerships and other entities. Call Shareholder Services
at 1 (800) 423-4026 for further information.

_______________________________________________________________________________
FEE TABLE

Call Shareholder Services at 1 (800) 423-4026 or send your request to FIC, Attn:
Correspondence Dept., 581 Main Street, Woodbridge N.J. 07095-1198 to request a
copy of the following records:

ACCOUNT HISTORY STATEMENTS CANCELLED CHECKS

1974 - 1982* $10 per year fee There is a $10 fee for a copy of a
1983 - present $5 total fee for all years cancelled dividend, liquidation, or
Current & investment check requested. There
Two Prior Years Free cancelled money market draft check.

DUPLICATE TAX FORMS

Current Year Free
Prior Year(s) $7.50 per tax form
per year
* ACCOUNT HISTORIES ARE NOT AVAILABLE
PRIOR TO 1974.

22
<PAGE>

oRETURN MAIL

If mail is returned to the fund marked undeliverable by the U.S. Postal Service
after two consecutive mailings, and the fund is unable to obtain a current
shareholder address, the account status will be changed to "Do Not Mail" to
discontinue future mailings and prevent unauthorized persons from obtaining
account information.

You can remove the "Do Not Mail" status on your account by submitting written
instructions including your current address signed by all shareholders with a
signature guarantee (see Signature Guarantee Policy). Additional requirements
may apply for certain accounts. Call Shareholder Services at 1 (800) 423-4026
for more information.

Returned dividend checks and other distributions will be reinvested in the fund
when an account's status has been changed to "Do Not Mail". No interest will be
paid on outstanding checks prior to reinvestment. All future dividends and other
distributions will be reinvested in additional shares until new instructions are
provided. If you cannot be located within a period of time mandated by your
state of residence your fund shares may be turned over to your state (in other
words forfeited).

Prior to turning over assets to your state, the fund will seek to obtain a
current shareholder address in accordance with Securities and Exchange
Commission rules. A search company may be employed to locate a current address.
The fund may deduct the costs associated with the search from your account.

oTRANSFERRING SHARES

A transfer is a change of share ownership from one customer to another. Unlike
an exchange, transfers occur within the same fund. You can transfer your shares
at any time.

To transfer shares, submit a letter of instruction including:

- -Your account number.

- -Dollar amount, percentage, or number of shares to be transferred.

- -Existing account number receiving the shares (IF ANY).

- -The name(s), registration, and taxpayer identification number of the customer
receiving the shares.

- -The signature of each account owner requesting the transfer with signature
guarantee(s).

In addition, we will request that the transferee complete a Master Account
Agreement to establish a brokerage account with First Investors Corporation and
validate his or her social security number to avoid back-up withholding. If the
transferee declines to complete an MAA, all transactions in the account must be
on an unsolicited basis and the account will be so coded.

Depending upon your account registration, additional documentation may be
required to transfer shares. Transfers due to the death or disability of a
shareholder also require additional documentation. Please call our Shareholder
Services Department at 1 (800) 423-4026 for specific transfer requirements
before initiating a request.

A transfer is a change of ownership and may trigger a taxable event. You should
consult your tax advisor before initiating a transfer.

23
<PAGE>

ACCOUNT STATEMENTS

oTRANSACTION CONFIRMATION STATEMENTS

You will receive a confirmation statement immediately after most transactions.
These include:

- -shareorder purchases

- -check investments

- -redemptions

- -exchanges

- -transfers

- -systematic withdrawals

Money Line and Automatic Payroll Investment purchases are not confirmed for each
transaction. They will appear on your next regularly scheduled monthly or
quarterly statement (see Dividend Schedule under "Dividends and Distributions").

A separate confirmation statement is generated for each fund account you own. It
provides:

- -Your fund account number -The date of the transaction

- -A description of the transaction (PURCHASE, REDEMPTION, ETC.)

- -The number of shares bought or sold for the transaction

- -The dollar amount of the transaction

- -The dollar amount of the dividend payment (IF APPLICABLE)

- -The total share balance in the account -The dollar amount of any dividends or
capital gains paid

- -The number of shares held by you, held for you (INCLUDING ESCROW SHARES), and
the total number of shares you own.

The confirmation statement also provides a perforated Investment Stub with your
preprinted name, registration, and fund account number for future investments.

oMASTER ACCOUNT STATEMENTS

If First Investors Corporation is your broker, you will receive a Master Account
Statement for all your identically owned First Investors fund accounts on at
least a quarterly basis. The Master Account Statement will also include a recap
of any First Investors Life Insurance and Executive Investors Trust accounts you
may own. Joint accounts registered under your taxpayer identification number
will appear on a separate Master Account Statement but may be mailed in the same
envelope upon request.

The Master Account Statement provides the following information for each First
Investors fund you own:

- -fund name
- -fund's current market value

- -total distributions paid year-to-date
- -total number of shares owned

oANNUAL AND SEMI-ANNUAL REPORTS

You will also receive an Annual and a Semi-Annual Report. These financial
reports show the assets, liabilities, revenues, expenses, and earnings of the
fund as well as a detailed accounting of all portfolio holdings. You will
receive one report per household.

24
<PAGE>

DIVIDENDS AND DISTRIBUTIONS

oDIVIDENDS AND DISTRIBUTIONS

For funds that declare daily dividends, you start earning dividends on the day
your purchase is made. For FI money market funds, you start earning dividends on
the day federal funds are credited to your fund account. The funds declare
dividends from net investment income and distribute the accrued earnings to
shareholders as noted below:

________________________________________________________________________________
DIVIDEND PAYMENT SCHEDULE
________________________________________________________________________________
MONTHLY: QUARTERLY: ANNUALLY (IF ANY):
Cash Management Fund Blue Chip Fund Global Fund
Fund for Income Growth & Income Fund Special Situations Fund
Government Fund Total Return Fund Mid-Cap Opportunity Fund
Insured Intermediate Tax-Exempt Utilities Income Fund
Insured Tax Exempt Fund
Investment Grade Fund
High Yield Fund
Multi-State Insured Tax Free Fund
New York Insured Tax Free Fund
Tax-Exempt Money Market Fund
________________________________________________________________________________

Capital gains distributions, if any, are paid annually, usually near the end of
the fund's fiscal year. On occasion, more than one capital gains distribution
may be paid during one year. Dividend and capital gains distributions are
automatically reinvested to purchase additional fund shares unless otherwise
instructed. Dividend payments of less than $5.00 are automatically reinvested to
purchase additional fund shares.

oBUYING A DIVIDEND

If you buy shares shortly before the record date of the dividend, the entire
dividend you receive may be taxable even though a part of the distribution is
actually a return of your purchase price. This is called "buying a dividend."

There is no advantage to buying a dividend because a fund's net asset value per
share is reduced by the amount of the dividend.

25
<PAGE>

<TABLE>
<CAPTION>
TAX FORMS

TAX FORM DESCRIPTION MAILED BY
<S> <C> <C>
_________________________________________________________________________________________________
1099-DIV Consolidated report lists all taxable dividend and capital gains January 31
distributions for all of the shareholder's accounts. Also includes
foreign taxes paid and any federal income tax withheld due to backup
withholding.
_________________________________________________________________________________________________
1099-B Lists proceeds from all redemptions including systematic January
31 withdrawals and exchanges. A separate form is issued for each
fund account. Includes amount of federal income tax withheld due
to backup withholding.
_________________________________________________________________________________________________
1099-R Lists taxable distributions from a retirement account. A separate January 31
form is issued for each fund account. Includes federal
income tax withheld due to IRS withholding requirements.
_________________________________________________________________________________________________
5498 Provided to shareholders who made an annual IRA May 31
contribution or rollover purchase. Also provides the account's
fair market value as of the last business day of the previous year.
A separate form is issued for each fund account.
_________________________________________________________________________________________________
1042-S Provided to non-resident alien shareholders to report the amount March 15
of fund dividends paid and the amount of federal taxes
withheld. A separate form is issued for each fund account.
_________________________________________________________________________________________________
Cost Basis Uses the "average cost-single category" method to show the cost January 31
Statement basis of any shares sold or exchanged. Information is provided
to assist shareholders in calculating capital gains or losses. A
separate statement, included with Form 1099-B, is issued for each
fund account. This statement is not reported to the IRS and does
not include money market funds or retirement accounts.
_________________________________________________________________________________________________
Tax Savings Consolidated report lists all amounts not subject to federal, January 31
Report for state and local income tax for all the shareholder's accounts.
Non-Taxable Also includes any amounts subject to alternative minimum tax.
Income
_________________________________________________________________________________________________
Tax Savings Provides the percentage of income paid by each fund that may January 31
Summary be exempt from state income tax.
_________________________________________________________________________________________________
</TABLE>

THE OUTLOOK

Today's strategies for tomorrow's goals are brought into focus in the OUTLOOK,
the quarterly newsletter for clients of First Investors Corporation. This
informative tool discusses the products and services we offer to help you take
advantage of current market conditions and tax law changes. The OUTLOOK'S
straight forward approach and timely articles make it a valuable resource. As
always, your registered representative is available to provide you with
additional information and assistance. Material contained in this publication
should not be considered legal, financial, or other professional advice.

26
<PAGE>

Principal Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095
1-800-423-4026

<PAGE>

PART C. OTHER INFORMATION

Item 23. Exhibits
--------

(a)(i) Articles of Restatement1

(ii) Articles Supplementary1

(iii) Certificate of Correction1

(b) Amended and Restated By-laws1

(c) Shareholders' rights are contained in (a) Articles FIFTH
and EIGHTH of Registrant's Articles of Restatement dated
September 14, 1994, previously filed as Exhibit 99.B1.1 to
Registrant's Registration Statement; (b) Article FOURTH of
Registrant's Articles Supplementary to Articles of
Incorporation dated October 20, 1994, previously filed as
Exhibit 99.B1.2 to Registrant's Registration Statement and
(c) Article II of Registrant's Amended and Restated
By-laws, previously filed as Exhibit 99.B2 to Registrant's
Registration Statement.

(d) Investment Advisory Agreement between Registrant and First
Investors Management Company, Inc.1

(e) Underwriting Agreement between Registrant and First
Investors Corporation1

(f) Bonus, profit sharing or pension plans - none

(g)(i) Custodian Agreement between Registrant and Irving
Trust Company1

(ii) Supplement to Custodian Agreement between Registrant
and The Bank of New York1

(iii) Payment and Redemption Agency Agreement between Registrant
and Irving Trust Company1

(h)(i) Administration Agreement between Registrant, First
Investors Management Company, Inc., First Investors
Corporation and Administrative Data Management Corp.1

(ii) Schedule A to Administration Agreement1

(i) Opinion and Consent of Counsel2

(j)(i) Consent of Independent Accountants2

(ii) Powers of Attorney1

(k) Financial statements omitted from prospectus -none

(l) Initial capital agreements - none

(m)(i) Amended and Restated Class A Distribution Plan1

<PAGE>

(ii) Class B Distribution Plan1

(n) Financial Data Schedules2

(o) 18f-3 Plan1

1 Incorporated by reference from Post-Effective Amendment No. 16 to
Registrant's Registration Statement (File No. 2-82572) filed on
April 24, 1996.

2 To be filed subsequently.

Item 24. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------

There are no persons controlled by or under common control with the
Registrant.

Item 25. Indemnification
---------------

Article X, Section 1 of the By-Laws of Registrant provides as
follows:

Section 1. Every person who is or was an officer or director of the
Corporation (and his heirs, executors and administrators) shall be indemnified
by the Corporation against reasonable costs and expenses incurred by him in
connection with any action, suit or proceeding to which he may be made a party
by reason of his being or having been a director or officer of the Corporation,
except in relation to any action, suit or proceeding in which he has been
adjudged liable because of negligence or misconduct, which shall be deemed to
include willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office. In the absence of an
adjudication which expressly absolves the director or officer of liability to
the Corporation or its stockholders for negligence or misconduct, within the
meaning thereof as used herein, or in the event of a settlement, each director
or officer (and his heirs, executors and administrators) shall be indemnified by
the Corporation against payments made, including reasonable costs and expenses,
provided that such indemnity shall be conditioned upon the prior determination
by a resolution of two-thirds of the Board of Directors who are not involved in
the action, suit or proceeding that the director or officer has no liability by
reason of negligence or misconduct within the meaning thereof as used herein,
and provided further that if a majority of the members of the Board of Directors
of the Corporation are involved in the action, suit or proceeding, such
determination shall have been made by a written opinion of independent counsel.
Amounts paid in settlement shall not exceed costs, fees and expenses which would
have been reasonably incurred if the action, suit or proceeding had been
litigated to a conclusion. Such a determination by the Board of Directors or by
independent counsel, and the payment of amounts by the Corporation on the basis
thereof, shall not prevent a stockholder from challenging such indemnification
by appropriate legal proceedings on the grounds that the person indemnified was
liable to the Corporation or its security holders by reason of negligence or
misconduct within the meaning thereof as used herein. The foregoing rights and
indemnification shall not be exclusive of any other rights to which any officer
or director (or his heirs, executors and administrators) may be entitled to
according to law.

<PAGE>

The Registrant's Investment Advisory Agreement provides as
follows:

The Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company or any Series in connection with
the matters to which this Agreement relate except a loss resulting from the
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
partner, employee, or agent of the Manager, who may be or become an officer,
Board member, employee or agent of the Company shall be deemed, when rendering
services to the Company or acting in any business of the Company, to be
rendering such services to or acting solely for the Company and not as an
officer, partner, employee, or agent or one under the control or direction of
the Manager even though paid by it.

The Registrant's Underwriting Agreement provides as follows:

The Underwriter agrees to use its best efforts in effecting the sale
and public distribution of the shares of the Fund through dealers and to perform
its duties in redeeming and repurchasing the shares of the Fund, but nothing
contained in this Agreement shall make the Underwriter or any of its officers
and directors or shareholders liable for any loss sustained by the Fund or any
of its officers, directors, or shareholders, or by any other person on account
of any act done or omitted to be done by the Underwriter under this Agreement
provided that nothing herein contained shall protect the Underwriter against any
liability to the Fund or to any of its shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties as Underwriter or by reason of its
reckless disregard of its obligations or duties as Underwriter under this
Agreement. Nothing in this Agreement shall protect the Underwriter from any
liabilities which they may have under the Securities Act of 1933 or the
Investment Company Act of 1940.

Reference is hereby made to the Maryland Corporations and
Associations Annotated Code, Sections 2-417, 2-418 (1986).

The general effect of this Indemnification will be to indemnify the
officers and directors of the Registrant from costs and expenses arising from
any action, suit or proceeding to which they may be made a party by reason of
their being or having been a director or officer of the Registrant, except where
such action is determined to have arisen out of the willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the director's or officer's office.

<PAGE>

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed 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. See Item 30 herein.

Item 26. Business and Other Connections of Investment Adviser
----------------------------------------------------

First Investors Management Company, Inc. offers investment
management services and is a registered investment adviser.
Affiliations of the officers and directors of the Investment Adviser
are set forth in Part B, Statement of Additional Information, under
"Directors or Trustees and Officers."

Item 27. Principal Underwriters
----------------------

(a) First Investors Corporation, Underwriter of the Registrant, is also
underwriter for:

First Investors Cash Management Fund, Inc.
First Investors Fund For Income, Inc.
First Investors Global Fund, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.
First Investors Life Variable Annuity Fund A
First Investors Life Variable Annuity Fund C
First Investors Life Variable Annuity Fund D
First Investors Life Level Premium Variable Life Insurance
(Separate Account B)

(b) The following persons are the officers and directors of the
Underwriter:

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ---------------- --------------------- ----------

Glenn O. Head Chairman President
95 Wall Street and Director and Director
New York, NY 10005

Marvin M. Hecker President None
95 Wall Street
New York, NY 10005

John T. Sullivan Director Chairman of the
95 Wall Street Board of
New York, NY 10005 Directors

<PAGE>

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ---------------- --------------------- ----------

Joseph I. Benedek Treasurer Treasurer
581 Main Street
Woodbridge, NJ 07095

Lawrence A. Fauci Senior Vice President None
95 Wall Street and Director
New York, NY 10005

Kathryn S. Head Vice President Director
581 Main Street and Director
Woodbridge, NJ 07095

Louis Rinaldi Senior Vice None
581 Main Street President
Woodbridge, NJ 07095

Frederick Miller Senior Vice President None
581 Main Street
Woodbridge, NJ 07095

Larry R. Lavoie Secretary and Director
95 Wall Street General Counsel
New York, NY 10005

Matthew Smith Vice President None
581 Main Street
Woodbridge, NJ 07095

Jeremiah J. Lyons Director None
56 Weston Avenue
Chatham, NJ 07928

Anne Condon Vice President None
581 Main Street
Woodbridge, NJ 07095

Jane W. Kruzan Director None
232 Adair Street
Decatur, GA 30030

Elizabeth Reilly Vice President None
581 Main Street
Woodbridge, NJ 07095

Robert Flanagan Vice President- None
95 Wall Street Sales Administration
New York, NY 10005

William M. Lipkus Chief Financial Officer None
581 Main Street
Woodbridge, NJ 07095

<PAGE>

Item 28. Location of Accounts and Records
--------------------------------

Physical possession of the books, accounts and records of the
Registrant are held by First Investors Management Company, Inc. and its
affiliated companies, First Investors Corporation and Administrative Data
Management Corp., at their corporate headquarters, 95 Wall Street, New York, NY
10005 and administrative offices, 581 Main Street, Woodbridge, NJ 07095, except
for those maintained by the Registrant's Custodian, The Bank of New York, 48
Wall Street, New York, NY 10286.

Item 29. Management Services
-------------------

Not Applicable.

Item 30. Undertakings
------------

The Registrant undertakes to carry out all indemnification provisions
of its Declaration of Trust, Advisory Agreement and Underwriting Agreement in
accordance with Investment Company Act Release No. 11330 (September 4, 1980) and
successor releases.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the provisions under Item 27 herein, 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 trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, 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.

The Registrant hereby undertakes to furnish a copy of its latest
annual report to shareholders, upon request and without charge, to each person
to whom a prospectus is delivered.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Post-Effective Amendment No. 19 to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on the 22nd day of February, 1999.

FIRST INVESTORS TAX-EXEMPT MONEY
MARKET FUND, INC.

By: /s/ GLENN O. HEAD
-----------------
Glenn O. Head
President and Director

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 19 to this Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated.

/s/ Glenn O. Head Principal Executive February 22, 1999
- ----------------------------- Officer and Director
Glenn O. Head

/s/ Joseph I. Benedek Principal Financial February 22, 1999
- ----------------------------- and Accounting Officer
Joseph I. Benedek

/s/ Kathryn S. Head* Director February 22, 1999
- -----------------------------
Kathryn S. Head

/s/ Larry R. Lavoie Director February 22, 1999
- -----------------------------
Larry R. Lavoie

/s/ Herbert Rubinstein* Director February 22, 1999
- -----------------------------
Herbert Rubinstein

/s/ Nancy Schaenen* Director February 22, 1999
- -----------------------------
Nancy Schaenen

/s/ James M. Srygley* Director February 22, 1999
- -----------------------------
James M. Srygley

/s/ John T. Sullivan* Director February 22, 1999
- -----------------------------
John T. Sullivan

<PAGE>

/s/ Rex R. Reed* Director February 22, 1999
- -----------------------------
Rex R. Reed

/s/ Robert F. Wentworth* Director February 22, 1999
- -----------------------------
Robert F. Wentworth

*By: /s/ LARRY R. LAVOIE
-------------------
Larry R. Lavoie
Attorney-in-fact

<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description
- ------ -----------

23(a)(i) Articles of Restatement1

23(a)(ii) Articles Supplementary1

23(a)(iii) Certificate of Correction1

23(b) Amended and Restated By-laws1

23(c) Shareholders' rights are contained in (a) Articles FIFTH and
EIGHTH of Registrant's Articles of Restatement dated September
14, 1994, previously filed as Exhibit 99.B1.1 to Registrant's
Registration Statement; (b) Article FOURTH of Registrant's
Articles Supplementary to Articles of Incorporation dated
October 20, 1994, previously filed as Exhibit 99.B1.2 to
Registrant's Registration Statement and (c) Article II of
Registrant's Amended and Restated By-laws, previously filed as
Exhibit 99.B2 to Registrant's Registration Statement.

23(d) Investment Advisory Agreement between Registrant and
First Investors Management Company, Inc.1

23(e) Underwriting Agreement between Registrant
and First Investors Corporation1

23(f) Bonus or Profit Sharing Contracts--None

23(g)(i) Custodian Agreement between Registrant and
Irving Trust Company1

23(g)(ii) Supplement to Custodian Agreement between
Registrant and The Bank of New York1

23(g)(iii) Payment and Redemption Agency Agreement between
Registrant and Irving Trust Company1

23(h)(i) Administration Agreement between Registrant,
First Investors Management Company, Inc.,
First Investors Corporation and Administrative
Data Management Corp.1

23(h)(ii) Schedule A to Administration Agreement1

23(i) Consent of Counsel2

<PAGE>

23(j)(i) Consent of independent accountants2

23(j)(ii) Powers of Attorney1

23(k) Omitted Financial Statements -- None

23(l) Initial Capital Agreements -- None

23(m)(i) Amended and Restated Class A Distribution Plan1

23(m)(ii) Class B Distribution Plan1

23(n) Financial Data Schedules2

23(o) Rule 18f-3 Plan1

- ---------------
1 Incorporated by reference from Post-Effective Amendment No. 16
to Registrant's Registration Statement (File No. 2-82572) filed
on April 24, 1996.

2 To be filed subsequently.