<PAGE> 1
As filed with the Securities and Exchange Commission on December 15, 1995
File No. 2-92260
File No. 811-4068
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 48 /X/
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 51 /X/
PACIFICA FUNDS TRUST
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(Exact Name of Registrant as Specified in Charter)
237 Park Avenue, New York, New York 10017
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (212) 808-3900
---------------
Jeffrey L. Steele, Esq. Joan V. Fiore, Esq.
Dechert Price & Rhoads Furman Selz Incorporated
1500 K Street, N.W. 237 Park Avenue
Washington, D.C. 20005 New York, NY 10017
(Name and Address of Agent for Service)
It is proposed that this filing will become effective in accordance with Rule
485 (check appropriate box)
X 60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2)
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immediately upon filing pursuant to paragraph (b)
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on (date) pursuant to paragraph (b)
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- -------------------
* Registrant has registered an indefinite number of shares of beneficial
interest pursuant to Rule 24f-2 under the Investment Company Act of
1940. The Registrant filed the Notice required by Rule 24f-2 on
November 30, 1995.
<PAGE> 2
PACIFICA FUNDS TRUST
CROSS-REFERENCE SHEET
REQUIRED BY RULE 495
UNDER THE SECURITIES ACT OF 1933
This Amendment to the Registration Statement relates solely to the
three Prospectuses and single Statement of Additional Information that describe
the Investor A and Investor B Shares of the Registrant's 100% U.S. Treasury
Money Market Fund.
The Prospectuses and Statements of Additional Information that
describe the Registrant's California Tax-Exempt Money Market Fund; National
Tax-Exempt Money Market Fund; Equity Index Fund; International Equity Fund;
Growth Fund; Equity Value Fund; Balanced Fund; Asset Preservation Fund;
Short-Term Government Bond Fund; Intermediate Government Bond Fund; Government
Income Fund; Intermediate Bond Fund; Oregon Tax-Exempt Fund; Arizona Tax-Exempt
Fund; California Short-Term Tax-Exempt Fund; California Tax-Exempt Fund;
National Tax-Exempt Fund; Government Money Market Fund; Money Market Fund;
Pacifica Prime Money Market Fund; Pacifica Treasury Money Market Fund and the
Pacifica Money Market Trust are not included in this filing.
PROSPECTUS I
100% U.S. Treasury Money Market Fund
(Investor A Shares)
<TABLE>
<CAPTION>
ITEM NO. IN PART A HEADING IN INVESTOR A SHARES PROSPECTUS
- ------------------ ---------------------------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Highlights; Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant The Fund: Investment Policies and
Practices of the Fund; Description of
Securities and Investment Practices;
Investment Restrictions
5. Management of the Fund Management of the Fund
5A. Management's Discussion of Fund Information is contained in the
Performance Annual Reports of the Registrant
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
6. Capital Stock and Other Securities Dividends, Distributions and Federal
Income Tax; Other Information
7. Purchase of Securities Being Offered Fund Share Valuation; Minimum Purchase
Requirements; Purchase of Investor
A Shares; Management of the Funds
8. Redemption or Repurchase Redemption of Investor Shares
9. Pending Legal Proceedings Not Applicable
</TABLE>
PROSPECTUS II
100% U.S. Treasury Money Market Fund
(Investor B Shares)
<TABLE>
<CAPTION>
ITEM NO. IN PART A HEADING IN INVESTOR B SHARES PROSPECTUS
- ------------------ ---------------------------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Highlights; Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant The Fund: Investment Policies and Practices
of the Fund; Description of Securities and
Investment Practices; Investment Restrictions
5. Management of the Fund Management of the Fund
5A. Management's Discussion of Fund Information is contained in the Performance
Annual Reports of the Registrant
6. Capital Stock and Other Securities Dividends, Distributions and Federal Income
Tax; Other Information
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
7. Purchase of Securities Being Offered Fund Share Valuation; Minimum Purchase
Requirements; Purchase of Investor B
Shares; Management of the Funds
8. Redemption or Repurchase Redemption of Investor Shares
9. Pending Legal Proceedings Not Applicable
</TABLE>
PROSPECTUS III
100% U.S. Treasury Money Market Fund
(Investor A Shares and Investor B Shares (Combined))
<TABLE>
<CAPTION>
ITEM NO. IN PART A HEADING IN COMBINED INVESTOR SHARES PROSPECTUS
- ------------------ ----------------------------------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Highlights; Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant The Fund: Investment Policies and Practices
of the Fund; Description of Securities and
Investment Practices; Investment Restrictions
5. Management of the Fund Management of the Fund
5A. Management's Discussion of Fund Information is contained in the Performance
Annual Reports of the Registrant
6. Capital Stock and Other Securities Dividends, Distributions and Federal Income
Tax; Other Information
7. Purchase of Securities Being Offered Fund Share Valuation; Minimum Purchase
Requirements; Purchase of Investor Class
A and B Shares; Management of the Funds
8. Redemption or Repurchase Redemption of Investor Shares
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
9. Pending Legal Proceedings Not Applicable
</TABLE>
<TABLE>
<CAPTION>
ITEM NO. IN PART B HEADING IN STATEMENT OF
- ------------------ ADDITIONAL INFORMATION
-----------------------
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Investment Policies
14. Management of the Fund Management
15. Control Persons and Principal Other Information
Holders of Securities
16. Investment Advisory and Other Management
Services
17. Brokerage Allocation and Other Portfolio Transactions
Practices
18. Capital Stock and Other Securities Other Information
19. Purchase, Redemption and Pricing Additional Purchase and
of Securities Being Offered Redemption Information;
Determination of Net Asset Value
20. Tax Status Taxation
21. Underwriters Management
22. Calculation of Performance Data Other Information
23. Financial Statements Financial Statements1
</TABLE>
<PAGE> 6
PACIFICA FUNDS TRUST
(INVESTOR A SHARES)
237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")
FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")
PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")
Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Investor A Shares of the following portfolio (the
"Fund"):
- Pacifica 100% U.S. Treasury Money Market Fund
This Prospectus sets forth concisely the information a prospective
investor should know before investing in the Fund and should be read and
retained for information about the Fund. A Statement of Additional Information
(the "SAI"), dated February __, 1996 (which may be revised from time to time),
containing additional and more detailed information about the Fund, has been
filed with the Securities and Exchange Commission ("SEC") and is hereby
incorporated by reference into this Prospectus. It is available without charge
and can be obtained by writing or calling the Fund at the address or
information number printed above.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY FIRST INTERSTATE OR OTHER BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996.
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FEE TABLE - INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . . 5
THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
INVESTMENT POLICIES AND PRACTICES OF THE FUND . . . . . . . . . . . . . 7
RISKS OF INVESTING IN THE FUND . . . . . . . . . . . . . . . . . . . . 7
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . 8
FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . 12
MINIMUM PURCHASE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . 12
PURCHASE OF INVESTOR A SHARES . . . . . . . . . . . . . . . . . . . . . 12
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . . . . . . . . 14
PRICING OF INVESTOR A SHARES . . . . . . . . . . . . . . . . . . . . . 14
EXCHANGE OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . . 17
REDEMPTION OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . 18
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . . . . . . . 21
DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . . . . . . . 23
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . 24
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
- 2 -
<PAGE> 8
HIGHLIGHTS
INVESTMENT OBJECTIVES AND POLICIES OF THE FUND
The investment objective of the 100% U.S. Treasury Securities Money
Market Fund is to seek as high a level of current income as is consistent with
liquidity and maximum safety of principal. The Fund pursues this objective by
investing exclusively in obligations of the U.S. Treasury which are backed by
the full faith and credit of the U.S. Government as to payment of principal and
interest and which have remaining maturities not exceeding 397 days.
For additional information concerning the investment policies,
practices and risk considerations of the Fund, see "The Fund," "Investment
Policies and Practices of the Fund" and "Risks of Investing in the Fund" in
this Prospectus.
RISKS OF INVESTING IN THE FUND
The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund may not achieve as high a level of current income
as other funds that do not limit their investments to the high quality U.S.
Treasury securities in which the Fund invests. The Fund's performance will
fluctuate based on many factors, including the quality of the instruments in
the Fund's investment portfolio, national and international economic
conditions, interest rate levels and general market conditions.
There is no assurance that the Fund will achieve its investment
objective.
MANAGEMENT OF THE FUND
First Interstate Capital Management, Inc. acts as investment advisor
to the Fund. For its services, the Advisor is entitled to receive a fee from
the Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Investor Shares" and "Management of the Fund" in this Prospectus.
Furman Selz acts as administrator and sponsor to the Fund. Furman
Selz provides certain management and administrative services to the Fund, and
is entitled to receive a fee from the Fund at an annual rate based on the
Fund's average daily net assets. PFD Inc. distributes the Fund's shares and
may be reimbursed for certain of its distribution-related expenses.
Fees and expenses charged to the Fund are outlined on page __ of this
Prospectus.
- 3 -
<PAGE> 9
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS
Purchase orders for the Fund received by your broker or Service
Organization in proper order by 4:15 p.m., Eastern time, and transmitted to the
Trust prior to 5:00 p.m. Eastern time will become effective that day.
<TABLE>
<S> <C> <C>
- MINIMUM INITIAL INVESTMENT . . . . . . . . . . . . $500
- MINIMUM INITIAL INVESTMENT FOR IRAS . . . . . . . $250
- MINIMUM SUBSEQUENT INVESTMENT . . . . . . . . . . $ 50
</TABLE>
Investor A Shares are sold with an initial sales charge of up
to 4 1/2% of the offering price.
Shareholders may exchange Investor Shares of the same class between
Funds by telephone or mail.
<TABLE>
<S> <C> <C>
- MINIMUM INITIAL EXCHANGE . . . . . . . . . . . . . $500
(No minimum for subsequent exchanges.)
</TABLE>
Shareholders may redeem Investor Shares by telephone, mail or wire.
- The Fund reserves the right upon not less than 30 days' notice
to redeem involuntarily all the Investor Shares in an
investor's account which have an aggregate value of $500 or
less for any particular Fund.
(The above redemption services are not available for IRAs and trust
clients of First Interstate Bancorp and its affiliates.)
All dividends and distributions will be automatically reinvested at
net asset value in additional Investor Shares of the Fund unless cash payment
is requested.
- Distributions for the Fund are paid monthly.
For additional information on how to purchase and redeem Investor
Shares of the Fund, see "Purchase of Investor Shares," "Exchange of Investor
Shares" and "Redemption of Investor Shares."
- 4 -
<PAGE> 10
FUND EXPENSES
The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Investor shareholder of the Fund.
The information is based on estimated amounts for the initial fiscal year of
the Fund.
FEE TABLE - INVESTOR SHARES
<TABLE>
<CAPTION>
Class A
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . . . . . . . . . . 4 1/2%
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) . . . . . . . . . . . . . . . . . . None
Deferred Sales Load (as a percentage of
redemption proceeds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30%
----
12b-1 Fees* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25%
----
Other Expenses (after waivers)** . . . . . . . . . . . . . . . . . . . . . . . . . . . .25%
----
TOTAL FUND OPERATING EXPENSES:
(after waivers)*** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80%
----
</TABLE>
- ---------------------
* Under rules of the National Association of Securities Dealers, Inc.
(the "NASD"), a 12b-1 fee may be treated as a sales charge for certain
purposes. Because a 12b-1 fee is an annual fee charged against the
assets of the Fund, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the NASD. See
"Management of the Fund -- The Sponsor and Distributor."
** Other Expenses (before waivers) would be ____% and are estimated.
*** Total Fund Operating Expenses (before waivers) would be ____%.
The purpose of this table is to assist shareholders in understanding
the various costs and expenses that an investor in the Fund's Investor Shares
will bear. The table does not reflect any charges that may be imposed by a
First Interstate Bank or other institutions directly on their customer accounts
in connection with investments in the Fund.
- 5 -
<PAGE> 11
EXAMPLE:*
<TABLE>
<S> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% gross annual return and (2) redemption at
the end of each time period: 1 year 3 years
------ -------
$ $
</TABLE>
- -----------------------
* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5%
ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE
GREATER OR LESS THAN THE ASSUMED AMOUNT.
- 6 -
<PAGE> 12
THE FUND
The Fund is a portfolio of a Massachusetts business trust, Pacifica
Funds Trust, organized under the laws of the Commonwealth of Massachusetts as
an open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Fund and elects the officers of the
Fund.
INVESTMENT POLICIES AND PRACTICES OF THE FUND
The investment objective of the Fund is to provide investors with as
high a level of current income as is consistent with liquidity and maximum
safety of principal. The SAI contains the specific investment restrictions
which govern the Fund's investments. Those restrictions and the Fund's
investment objectives are fundamental policies, which means that they may not
be changed without a majority vote of shareholders of the Fund. Except for the
objectives and those restrictions specifically identified as fundamental all
other investment policies and practices described in this Prospectus and in the
SAI are not fundamental, which means that the Board of Trustees may change them
without shareholder approval. The Advisor selects investments and makes
investment decisions based on the investment objective and policies of the
Fund.
The Advisor selects only those U.S. dollar-denominated debt
instruments for the Fund which meet the high quality, credit risk standards
established by the Fund's Board of Trustees. The Fund will not maintain a
dollar-weighted average portfolio maturity that exceeds 90 days nor purchase
any instrument with a remaining maturity of greater than 397 calendar days.
The Fund restricts its investment to U.S. Treasury securities.
Securities issued by the U.S. Treasury have historically involved little risk
of loss of principal if held to maturity. It should be noted that neither the
United States Government, nor any agency or instrumentality thereof, has
guaranteed, sponsored or approved the Fund or its shares. Generally,
securities in which the Fund invests will not earn as high a yield as
securities of longer maturity and/or of lesser quality which are more subject
to market volatility.
The types of securities and investment practices used by the Fund are
described in greater detail under the section "Description of Securities and
Investment Practices" on pages _______ of this Prospectus.
RISKS OF INVESTING IN THE FUND
The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund's performance will fluctuate based on many factors,
including the quality of the instruments in the Fund's investment portfolio,
national and international economic conditions, interest rate levels and
general market conditions.
- 7 -
<PAGE> 13
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the direction
of the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N.
Hankin, John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer.
Information about the Trustees, as well as the Fund's executive officers, may
be found in the SAI under the heading "Management Trustees and Officers."
THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.
First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Fund and
continuously reviews, supervises and administers the Fund's investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Fund's investments directly with brokers and dealers selected by it in its
discretion.
FICM is a wholly-owned subsidiary of First Interstate Bank of
California, which is the largest banking subsidiary of First Interstate
Bancorp, a multi-bank holding company. First Interstate Bancorp provides
financial products and services marketed at the local level to nearly five
million households in over 500 communities in 13 western states.
For the advisory services it provides to the Fund, FICM is entitled to
receive from the Fund fees, payable monthly, at the annual rate of 0.30% of the
first $500 million of the Fund's average daily net assets, 0.25% of the next
$500 million of the Fund's average daily net assets, and 0.20% of the Fund's
average daily net assets in excess of $1 billion.
THE SPONSOR AND DISTRIBUTOR
Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Fund. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust; however, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.
Under a Distribution Plan (the "Plan") adopted by the Fund for its
Investor A Shares, the Fund may pay PFD Inc. monthly a fee of 0.25% per annum
of the average daily net asset value of the outstanding Investor A Shares of
the Fund as compensation for services and expenses of PFD Inc. in connection
with the distribution of Investor A Shares of the Fund. These costs and
expenses include (i) advertising by radio, television, newspapers, magazines,
brochures, sales literature, direct mail or any other form of
- 8 -
<PAGE> 14
advertising; (ii) expenses of sales employees or agents of PFD Inc., including
salary, commissions, travel and related expenses; (iii) payments to
broker-dealers and financial institutions for services in connection with the
distribution of Investor Shares, including sales commissions and fees
calculated with reference to the average daily net asset value of Investor
Shares held by shareholders who have a brokerage or other service relationship
with the broker-dealer or other institution receiving such fees; (iv) costs of
printing prospectuses and other materials to be given or sent to prospective
investors; and (v) such other similar services as the Fund determines to be
reasonably calculated to result in the sale of Investor Shares of the Fund.
The Fund will pay all costs and expenses in connection with the preparation,
printing and distribution of prospectuses to current shareholders and the
operation of its Plan, including related legal and accounting fees. Under the
Plan, up to .25 of 1% of the average daily net assets of the respective classes
may be used to pay for personal service and/or maintenance of shareholder
accounts. The distribution fee and initial sales charge of one class will not
be used to subsidize the sale of another class. The Fund will not be liable
for distribution expenditures made by PFD Inc. in any given year in excess of
the maximum annual amount payable under the Plan for that Fund.
PFD Inc. may from time to time pay a bonus or other incentive to
dealers which employ registered representatives who sell a minimum dollar
amount of Investor Shares of the Fund and/or other funds distributed by Furman
Selz or PFD Inc. during a specific period of time. Such bonus or other
incentive will take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States, or other bonuses, such as gift certificates or the cash
equivalent of such bonuses. PFD Inc. has established such a special
promotional incentive program with First Interstate Securities, Inc.
PFD Inc. receives a percentage of the initial sales charge on the sale
of Investor A shares.
ADMINISTRATIVE SERVICES
The Fund has also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Fund's operations including: (i)
general supervision of the operation of the Fund including coordination of the
services performed by the Fund's investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Fund; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Fund's Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Fund. For these services, Furman
- 9 -
<PAGE> 15
Selz is entitled to receive a fee, payable monthly, at the annual rate of 0.15%
of the average daily net assets of the Fund. Pursuant to a Services Agreement
with the Trust, Furman Selz assists the Trust with certain transfer and
dividend disbursing agent functions and receives a fee of $15.00 per account
per year plus out-of-pocket expenses. Pursuant to the Fund Accounting
Agreement with the Trust, Furman Selz assists the Trust in calculating net
asset values and provides certain other accounting services for the Fund for an
annual fee of $30,000 per Fund plus out-of-pocket expenses.
SERVICE ORGANIZATIONS
Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Fund's Institutional
Shares, such as maintaining shareholder accounts and records. The Fund may pay
fees to Service Organizations (which vary depending upon the services provided)
in amounts up to an annual rate of 0.25% of the average daily net asset value
of the outstanding Investor Shares of the Fund owned by shareholders with whom
a Service Organization has a servicing relationship. These fees will be home
entirely by the Fund's Investor Shares.
Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest a
specified amount in the Fund or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Fund. Each Service Organization has agreed to
transmit to its clients a schedule of any such fees. Shareholders using
Service Organizations are urged to consult with them regarding any such fees or
conditions.
The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Fund and alternative means for continuing the
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
- 10 -
<PAGE> 16
OTHER EXPENSES
The Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz, PFD Inc. or the Advisor. The costs borne
by the Fund include legal and accounting expenses; Trustees' fees and expenses;
insurance premiums; custodian and transfer agent fees and expenses; expenses
incurred in acquiring or disposing of the Fund's portfolio securities; expenses
of registering and qualifying the Fund's shares for sale with the SEC and with
various state securities commissions; expenses of obtaining quotations on the
Fund's portfolio securities and pricing of the Fund's shares; expenses of
maintaining the Fund's legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. The Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a
five-year period from the commencement of the Fund's operations. See
"Management" in the SAI for additional information on expenses borne by the
Fund. Trust expenses directly attributable to a particular Fund are charged to
that Fund, and expenses attributable to a particular class of shares of the
Fund (such as Service Organization fees) are charged to that class. Other
expenses are allocated proportionately among all of the investment portfolios
in the Trust in relation to the net assets of each portfolio or by other means
deemed fair and equitable by the Board of Trustees.
PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Fund's
accounts with brokers or dealers selected by it in its discretion.
In effecting purchases and sales of portfolio securities for the
account of the Fund, the Advisor will seek the best execution of the Fund's
orders. Purchases and sales of debt securities are generally placed by the
Advisor with primary market makers for these securities on a net basis, i.e.,
without any brokerage commission being paid by the Fund. Trading does,
however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made which will include an underwriting
fee paid to the underwriter. Broker-dealers are selected on the basis of a
variety of factors such as reputation, capital strength, size and difficulty of
the order, sale of Fund shares by the broker-dealer, and research provided to
the Advisor by the broker-dealer. The Advisor may cause the Fund to pay
commissions higher than another broker-dealer would have charged if the Advisor
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Advisor.
- 11 -
<PAGE> 17
FUND SHARE VALUATION
The net asset value of each class of shares of the Fund is calculated
at 4:15 p.m. (Eastern time), Monday through Friday, on each day the New York
Stock Exchange is open for trading (a "Business Day"), which excludes the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share for each class of shares is computed by dividing
the value of the Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class. All expenses, including fees paid to the Advisor, Furman Selz
and PFD Inc., are accrued daily and taken into account for the purpose of
determining the net asset value.
The Fund uses the amortized cost method to value its portfolio
securities and seeks to maintain a constant net asset value of $1.00 per share,
although there may be circumstances under which this goal cannot be achieved.
The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless
of the impact of fluctuating interest rates on the market value of the
security. See the SAI for a more complete description of the amortized cost
method.
MINIMUM PURCHASE REQUIREMENTS
The minimum initial investment in the Fund is $500, except that the
minimum is $250 for an IRA. Any subsequent investments must be at least $50,
including an IRA investment. All initial investments should be accompanied by
a completed Purchase Application. A separate application is required for IRA
investments.
PURCHASE OF INVESTOR A SHARES
The following purchase procedures do not apply to certain trust or
other accounts that are managed by First Interstate Bancorp, its subsidiaries
or affiliates. An account customer should consult his or her account officer
for proper instructions.
All funds received by the Trust are invested in full and fractional
Investor Shares of the Fund. Certificates for Investor A Shares are not
issued. Furman Selz maintains records of each shareholder's holdings of Fund
shares, and each shareholder receives a statement of transactions, holdings and
dividends. The Fund reserves the right to reject any purchase.
An investment may be made using any of the following methods:
Through an Authorized Broker, Investment Advisor or Service
Organization. Investor A Shares are available to new and existing shareholders
through authorized brokers,
- 12 -
<PAGE> 18
investment advisors and Service Organizations. To make an investment using
this method, simply complete a Purchase Application and contact your broker,
investment advisor or Service Organization with instructions as to the amount
(and class of shares) you wish to invest. Your broker will then contact the
Fund to place the order on your behalf on that day.
Orders received by your broker or Service Organization for the Fund in
proper order prior to the determination of the Fund's net asset value and
transmitted to the Trust prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Brokers
who receive orders are obligated to transmit them promptly. You should receive
written confirmation of your order within a few days of receipt of instructions
from your broker.
By Wire. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the Fund. In most cases, your bank will either be a member of the
Federal Reserve Banking System or have a relationship with a bank that is.
Your bank will normally charge you a fee for handling the transaction. To
purchase Investor Shares by a Federal funds wire, please first contact Furman
Selz Mutual Funds Client Services. They will establish a record of information
for the wire to ensure its correct processing. You can reach the Wire Desk at
1-800-662-9417.
Have your bank wire funds using the following instructions:
Fiduciary Trust Company
Kansas City, MO 64105
ABA #1010-0362-1
Account #7527950
Further Credit to: Fund Name
As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way.
When new accounts are established by wire, the distribution options will be set
to reinvest and the social security or tax identification number ("TIN") will
not be certified until a signed application is received. Completed
applications should be forwarded immediately to the Fund. With the Purchase
Application, the shareholder can specify other distribution options and add any
special features offered by the Fund. Should any dividend distributions or
redemptions be paid before the TIN is certified, they will be subject to 31%
Federal tax withholding.
Automatic Investment Program. An eligible shareholder may also
participate in the Pacifica Automatic Investment Program, an investment plan
that automatically debits money from the shareholder's bank account and invests
it in the Fund through the use of electronic funds transfers or automatic bank
drafts. Shareholders may elect to make
- 13 -
<PAGE> 19
subsequent investments by transfers of a minimum of $50 on either the fifth or
twentieth day of each month into their established Fund accounts. Contact the
Trust at 1-800-662-8417 for more information about the Pacifica Automatic
Investment Program.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund may be used as a funding medium for IRAs. Investor Class A and B
Shares may also be purchased for IRAs established with an affiliate of First
Interstate Bancorp or other authorized custodians. In addition, an IRA may be
established through a custodial account with Investors Fiduciary Trust Company.
Completion of a special application is required in order to create such an
account, and the minimum initial investment for an IRA is $250. Contributions
to IRAs are subject to prevailing amount limits set by the Internal Revenue
Service. A $5.00 establishment fee and an annual $12.00 maintenance and
custody fee is payable with respect to each IRA, and there will be a $10.00
termination fee when the account is closed. For more information, call the
Fund at 1-800-662-8417.
PRICING OF INVESTOR A SHARES
Orders for the purchase of Investor A Shares will be executed at the
net asset value per share plus any applicable sales charge (the "public
offering price") next determined after an order has become effective. The
sales charge on purchases of Investor A Shares of the Funds varies with the
size of the purchase made according to the following schedule:
<TABLE>
<CAPTION>
Amount of
Sales Charge as a Sales Charge
Percentage of Reallowed to
------------------- Dealers as a
Public Net Percentage of
Offering Amount Public
Amount of Investment Price Invested Offering Price
-------------------- -------- -------- --------------
<S> <C> <C> <C>
Less than $100,000 . . . . . . . . . . . . . . . . 4.50% 4.71% 4.00%
$100,000 but less than $250,000 . . . . . . . . . . 3.50% 3.63% 3.00%
$250,000 but less than $500,000 . . . . . . . . . . 2.60% 2.67% 2.25%
$500,000 but less than $1,000,000 . . . . . . . . . 2.00% 2.04% 1.75%
$1,000,000 and over . . . . . . . . . . . . . . . . None+ None+ None+
</TABLE>
- ---------------
+ There is no initial sales charge on purchases of $1 million or more; however,
the Distributor pays investment dealers and financial institutions a commission
from its own resources of 0.70% of the amount invested, and shareholders who
redeem their Investor A Shares within one year of the date of purchase will be
subject to a 1% contingent deferred sales charge for the purpose of reimbursing
the Distributor for the commission paid.
- 14 -
<PAGE> 20
The initial sales load will not apply to Investor A Shares purchased
by: (i) trust, investment management, advisory and fiduciary accounts managed
or administered by First Interstate Bancorp, its subsidiaries and affiliates,
or the Advisor pursuant to a written agreement; (ii) any person purchasing
Investor A Shares with the proceeds of a distribution from a trust, investment
management, advisory or other fiduciary account managed or administered by
First Interstate Bancorp, its subsidiaries and affiliates, or the Advisor
pursuant to a written agreement; (iii) any person purchasing Investor A Shares
with the proceeds of a redemption from a mutual fund, other than an investment
portfolio offered by the Trust, that was originally purchased with a sales
load, (iv) Furman Selz or any of its affiliates; (v) Trustees or officers of
the Funds; (vi) directors or officers of Furman Selz, the Advisor, or their
affiliates or bona fide employees or former employees of any of the foregoing
who have acted as such for not less than 90 days (including members of their
immediate families and their retirement plans or accounts); or (vii) retirement
accounts or plans for which a depository institution, which is a client or
customer of the Advisor, Furman Selz or PFD Inc. serves as custodian or
trustee, or to any trust, pension, Individual Retirement Account ("IRA"),
spousal IRA, profit-sharing or other benefit plan for such persons so long as
such Investor A Shares are purchased through PFD Inc. The initial sales load
also does not apply to Investor A Shares sold to representatives of selling
brokers and members of their immediate families. In addition, the initial
sales load does not apply to sales to bank trust departments, acting on behalf
of one or more clients, of Investor A Shares having an aggregate value equal to
or exceeding $200,000.
See "Dividends, Distributions and Federal Income Tax," for an
explanation of circumstances in which a sales load paid to acquire Investor A
Shares of a mutual fund may not be taken into account in determining gain or
loss on the disposition of those Investor A Shares.
QUANTITY DISCOUNTS IN THE SALES CHARGES
The following quantity discounts shall be available to: (a) an
individual, his or her spouse, and their children under the age of 21, and any
trust, pension, IRA, spousal IRA, profit sharing or other benefit plan for such
persons; (b) a trustee or other fiduciary of a single trust estate or a single
fiduciary account; (c) a pension, profit-sharing or other employee benefit plan
qualified under Section 401 of the Internal Revenue Code of 1986, and (d)
tax-exempt organizations under Section 501 (c) (3) of the Code.
Right of Accumulation. The schedule of reduced sales charges will be
applicable once the accumulated value of the account has reached $100,000. For
this purpose, the dollar amount of the qualifying concurrent or subsequent
purchase is added to the net asset value of any Investor A Shares of those
investment portfolios of the Trust that are subject to a sales charge and are
owned at the time of such purchase by the investor. The sales charge imposed
on the Investor A Shares being purchased will then be at the rate applicable to
the aggregate value of Investor A Shares owned and to be purchased
- 15 -
<PAGE> 21
by the investor. For example, if the investor held Investor A Shares valued at
$100,000 and purchased an additional $20,000 of Investor A Shares (totalling an
investment of $120,000), the sales charge for the $20,000 purchase would be at
the next lower sales charge on the schedule (i.e., the sales charge for
purchases over $100,000 but less than $250,000). There can be no assurance
that investors will receive the cumulative discounts to which they may be
entitled unless, at the time of placing their purchase order, the investors or
their dealers make a written request for the discount. The cumulative discount
program may be amended or terminated at any time. This particular privilege
does not entitle the investor to any adjustment in the sales charge paid
previously on purchases of Investor A Shares. If the investor knows that he
will be making additional purchases of Investor A Shares in the future, he may
wish to consider executing a Letter of Intent.
Letter of Intent. The schedule of reduced sales charges is also
available to investors who enter into a written Letter of Intent providing for
the purchase, within a 13-month period, of Investor A Shares of a particular
Fund. Investor A Shares of a Fund previously purchased during the 90-day
period prior to the date of receipt by the Fund of the Letter of Intent which
are still owned by the shareholder may also be included in determining the
applicable reduction, provided the shareholder or the dealer notifies the Fund
of such prior purchases.
A Letter of Intent permits an investor to establish a total investment
goal to be achieved by any number of investments over a 13-month period. Each
investment made during the period will receive the reduced sales commission
applicable to the amount represented by the goal as if it were a single
investment. A number of Investor A Shares totaling 5% of the dollar amount of
the Letter of Intent will be held in escrow by the Fund in the name of the
shareholder. The initial purchase under a Letter of Intent must be equal to at
least 5% of the stated investment goal.
The Letter of Intent does not obligate the investor to purchase, or a
Fund to sell, the indicated amount. In the event the Letter of Intent goal is
not achieved within the 13-month period, the investor is required to pay the
difference between the sales charge otherwise applicable to the purchases made
during this period and sales charges actually paid. The Fund is authorized by
the shareholder to liquidate a sufficient number of escrowed Investor A Shares
to obtain such difference. If the goal is exceeded and purchases pass the next
sales charge level, the sales charge on the entire amount of the purchase that
results in passing that level and on subsequent purchases will be subject to
further reduced sales charges in the same manner as set forth under "Right of
Accumulation," but there will be no retroactive reduction of sales charges on
previous purchases. At any time while a Letter of Intent is in effect, a
shareholder may, by written notice to PFD Inc., increase the amount of the
stated goal. In that event, Investor A Shares purchased during the previous
90-day period and still owned by the shareholder will be included in
determining the applicable sales charge reduction. The 5% escrow and minimum
purchase requirements will be applicable to the new stated
- 16 -
<PAGE> 22
goal. Investors electing to purchase Investor A Shares pursuant to a Letter of
Intent should carefully read the application for a Letter of Intent which is
available from the Trust.
EXCHANGE OF INVESTOR SHARES
The Fund offers two convenient ways to exchange Investor Shares in the
Fund for Investor Shares in another investment portfolio of the Trust. Before
engaging in an exchange transaction, a shareholder should read carefully the
Prospectus describing the investment portfolio into which the exchange will
occur, which is available without charge and can be obtained by writing to
Furman Selz, Mutual Fund Department 237 Park Avenue, Suite 910, New York, New
York 10017, or by calling 1-800-662-8417. A shareholder may not exchange
Investor Shares of one portfolio for Investor Shares of another portfolio if
both or either are not qualified for sale in the state of the shareholder's
residence. Investor A shares may only be exchanged for Investor A shares of
another investment portfolio. The minimum amount for an initial exchange is
$500. No minimum is required in subsequent exchanges. The Trust may terminate
or amend the terms of the exchange privilege at any time.
A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by the Trust in good order, plus any applicable sales
charge.
An exchange is taxable as a sale of a security; however, if the Fund
maintains a net asset value of $1.00 per share, no gain or loss would be
realized upon an exchange of Fund shares. Shareholders should receive written
confirmation of the exchange within a few days of the completion of the
transaction.
In the case of transactions subject to an initial sales charge, the
sales charge will be assessed on an exchange of Investor Shares, equal to the
excess of the sales load applicable to the Investor Shares to be acquired over
the amount of any sales load previously paid on the Investor Shares to be
exchanged. No service fee is imposed. See "Dividends, Distributions and
Federal Income Tax" for an explanation of circumstances in which a sales load
paid to acquire Investor Shares of the Fund may not be taken into account in
determining gain or loss on the disposition of those Investor Shares.
Any applicable CDSC payable upon redemption of shares exchanged will
be that imposed by the Fund in which shares were initially purchased and will
be calculated from the first day of the month after the initial purchase,
excluding the time shares were held in a money market fund.
- 17 -
<PAGE> 23
In addition, Institutional Shares of the Fund may be exchanged for
Investor Shares of the Fund in connection with the distribution of assets held
in a qualified trust, agency or custodial account maintained with the trust
department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares (not described in this prospectus) of the Fund if the
shares are to be held in such a qualified trust, agency or custodial account.
These exchanges are made without a sales charge at the net asset value of the
respective share classes.
Exchange by Mail. To exchange Investor Shares of the Fund by mail,
simply send a letter of instruction to Furman Selz. The letter of instruction
must include: (i) your account number, (ii) the Fund (and class) from and the
Fund into which you wish to exchange your investment; (iii) the dollar or share
amount you wish to exchange; and (iv) the signatures of all registered owners
or authorized parties. All signatures must be guaranteed by an eligible
guarantor institution including a member of a national securities exchange or
by a commercial bank or trust company, broker-dealers, credit unions and
savings associations.
Exchange by Telephone. To exchange Investor Shares of the Fund by
telephone, or if you have any questions, simply call the Trust at
1-800-662-8417. You should be prepared to give the telephone representative
the following information: (i) your account number, social security number and
account registration; (ii) the name of the portfolio (and class) from and the
portfolio into which you wish to transfer your investment; and (iii) the dollar
or share amount you wish to exchange. The conversation may be recorded to
protect you and the Fund. Telephone exchanges are available only if the
shareholder so indicates by checking the "yes" box on the Purchase Application.
See "Redemption of Investor Fund Shares -- By Telephone" for a discussion of
telephone transactions generally.
REDEMPTION OF INVESTOR SHARES
Shareholders may redeem their Investor Shares, in whole or in part, on
any Business Day. Investor Shares will be redeemed at the net asset value next
determined after a redemption request in good order has been received and
accepted by the Trust. (See "Fund Share Valuation.") A redemption may be a
taxable transaction on which gain or loss may be recognized. Generally,
however, gain or loss is not expected to be recognized on a redemption of
shares of the Fund because the Fund seeks to maintain a net asset value of
$1.00 per share.
Where the Investor Shares to be redeemed have been purchased by check,
the Trust may delay payment of the redemption proceeds until the purchasing
check has cleared, which may take up to 15 days. Shareholders may avoid this
delay by investing through wire transfers of Federal funds. During the period
prior to the time the Investor Shares are redeemed, dividends on the Investor
Shares will continue to accrue and be
- 18 -
<PAGE> 24
payable and the shareholder will be entitled to exercise all other beneficial
rights of ownership.
Once the Investor Shares are redeemed, the Fund will ordinarily send
the proceeds by check to the shareholder at the address of record on the next
Business Day. The Fund may, however, take up to seven days to make payment.
This will not be the customary practice. Also, if the New York Stock Exchange
is closed (or when trading is restricted) for any reason other than the
customary weekend or holiday closing or if an emergency condition as determined
by the SEC merits such action, the Fund may suspend redemptions or postpone
payment dates.
To ensure acceptance of your redemption request, it is important to
follow the procedures described below. Although the Trust has no present
intention to do so, it reserves the right to refuse or to limit the frequency
of any telephone or wire redemptions. Of course, it may be difficult to place
orders by telephone during periods of severe market or economic change, and a
shareholder should consider alternative methods of communications, such as
couriers or U.S. mail. The services offered by the Fund may be modified or
terminated at any time. If the Fund terminates any particular service, they
will do so only after giving written notice to shareholders.
You may redeem your Investor Shares using any of the following
methods:
Through an Authorized Broker, Investment Advisor or Service
Organization. You may redeem your Investor Shares by contacting your broker or
investment advisor and instructing him or her to redeem your Investor Shares.
He or she will then contact PFD Inc. and place a redemption trade on your
behalf. He or she may charge you a fee for this service.
By Mail. You may redeem your Investor Shares by sending a letter
directly to the Fund. To be accepted, a letter requesting redemption must
include: (i) the Fund name and account registration from which you are
redeeming Investor Shares; (ii) your account number, (iii) the dollar or share
amount and class of shares to be redeemed; (iv) the signatures of all
registered owners; and (v) a signature guarantee by any eligible guarantor
institution including a member of a national securities exchange or a
commercial bank or trust company, broker-dealers, credit unions and savings
associations. Corporations, partnerships, trusts or other legal entities will
be required to submit additional documentation.
By Telephone. You may redeem your Investor Shares by calling the Fund
toll free at 1-800-662-8417. You should be prepared to give the telephone
representative the following information: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount and class of shares to be
redeemed. The conversation may be recorded to protect you and the Fund.
Telephone redemptions are available only if the shareholder
- 19 -
<PAGE> 25
so indicates by checking the "yes" box on the Purchase Application. The Fund
employs reasonable procedures to confirm that instructions communicated by
telephone are genuine. If the Fund fails to employ such reasonable procedures,
they may be liable for any loss, damage or expense arising out of any telephone
transactions purporting to be on a shareholder's behalf. In order to assure
the accuracy of instructions received by telephone, the Fund requires some form
of personal identification prior to acting upon instructions received by
telephone, record telephone instructions and provide written confirmation to
investors of such transactions.
By Wire. You may redeem your Investor Shares by contacting the Fund
by mail or telephone and instructing them to send a wire transmission to your
personal bank.
Your instructions should include: (i) your account number, social
security number and account registration; (ii) the Fund name from which you are
redeeming Investor Shares; and (iii) the amount and class of shares to be
redeemed. Wire redemptions can be made only if the "yes" box has been checked
on your Purchase Application, and a copy of a void check from the account where
proceeds are to be wired is attached to the Purchase Application. Your bank
may charge you a fee for receiving a wire payment on your behalf.
The above-mentioned services "By Telephone" and "By Wire" are not
available for IRAs and trust clients of an affiliate of First Interstate
Bancorp.
Systematic Withdrawal Plan. An owner of $10,000 or more of Investor
Shares of the Fund may elect to have periodic redemptions from his or her
account to be paid on a monthly, quarterly, semi-annual or annual basis. The
minimum periodic payment is $100. A sufficient number of Investor Shares to
make the scheduled redemption will normally be redeemed on the date selected by
the shareholder. Depending on the size of the payment requested and
fluctuation in the net asset value, if any, of the Investor Shares redeemed,
redemptions for the purpose of making such payments may reduce or even exhaust
the account. A shareholder may request that these payments be sent to a
predesignated bank or other designated party. Capital gains and dividend
distributions paid to the account will automatically be reinvested at net asset
value on the distribution payment date.
Redemption of Small Accounts. Due to the disproportionately higher
cost of servicing small accounts, the Fund reserves the right to redeem, on not
less than 30 days' notice, an account in the Fund that has been reduced by a
shareholder to $500 or less. However, if during the 30-day notice period the
shareholder purchases sufficient Investor Shares to bring the value of the
account above $500, this restriction will not apply.
Redemption in Kind. All redemptions of Investor Shares of the Fund
shall be made in cash, except that the commitment to redeem Investor Shares in
cash extends only to redemption requests made by each shareholder of the Fund
during any 90-day
- 20 -
<PAGE> 26
period of up to the lesser of $250,000 or 1% of the net asset value of that
Fund at the beginning of such period. This commitment is irrevocable without
the prior approval of the SEC and is a fundamental policy of the Fund that may
not be changed without shareholder approval. In the case of redemption
requests by shareholders in excess of such amounts, the Board of Trustees
reserves the right to have the Fund make payment, in whole or in part, in
securities or other assets, in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In this event, the securities would be valued in the
same manner as the securities of that Fund are valued. If the recipient were
to sell such securities, he or she would incur brokerage charges.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX
The Fund intends to qualify annually and to elect to be treated as a
regulated investment company pursuant to the provisions of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). By so qualifying and
electing, the Fund generally will not be subject to Federal income tax to the
extent that it distributes investment company taxable income and net capital
gains in the manner required under the Code.
The Fund intends to distribute to its shareholders substantially all
of its investment company taxable income (which includes, among other items,
dividends and interest and the excess, if any, of net short-term capital gains
over net long-term capital losses). The Fund will declare distributions of
investment company income daily and pay those dividends monthly. The Fund
intends to distribute, at least annually, substantially all net capital gain
(the excess of net long-term capital gains over net short-term capital losses),
if any. In determining amounts of capital gains to be distributed, any capital
loss carryovers from prior years will first be applied against capital gains.
Distributions will be paid in additional shares of the Fund based on
the net asset value at the close of business on the payment date of the
distribution, unless the shareholder elects in writing, which is received by
Furman Selz not less than five full business days prior to the record date, to
receive such distributions in cash. Dividends declared in, and attributable
to, the preceding month will be paid within five business days after the end of
each month.
Shares purchased will begin earning dividends on the day the purchase
order is executed and shares redeemed will earn dividends through the previous
day. Net investment income for a Saturday, Sunday or a holiday will be
declared as a dividend on the previous business day. Investors who redeem all
or a portion of Fund shares prior to a dividend payment date will be entitled
on the next dividend payment date to all dividends declared but unpaid on those
shares at the time of their redemption.
- 21 -
<PAGE> 27
Distributions of investment company taxable income (regardless of
whether derived from dividends, interest or net short-term capital gains) will
be taxable to shareholders as ordinary income. Distributions of net long-term
capital gains designated by the Fund as capital gain dividends will be taxable
as long-term capital gains, regardless of how long a shareholder has held his
Fund shares. Distributions are taxable in the same manner whether received in
additional shares or in cash.
Earnings of the Fund not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To prevent imposition of this tax, the Fund intends to comply with
this distribution requirement.
A distribution will be treated as paid on December 31 of a calendar
year if it is declared by the Fund during October, November, or December of
that year to shareholders of record in such a month and paid by the Fund during
January of the following calendar year. Such distributions will be treated as
received by shareholders in the calendar year in which the distributions are
declared, rather than the calendar year in which the distributions are
received.
The dividends paid by the Fund are not expected to qualify for the
dividends-received deduction available to corporations.
The Fund may be required to withhold for Federal income tax ("backup
withholding") 31% of the distributions and the proceeds of redemptions payable
to shareholders who fail to provide a correct taxpayer identification number or
to make required certifications, or where the Fund or shareholder has been
notified by the Internal Revenue Service that the shareholder is subject to
backup withholding. Most corporate shareholders and certain other shareholders
specified in the Code are exempt from backup withholding. Backup withholding
is not an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.
Shareholders will be notified annually by the Trust as to the Federal
tax status of distributions made by the Fund. Depending on the residence of
the shareholder for tax purposes, distributions also may be subject to state
and local taxes, including withholding taxes. Foreign shareholders may, for
example, be subject to special withholding requirements. Special tax
treatment, including a penalty on certain pre-retirement distributions, is
accorded to accounts maintained as IRAs. Shareholders should consult their own
tax advisors as to the Federal, state and local tax consequences of ownership
of shares of the Fund in their particular circumstances.
Under certain circumstances, the sales charge incurred in acquiring
shares of a Fund may not be taken into account in determining the gain or loss
on the disposition of those shares. This rule applies where shares of a Fund
are exchanged within 90 days after the date they were purchased and new shares
of the Fund or of another investment
- 22 -
<PAGE> 28
portfolio of the Trust are acquired without a sales charge or at a reduced
sales charge. In that case, the gain or loss recognized on the exchange will
be determined by excluding from the tax basis of the shares exchanged all or a
portion of the sales charge incurred in acquiring those shares. This exclusion
applies to the extent that the otherwise applicable sales charge with respect
to the newly acquired shares is reduced as a result of having incurred a sales
charge initially. The portion of the sales charge affected by this rule will
be treated as a sales charge paid for the new shares.
DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES
U.S. Treasury Obligations. U.S. Treasury securities are obligations
issued by the U.S. Treasury. U.S. Treasury bills, which have a maturity of up
to one year, are direct obligations of the United States and are the most
frequently issued marketable U.S. Government security. The U.S. Treasury also
issues securities with longer maturities in the form of notes and bonds.
Stripped Obligations. The Fund may invest in U.S. Treasury
obligations offered under the STRIPS or CUBES programs. Such obligations may
represent future interest or principal payments. These stripped securities are
direct obligations of the U.S. Government and clear through the Federal
Reserve book-entry system. Stripped securities are issued at a discount to
their face value and may exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors.
Securities Issued by Other Investment Companies. The Fund may invest
in securities issued by other investment companies within the limits prescribed
by the 1940 Act. The Fund currently intends to limit its investments so that,
as determined immediately after a securities purchase is made: (a) not more
than 5% of the value of its total assets will be invested in the securities of
any one investment company; (b) not more than 10% of the value of its total
assets will be invested in the aggregate in securities of investment companies
as a group; (c) not more than 3% of the outstanding voting stock of any one
investment company will be owned by the Fund; and (d) not more than 10% of the
outstanding voting stock of any one investment company will be owned in the
aggregate by the Fund and other investment companies advised by the Advisor or
any other affiliate of First Interstate Bancorp. As a shareholder of another
investment company, the Fund would bear, along with other shareholders, its pro
rata portion of the expenses of such other investment company, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that each Fund bears directly in connection with its own operations,
and may represent a duplication of fees to shareholders of the Fund. The Fund
may only invest in investment companies which restrict their portfolio
investments solely to the same investment instruments that are permissible
investments for the Fund.
- 23 -
<PAGE> 29
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental investment restrictions that
may be changed only with the approval of a majority of the Fund's outstanding
shares. The following description summarizes several of the Fund's fundamental
restrictions, which are set forth in full in the SAI.
The Fund may not:
1. Purchase securities (except U.S. Government securities and
repurchase agreements collateralized by such securities) if
more than 5% of its total assets at the time of purchase will
be invested in securities of any one issuer, except that up to
25% of the Fund's total assets may be invested without regard
to this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.
3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.
4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.
If a percentage restriction on the investment or use of assets set
forth in this Prospectus is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing values will not be
considered a violation, however, the Fund will not at any time have more than
10% of its respective net assets invested in illiquid securities.
OTHER INFORMATION
CAPITALIZATION
Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Fund are fully paid,
non-assessable and freely transferable.
The Board of Trustees has authorized the issuance of five classes of
shares in the Fund -- Investor, Investor A Shares, Service Shares and
Institutional Shares. Each share of the Fund represents an equal proportionate
interest in the Fund with other shares of the same class and is entitled to
cash dividends and distributions earned on such shares as are declared in the
discretion of the Board of Trustees.
- 24 -
<PAGE> 30
The Fund's Institutional and Service Shares and Investor Classes of
Shares bear their pro rata portion of all operating expenses paid by the Fund
except for the distribution payments, Service Organization fees and other
"class" expenses that are allocated to a particular share class. The Board of
Trustees has not approved a Distribution Plan with respect to Institutional
Shares. The Fund may pay fees to Service Organizations in amounts up to an
annual rate of 0.25% of the daily net asset value of the Fund's outstanding
Institutional Shares owned by shareholders with whom a Service Organization has
a servicing relationship. Because of the "class expenses," the performance of
the Fund's Institutional and Service Shares is expected to be higher than the
performance of its Investor Classes of Shares. The Trust offers various
services and privileges in connection with its Investor Shares that are not
offered in connection with its Institutional or Service Shares, including an
automatic investment plan, automatic withdrawal plan and, with respect to
certain portfolios, checkwriting. For information regarding the Fund's
Institutional and Service Shares Investor B Shares, contact Furman Selz at
1-800-662-8417 or your Service Organization.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees or officers of the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the Trust. The Declaration of
Trust also provides for indemnification out of the property of the Fund of any
shareholder held personally liable solely by reason of being or having been a
shareholder of the Fund. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Fund
itself would be unable to meet its obligations and should be considered remote.
VOTING
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Fund's shareholders, but in the event that a
special meeting is held, shareholders of each portfolio offered by the Trust
will be entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of the Fund's shares. Shareholders of a class will have exclusive voting
rights with respect to the distribution plan applicable to that class of
shares. Voting rights are not cumulative.
- 25 -
<PAGE> 31
The Declaration of Trust provides that the holders of not less than
two-thirds of the outstanding shares of the Trust may remove a person serving
as Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust and in connection with such meeting to comply with the shareholders'
communications provisions of Section 16 (c) of the 1940 Act.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of the Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of the Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of the Fund. For purposes of the 1940 Act, any person
who owns either directly or through one or more controlled companies more than
25 percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.
PERFORMANCE INFORMATION
The Fund may, from time to time, include yield data in advertisements
or reports to shareholders or prospective investors. The methods used to
calculate the yields of the Fund are mandated by the SEC. Yield and Total
Return are calculated separately for each class of share.
Quotations of "yield" for the Fund will be based on the income
received by a hypothetical investment (less a pro-rata share of Fund expenses)
over a particular seven-day period, which is then "annualized" (i.e., assuming
that the seven-day yield would be received for 52 weeks, stated in terms of an
annual percentage return on the investment).
"Effective yield" for the Fund is calculated in a manner similar to
that used to calculate yield, but includes the compounding effect of earnings
on reinvested dividends.
Quotations of yield reflect only the performance of the Fund during
the particular period on which the calculations are based. Yield and effective
yield for the Fund will vary based on changes in market conditions, the level
of interest rates and the level of the expenses of the Fund and no reported
performance figure should be considered an indication of performance which may
be expected in the future.
For purposes of comparison, the Fund may, from time to time, quote
performance information from IBC/Donoghue's MONEY FUND REPORT of Holliston,
Massachusetts 01746. IBC/Donoghue's MONEY MARKET AVERAGE is a widely
- 26 -
<PAGE> 32
recognized index of money market fund performance. Figures reflect average
yields of all taxable money funds included in IBC/Donoghue's index.
IBC/Donoghue's 100% U.S. TREASURY MONEY FUND AVERAGE is a component of this
average and reflects average yields of all taxable U.S. Treasury money funds.
Any performance information should be considered in light of the Fund's
investment objective and policies, characteristics and quality of the Fund and
the market conditions during the time period indicated, and should not be
considered to be representative of what may be achieved in the future. For a
description of the methods used to determine yield for the Fund, see "Other
Information -- Performance Information" in the SAI.
ACCOUNT SERVICES
All transactions in shares of the Fund will be reflected in a
statement for each shareholder. In those cases where a Service Organization or
its nominee is shareholder of record of shares purchased for its customer, the
Fund has been advised that the statement may be transmitted to the customer at
the discretion of the Service Organization.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.
General and Account Information: (800) 662-8417.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUND OR BY ITS DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED,
ENDORSED OR OTHERWISE SUPPORTED BY FIRST INTERSTATE BANCORP OR ITS AFFILIATES,
AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- 27 -
<PAGE> 33
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258
ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169
DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 34
PACIFICA FUNDS TRUST
(INVESTOR B SHARES)
237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")
FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")
PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")
Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Investor B Shares of the following portfolio (the
"Fund"):
- Pacifica 100% U.S. Treasury Money Market Fund
This Prospectus sets forth concisely the information a prospective
investor should know before investing in the Fund and should be read and
retained for information about the Fund. A Statement of Additional Information
(the "SAI"), dated February __, 1996 (which may be revised from time to time),
containing additional and more detailed information about the Fund, has been
filed with the Securities and Exchange Commission ("SEC") and is hereby
incorporated by reference into this Prospectus. It is available without charge
and can be obtained by writing or calling the Fund at the address or
information number printed above.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY FIRST INTERSTATE OR OTHER BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996.
<PAGE> 35
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FEE TABLE - INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . 6
THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
INVESTMENT POLICIES AND PRACTICES OF THE FUND . . . . . . . . . . . . 8
RISKS OF INVESTING IN THE FUND . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . 9
FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . . . . . . 13
MINIMUM PURCHASE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . 13
PURCHASE OF INVESTOR B SHARES . . . . . . . . . . . . . . . . . . . . 13
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . . . . . . . 15
PRICING OF INVESTOR B SHARES . . . . . . . . . . . . . . . . . . . . 15
CONVERSION FEATURE -- INVESTOR B SHARES . . . . . . . . . . . . . . . 17
EXCHANGE OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . 18
REDEMPTION OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . 19
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . . . . . . 22
DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . . . . . . 24
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . 25
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
- 2 -
<PAGE> 36
HIGHLIGHTS
INVESTMENT OBJECTIVES AND POLICIES OF THE FUND
The investment objective of the 100% U.S. Treasury Securities Money
Market Fund is to seek as high a level of current income as is consistent with
liquidity and maximum safety of principal. The Fund pursues this objective by
investing exclusively in obligations of the U.S. Treasury which are backed by
the full faith and credit of the U.S. Government as to payment of principal and
interest and which have remaining maturities not exceeding 397 days.
For additional information concerning the investment policies,
practices and risk considerations of the Fund, see "The Fund," "Investment
Policies and Practices of the Fund" and "Risks of Investing in the Fund" in
this Prospectus.
RISKS OF INVESTING IN THE FUND
The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund may not achieve as high a level of current income
as other funds that do not limit their investments to the high quality U.S.
Treasury securities in which the Fund invests. The Fund's performance will
fluctuate based on many factors, including the quality of the instruments in
the Fund's investment portfolio, national and international economic
conditions, interest rate levels and general market conditions.
There is no assurance that the Fund will achieve its investment
objective.
MANAGEMENT OF THE FUND
First Interstate Capital Management, Inc. acts as investment advisor
to the Fund. For its services, the Advisor is entitled to receive a fee from
the Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Investor Shares" and "Management of the Fund" in this Prospectus.
Furman Selz acts as administrator and sponsor to the Fund. Furman
Selz provides certain management and administrative services to the Fund, and
is entitled to receive a fee from the Fund at an annual rate based on the
Fund's average daily net assets. PFD Inc. distributes the Fund's shares and
may be reimbursed for certain of its distribution-related expenses.
Fees and expenses charged to the Fund are outlined on page __ of this
Prospectus.
- 3 -
<PAGE> 37
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS
Purchase orders for the Fund received by your broker or Service
Organization in proper order by 4:15 p.m., Eastern time, and transmitted to the
Trust prior to 5:00 p.m. Eastern time will become effective that day.
<TABLE>
<S> <C> <C>
- MINIMUM INITIAL INVESTMENT . . . . . . . . . . . . . . . $500
- MINIMUM INITIAL INVESTMENT FOR IRAS . . . . . . . . . . $250
- MINIMUM SUBSEQUENT INVESTMENT . . . . . . . . . . . . . $ 50
</TABLE>
- Investor B Shares are sold without an initial sales charge but
are subject to a contingent deferred sales charge or CDSC
(declining from 5% to zero of the lower of the amount invested
or the redemption proceeds) which will be imposed on certain
redemptions made within six years of purchase. Investor B
Shares are subject to on-going distribution fees which are
paid by the Fund. Investor B Shares will automatically
convert to Investor A Shares (not described in this
Prospectus), which are subject to lower distribution fees,
approximately eight years after purchase.
Shareholders may exchange Investor Shares of the same class between
Funds by telephone or mail.
<TABLE>
<S> <C> <C>
- MINIMUM INITIAL EXCHANGE . . . . . . . . . . . . . . . . $500
(No minimum for subsequent exchanges.)
</TABLE>
Shareholders may redeem Investor Shares by telephone, mail or wire.
- The Fund reserves the right upon not less than 30 days' notice
to redeem involuntarily all the Investor Shares in an
investor's account which have an aggregate value of $500 or
less for any particular Fund.
(The above redemption services are not available for IRAs and trust
clients of First Interstate Bancorp and its affiliates.)
All dividends and distributions will be automatically reinvested at
net asset value in additional Investor Shares of the Fund unless cash payment
is requested.
- Distributions for the Fund are paid monthly.
- 4 -
<PAGE> 38
For additional information on how to purchase and redeem Investor
Shares of the Fund, see "Purchase of Investor Shares," "Exchange of Investor
Shares" and "Redemption of Investor Shares."
- 5 -
<PAGE> 39
FUND EXPENSES
The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Investor shareholder of the Fund.
The information is based on estimated amounts for the initial fiscal year of
the Fund.
FEE TABLE - INVESTOR SHARES
<TABLE>
<CAPTION>
Class B
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . . None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) . . . . . . . . . . None
Deferred Sales Load (as a percentage of
redemption proceeds) . . . . . . . . . . . . . . . . . . . . . . . 5% during first year, decreasing to
4% during the second and third
years and decreasing by 1% each
year thereafter until 0% in the
seventh year.+
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . .30%
----
12b-1 Fees* . . . . . . . . . . . . . . . . . . . . . . . . 1.00%
-----
Other Expenses (after waivers)** . . . . . . . . . . . . . . . . . . . .25%
----
TOTAL FUND OPERATING EXPENSES:
(after waivers)*** . . . . . . . . . . . . . . . . . . . . . . . . 1.55%
-----
</TABLE>
- --------------------
* Under rules of the National Association of Securities Dealers, Inc.
(the "NASD"), a 12b-1 fee may be treated as a sales charge for certain
purposes. Because a 12b-1 fee is an annual fee charged against the
assets of the Fund, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the NASD. See
"Management of the Fund -- The Sponsor and Distributor."
** Other Expenses (before waivers) would be ____% and are estimated.
*** Total Fund Operating Expenses (before waivers) would be ____%.
+ Class B Shares will automatically convert to Class A Shares
approximately eight years after purchase.
- 6 -
<PAGE> 40
The purpose of this table is to assist shareholders in understanding
the various costs and expenses that an investor in the Fund's Investor Shares
will bear. The table does not reflect any charges that may be imposed by a
First Interstate Bank or other institutions directly on their customer accounts
in connection with investments in the Fund.
EXAMPLE:*
<TABLE>
<S> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% gross annual return and (2) redemption at
the end of each time period: 1 year 3 years
------ -------
$ $
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% gross annual return and (2) assuming no
redemption at the end of each time period: 1 year 3 years
------ -------
$ $
</TABLE>
- -------------------
* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5%
ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE
GREATER OR LESS THAN THE ASSUMED AMOUNT.
- 7 -
<PAGE> 41
THE FUND
The Fund is a portfolio of a Massachusetts business trust, Pacifica
Funds Trust, organized under the laws of the Commonwealth of Massachusetts as
an open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Fund and elects the officers of the
Fund.
INVESTMENT POLICIES AND PRACTICES OF THE FUND
The investment objective of the Fund is to provide investors with as
high a level of current income as is consistent with liquidity and maximum
safety of principal. The SAI contains the specific investment restrictions
which govern the Fund's investments. Those restrictions and the Fund's
investment objectives are fundamental policies, which means that they may not
be changed without a majority vote of shareholders of the Fund. Except for the
objectives and those restrictions specifically identified as fundamental all
other investment policies and practices described in this Prospectus and in the
SAI are not fundamental, which means that the Board of Trustees may change them
without shareholder approval. The Advisor selects investments and makes
investment decisions based on the investment objective and policies of the
Fund.
The Advisor selects only those U.S. dollar-denominated debt
instruments for the Fund which meet the high quality, credit risk standards
established by the Fund's Board of Trustees. The Fund will not maintain a
dollar-weighted average portfolio maturity that exceeds 90 days nor purchase
any instrument with a remaining maturity of greater than 397 calendar days.
The Fund restricts its investment to U.S. Treasury securities.
Securities issued by the U.S. Treasury have historically involved little risk
of loss of principal if held to maturity. It should be noted that neither the
United States Government, nor any agency or instrumentality thereof, has
guaranteed, sponsored or approved the Fund or its shares. Generally,
securities in which the Fund invests will not earn as high a yield as
securities of longer maturity and/or of lesser quality which are more subject
to market volatility.
The types of securities and investment practices used by the Fund are
described in greater detail under the section "Description of Securities and
Investment Practices" on pages _______ of this Prospectus.
RISKS OF INVESTING IN THE FUND
The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund's performance will fluctuate based on many factors,
including the quality of the instruments in the Fund's investment portfolio,
national and international economic conditions, interest rate levels and
general market conditions.
- 8 -
<PAGE> 42
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the direction
of the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N.
Hankin, John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer.
Information about the Trustees, as well as the Fund's executive officers, may
be found in the SAI under the heading "Management Trustees and Officers."
THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.
First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Fund and
continuously reviews, supervises and administers the Fund's investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Fund's investments directly with brokers and dealers selected by it in its
discretion.
FICM is a wholly-owned subsidiary of First Interstate Bank of
California, which is the largest banking subsidiary of First Interstate
Bancorp, a multi-bank holding company. First Interstate Bancorp provides
financial products and services marketed at the local level to nearly five
million households in over 500 communities in 13 western states.
For the advisory services it provides to the Fund, FICM is entitled to
receive from the Fund fees, payable monthly, at the annual rate of 0.30% of the
first $500 million of the Fund's average daily net assets, 0.25% of the next
$500 million of the Fund's average daily net assets, and 0.20% of the Fund's
average daily net assets in excess of $1 billion.
THE SPONSOR AND DISTRIBUTOR
Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Fund. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust; however, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.
Under a Distribution Plan (the "Plan") adopted by the Fund for its
Investor B Shares, the Fund may pay directly or reimburse PFD Inc. monthly a
fee of 1.00% per annum of average daily net assets as compensation for services
and expenses of PFD Inc. in connection with the distribution of Investor B
Shares of the Fund. These costs and expenses include (i) advertising by radio,
television, newspapers, magazines, brochures, sales literature, direct mail or
any other form of advertising; (ii) expenses of sales
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<PAGE> 43
employees or agents of PFD Inc., including salary, commissions, travel and
related expenses; (iii) payments to broker-dealers and financial institutions
for services in connection with the distribution of Investor Shares, including
sales commissions and fees calculated with reference to the average daily net
asset value of Investor Shares held by shareholders who have a brokerage or
other service relationship with the broker-dealer or other institution
receiving such fees; (iv) costs of printing prospectuses and other materials to
be given or sent to prospective investors; and (v) such other similar services
as the Fund determines to be reasonably calculated to result in the sale of
Investor Shares of the Fund. The Fund will pay all costs and expenses in
connection with the preparation, printing and distribution of prospectuses to
current shareholders and the operation of its Plan, including related legal and
accounting fees. Under the Plan for each class of Investor Shares, up to .25
of 1% of the average daily net assets of the respective classes may be used to
pay for personal service and/or maintenance of shareholder accounts. The
distribution fee and contingent deferred sales charge of one class will not be
used to subsidize the sale of another class. The Fund will not be liable for
distribution expenditures made by PFD Inc. in any given year in excess of the
maximum annual amount payable under the Plan for that Fund.
PFD Inc. may from time to time pay a bonus or other incentive to
dealers which employ registered representatives who sell a minimum dollar
amount of Investor Shares of the Fund and/or other funds distributed by Furman
Selz or PFD Inc. during a specific period of time. Such bonus or other
incentive will take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States, or other bonuses, such as gift certificates or the cash
equivalent of such bonuses. PFD Inc. has established such a special
promotional incentive program with First Interstate Securities, Inc.
PFD Inc. receives any contingent deferred sales charge paid on
redemptions on Investor B shares.
ADMINISTRATIVE SERVICES
The Fund has also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Fund's operations including: (i)
general supervision of the operation of the Fund including coordination of the
services performed by the Fund's investment advisor, transfer agent, custodian,
independent accountants and legal counsel, regulatory compliance, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and preparation of proxy statements
and shareholder reports for the Fund; (ii) general supervision relative to the
compilation of data required for the preparation of periodic reports
distributed to the Fund's Officers and Board of Trustees; and (iii) furnishing
office space and certain facilities required for conducting the business of the
Fund. For these services, Furman
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<PAGE> 44
Selz is entitled to receive a fee, payable monthly, at the annual rate of 0.15%
of the average daily net assets of the Fund. Pursuant to a Services Agreement
with the Trust, Furman Selz assists the Trust with certain transfer and
dividend disbursing agent functions and receives a fee of $15.00 per account
per year plus out-of-pocket expenses. Pursuant to the Fund Accounting
Agreement with the Trust, Furman Selz assists the Trust in calculating net
asset values and provides certain other accounting services for the Fund for an
annual fee of $30,000 per Fund plus out-of-pocket expenses.
SERVICE ORGANIZATIONS
Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Fund's Institutional
Shares, such as maintaining shareholder accounts and records. The Fund may pay
fees to Service Organizations (which vary depending upon the services provided)
in amounts up to an annual rate of 0.25% of the average daily net asset value
of the outstanding Investor Shares of the Fund owned by shareholders with whom
a Service Organization has a servicing relationship. These fees will be home
entirely by the Fund's Investor Shares.
Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest a
specified amount in the Fund or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Fund. Each Service Organization has agreed to
transmit to its clients a schedule of any such fees. Shareholders using
Service Organizations are urged to consult with them regarding any such fees or
conditions.
The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Fund and alternative means for continuing the
servicing of such shareholders would be sought. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
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<PAGE> 45
OTHER EXPENSES
The Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz, PFD Inc. or the Advisor. The costs borne
by the Fund include legal and accounting expenses; Trustees' fees and expenses;
insurance premiums; custodian and transfer agent fees and expenses; expenses
incurred in acquiring or disposing of the Fund's portfolio securities; expenses
of registering and qualifying the Fund's shares for sale with the SEC and with
various state securities commissions; expenses of obtaining quotations on the
Fund's portfolio securities and pricing of the Fund's shares; expenses of
maintaining the Fund's legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. The Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a
five-year period from the commencement of the Fund's operations. See
"Management" in the SAI for additional information on expenses borne by the
Fund. Trust expenses directly attributable to a particular Fund are charged to
that Fund, and expenses attributable to a particular class of shares of the
Fund (such as Service Organization fees) are charged to that class. Other
expenses are allocated proportionately among all of the investment portfolios
in the Trust in relation to the net assets of each portfolio or by other means
deemed fair and equitable by the Board of Trustees.
PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Fund's
accounts with brokers or dealers selected by it in its discretion.
In effecting purchases and sales of portfolio securities for the
account of the Fund, the Advisor will seek the best execution of the Fund's
orders. Purchases and sales of debt securities are generally placed by the
Advisor with primary market makers for these securities on a net basis, i.e.,
without any brokerage commission being paid by the Fund. Trading does,
however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made which will include an underwriting
fee paid to the underwriter. Broker-dealers are selected on the basis of a
variety of factors such as reputation, capital strength, size and difficulty of
the order, sale of Fund shares by the broker-dealer, and research provided to
the Advisor by the broker-dealer. The Advisor may cause the Fund to pay
commissions higher than another broker-dealer would have charged if the Advisor
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Advisor.
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<PAGE> 46
FUND SHARE VALUATION
The net asset value of each class of shares of the Fund is calculated
at 4:15 p.m. (Eastern time), Monday through Friday, on each day the New York
Stock Exchange is open for trading (a "Business Day"), which excludes the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share for each class of shares is computed by dividing
the value of the Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class. All expenses, including fees paid to the Advisor, Furman Selz
and PFD Inc., are accrued daily and taken into account for the purpose of
determining the net asset value.
The Fund uses the amortized cost method to value its portfolio
securities and seeks to maintain a constant net asset value of $1.00 per share,
although there may be circumstances under which this goal cannot be achieved.
The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless
of the impact of fluctuating interest rates on the market value of the
security. See the SAI for a more complete description of the amortized cost
method.
MINIMUM PURCHASE REQUIREMENTS
The minimum initial investment in the Fund is $500, except that the
minimum is $250 for an IRA. Any subsequent investments must be at least $50,
including an IRA investment. All initial investments should be accompanied by
a completed Purchase Application. A separate application is required for IRA
investments.
PURCHASE OF INVESTOR B SHARES
The following purchase procedures do not apply to certain trust or
other accounts that are managed by First Interstate Bancorp, its subsidiaries
or affiliates. An account customer should consult his or her account officer
for proper instructions.
All funds received by the Trust are invested in full and fractional
Investor Shares of the Fund. Certificates for Investor B Shares are not
issued. Furman Selz maintains records of each shareholder's holdings of Fund
shares, and each shareholder receives a statement of transactions, holdings and
dividends. The Fund reserves the right to reject any purchase.
An investment may be made using any of the following methods:
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<PAGE> 47
Through an Authorized Broker, Investment Advisor or Service
Organization. Investor B Shares are available to new and existing shareholders
through authorized brokers, investment advisors and Service Organizations. To
make an investment using this method, simply complete a Purchase Application
and contact your broker, investment advisor or Service Organization with
instructions as to the amount (and class of shares) you wish to invest. Your
broker will then contact the Fund to place the order on your behalf on that
day.
Orders received by your broker or Service Organization for the Fund in
proper order prior to the determination of the Fund's net asset value and
transmitted to the Trust prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Brokers
who receive orders are obligated to transmit them promptly. You should receive
written confirmation of your order within a few days of receipt of instructions
from your broker.
By Wire. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the Fund. In most cases, your bank will either be a member of the
Federal Reserve Banking System or have a relationship with a bank that is.
Your bank will normally charge you a fee for handling the transaction. To
purchase Investor Shares by a Federal funds wire, please first contact Furman
Selz Mutual Funds Client Services. They will establish a record of information
for the wire to ensure its correct processing. You can reach the Wire Desk at
1-800-662-9417.
Have your bank wire funds using the following instructions:
Fiduciary Trust Company
Kansas City, MO 64105
ABA #1010-0362-1
Account #7527950
Further Credit to: Fund Name
As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way.
When new accounts are established by wire, the distribution options will be set
to reinvest and the social security or tax identification number ("TIN") will
not be certified until a signed application is received. Completed
applications should be forwarded immediately to the Fund. With the Purchase
Application, the shareholder can specify other distribution options and add any
special features offered by the Fund. Should any dividend distributions or
redemptions be paid before the TIN is certified, they will be subject to 31%
Federal tax withholding.
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<PAGE> 48
Automatic Investment Program. An eligible shareholder may also
participate in the Pacifica Automatic Investment Program, an investment plan
that automatically debits money from the shareholder's bank account and invests
it in the Fund through the use of electronic funds transfers or automatic bank
drafts. Shareholders may elect to make subsequent investments by transfers of
a minimum of $50 on either the fifth or twentieth day of each month into their
established Fund accounts. Contact the Trust at 1-800-662-8417 for more
information about the Pacifica Automatic Investment Program.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund may be used as a funding medium for IRAs. Investor Class A and B
Shares may also be purchased for IRAs established with an affiliate of First
Interstate Bancorp or other authorized custodians. In addition, an IRA may be
established through a custodial account with Investors Fiduciary Trust Company.
Completion of a special application is required in order to create such an
account, and the minimum initial investment for an IRA is $250. Contributions
to IRAs are subject to prevailing amount limits set by the Internal Revenue
Service. A $5.00 establishment fee and an annual $12.00 maintenance and
custody fee is payable with respect to each IRA, and there will be a $10.00
termination fee when the account is closed. For more information, call the
Fund at 1-800-662-8417.
PRICING OF INVESTOR B SHARES
Orders for the purchase of Investor B shares will be executed at the
net asset value per share next determined after an order has become effective.
There is no initial sales charge but redemptions of Investor B shares may be
subject to a contingent deferred sales charge.
CONTINGENT DEFERRED SALES CHARGES
Redemptions of Class B shares will be subject to a contingent deferred
sales charge or CDSC declining from 5% to zero over a six-year period. The
CDSC will be deducted from the redemption proceeds and reduce the amount paid
to you. The CDSC will be imposed on any redemption by you which reduces the
current value of your shares to an amount which is lower than the amount of all
payments by you for shares during the preceding six years, in the case of Class
B shares. A CDSC will be applied on the lesser of the original purchase price
or the current value of the shares being redeemed. Increases in the value of
your shares or shares acquired through reinvestment of dividends or
distributions are not subject to a CDSC. The amount of any CDSC will be paid
to and retained by the Distributor. See "Management of the Fund " above and
"Waiver of the Contingent Deferred Sales Charges -- Class B Shares" below.
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<PAGE> 49
The amount of the CDSC, if any, will vary depending on the number of
years from the time of payment for the purchase of shares until the time of
redemption of such shares. Solely for purposes of determining the number of
years from the time of any payment for the purchase of shares, all payments
during a month will be aggregated and deemed to have been made on the last day
of the month. The CDSC will be calculated form the first day of the month
after the initial purchase, excluding the time shares were held in a money
market fund. See "How to Exchange Your Shares." The following table sets
forth the rates of the CDSC applicable to redemptions of Class B shares:
<TABLE>
<CAPTION>
YEAR SINCE CONTINGENT DEFERRED SALES CHARGE
PURCHASE PAYMENT MADE AS A PERCENTAGE OF DOLLARS INVESTED
OR REDEMPTION PROCEEDS
<S> <C>
First . . . . . . . . . . . . . . . . . 5.0%
Second . . . . . . . . . . . . . . . . . 4.0%
Third . . . . . . . . . . . . . . . . . 4.0%
Fourth . . . . . . . . . . . . . . . . . 3.0%
Fifth . . . . . . . . . . . . . . . . . 2.0%
Sixth . . . . . . . . . . . . . . . . . 1.0%
Seventh . . . . . . . . . . . . . . . . None
</TABLE>
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in the following manner. It will be assumed that
the redemption is made first of amounts representing the cost of shares held
beyond the applicable CDSC period; then of amounts representing shares acquired
pursuant to the reinvestment of dividends and distributions; then of amounts
representing the increase in net asset value above the total amount of payments
for the purchase of Fund shares made within the applicable CDSC period; and
finally, of amounts representing the cost of shares held for the longest period
of time within the applicable CDSC period.
For example, assume you purchased 100 Class B shares at $10
per share for a cost of $1,000. Subsequently, you acquired 5 additional Class
B shares through dividend reinvestment. During the second year after the
purchase you decided to redeem $500 of your investment. Assuming at the time
of the redemption the net asset value had appreciated to $12 per shares, the
value of your Class B shares would be $1,260 (105 shares at $12 per share).
The CDSC would not be applied to the value of the reinvested dividend shares
and the amount which represents appreciation ($260). Therefore, $240 of the
$500 redemption proceeds ($500 minus $260) would be charged at a rate of 4%
(the applicable rate in the second year after purchase) for a total CDSC of
$9.60.
For federal income tax purposes, the amount of the CDSC will
reduce the gain or increase the loss, as the case may be, on the amount
recognized on the redemption of shares.
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<PAGE> 50
WAIVER OF THE CONTINGENT DEFERRED SALES CHARGES -- CLASS B
SHARES. The CDSC will be waived in the case of a redemption following the
death or disability of a shareholder or, in the case of a trust account,
following the death or disability of the grantor. The waiver is available for
total or partial redemptions of shares owned by a person, either individually
or in joint tenancy (with rights of survivorship), or a trust, at the time of
death or initial determination of disability, provided that the shares were
purchased prior to death or disability.
The CDSC will also be waived in the case of a total or partial
redemption in connection with certain distributions made without penalty under
the Internal Revenue Code from a tax-deferred retirement plan, an IRA or
Section 405(b) custodial account. These distributions include: (i) in the case
of a tax-deferred retirement plan, a lump-sum or other distribution after
retirement; (ii) in the case of an IRA or Section 405(b) custodial account, a
lump-sum or other distribution after attaining age 59 1/2; and (iii) a tax-free
return of an excess contribution or plan distributions following the death or
disability of the shareholder, provided that the shares were purchased prior to
death or disability. The waiver does not apply in the case of a tax-free
rollover or transfer of assets, other than one following separation from
service (i.e., following voluntary or involuntary termination of employment or
following retirement). Under no circumstances will the CDSC be waived on
redemption resulting from the termination of a tax-deferred retirement plan,
unless such redemptions otherwise qualify for a waiver as described above. In
addition, the CDSC will be waived on redemptions of shares held by Trustees of
the Fund.
You must notify the Fund's Transfer Agent either directly or
through your broker or service organization, at the time of redemption, that
you are entitled to waiver of the CDSC and provide the Transfer Agent with
such supporting documentation as it may deem appropriate. The waiver will be
granted subject to confirmation of your entitlement. See "Waiver of the
Contingent Deferred Sales Charge -- Class B Shares" in the Statement of
Additional Information.
CONVERSION FEATURE -- INVESTOR B SHARES
Class B shares will automatically convert to Class A shares on
a quarterly basis approximately eight years after purchase. Conversions will
be effected at relative net asset value without the imposition of any
additional sales charge.
Since annual distribution-related fees are lower for Class A
shares than Class B shares, the per share net asset value of the Class A shares
may be higher than that of the Class B shares at the time of conversion. Thus,
although the aggregate dollar value will be same, you may receive fewer Class A
shares than Class B shares converted. See "How the Fund Values its Shares."
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<PAGE> 51
For purposes of calculating the applicable holding period for
conversions, all payments for Class B shares during a month will be deemed to
have been made on the last day of the month, or for Class B shares acquired
through exchange, or a series of exchanges, on the last day of the month in
which the original payment for purchases of such Class B shares was made. For
Class B shares previously exchanged for shares of a money market fund, the time
period during which such shares were held in the money market fund will be
excluded. For example, Class B shares held in a money market fund for one year
will not convert to Class A shares until approximately nine years from
purchase. For purposes of measuring the time period ruing which shares are
held in a money market fund, exchanges will be deemed to have been made on the
last day of the month. Class B shares acquired through exchange will convert
to Class A shares after expiration of the conversion period applicable to the
original purchase of such shares.
The conversion feature may be subject to the continuing
availability of opinions of counsel or rulings of the Internal Revenue Service
(i) that the dividends and other distributions paid on Class A and Class B
shares will not constitute "preferential dividends" under the Internal Revenue
Code and (ii) that the conversion of shares does not constitute a taxable
event. The conversion of Class B shares into Class A shares may be suspended
if such opinions or rulings are no longer available. If conversions are
suspended, Class B shares of the Fund will continue to be subject, possibly
indefinitely, to their higher annual distribution and service fee.
EXCHANGE OF INVESTOR SHARES
The Fund offers two convenient ways to exchange Investor
Shares in the Fund for Investor Shares in another investment portfolio of the
Trust. Before engaging in an exchange transaction, a shareholder should read
carefully the Prospectus describing the investment portfolio into which the
exchange will occur, which is available without charge and can be obtained by
writing to Furman Selz, Mutual Fund Department 237 Park Avenue, Suite 910, New
York, New York 10017, or by calling 1-800-662-8417. A shareholder may not
exchange Investor Shares of one portfolio for Investor Shares of another
portfolio if both or either are not qualified for sale in the state of the
shareholder's residence. The minimum amount for an initial exchange is $500.
No minimum is required in subsequent exchanges. The Trust may terminate or
amend the terms of the exchange privilege at any time.
Investor B shares may only be exchanged for Investor B shares
of another investment portfolio.
A new account opened by exchange must be established with the
same name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by the Trust in good order, plus any applicable sales
charge.
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<PAGE> 52
An exchange is taxable as a sale of a security; however, if
the Fund maintains a net asset value of $1.00 per share, no gain or loss would
be realized upon an exchange of Fund shares. Shareholders should receive
written confirmation of the exchange within a few days of the completion of the
transaction.
In the case of transactions subject to an initial sales
charge, the sales charge will be assessed on an exchange of Investor Shares,
equal to the excess of the sales load applicable to the Investor Shares to be
acquired over the amount of any sales load previously paid on the Investor
Shares to be exchanged. No service fee is imposed. See "Dividends,
Distributions and Federal Income Tax" for an explanation of circumstances in
which a sales load paid to acquire Investor Shares of the Fund may not be taken
into account in determining gain or loss on the disposition of those Investor
Shares.
Any applicable CDSC payable upon redemption of shares
exchanged will be that imposed by the Fund in which shares were initially
purchased and will be calculated from the first day of the month after the
initial purchase, excluding the time shares were held in a money market fund.
In addition, Institutional Shares of the Fund may be exchanged
for Investor Shares of the Fund in connection with the distribution of assets
held in a qualified trust, agency or custodial account maintained with the
trust department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares (not described in this prospectus) of the Fund if the
shares are to be held in such a qualified trust, agency or custodial account.
These exchanges are made without a sales charge at the net asset value of the
respective share classes.
Exchange by Mail. To exchange Investor Shares of the Fund by
mail, simply send a letter of instruction to Furman Selz. The letter of
instruction must include: (i) your account number, (ii) the Fund (and class)
from and the Fund into which you wish to exchange your investment; (iii) the
dollar or share amount you wish to exchange; and (iv) the signatures of all
registered owners or authorized parties. All signatures must be guaranteed by
an eligible guarantor institution including a member of a national securities
exchange or by a commercial bank or trust company, broker-dealers, credit
unions and savings associations.
Exchange by Telephone. To exchange Investor Shares of the
Fund by telephone, or if you have any questions, simply call the Trust at
1-800-662-8417. You should be prepared to give the telephone representative
the following information: (i) your account number, social security number and
account registration; (ii) the name of the portfolio (and class) from and the
portfolio into which you wish to transfer your investment; and (iii) the dollar
or share amount you wish to exchange. The conversation may be recorded to
protect you and the Fund. Telephone exchanges are available only if
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<PAGE> 53
the shareholder so indicates by checking the "yes" box on the Purchase
Application. See "Redemption of Investor Fund Shares -- By Telephone" for a
discussion of telephone transactions generally.
REDEMPTION OF INVESTOR SHARES
Shareholders may redeem their Investor Shares, in whole or in
part, on any Business Day. Investor Shares will be redeemed at the net asset
value next determined after a redemption request in good order has been
received and accepted by the Trust. Although redemption proceeds may, in the
case of Investor B shares, be subject to any applicable contingent deferred
sales charge, as described below (See "Contingent Deferred Sales Charge" above.
See also "Fund Share Valuation.") A redemption may be a taxable transaction on
which gain or loss may be recognized. Generally, however, gain or loss is not
expected to be recognized on a redemption of shares of the Fund because the
Fund seeks to maintain a net asset value of $1.00 per share.
Where the Investor Shares to be redeemed have been purchased
by check, the Trust may delay payment of the redemption proceeds until the
purchasing check has cleared, which may take up to 15 days. Shareholders may
avoid this delay by investing through wire transfers of Federal funds. During
the period prior to the time the Investor Shares are redeemed, dividends on the
Investor Shares will continue to accrue and be payable and the shareholder will
be entitled to exercise all other beneficial rights of ownership.
Once the Investor Shares are redeemed, the Fund will
ordinarily send the proceeds by check to the shareholder at the address of
record on the next Business Day. The Fund may, however, take up to seven days
to make payment. This will not be the customary practice. Also, if the New
York Stock Exchange is closed (or when trading is restricted) for any reason
other than the customary weekend or holiday closing or if an emergency
condition as determined by the SEC merits such action, the Fund may suspend
redemptions or postpone payment dates.
To ensure acceptance of your redemption request, it is
important to follow the procedures described below. Although the Trust has no
present intention to do so, it reserves the right to refuse or to limit the
frequency of any telephone or wire redemptions. Of course, it may be difficult
to place orders by telephone during periods of severe market or economic
change, and a shareholder should consider alternative methods of
communications, such as couriers or U.S. mail. The services offered by the
Fund may be modified or terminated at any time. If the Fund terminates any
particular service, they will do so only after giving written notice to
shareholders.
- 20 -
<PAGE> 54
You may redeem your Investor Shares using any of the following
methods:
Through an Authorized Broker, Investment Advisor or Service
Organization. You may redeem your Investor Shares by contacting your broker or
investment advisor and instructing him or her to redeem your Investor Shares.
He or she will then contact PFD Inc. and place a redemption trade on your
behalf. He or she may charge you a fee for this service.
By Mail. You may redeem your Investor Shares by sending a
letter directly to the Fund. To be accepted, a letter requesting redemption
must include: (i) the Fund name and account registration from which you are
redeeming Investor Shares; (ii) your account number, (iii) the dollar or share
amount and class of shares to be redeemed; (iv) the signatures of all
registered owners; and (v) a signature guarantee by any eligible guarantor
institution including a member of a national securities exchange or a
commercial bank or trust company, broker-dealers, credit unions and savings
associations. Corporations, partnerships, trusts or other legal entities will
be required to submit additional documentation.
By Telephone. You may redeem your Investor Shams by calling
the Fund toll free at 1-800-662-8417. You should be prepared to give the
telephone representative the following information: (i) your account number,
social security number and account registration; (ii) the Fund name from which
you are redeeming Investor Shares; and (iii) the amount and class of shares to
be redeemed. The conversation may be recorded to protect you and the Fund.
Telephone redemptions are available only if the shareholder so indicates by
checking the "yes" box on the Purchase Application. The Fund employs
reasonable procedures to confirm that instructions communicated by telephone
are genuine. If the Fund fails to employ such reasonable procedures, they may
be liable for any loss, damage or expense arising out of any telephone
transactions purporting to be on a shareholder's behalf. In order to assure
the accuracy of instructions received by telephone, the Fund requires some form
of personal identification prior to acting upon instructions received by
telephone, record telephone instructions and provide written confirmation to
investors of such transactions.
By Wire. You may redeem your Investor Shares by contacting
the Fund by mail or telephone and instructing them to send a wire transmission
to your personal bank.
Your instructions should include: (i) your account number,
social security number and account registration; (ii) the Fund name from which
you are redeeming Investor Shares; and (iii) the amount and class of shares to
be redeemed. Wire redemptions can be made only if the "yes" box has been
checked on your Purchase Application, and a copy of a void check from the
account where proceeds are to be wired is attached to the Purchase Application.
Your bank may charge you a fee for receiving a wire payment on your behalf.
- 21 -
<PAGE> 55
The above-mentioned services "By Telephone" and "By Wire" are
not available for IRAs and trust clients of an affiliate of First Interstate
Bancorp.
Systematic Withdrawal Plan. An owner of $10,000 or more of
Investor Shares of the Fund may elect to have periodic redemptions from his or
her account to be paid on a monthly, quarterly, semi-annual or annual basis.
The minimum periodic payment is $100. A sufficient number of Investor Shares
to make the scheduled redemption will normally be redeemed on the date selected
by the shareholder. Depending on the size of the payment requested and
fluctuation in the net asset value, if any, of the Investor Shares redeemed,
redemptions for the purpose of making such payments may reduce or even exhaust
the account. A shareholder may request that these payments be sent to a
predesignated bank or other designated party. Capital gains and dividend
distributions paid to the account will automatically be reinvested at net asset
value on the distribution payment date.
Redemption of Small Accounts. Due to the disproportionately
higher cost of servicing small accounts, the Fund reserves the right to redeem,
on not less than 30 days' notice, an account in the Fund that has been reduced
by a shareholder to $500 or less. However, if during the 30-day notice period
the shareholder purchases sufficient Investor Shares to bring the value of the
account above $500, this restriction will not apply.
Redemption in Kind. All redemptions of Investor Shares of the
Fund shall be made in cash, except that the commitment to redeem Investor
Shares in cash extends only to redemption requests made by each shareholder of
the Fund during any 90-day period of up to the lesser of $250,000 or 1% of the
net asset value of that Fund at the beginning of such period. This commitment
is irrevocable without the prior approval of the SEC and is a fundamental
policy of the Fund that may not be changed without shareholder approval. In
the case of redemption requests by shareholders in excess of such amounts, the
Board of Trustees reserves the right to have the Fund make payment, in whole or
in part, in securities or other assets, in case of an emergency or any time a
cash distribution would impair the liquidity of the Fund to the detriment of
the existing shareholders. In this event, the securities would be valued in
the same manner as the securities of that Fund are valued. If the recipient
were to sell such securities, he or she would incur brokerage charges.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX
The Fund intends to qualify annually and to elect to be
treated as a regulated investment company pursuant to the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
so qualifying and electing, the Fund generally will not be subject to Federal
income tax to the extent that it distributes investment company taxable income
and net capital gains in the manner required under the Code.
- 22 -
<PAGE> 56
The Fund intends to distribute to its shareholders
substantially all of its investment company taxable income (which includes,
among other items, dividends and interest and the excess, if any, of net
short-term capital gains over net long-term capital losses). The Fund will
declare distributions of investment company income daily and pay those
dividends monthly. The Fund intends to distribute, at least annually,
substantially all net capital gain (the excess of net long-term capital gains
over net short-term capital losses), if any. In determining amounts of capital
gains to be distributed, any capital loss carryovers from prior years will
first be applied against capital gains.
Distributions will be paid in additional shares of the Fund
based on the net asset value at the close of business on the payment date of
the distribution, unless the shareholder elects in writing, which is received
by Furman Selz not less than five full business days prior to the record date,
to receive such distributions in cash. Dividends declared in, and attributable
to, the preceding month will be paid within five business days after the end of
each month.
Shares purchased will begin earning dividends on the day the
purchase order is executed and shares redeemed will earn dividends through the
previous day. Net investment income for a Saturday, Sunday or a holiday will
be declared as a dividend on the previous business day. Investors who redeem
all or a portion of Fund shares prior to a dividend payment date will be
entitled on the next dividend payment date to all dividends declared but unpaid
on those shares at the time of their redemption.
Distributions of investment company taxable income (regardless
of whether derived from dividends, interest or net short-term capital gains)
will be taxable to shareholders as ordinary income. Distributions of net
long-term capital gains designated by the Fund as capital gain dividends will
be taxable as long-term capital gains, regardless of how long a shareholder has
held his Fund shares. Distributions are taxable in the same manner whether
received in additional shares or in cash.
Earnings of the Fund not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible 4% excise tax. To prevent imposition of this tax, the Fund
intends to comply with this distribution requirement.
A distribution will be treated as paid on December 31 of a
calendar year if it is declared by the Fund during October, November, or
December of that year to shareholders of record in such a month and paid by the
Fund during January of the following calendar year. Such distributions will be
treated as received by shareholders in the calendar year in which the
distributions are declared, rather than the calendar year in which the
distributions are received.
The dividends paid by the Fund are not expected to qualify for
the dividends-received deduction available to corporations.
- 23 -
<PAGE> 57
The Fund may be required to withhold for Federal income tax
("backup withholding") 31% of the distributions and the proceeds of redemptions
payable to shareholders who fail to provide a correct taxpayer identification
number or to make required certifications, or where the Fund or shareholder has
been notified by the Internal Revenue Service that the shareholder is subject
to backup withholding. Most corporate shareholders and certain other
shareholders specified in the Code are exempt from backup withholding. Backup
withholding is not an additional tax. Any amounts withheld may be credited
against the shareholder's U.S. Federal income tax liability.
Shareholders will be notified annually by the Trust as to the
Federal tax status of distributions made by the Fund. Depending on the
residence of the shareholder for tax purposes, distributions also may be
subject to state and local taxes, including withholding taxes. Foreign
shareholders may, for example, be subject to special withholding requirements.
Special tax treatment, including a penalty on certain pre-retirement
distributions, is accorded to accounts maintained as IRAs. Shareholders should
consult their own tax advisors as to the Federal, state and local tax
consequences of ownership of shares of the Fund in their particular
circumstances.
Under certain circumstances, the sales charge incurred in
acquiring shares of a Fund may not be taken into account in determining the
gain or loss on the disposition of those shares. This rule applies where
shares of a Fund are exchanged within 90 days after the date they were
purchased and new shares of the Fund or of another investment portfolio of the
Trust are acquired without a sales charge or at a reduced sales charge. In
that case, the gain or loss recognized on the exchange will be determined by
excluding from the tax basis of the shares exchanged all or a portion of the
sales charge incurred in acquiring those shares. This exclusion applies to the
extent that the otherwise applicable sales charge with respect to the newly
acquired shares is reduced as a result of having incurred a sales charge
initially. The portion of the sales charge affected by this rule will be
treated as a sales charge paid for the new shares.
DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES
U.S. Treasury Obligations. U.S. Treasury securities are
obligations issued by the U.S. Treasury. U.S. Treasury bills, which have a
maturity of up to one year, are direct obligations of the United States and are
the most frequently issued marketable U.S. Government security. The U.S.
Treasury also issues securities with longer maturities in the form of notes and
bonds.
Stripped Obligations. The Fund may invest in U.S. Treasury
obligations offered under the STRIPS or CUBES programs. Such obligations may
represent future interest or principal payments. These stripped securities are
direct obligations of the U.S. Government and clear through the Federal
Reserve book-entry system. Stripped securities are issued at a discount to
their face value and may exhibit greater price
- 24 -
<PAGE> 58
volatility than ordinary debt securities because of the manner in which their
principal and interest are returned to investors.
Securities Issued by Other Investment Companies. The Fund may
invest in securities issued by other investment companies within the limits
prescribed by the 1940 Act. The Fund currently intends to limit its
investments so that, as determined immediately after a securities purchase is
made: (a) not more than 5% of the value of its total assets will be invested
in the securities of any one investment company; (b) not more than 10% of the
value of its total assets will be invested in the aggregate in securities of
investment companies as a group; (c) not more than 3% of the outstanding voting
stock of any one investment company will be owned by the Fund; and (d) not more
than 10% of the outstanding voting stock of any one investment company will be
owned in the aggregate by the Fund and other investment companies advised by
the Advisor or any other affiliate of First Interstate Bancorp. As a
shareholder of another investment company, the Fund would bear, along with
other shareholders, its pro rata portion of the expenses of such other
investment company, including advisory fees. These expenses would be in
addition to the advisory and other expenses that each Fund bears directly in
connection with its own operations, and may represent a duplication of fees to
shareholders of the Fund. The Fund may only invest in investment companies
which restrict their portfolio investments solely to the same investment
instruments that are permissible investments for the Fund.
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental investment
restrictions that may be changed only with the approval of a majority of the
Fund's outstanding shares. The following description summarizes several of the
Fund's fundamental restrictions, which are set forth in full in the SAI.
The Fund may not:
1. Purchase securities (except U.S. Government securities and
repurchase agreements collateralized by such securities) if
more than 5% of its total assets at the time of purchase will
be invested in securities of any one issuer, except that up to
25% of the Fund's total assets may be invested without regard
to this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.
3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.
- 25 -
<PAGE> 59
4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.
If a percentage restriction on the investment or use of assets set
forth in this Prospectus is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing values will not be
considered a violation, however, the Fund will not at any time have more than
10% of its respective net assets invested in illiquid securities.
OTHER INFORMATION
CAPITALIZATION
Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Fund are fully paid,
non-assessable and freely transferable.
The Board of Trustees has authorized the issuance of five classes of
shares in the Fund -- Investor, Investor B Shares, Service Shares and
Institutional Shares. Each share of the Fund represents an equal proportionate
interest in the Fund with other shares of the same class and is entitled to
cash dividends and distributions earned on such shares as are declared in the
discretion of the Board of Trustees.
The Fund's Institutional and Service Shares and Investor Classes of
Shares bear their pro rata portion of all operating expenses paid by the Fund
except for the distribution payments, Service Organization fees and other
"class" expenses that are allocated to a particular share class. The Board of
Trustees has not approved a Distribution Plan with respect to Institutional
Shares. The Fund may pay fees to Service Organizations in amounts up to an
annual rate of 0.25% of the daily net asset value of the Fund's outstanding
Institutional Shares owned by shareholders with whom a Service Organization has
a servicing relationship. Because of the "class expenses," the performance of
the Fund's Institutional and Service Shares is expected to be higher than the
performance of its Investor Classes of Shares. The Trust offers various
services and privileges in connection with its Investor Shares that are not
offered in connection with its Institutional or Service Shares, including an
automatic investment plan, automatic withdrawal plan and, with respect to
certain portfolios, checkwriting. For information regarding the Fund's
Institutional and Service Shares, contact Furman Selz at 1-800-662-8417 or your
Service Organization.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees or officers of the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the Trust.
- 26 -
<PAGE> 60
The Declaration of Trust also provides for indemnification out of the property
of the Fund of any shareholder held personally liable solely by reason of being
or having been a shareholder of the Fund. The risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations and should be
considered remote.
VOTING
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Fund's shareholders, but in the event that a
special meeting is held, shareholders of each portfolio offered by the Trust
will be entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of the Fund's shares. Shareholders of a class will have exclusive voting
rights with respect to the distribution plan applicable to that class of
shares. Voting rights are not cumulative.
The Declaration of Trust provides that the holders of not less than
two-thirds of the outstanding shares of the Trust may remove a person serving
as Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the outstanding shares of the
Trust and in connection with such meeting to comply with the shareholders'
communications provisions of Section 16 (c) of the 1940 Act.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of the Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of the Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of the Fund. For purposes of the 1940 Act, any person
who owns either directly or through one or more controlled companies more than
25 percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.
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<PAGE> 61
PERFORMANCE INFORMATION
The Fund may, from time to time, include yield data in advertisements
or reports to shareholders or prospective investors. The methods used to
calculate the yields of the Fund are mandated by the SEC. Yield and Total
Return are calculated separately for each class of share.
Quotations of "yield" for the Fund will be based on the income
received by a hypothetical investment (less a pro-rata share of Fund expenses)
over a particular seven-day period, which is then "annualized" (i.e., assuming
that the seven-day yield would be received for 52 weeks, stated in terms of an
annual percentage return on the investment).
"Effective yield" for the Fund is calculated in a manner similar to
that used to calculate yield, but includes the compounding effect of earnings
on reinvested dividends.
Quotations of yield reflect only the performance of the Fund during
the particular period on which the calculations are based. Yield and effective
yield for the Fund will vary based on changes in market conditions, the level
of interest rates and the level of the expenses of the Fund and no reported
performance figure should be considered an indication of performance which may
be expected in the future.
For purposes of comparison, the Fund may, from time to time, quote
performance information from IBC/Donoghue's MONEY FUND REPORT of Holliston,
Massachusetts 01746. IBC/Donoghue's MONEY MARKET AVERAGE is a widely
recognized index of money market fund performance. Figures reflect average
yields of all taxable money funds included in IBC/Donoghue's index.
IBC/Donoghue's 100% U.S. TREASURY MONEY FUND AVERAGE is a component of this
average and reflects average yields of all taxable U.S. Treasury money funds.
Any performance information should be considered in light of the Fund's
investment objective and policies, characteristics and quality of the Fund and
the market conditions during the time period indicated, and should not be
considered to be representative of what may be achieved in the future. For a
description of the methods used to determine yield for the Fund, see "Other
Information -- Performance Information" in the SAI.
ACCOUNT SERVICES
All transactions in shares of the Fund will be reflected in a
statement for each shareholder. In those cases where a Service Organization or
its nominee is shareholder of record of shares purchased for its customer, the
Fund has been advised that the statement may be transmitted to the customer at
the discretion of the Service Organization.
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<PAGE> 62
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.
General and Account Information: (800) 662-8417.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUND OR BY ITS DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED,
ENDORSED OR OTHERWISE SUPPORTED BY FIRST INTERSTATE BANCORP OR ITS AFFILIATES,
AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
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<PAGE> 63
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258
ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169
DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 64
PACIFICA FUNDS TRUST
(INVESTOR A AND INVESTOR B SHARES)
237 PARK AVENUE, NEW YORK, NEW YORK 10017
GENERAL AND ACCOUNT INFORMATION:
(800) 662-8417
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. -
INVESTMENT ADVISOR
("FICM" OR THE "ADVISOR")
FURMAN SELZ INCORPORATED - ADMINISTRATOR AND SPONSOR
("FURMAN SELZ" OR THE "SPONSOR")
PACIFICA FUNDS DISTRIBUTOR INC. - DISTRIBUTOR
("PFD INC." OR THE "DISTRIBUTOR")
Pacifica Funds Trust (the "Trust") is an open-end investment company
(a mutual fund) that offers a selection of separate investment portfolios.
This Prospectus describes the Investor A and Investor B Shares of the following
portfolio (the "Fund"):
- Pacifica 100% U.S. Treasury Money Market Fund
This Prospectus sets forth concisely the information a prospective
investor should know before investing in the Fund and should be read and
retained for information about the Fund. A Statement of Additional Information
(the "SAI"), dated February __, 1996 (which may be revised from time to time),
containing additional and more detailed information about the Fund, has been
filed with the Securities and Exchange Commission ("SEC") and is hereby
incorporated by reference into this Prospectus. It is available without charge
and can be obtained by writing or calling the Fund at the address or
information number printed above.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY FIRST INTERSTATE OR OTHER BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 1996.
<PAGE> 65
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FEE TABLE - INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . . 6
THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
INVESTMENT POLICIES AND PRACTICES OF THE FUND . . . . . . . . . . . . . 8
RISKS OF INVESTING IN THE FUND . . . . . . . . . . . . . . . . . . . . 8
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . 9
FUND SHARE VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . 13
MINIMUM PURCHASE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . 13
PURCHASE OF INVESTOR CLASS A AND B SHARES . . . . . . . . . . . . . . . 13
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . . . . . . . . 14
ALTERNATIVE PURCHASE ARRANGEMENTS . . . . . . . . . . . . . . . . . . . 15
PRICING OF INVESTOR A SHARES . . . . . . . . . . . . . . . . . . . . . 16
PRICING OF INVESTOR B SHARES . . . . . . . . . . . . . . . . . . . . . 19
CONVERSION FEATURE - INVESTOR B SHARES . . . . . . . . . . . . . . . . 21
EXCHANGE OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . . 22
REDEMPTION OF INVESTOR SHARES . . . . . . . . . . . . . . . . . . . . . 24
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX . . . . . . . . . . . . 27
DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES . . . . . . . . . . 29
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . 29
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
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<PAGE> 66
HIGHLIGHTS
INVESTMENT OBJECTIVES AND POLICIES OF THE FUND
The investment objective of the 100% U.S. Treasury Securities Money
Market Fund is to seek as high a level of current income as is consistent with
liquidity and maximum safety of principal. The Fund pursues this objective by
investing exclusively in obligations of the U.S. Treasury which are backed by
the full faith and credit of the U.S. Government as to payment of principal and
interest and which have remaining maturities not exceeding 397 days.
For additional information concerning the investment policies,
practices and risk considerations of the Fund, see "The Fund," "Investment
Policies and Practices of the Fund" and "Risks of Investing in the Fund" in
this Prospectus.
RISKS OF INVESTING IN THE FUND
The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund may not achieve as high a level of current income
as other funds that do not limit their investments to the high quality U.S.
Treasury securities in which the Fund invests. The Fund's performance will
fluctuate based on many factors, including the quality of the instruments in
the Fund's investment portfolio, national and international economic
conditions, interest rate levels and general market conditions.
There is no assurance that the Fund will achieve its investment
objective.
MANAGEMENT OF THE FUND
First Interstate Capital Management, Inc. acts as investment advisor
to the Fund. For its services, the Advisor is entitled to receive a fee from
the Fund at an annual rate based on the Fund's average daily net assets. See
"Fee Table -- Investor Shares" and "Management of the Fund" in this Prospectus.
Furman Selz acts as administrator and sponsor to the Fund. Furman
Selz provides certain management and administrative services to the Fund, and
is entitled to receive a fee from the Fund at an annual rate based on the
Fund's average daily net assets. PFD Inc. distributes the Fund's shares and
may be reimbursed for certain of its distribution-related expenses.
Fees and expenses charged to the Fund are outlined on page __ of this
Prospectus.
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<PAGE> 67
GUIDE TO INVESTING IN THE PACIFICA FAMILY OF FUNDS
Purchase orders for the Fund received by your broker or Service
Organization in proper order by 4:15 p.m., Eastern time, and transmitted to the
Trust prior to 5:00 p.m. Eastern time will become effective that day.
<TABLE>
<S> <C> <C>
- MINIMUM INITIAL INVESTMENT . . . . . . . . . . . . . . . . . . . . . $500
- MINIMUM INITIAL INVESTMENT FOR IRAS . . . . . . . . . . . . . . . . $250
- MINIMUM SUBSEQUENT INVESTMENT . . . . . . . . . . . . . . . . . . . $ 50
</TABLE>
- The Fund offers Alternative Purchase Arrangements. Consider
whether to purchase Investor A Class or Investor B Class of
Shares. See "Alternative Purchase Arrangement."
Investor A Shares are sold with an initial sales charge of up
to 4 1/2% of the offering price.
Investor B Shares are sold without an initial sales charge but
are subject to a contingent deferred sales charge or CDSC
(declining from 5% to zero of the lower of the amount invested
or the redemption proceeds) which will be imposed on certain
redemptions made within six years of purchase. Investor B
Shares are subject to higher ongoing distribution fees than
Investor A Shares; however, Investor B Shares will
automatically convert to Investor A Shares, which are subject
to lower distribution fees, approximately eight years after
purchase.
Shareholders may exchange Investor Shares of the same class between
Funds by telephone or mail.
<TABLE>
<S> <C> <C>
- MINIMUM INITIAL EXCHANGE . . . . . . . . . . . . . . . . . . $500
(No minimum for subsequent exchanges.)
</TABLE>
Shareholders may redeem Investor Shares by telephone, mail or wire.
- The Fund reserves the right upon not less than 30 days' notice
to redeem involuntarily all the Investor Shares in an
investor's account which have an aggregate value of $500 or
less for any particular Fund.
(The above redemption services are not available for IRAs and trust
clients of First Interstate Bancorp and its affiliates.)
- 4 -
<PAGE> 68
All dividends and distributions will be automatically reinvested at
net asset value in additional Investor Shares of the Fund unless cash payment
is requested.
- Distributions for the Fund are paid monthly.
For additional information on how to purchase and redeem Investor
Shares of the Fund, see "Purchase of Investor Shares," "Exchange of Investor
Shares" and "Redemption of Investor Shares."
- 5 -
<PAGE> 69
FUND EXPENSES
The following table lists the costs and expenses that an investor will
incur either directly or indirectly as an Investor shareholder of the Fund.
The information is based on estimated amounts for the initial fiscal year of
the Fund.
FEE TABLE - INVESTOR SHARES
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . . . 4 1/2% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) . . . . . . . . . . . None None
Deferred Sales Load (as a percentage of
redemption proceeds) . . . . . . . . . . . . . . . . . . . . . . . . None 5% during first year,
decreasing to 4% during the
second and third years and
decreasing by 1% each year
thereafter until 0% in the
seventh year.+
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . None None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . None None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . .30% .30%
---- -----
12b-1 Fees* . . . . . . . . . . . . . . . . . . . . . . . . . .25% 1.00%
---- -----
Other Expenses (after waivers)** . . . . . . . . . . . . . . . . . . . . .25% .25%
---- -----
TOTAL FUND OPERATING EXPENSES:
(after waivers)*** . . . . . . . . . . . . . . . . . . . . . . . . . .80% 1.55%
---- -----
</TABLE>
- -----------------------
* Under rules of the National Association of Securities Dealers, Inc.
(the "NASD"), a 12b-1 fee may be treated as a sales charge for certain
purposes. Because a 12b-1 fee is an annual fee charged against the
assets of the Fund, long-term shareholders may indirectly pay more in
total sales charges than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the NASD. See
"Management of the Fund -- The Sponsor and Distributor."
** Other Expenses (before waivers) would be ____% and are estimated.
*** Total Fund Operating Expenses (before waivers) would be ____%.
+ Class B Shares will automatically convert to Class A Shares
approximately eight years after purchase.
The purpose of this table is to assist shareholders in understanding
the various costs and expenses that an investor in the Fund's Investor Shares
will bear. The table
- 6 -
<PAGE> 70
does not reflect any charges that may be imposed by a First Interstate Bank or
other institutions directly on their customer accounts in connection with
investments in the Fund.
EXAMPLE:*
<TABLE>
<CAPTION>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% gross annual return and (2) redemption at
the end of each time period: 1 year 3 years
----- -------
<S> <C> <C>
Investor A Shares . . . . . . . . . . . . . . . . . . . . $ $
Investor B Shares . . . . . . . . . . . . . . . . . . . .
</TABLE>
<TABLE>
<CAPTION>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% gross annual return and (2) assuming no
redemption at the end of each time period: 1 year 3 years
----- -------
<S> <C> <C>
Investor A Shares . . . . . . . . . . . . . . . . . . . . $ $
Investor B Shares . . . . . . . . . . . . . . . . . . . .
</TABLE>
- -----------------------
* THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. THE ASSUMED 5%
ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURN; ACTUAL RETURN MAY BE
GREATER OR LESS THAN THE ASSUMED AMOUNT.
- 7 -
<PAGE> 71
THE FUND
The Fund is a portfolio of a Massachusetts business trust, Pacifica
Funds Trust, organized under the laws of the Commonwealth of Massachusetts as
an open-end, management investment company. The Trust's Board of Trustees
oversees the overall management of the Fund and elects the officers of the
Fund.
INVESTMENT POLICIES AND PRACTICES OF THE FUND
The investment objective of the Fund is to provide investors with as
high a level of current income as is consistent with liquidity and maximum
safety of principal. The SAI contains the specific investment restrictions
which govern the Fund's investments. Those restrictions and the Fund's
investment objectives are fundamental policies, which means that they may not
be changed without a majority vote of shareholders of the Fund. Except for the
objectives and those restrictions specifically identified as fundamental all
other investment policies and practices described in this Prospectus and in the
SAI are not fundamental, which means that the Board of Trustees may change them
without shareholder approval. The Advisor selects investments and makes
investment decisions based on the investment objective and policies of the
Fund.
The Advisor selects only those U.S. dollar-denominated debt
instruments for the Fund which meet the high quality, credit risk standards
established by the Fund's Board of Trustees. The Fund will not maintain a
dollar-weighted average portfolio maturity that exceeds 90 days nor purchase
any instrument with a remaining maturity of greater than 397 calendar days.
The Fund restricts its investment to U.S. Treasury securities.
Securities issued by the U.S. Treasury have historically involved little risk
of loss of principal if held to maturity. It should be noted that neither the
United States Government, nor any agency or instrumentality thereof, has
guaranteed, sponsored or approved the Fund or its shares. Generally,
securities in which the Fund invests will not earn as high a yield as
securities of longer maturity and/or of lesser quality which are more subject
to market volatility.
The types of securities and investment practices used by the Fund are
described in greater detail under the section "Description of Securities and
Investment Practices" on pages _______ of this Prospectus.
RISKS OF INVESTING IN THE FUND
The Fund attempts to maintain the value of its shares at a constant
$1.00 per share, although there can be no assurance that the Fund will always
be able to do so. The Fund's performance will fluctuate based on many factors,
including the quality of the instruments in the Fund's investment portfolio,
national and international economic conditions, interest rate levels and
general market conditions.
- 8 -
<PAGE> 72
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the direction
of the Board of Trustees. The Trustees are Dennis W. Draper, Joseph N.
Hankin, John E. Heilmann, Jack D. Henderson and Richard A. Wedemeyer.
Information about the Trustees, as well as the Fund's executive officers, may
be found in the SAI under the heading "Management Trustees and Officers."
THE ADVISOR: FIRST INTERSTATE CAPITAL MANAGEMENT, INC.
First Interstate Capital Management, Inc., 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258, serves as investment advisor to the Trust. FICM
manages the investment and reinvestment of the assets of the Fund and
continuously reviews, supervises and administers the Fund's investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Fund's investments directly with brokers and dealers selected by it in its
discretion.
FICM is a wholly-owned subsidiary of First Interstate Bank of
California, which is the largest banking subsidiary of First Interstate
Bancorp, a multi-bank holding company. First Interstate Bancorp provides
financial products and services marketed at the local level to nearly five
million households in over 500 communities in 13 western states.
For the advisory services it provides to the Fund, FICM is entitled to
receive from the Fund fees, payable monthly, at the annual rate of 0.30% of the
first $500 million of the Fund's average daily net assets, 0.25% of the next
$500 million of the Fund's average daily net assets, and 0.20% of the Fund's
average daily net assets in excess of $1 billion.
THE SPONSOR AND DISTRIBUTOR
Furman Selz Incorporated, 230 Park Avenue, New York, New York 10169,
acts as Sponsor of the Fund. Furman Selz is primarily an institutional
brokerage firm with memberships on the New York, American, Boston, Midwest,
Pacific and Philadelphia Stock Exchanges. Furman Selz also serves as
administrator and distributor of other mutual funds. Pacifica Funds
Distributor Inc. is an affiliate of Furman Selz and was organized specifically
to distribute shares of the Trust; however, offers and sales of shares of the
Trust will be made only through Furman Selz or other registered (or exempt)
dealers.
Under separate Distribution Plans (the "Plans") adopted by the Fund
for its Investor Shares, the Fund may pay directly or reimburse PFD Inc.
monthly (subject to a limit of 0.25% per annum of the average daily net asset
value of the outstanding Investor A Shares of the Fund and 1.00% per annum in
the case of Investor B Shares) as compensation for services and expenses of PFD
Inc. in connection with the distribution of Investor Shares of the Fund. These
costs and expenses include (i) advertising by
- 9 -
<PAGE> 73
radio, television, newspapers, magazines, brochures, sales literature, direct
mail or any other form of advertising; (ii) expenses of sales employees or
agents of PFD Inc., including salary, commissions, travel and related expenses;
(iii) payments to broker-dealers and financial institutions for services in
connection with the distribution of Investor Shares, including sales
commissions and fees calculated with reference to the average daily net asset
value of Investor Shares held by shareholders who have a brokerage or other
service relationship with the broker-dealer or other institution receiving such
fees; (iv) costs of printing prospectuses and other materials to be given or
sent to prospective investors; and (v) such other similar services as the Fund
determines to be reasonably calculated to result in the sale of Investor Shares
of the Fund. The Fund will pay all costs and expenses in connection with the
preparation, printing and distribution of prospectuses to current shareholders
and the operation of its Plan, including related legal and accounting fees.
Under the Plan for each class of Investor Shares, up to .25 of 1% of the
average daily net assets of the respective classes may be used to pay for
personal service and/or maintenance of shareholder accounts. Distribution
expenses attributable to the sale of the Investor Shares of the Fund will be
allocated between the Class A and Class B shares based upon the ratio of sales
of each class to the sales of these two classes of Shares of the Fund, other
than expenses which are directly allocable to a particular class. The
distribution fee and initial sales charge of one class will not be used to
subsidize the sale of another class. The Fund will not be liable for
distribution expenditures made by PFD Inc. in any given year in excess of the
maximum annual amount payable under the Plan for that Fund.
PFD Inc. may from time to time pay a bonus or other incentive to
dealers which employ registered representatives who sell a minimum dollar
amount of Investor Shares of the Fund and/or other funds distributed by Furman
Selz or PFD Inc. during a specific period of time. Such bonus or other
incentive will take the form of payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places within or outside the
United States, or other bonuses, such as gift certificates or the cash
equivalent of such bonuses. PFD Inc. has established such a special
promotional incentive program with First Interstate Securities, Inc.
PFD Inc. receives a percentage of the initial sales charge on the sale
of Investor A shares and receives any contingent deferred sales charge paid on
redemptions on Investor B shares.
ADMINISTRATIVE SERVICES
The Fund has also entered into an Administrative Services Contract
with Furman Selz pursuant to which Furman Selz provides certain management and
administrative services necessary for the Fund's operations including: (i)
general supervision of the operation of the Fund including coordination of the
services performed by the Fund's investment advisor, transfer agent, custodian,
independent accountants and legal counsel,
- 10 -
<PAGE> 74
regulatory compliance, including the compilation of information for documents
such as reports to, and filings with, the SEC and state securities commissions,
and preparation of proxy statements and shareholder reports for the Fund; (ii)
general supervision relative to the compilation of data required for the
preparation of periodic reports distributed to the Fund's Officers and Board of
Trustees; and (iii) furnishing office space and certain facilities required for
conducting the business of the Fund. For these services, Furman Selz is
entitled to receive a fee, payable monthly, at the annual rate of 0.15% of the
average daily net assets of the Fund. Pursuant to a Services Agreement with
the Trust, Furman Selz assists the Trust with certain transfer and dividend
disbursing agent functions and receives a fee of $15.00 per account per year
plus out-of-pocket expenses. Pursuant to the Fund Accounting Agreement with
the Trust, Furman Selz assists the Trust in calculating net asset values and
provides certain other accounting services for the Fund for an annual fee of
$30,000 per Fund plus out-of-pocket expenses.
SERVICE ORGANIZATIONS
Various banks (including banks affiliated with First Interstate
Bancorp), trust companies, broker-dealers (other than the Sponsor) or other
financial organizations (collectively, "Service Organizations") also may
provide administrative services with respect to the Fund's Institutional
Shares, such as maintaining shareholder accounts and records. The Fund may pay
fees to Service Organizations (which vary depending upon the services provided)
in amounts up to an annual rate of 0.25% of the average daily net asset value
of the outstanding Investor Shares of the Fund owned by shareholders with whom
a Service Organization has a servicing relationship. These fees will be home
entirely by the Fund's Investor Shares.
Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest a
specified amount in the Fund or charging a direct fee for servicing. If
imposed, these fees would be in addition to any amounts which might be paid to
the Service Organization by the Fund. Each Service Organization has agreed to
transmit to its clients a schedule of any such fees. Shareholders using
Service Organizations are urged to consult with them regarding any such fees or
conditions.
The Glass-Steagall Act and other applicable laws provide that, among
other things, banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, could prevent a bank Service Organization from
continuing to perform all or a part of its servicing activities. If a bank
were prohibited from so acting, its shareholder clients would be permitted to
remain shareholders of the Fund and alternative means for continuing the
servicing of such shareholders would be sought. It is
- 11 -
<PAGE> 75
not expected that shareholders would suffer any adverse financial consequences
as a result of any of these occurrences.
OTHER EXPENSES
The Fund bears all costs of its operations other than expenses
specifically assumed by Furman Selz, PFD Inc. or the Advisor. The costs borne
by the Fund include legal and accounting expenses; Trustees' fees and expenses;
insurance premiums; custodian and transfer agent fees and expenses; expenses
incurred in acquiring or disposing of the Fund's portfolio securities; expenses
of registering and qualifying the Fund's shares for sale with the SEC and with
various state securities commissions; expenses of obtaining quotations on the
Fund's portfolio securities and pricing of the Fund's shares; expenses of
maintaining the Fund's legal existence and of shareholders' meetings; and
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses. The Fund bears its own expenses associated with its
establishment as a series of the Trust; these expenses are amortized over a
five-year period from the commencement of the Fund's operations. See
"Management" in the SAI for additional information on expenses borne by the
Fund. Trust expenses directly attributable to a particular Fund are charged to
that Fund, and expenses attributable to a particular class of shares of the
Fund (such as Service Organization fees) are charged to that class. Other
expenses are allocated proportionately among all of the investment portfolios
in the Trust in relation to the net assets of each portfolio or by other means
deemed fair and equitable by the Board of Trustees.
PORTFOLIO TRANSACTIONS
Pursuant to the Investment Advisory Contract, the Advisor places
orders for the purchase and sale of portfolio investments for the Fund's
accounts with brokers or dealers selected by it in its discretion.
In effecting purchases and sales of portfolio securities for the
account of the Fund, the Advisor will seek the best execution of the Fund's
orders. Purchases and sales of debt securities are generally placed by the
Advisor with primary market makers for these securities on a net basis, i.e.,
without any brokerage commission being paid by the Fund. Trading does,
however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made which will include an underwriting
fee paid to the underwriter. Broker-dealers are selected on the basis of a
variety of factors such as reputation, capital strength, size and difficulty of
the order, sale of Fund shares by the broker-dealer, and research provided to
the Advisor by the broker-dealer. The Advisor may cause the Fund to pay
commissions higher than another broker-dealer would have charged if the Advisor
believes the commission paid is reasonable in relation to the value of the
brokerage and research services received by the Advisor.
- 12 -
<PAGE> 76
FUND SHARE VALUATION
The net asset value of each class of shares of the Fund is calculated
at 4:15 p.m. (Eastern time), Monday through Friday, on each day the New York
Stock Exchange is open for trading (a "Business Day"), which excludes the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The net asset value per share for each class of shares is computed by dividing
the value of the Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class. All expenses, including fees paid to the Advisor, Furman Selz
and PFD Inc., are accrued daily and taken into account for the purpose of
determining the net asset value.
The Fund uses the amortized cost method to value its portfolio
securities and seeks to maintain a constant net asset value of $1.00 per share,
although there may be circumstances under which this goal cannot be achieved.
The amortized cost method involves valuing a security at its cost and
amortizing any discount or premium over the period until maturity, regardless
of the impact of fluctuating interest rates on the market value of the
security. See the SAI for a more complete description of the amortized cost
method.
MINIMUM PURCHASE REQUIREMENTS
The minimum initial investment in the Fund is $500, except that the
minimum is $250 for an IRA. Any subsequent investments must be at least $50,
including an IRA investment. All initial investments should be accompanied by
a completed Purchase Application. A separate application is required for IRA
investments.
PURCHASE OF INVESTOR CLASS A AND B SHARES
The following purchase procedures do not apply to certain trust or
other accounts that are managed by First Interstate Bancorp, its subsidiaries
or affiliates. An account customer should consult his or her account officer
for proper instructions.
All funds received by the Trust are invested in full and fractional
Investor Shares of the Fund. Certificates for Investor A or B Shares are not
issued. Furman Selz maintains records of each shareholder's holdings of Fund
shares, and each shareholder receives a statement of transactions, holdings and
dividends. The Fund reserves the right to reject any purchase.
After deciding whether to purchase Investor A or Investor B class of
shares (See ALTERNATIVE PURCHASE ARRANGEMENTS, below), an investment may be
made using any of the following methods:
- 13 -
<PAGE> 77
Through an Authorized Broker, Investment Advisor or Service
Organization. Investor A and B Shares are available to new and existing
shareholders through authorized brokers, investment advisors and Service
Organizations. To make an investment using this method, simply complete a
Purchase Application and contact your broker, investment advisor or Service
Organization with instructions as to the amount (and class of shares) you wish
to invest. Your broker will then contact the Fund to place the order on your
behalf on that day.
Orders received by your broker or Service Organization for the Fund in
proper order prior to the determination of the Fund's net asset value and
transmitted to the Trust prior to the close of its business day (which is
currently 5:00 p.m., Eastern time), will become effective that day. Brokers
who receive orders are obligated to transmit them promptly. You should receive
written confirmation of your order within a few days of receipt of instructions
from your broker.
By Wire. Investments may be made directly through the use of wire
transfers of Federal funds. Contact your bank and request it to wire Federal
funds to the Fund. In most cases, your bank will either be a member of the
Federal Reserve Banking System or have a relationship with a bank that is.
Your bank will normally charge you a fee for handling the transaction. To
purchase Investor Shares by a Federal funds wire, please first contact Furman
Selz Mutual Funds Client Services. They will establish a record of information
for the wire to ensure its correct processing. You can reach the Wire Desk at
1-800-662-9417.
Have your bank wire funds using the following instructions: Fiduciary
Trust Company
Kansas City, MO 64105
ABA #1010-0362-1
Account #7527950
Further Credit to: Fund Name
As long as you have read the Prospectus, you may establish a new
regular account through the Wire Desk; IRAs may not be opened in this way.
When new accounts are established by wire, the distribution options will be set
to reinvest and the social security or tax identification number ("TIN") will
not be certified until a signed application is received. Completed
applications should be forwarded immediately to the Fund. With the Purchase
Application, the shareholder can specify other distribution options and add any
special features offered by the Fund. Should any dividend distributions or
redemptions be paid before the TIN is certified, they will be subject to 31%
Federal tax withholding.
Automatic Investment Program. An eligible shareholder may also
participate in the Pacifica Automatic Investment Program, an investment plan
that automatically debits
- 14 -
<PAGE> 78
money from the shareholder's bank account and invests it in the Fund through
the use of electronic funds transfers or automatic bank drafts. Shareholders
may elect to make subsequent investments by transfers of a minimum of $50 on
either the fifth or twentieth day of each month into their established Fund
accounts. Contact the Trust at 1-800-662-8417 for more information about the
Pacifica Automatic Investment Program.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund may be used as a funding medium for IRAs. Investor Class A and B
Shares may also be purchased for IRAs established with an affiliate of First
Interstate Bancorp or other authorized custodians. In addition, an IRA may be
established through a custodial account with Investors Fiduciary Trust Company.
Completion of a special application is required in order to create such an
account, and the minimum initial investment for an IRA is $250. Contributions
to IRAs are subject to prevailing amount limits set by the Internal Revenue
Service. A $5.00 establishment fee and an annual $12.00 maintenance and
custody fee is payable with respect to each IRA, and there will be a $10.00
termination fee when the account is closed. For more information, call the
Fund at 1-800-662-8417.
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers two classes of shares in this prospectus (Investor Class A and
Investor Class B Shares) so shareholders may choose between two alternative
sales charge arrangements.
Investor A Shares are offered with a sales charge at the time of purchase and
are subject to and an on-going distribution fee at an annual rate of 0.25% of
average daily net assets. The distribution fee is paid by the Fund. The
initial sales charge is a maximum of 4 1/2% and is waived or reduced for
certain purchases.
Investor B Shares are offered without an initial sales charge but are subject
to a contingent deferred sales charge of 5% which declines to zero after six
years. Investor B shares are also subject to an on-going distribution fee at
an annual rate of 1.00% of average daily net assets; this fee is paid by the
Fund. Class B shares automatically will invest to Class A shares approximately
eight years after a purchase.
The two classes of shares represent an interest in the same portfolio of
investments of the Fund and have the same rights, except that (i) each class
bears the separate expenses of its Rule 12b-1 distribution and service plan,
(ii) each class has exclusive voting rights with respect to its plan, and (iii)
only Class B shares have a conversion feature. The two classes also have
separate exchange privileges. See "Exchange of Investor Shares" below. The
income attributable to each class and the dividends payable on the shares of
each class will be reduced by the amount of the distribution fee of each class.
Class B shares
- 15 -
<PAGE> 79
bear the expenses of a higher distribution fee which will generally cause it to
have higher expense ratios and to pay lower dividends than the Class A shares.
In selecting a purchase alternative, you should consider, among other things,
(1) the length of time you expect to hold your investment, (2) the amount of
any applicable sales charge (whether imposed at the time of purchase or
redemption) and distribution-related fees, as noted above, (3) whether you
qualify for any reduction or waiver of any applicable sales charge, (4) the
various exchange privileges among the different classes of shares (see
"Exchange of Investor Shares" below) and (5) the fact that Class B shares
automatically convert to Class A shares approximately eight years after
purchase (see "Conversion Feature -- Class B shares" below).
The following is provided to assist you in determining which method of
purchase best suits your individual circumstances and is based on current fees
and expenses being charged to the fund:
If you intend to hold your investment for more than 6 years, you
should consider purchasing Class A shares over Class B shares regardless of
whether or not you qualify for a reduced sales charge on Class A shares.
If you qualify for a reduced sales charge on Class A shares and you
purchase Class B shares, you would have to hold your investment for more than
__ years in the case of Class B shares for the higher cumulative annual
distribution-related fee on those shares to exceed the initial sales charge
plus cumulative annual distribution related fees on Class A shares. This does
not take into account the time value of money which further reduces the impact
of the higher Class B distribution-related fee on the investment, fluctuations
in net asset value, the effect of the return on the investment over the period
of time or redemptions during which the CDSC is applicable.
ALL PURCHASES OF $1 MILLION OR MORE, EITHER AS PART OF A SINGLE
INVESTMENT OR UNDER RIGHTS OF ACCUMULATION OR LETTER OF INTENT, MUST BE FOR
CLASS A SHARES. SEE "REDUCTION AND WAIVER OF INITIAL SALES CHARGES" BELOW.
PRICING OF INVESTOR A SHARES
Orders for the purchase of Investor A Shares will be executed at the
net asset value per share plus any applicable sales charge (the "public
offering price") next determined after an order has become effective. The
sales charge on purchases of Investor A Shares of the Funds varies with the
size of the purchase made according to the following schedule:
- 16 -
<PAGE> 80
<TABLE>
<CAPTION>
Amount of
Sales Charge as a Sales Charge
Percentage of Reallowed to
------------------- Dealers as a
Public Net Percentage of
Offering Amount Public
Amount of Investment Price Invested Offering Price
-------------------- -------- -------- --------------
<S> <C> <C> <C>
Less than $100,000 . . . . . . . . . . . . . . . . 4.50% 4.71% 4.00%
$100,000 but less than $250,000 . . . . . . . . . . 3.50% 3.63% 3.00%
$250,000 but less than $500,000 . . . . . . . . . . 2.60% 2.67% 2.25%
$500,000 but less than $1,000,000 . . . . . . . . . 2.00% 2.04% 1.75%
$1,000,000 and over . . . . . . . . . . . . . . . . None+ None+ None+
</TABLE>
- ---------------
+ There is no initial sales charge on purchases of $1 million or more; however,
the Distributor pays investment dealers and financial institutions a commission
from its own resources of 0.70% of the amount invested, and shareholders who
redeem their Investor A Shares within one year of the date of purchase will be
subject to a 1% contingent deferred sales charge for the purpose of reimbursing
the Distributor for the commission paid.
The initial sales load will not apply to Investor A Shares purchased
by: (i) trust, investment management, advisory and fiduciary accounts managed
or administered by First Interstate Bancorp, its subsidiaries and affiliates,
or the Advisor pursuant to a written agreement; (ii) any person purchasing
Investor A Shares with the proceeds of a distribution from a trust, investment
management, advisory or other fiduciary account managed or administered by
First Interstate Bancorp, its subsidiaries and affiliates, or the Advisor
pursuant to a written agreement; (iii) any person purchasing Investor A Shares
with the proceeds of a redemption from a mutual fund, other than an investment
portfolio offered by the Trust, that was originally purchased with a sales
load, (iv) Furman Selz or any of its affiliates; (v) Trustees or officers of
the Funds; (vi) directors or officers of Furman Selz, the Advisor, or their
affiliates or bona fide employees or former employees of any of the foregoing
who have acted as such for not less than 90 days (including members of their
immediate families and their retirement plans or accounts); or (vii) retirement
accounts or plans for which a depository institution, which is a client or
customer of the Advisor, Furman Selz or PFD Inc. serves as custodian or
trustee, or to any trust, pension, Individual Retirement Account ("IRA"),
spousal IRA, profit-sharing or other benefit plan for such persons so long as
such Investor A Shares are purchased through PFD Inc. The initial sales load
also does not apply to Investor A Shares sold to representatives of selling
brokers and members of their immediate families. In addition, the initial
sales load does not apply to sales to bank trust departments, acting on behalf
of one or more clients, of Investor A Shares having an aggregate value equal to
or exceeding $200,000.
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<PAGE> 81
See "Dividends, Distributions and Federal Income Tax," for an
explanation of circumstances in which a sales load paid to acquire Investor A
Shares of a mutual fund may not be taken into account in determining gain or
loss on the disposition of those Investor A Shares.
QUANTITY DISCOUNTS IN THE SALES CHARGES
The following quantity discounts shall be available to: (a) an
individual, his or her spouse, and their children under the age of 21, and any
trust, pension, IRA, spousal IRA, profit sharing or other benefit plan for such
persons; (b) a trustee or other fiduciary of a single trust estate or a single
fiduciary account; (c) a pension, profit-sharing or other employee benefit plan
qualified under Section 401 of the Internal Revenue Code of 1986, and (d)
tax-exempt organizations under Section 501 (c) (3) of the Code.
Right of Accumulation. The schedule of reduced sales charges will be
applicable once the accumulated value of the account has reached $100,000. For
this purpose, the dollar amount of the qualifying concurrent or subsequent
purchase is added to the net asset value of any Investor A Shares of those
investment portfolios of the Trust that are subject to a sales charge and are
owned at the time of such purchase by the investor. The sales charge imposed
on the Investor A Shares being purchased will then be at the rate applicable to
the aggregate value of Investor A Shares owned and to be purchased by the
investor. For example, if the investor held Investor A Shares valued at
$100,000 and purchased an additional $20,000 of Investor A Shares (totalling an
investment of $120,000), the sales charge for the $20,000 purchase would be at
the next lower sales charge on the schedule (i.e., the sales charge for
purchases over $100,000 but less than $250,000). There can be no assurance
that investors will receive the cumulative discounts to which they may be
entitled unless, at the time of placing their purchase order, the investors or
their dealers make a written request for the discount. The cumulative discount
program may be amended or terminated at any time. This particular privilege
does not entitle the investor to any adjustment in the sales charge paid
previously on purchases of Investor A Shares. If the investor knows that he
will be making additional purchases of Investor A Shares in the future, he may
wish to consider executing a Letter of Intent.
Letter of Intent. The schedule of reduced sales charges is also
available to investors who enter into a written Letter of Intent providing for
the purchase, within a 13-month period, of Investor A Shares of a particular
Fund. Investor A Shares of a Fund previously purchased during the 90-day
period prior to the date of receipt by the Fund of the Letter of Intent which
are still owned by the shareholder may also be included in determining the
applicable reduction, provided the shareholder or the dealer notifies the Fund
of such prior purchases.
A Letter of Intent permits an investor to establish a total investment
goal to be achieved by any number of investments over a 13-month period. Each
investment made
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<PAGE> 82
during the period will receive the reduced sales commission applicable to the
amount represented by the goal as if it were a single investment. A number of
Investor A Shares totaling 5% of the dollar amount of the Letter of Intent will
be held in escrow by the Fund in the name of the shareholder. The initial
purchase under a Letter of Intent must be equal to at least 5% of the stated
investment goal.
The Letter of Intent does not obligate the investor to purchase, or a
Fund to sell, the indicated amount. In the event the Letter of Intent goal is
not achieved within the 13-month period, the investor is required to pay the
difference between the sales charge otherwise applicable to the purchases made
during this period and sales charges actually paid. The Fund is authorized by
the shareholder to liquidate a sufficient number of escrowed Investor A Shares
to obtain such difference. If the goal is exceeded and purchases pass the next
sales charge level, the sales charge on the entire amount of the purchase that
results in passing that level and on subsequent purchases will be subject to
further reduced sales charges in the same manner as set forth under "Right of
Accumulation," but there will be no retroactive reduction of sales charges on
previous purchases. At any time while a Letter of Intent is in effect, a
shareholder may, by written notice to PFD Inc., increase the amount of the
stated goal. In that event, Investor A Shares purchased during the previous
90-day period and still owned by the shareholder will be included in
determining the applicable sales charge reduction. The 5% escrow and minimum
purchase requirements will be applicable to the new stated goal. Investors
electing to purchase Investor A Shares pursuant to a Letter of Intent should
carefully read the application for a Letter of Intent which is available from
the Trust.
PRICING OF INVESTOR B SHARES
Orders for the purchase of Investor B shares will be executed at the
net asset value per share next determined after an order has become effective.
There is no initial sales charge but redemptions of Investor B shares may be
subject to a contingent deferred sales charge.
CONTINGENT DEFERRED SALES CHARGES
Redemptions of Class B shares will be subject to a contingent deferred
sales charge or CDSC declining from 5% to zero over a six-year period. The
CDSC will be deducted from the redemption proceeds and reduce the amount paid
to you. The CDSC will be imposed on any redemption by you which reduces the
current value of your shares to an amount which is lower than the amount of all
payments by you for shares during the preceding six years, in the case of Class
B shares. A CDSC will be applied on the lesser of the original purchase price
or the current value of the shares being redeemed. Increases in the value of
your shares or shares acquired through reinvestment of dividends or
distributions are not subject to a CDSC. The amount of any CDSC will
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<PAGE> 83
be paid to and retained by the Distributor. See "Management of the Fund "
above and "Waiver of the Contingent Deferred Sales Charges -- Class B Shares"
below.
The amount of the CDSC, if any, will vary depending on the number of
years from the time of payment for the purchase of shares until the time of
redemption of such shares. Solely for purposes of determining the number of
years from the time of any payment for the purchase of shares, all payments
during a month will be aggregated and deemed to have been made on the last day
of the month. The CDSC will be calculated form the first day of the month
after the initial purchase, excluding the time shares were held in a money
market fund. See "How to Exchange Your Shares." The following table sets
forth the rates of the CDSC applicable to redemptions of Class B shares:
<TABLE>
<CAPTION>
YEAR SINCE CONTINGENT DEFERRED SALES CHARGE
PURCHASE PAYMENT MADE AS A PERCENTAGE OF DOLLARS INVESTED
OR REDEMPTION PROCEEDS
<S> <C>
First . . . . . . . . . . . . . . . . . 5.0%
Second . . . . . . . . . . . . . . . . . 4.0%
Third . . . . . . . . . . . . . . . . . 4.0%
Fourth . . . . . . . . . . . . . . . . . 3.0%
Fifth . . . . . . . . . . . . . . . . . 2.0%
Sixth . . . . . . . . . . . . . . . . . 1.0%
Seventh . . . . . . . . . . . . . . . . None
</TABLE>
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in the following manner. It will be assumed that
the redemption is made first of amounts representing the cost of shares held
beyond the applicable CDSC period; then of amounts representing shares acquired
pursuant to the reinvestment of dividends and distributions; then of amounts
representing the increase in net asset value above the total amount of payments
for the purchase of Fund shares made within the applicable CDSC period; and
finally, of amounts representing the cost of shares held for the longest period
of time within the applicable CDSC period.
For example, assume you purchased 100 Class B shares at $10
per share for a cost of $1,000. Subsequently, you acquired 5 additional Class
B shares through dividend reinvestment. During the second year after the
purchase you decided to redeem $500 of your investment. Assuming at the time
of the redemption the net asset value had appreciated to $12 per shares, the
value of your Class B shares would be $1,260 (105 shares at $12 per share).
The CDSC would not be applied to the value of the reinvested dividend shares
and the amount which represents appreciation ($260). Therefore, $240 of the
$500 redemption proceeds ($500 minus $260) would be charged at a rate of 4%
(the applicable rate in the second year after purchase) for a total CDSC of
$9.60.
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<PAGE> 84
For federal income tax purposes, the amount of the CDSC will
reduce the gain or increase the loss, as the case may be, on the amount
recognized on the redemption of shares.
WAIVER OF THE CONTINGENT DEFERRED SALES CHARGES -- CLASS B
SHARES. The CDSC will be waived in the case of a redemption following the
death or disability of a shareholder or, in the case of a trust account,
following the death or disability of the grantor. The waiver is available for
total or partial redemptions of shares owned by a person, either individually
or in joint tenancy (with rights of survivorship), or a trust, at the time of
death or initial determination of disability, provided that the shares were
purchased prior to death or disability.
The CDSC will also be waived in the case of a total or partial
redemption in connection with certain distributions made without penalty under
the Internal Revenue Code from a tax-deferred retirement plan, an IRA or
Section 405(b) custodial account. These distributions include: (i) in the case
of a tax-deferred retirement plan, a lump-sum or other distribution after
retirement; (ii) in the case of an IRA or Section 405(b) custodial account, a
lump-sum or other distribution after attaining age 59 1/2; and (iii) a tax-free
return of an excess contribution or plan distributions following the death or
disability of the shareholder, provided that the shares were purchased prior to
death or disability. The waiver does not apply in the case of a tax-free
rollover or transfer of assets, other than one following separation from
service (i.e., following voluntary or involuntary termination of employment or
following retirement). Under no circumstances will the CDSC be waived on
redemption resulting from the termination of a tax-deferred retirement plan,
unless such redemptions otherwise qualify for a waiver as described above. In
addition, the CDSC will be waived on redemptions of shares held by Trustees of
the Fund.
You must notify the Fund's Transfer Agent either directly or
through your broker or service organization, at the time of redemption, that
you are entitled to waiver of the CDSC and provide the Transfer Agent with
such supporting documentation as it may deem appropriate. The waiver will be
granted subject to confirmation of your entitlement. See "Waiver of the
Contingent Deferred Sales Charge -- Class B Shares" in the Statement of
Additional Information.
CONVERSION FEATURE -- INVESTOR B SHARES
Class B shares will automatically convert to Class A shares on
a quarterly basis approximately eight years after purchase. Conversions will
be effected at relative net asset value without the imposition of any
additional sales charge.
Since annual distribution-related fees are lower for Class A
shares than Class B shares, the per share net asset value of the Class A shares
may be higher than that of the Class B shares at the time of conversion. Thus,
although the aggregate dollar
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<PAGE> 85
value will be same, you may receive fewer Class A shares than Class B shares
converted. See "How the Fund Values its Shares."
For purposes of calculating the applicable holding period for
conversions, all payments for Class B shares during a month will be deemed to
have been made on the last day of the month, or for Class B shares acquired
through exchange, or a series of exchanges, on the last day of the month in
which the original payment for purchases of such Class B shares was made. For
Class B shares previously exchanged for shares of a money market fund, the time
period during which such shares were held in the money market fund will be
excluded. For example, Class B shares held in a money market fund for one year
will not convert to Class A shares until approximately nine years from
purchase. For purposes of measuring the time period ruing which shares are
held in a money market fund, exchanges will be deemed to have been made on the
last day of the month. Class B shares acquired through exchange will convert
to Class A shares after expiration of the conversion period applicable to the
original purchase of such shares.
The conversion feature may be subject to the continuing
availability of opinions of counsel or rulings of the Internal Revenue Service
(i) that the dividends and other distributions paid on Class A and Class B
shares will not constitute "preferential dividends" under the Internal Revenue
Code and (ii) that the conversion of shares does not constitute a taxable
event. The conversion of Class B shares into Class A shares may be suspended
if such opinions or rulings are no longer available. If conversions are
suspended, Class B shares of the Fund will continue to be subject, possibly
indefinitely, to their higher annual distribution and service fee.
EXCHANGE OF INVESTOR SHARES
The Fund offers two convenient ways to exchange Investor
Shares in the Fund for Investor Shares in another investment portfolio of the
Trust. Before engaging in an exchange transaction, a shareholder should read
carefully the Prospectus describing the investment portfolio into which the
exchange will occur, which is available without charge and can be obtained by
writing to Furman Selz, Mutual Fund Department 237 Park Avenue, Suite 910, New
York, New York 10017, or by calling 1-800-662-8417. A shareholder may not
exchange Investor Shares of one portfolio for Investor Shares of another
portfolio if both or either are not qualified for sale in the state of the
shareholder's residence. The minimum amount for an initial exchange is $500.
No minimum is required in subsequent exchanges. The Trust may terminate or
amend the terms of the exchange privilege at any time.
Investor A shares may only be exchanged for Investor A shares
of another investment portfolio. Investor B shares may only be exchanged for
Investor B shares of another investment portfolio.
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<PAGE> 86
A new account opened by exchange must be established with the
same name(s), address and social security number as the existing account. All
exchanges will be made based on the net asset value next determined following
receipt of the request by the Trust in good order, plus any applicable sales
charge.
An exchange is taxable as a sale of a security; however, if
the Fund maintains a net asset value of $1.00 per share, no gain or loss would
be realized upon an exchange of Fund shares. Shareholders should receive
written confirmation of the exchange within a few days of the completion of the
transaction.
In the case of transactions subject to an initial sales
charge, the sales charge will be assessed on an exchange of Investor Shares,
equal to the excess of the sales load applicable to the Investor Shares to be
acquired over the amount of any sales load previously paid on the Investor
Shares to be exchanged. No service fee is imposed. See "Dividends,
Distributions and Federal Income Tax" for an explanation of circumstances in
which a sales load paid to acquire Investor Shares of the Fund may not be taken
into account in determining gain or loss on the disposition of those Investor
Shares.
Any applicable CDSC payable upon redemption of shares
exchanged will be that imposed by the Fund in which shares were initially
purchased and will be calculated from the first day of the month after the
initial purchase, excluding the time shares were held in a money market fund.
In addition, Institutional Shares of the Fund may be exchanged
for Investor Shares of the Fund in connection with the distribution of assets
held in a qualified trust, agency or custodial account maintained with the
trust department of a First Interstate or other bank, trust company or thrift
institution, or in other cases where Institutional Shares are not held in such
qualified accounts. Similarly, Investor Shares may be exchanged for
Institutional Shares (not described in this prospectus) of the Fund if the
shares are to be held in such a qualified trust, agency or custodial account.
These exchanges are made without a sales charge at the net asset value of the
respective share classes.
Exchange by Mail. To exchange Investor Shares of the Fund by
mail, simply send a letter of instruction to Furman Selz. The letter of
instruction must include: (i) your account number, (ii) the Fund (and class)
from and the Fund into which you wish to exchange your investment; (iii) the
dollar or share amount you wish to exchange; and (iv) the signatures of all
registered owners or authorized parties. All signatures must be guaranteed by
an eligible guarantor institution including a member of a national securities
exchange or by a commercial bank or trust company, broker-dealers, credit
unions and savings associations.
Exchange by Telephone. To exchange Investor Shares of the
Fund by telephone, or if you have any questions, simply call the Trust at
1-800-662-8417. You
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<PAGE> 87
should be prepared to give the telephone representative the following
information: (i) your account number, social security number and account
registration; (ii) the name of the portfolio (and class) from and the portfolio
into which you wish to transfer your investment; and (iii) the dollar or share
amount you wish to exchange. The conversation may be recorded to protect you
and the Fund. Telephone exchanges are available only if the shareholder so
indicates by checking the "yes" box on the Purchase Application. See
"Redemption of Investor Fund Shares -- By Telephone" for a discussion of
telephone transactions generally.
REDEMPTION OF INVESTOR SHARES
Shareholders may redeem their Investor Shares, in whole or in
part, on any Business Day. Investor Shares will be redeemed at the net asset
value next determined after a redemption request in good order has been
received and accepted by the Trust. Although redemption proceeds may, in the
case of Investor B shares, be subject to any applicable contingent deferred
sales charge, as described below (See "Contingent Deferred Sales Charge" above.
See also "Fund Share Valuation.") A redemption may be a taxable transaction on
which gain or loss may be recognized. Generally, however, gain or loss is not
expected to be recognized on a redemption of shares of the Fund because the
Fund seeks to maintain a net asset value of $1.00 per share.
Where the Investor Shares to be redeemed have been purchased
by check, the Trust may delay payment of the redemption proceeds until the
purchasing check has cleared, which may take up to 15 days. Shareholders may
avoid this delay by investing through wire transfers of Federal funds. During
the period prior to the time the Investor Shares are redeemed, dividends on the
Investor Shares will continue to accrue and be payable and the shareholder will
be entitled to exercise all other beneficial rights of ownership.
Once the Investor Shares are redeemed, the Fund will
ordinarily send the proceeds by check to the shareholder at the address of
record on the next Business Day. The Fund may, however, take up to seven days
to make payment. This will not be the customary practice. Also, if the New
York Stock Exchange is closed (or when trading is restricted) for any reason
other than the customary weekend or holiday closing or if an emergency
condition as determined by the SEC merits such action, the Fund may suspend
redemptions or postpone payment dates.
To ensure acceptance of your redemption request, it is
important to follow the procedures described below. Although the Trust has no
present intention to do so, it reserves the right to refuse or to limit the
frequency of any telephone or wire redemptions. Of course, it may be difficult
to place orders by telephone during periods of severe market or economic
change, and a shareholder should consider alternative methods of
communications, such as couriers or U.S. mail. The services offered by the
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<PAGE> 88
Fund may be modified or terminated at any time. If the Fund terminates any
particular service, they will do so only after giving written notice to
shareholders.
You may redeem your Investor Shares using any of the following
methods:
Through an Authorized Broker, Investment Advisor or Service
Organization. You may redeem your Investor Shares by contacting your broker or
investment advisor and instructing him or her to redeem your Investor Shares.
He or she will then contact PFD Inc. and place a redemption trade on your
behalf. He or she may charge you a fee for this service.
By Mail. You may redeem your Investor Shares by sending a
letter directly to the Fund. To be accepted, a letter requesting redemption
must include: (i) the Fund name and account registration from which you are
redeeming Investor Shares; (ii) your account number, (iii) the dollar or share
amount and class of shares to be redeemed; (iv) the signatures of all
registered owners; and (v) a signature guarantee by any eligible guarantor
institution including a member of a national securities exchange or a
commercial bank or trust company, broker-dealers, credit unions and savings
associations. Corporations, partnerships, trusts or other legal entities will
be required to submit additional documentation.
By Telephone. You may redeem your Investor Shams by calling
the Fund toll free at 1-800-662-8417. You should be prepared to give the
telephone representative the following information: (i) your account number,
social security number and account registration; (ii) the Fund name from which
you are redeeming Investor Shares; and (iii) the amount and class of shares to
be redeemed. The conversation may be recorded to protect you and the Fund.
Telephone redemptions are available only if the shareholder so indicates by
checking the "yes" box on the Purchase Application. The Fund employs
reasonable procedures to confirm that instructions communicated by telephone
are genuine. If the Fund fails to employ such reasonable procedures, they may
be liable for any loss, damage or expense arising out of any telephone
transactions purporting to be on a shareholder's behalf. In order to assure
the accuracy of instructions received by telephone, the Fund requires some form
of personal identification prior to acting upon instructions received by
telephone, record telephone instructions and provide written confirmation to
investors of such transactions.
By Wire. You may redeem your Investor Shares by contacting
the Fund by mail or telephone and instructing them to send a wire transmission
to your personal bank.
Your instructions should include: (i) your account number,
social security number and account registration; (ii) the Fund name from which
you are redeeming Investor Shares; and (iii) the amount and class of shares to
be redeemed. Wire redemptions can be made only if the "yes" box has been
checked on your Purchase
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<PAGE> 89
Application, and a copy of a void check from the account where proceeds are to
be wired is attached to the Purchase Application. Your bank may charge you a
fee for receiving a wire payment on your behalf.
The above-mentioned services "By Telephone" and "By Wire" are
not available for IRAs and trust clients of an affiliate of First Interstate
Bancorp.
Systematic Withdrawal Plan. An owner of $10,000 or more of
Investor Shares of the Fund may elect to have periodic redemptions from his or
her account to be paid on a monthly, quarterly, semi-annual or annual basis.
The minimum periodic payment is $100. A sufficient number of Investor Shares
to make the scheduled redemption will normally be redeemed on the date selected
by the shareholder. Depending on the size of the payment requested and
fluctuation in the net asset value, if any, of the Investor Shares redeemed,
redemptions for the purpose of making such payments may reduce or even exhaust
the account. A shareholder may request that these payments be sent to a
predesignated bank or other designated party. Capital gains and dividend
distributions paid to the account will automatically be reinvested at net asset
value on the distribution payment date.
Redemption of Small Accounts. Due to the disproportionately
higher cost of servicing small accounts, the Fund reserves the right to redeem,
on not less than 30 days' notice, an account in the Fund that has been reduced
by a shareholder to $500 or less. However, if during the 30-day notice period
the shareholder purchases sufficient Investor Shares to bring the value of the
account above $500, this restriction will not apply.
Redemption in Kind. All redemptions of Investor Shares of the
Fund shall be made in cash, except that the commitment to redeem Investor
Shares in cash extends only to redemption requests made by each shareholder of
the Fund during any 90-day period of up to the lesser of $250,000 or 1% of the
net asset value of that Fund at the beginning of such period. This commitment
is irrevocable without the prior approval of the SEC and is a fundamental
policy of the Fund that may not be changed without shareholder approval. In
the case of redemption requests by shareholders in excess of such amounts, the
Board of Trustees reserves the right to have the Fund make payment, in whole or
in part, in securities or other assets, in case of an emergency or any time a
cash distribution would impair the liquidity of the Fund to the detriment of
the existing shareholders. In this event, the securities would be valued in
the same manner as the securities of that Fund are valued. If the recipient
were to sell such securities, he or she would incur brokerage charges.
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<PAGE> 90
DIVIDENDS, DISTRIBUTIONS AND FEDERAL INCOME TAX
The Fund intends to qualify annually and to elect to be
treated as a regulated investment company pursuant to the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). By
so qualifying and electing, the Fund generally will not be subject to Federal
income tax to the extent that it distributes investment company taxable income
and net capital gains in the manner required under the Code.
The Fund intends to distribute to its shareholders
substantially all of its investment company taxable income (which includes,
among other items, dividends and interest and the excess, if any, of net
short-term capital gains over net long-term capital losses). The Fund will
declare distributions of investment company income daily and pay those
dividends monthly. The Fund intends to distribute, at least annually,
substantially all net capital gain (the excess of net long-term capital gains
over net short-term capital losses), if any. In determining amounts of capital
gains to be distributed, any capital loss carryovers from prior years will
first be applied against capital gains.
Distributions will be paid in additional shares of the Fund
based on the net asset value at the close of business on the payment date of
the distribution, unless the shareholder elects in writing, which is received
by Furman Selz not less than five full business days prior to the record date,
to receive such distributions in cash. Dividends declared in, and attributable
to, the preceding month will be paid within five business days after the end of
each month.
Shares purchased will begin earning dividends on the day the
purchase order is executed and shares redeemed will earn dividends through the
previous day. Net investment income for a Saturday, Sunday or a holiday will
be declared as a dividend on the previous business day. Investors who redeem
all or a portion of Fund shares prior to a dividend payment date will be
entitled on the next dividend payment date to all dividends declared but unpaid
on those shares at the time of their redemption.
Distributions of investment company taxable income (regardless
of whether derived from dividends, interest or net short-term capital gains)
will be taxable to shareholders as ordinary income. Distributions of net
long-term capital gains designated by the Fund as capital gain dividends will
be taxable as long-term capital gains, regardless of how long a shareholder has
held his Fund shares. Distributions are taxable in the same manner whether
received in additional shares or in cash.
Earnings of the Fund not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible 4% excise tax. To prevent imposition of this tax, the Fund
intends to comply with this distribution requirement.
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<PAGE> 91
A distribution will be treated as paid on December 31 of a
calendar year if it is declared by the Fund during October, November, or
December of that year to shareholders of record in such a month and paid by the
Fund during January of the following calendar year. Such distributions will be
treated as received by shareholders in the calendar year in which the
distributions are declared, rather than the calendar year in which the
distributions are received.
The dividends paid by the Fund are not expected to qualify for
the dividends-received deduction available to corporations.
The Fund may be required to withhold for Federal income tax
("backup withholding") 31% of the distributions and the proceeds of redemptions
payable to shareholders who fail to provide a correct taxpayer identification
number or to make required certifications, or where the Fund or shareholder has
been notified by the Internal Revenue Service that the shareholder is subject
to backup withholding. Most corporate shareholders and certain other
shareholders specified in the Code are exempt from backup withholding. Backup
withholding is not an additional tax. Any amounts withheld may be credited
against the shareholder's U.S. Federal income tax liability.
Shareholders will be notified annually by the Trust as to the
Federal tax status of distributions made by the Fund. Depending on the
residence of the shareholder for tax purposes, distributions also may be
subject to state and local taxes, including withholding taxes. Foreign
shareholders may, for example, be subject to special withholding requirements.
Special tax treatment, including a penalty on certain pre-retirement
distributions, is accorded to accounts maintained as IRAs. Shareholders should
consult their own tax advisors as to the Federal, state and local tax
consequences of ownership of shares of the Fund in their particular
circumstances.
Under certain circumstances, the sales charge incurred in
acquiring shares of a Fund may not be taken into account in determining the
gain or loss on the disposition of those shares. This rule applies where
shares of a Fund are exchanged within 90 days after the date they were
purchased and new shares of the Fund or of another investment portfolio of the
Trust are acquired without a sales charge or at a reduced sales charge. In
that case, the gain or loss recognized on the exchange will be determined by
excluding from the tax basis of the shares exchanged all or a portion of the
sales charge incurred in acquiring those shares. This exclusion applies to the
extent that the otherwise applicable sales charge with respect to the newly
acquired shares is reduced as a result of having incurred a sales charge
initially. The portion of the sales charge affected by this rule will be
treated as a sales charge paid for the new shares.
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<PAGE> 92
DESCRIPTION OF SECURITIES AND INVESTMENT PRACTICES
U.S. Treasury Obligations. U.S. Treasury securities are
obligations issued by the U.S. Treasury. U.S. Treasury bills, which have a
maturity of up to one year, are direct obligations of the United States and are
the most frequently issued marketable U.S. Government security. The U.S.
Treasury also issues securities with longer maturities in the form of notes and
bonds.
Stripped Obligations. The Fund may invest in U.S. Treasury
obligations offered under the STRIPS or CUBES programs. Such obligations may
represent future interest or principal payments. These stripped securities are
direct obligations of the U.S. Government and clear through the Federal
Reserve book-entry system. Stripped securities are issued at a discount to
their face value and may exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest are
returned to investors.
Securities Issued by Other Investment Companies. The Fund may
invest in securities issued by other investment companies within the limits
prescribed by the 1940 Act. The Fund currently intends to limit its
investments so that, as determined immediately after a securities purchase is
made: (a) not more than 5% of the value of its total assets will be invested
in the securities of any one investment company; (b) not more than 10% of the
value of its total assets will be invested in the aggregate in securities of
investment companies as a group; (c) not more than 3% of the outstanding voting
stock of any one investment company will be owned by the Fund; and (d) not more
than 10% of the outstanding voting stock of any one investment company will be
owned in the aggregate by the Fund and other investment companies advised by
the Advisor or any other affiliate of First Interstate Bancorp. As a
shareholder of another investment company, the Fund would bear, along with
other shareholders, its pro rata portion of the expenses of such other
investment company, including advisory fees. These expenses would be in
addition to the advisory and other expenses that each Fund bears directly in
connection with its own operations, and may represent a duplication of fees to
shareholders of the Fund. The Fund may only invest in investment companies
which restrict their portfolio investments solely to the same investment
instruments that are permissible investments for the Fund.
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental investment
restrictions that may be changed only with the approval of a majority of the
Fund's outstanding shares. The following description summarizes several of the
Fund's fundamental restrictions, which are set forth in full in the SAI.
- 29 -
<PAGE> 93
The Fund may not:
1. Purchase securities (except U.S. Government securities and
repurchase agreements collateralized by such securities) if
more than 5% of its total assets at the time of purchase will
be invested in securities of any one issuer, except that up to
25% of the Fund's total assets may be invested without regard
to this 5% limitation.
2. Subject to the foregoing 25% exception, purchase more than 10%
of the outstanding voting securities of any issuer.
3. Invest 25% or more of its total assets at the time of purchase
in securities of issuers whose principal business activities
are in the same industry.
4. Borrow money except in amounts up to 10% of the value of its
total assets at the time of borrowing.
If a percentage restriction on the investment or use of assets set
forth in this Prospectus is adhered to at the time a transaction is effected,
later changes in percentage resulting from changing values will not be
considered a violation, however, the Fund will not at any time have more than
10% of its respective net assets invested in illiquid securities.
OTHER INFORMATION
CAPITALIZATION
Pacifica Funds Trust (formerly Fund Source) was organized as a
Massachusetts business trust on July 17, 1994. The capitalization of the Trust
consists solely of an unlimited number of shares of beneficial interest with a
par value of $0.001 each. When issued, shares of the Fund are fully paid,
non-assessable and freely transferable.
The Board of Trustees has authorized the issuance of five classes of
shares in the Fund -- Investor, Investor A and Investor B Shares, Service
Shares and Institutional Shares. Each share of the Fund represents an equal
proportionate interest in the Fund with other shares of the same class and is
entitled to cash dividends and distributions earned on such shares as are
declared in the discretion of the Board of Trustees.
The Fund's Institutional and Service Shares and Investor Classes of
Shares bear their pro rata portion of all operating expenses paid by the Fund
except for the distribution payments, Service Organization fees and other
"class" expenses that are allocated to a particular share class. The Board of
Trustees has not approved a Distribution Plan with respect to Institutional
Shares. The Fund may pay fees to Service Organizations in amounts up to an
annual rate of 0.25% of the daily net asset value of the Fund's
- 30 -
<PAGE> 94
outstanding Institutional Shares owned by shareholders with whom a Service
Organization has a servicing relationship. Because of the "class expenses,"
the performance of the Fund's Institutional and Service Shares is expected to
be higher than the performance of its Investor Classes of Shares. The Trust
offers various services and privileges in connection with its Investor Shares
that are not offered in connection with its Institutional or Service Shares,
including an automatic investment plan, automatic withdrawal plan and, with
respect to certain portfolios, checkwriting. For information regarding the
Fund's Institutional and Service Shares, contact Furman Selz at 1-800-662-8417
or your Service Organization.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims liability of the shareholders,
Trustees or officers of the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the Trust. The Declaration of
Trust also provides for indemnification out of the property of the Fund of any
shareholder held personally liable solely by reason of being or having been a
shareholder of the Fund. The risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the Fund
itself would be unable to meet its obligations and should be considered remote.
VOTING
Shareholders have the right to vote in the election of Trustees and on
any and all matters on which, by law or under the provisions of the Declaration
of Trust, they may be entitled to vote. The Trust is not required to hold
regular annual meetings of the Fund's shareholders, but in the event that a
special meeting is held, shareholders of each portfolio offered by the Trust
will be entitled to one vote for each full share held and fractional votes for
fractional shares held, and will vote in the aggregate and not on a
portfolio-by-portfolio basis, except as required by the 1940 Act or other
applicable law. It is contemplated that, as required by the 1940 Act, the
shareholders of a portfolio will vote separately on a portfolio-by-portfolio
basis on matters relating to a particular portfolio's investment advisory
agreement or changes in a portfolio's fundamental investment limitations, and
on other matters where the interests of the respective portfolios are not
substantially identical. Similarly, shareholders of each portfolio will vote
in the aggregate and not by class unless the Trustees determine that the matter
to be voted on affects only the interests of the holders of a particular class
of the Fund's shares. Shareholders of a class will have exclusive voting
rights with respect to the distribution plan applicable to that class of
shares. Voting rights are not cumulative.
The Declaration of Trust provides that the holders of not less than
two-thirds of the outstanding shares of the Trust may remove a person serving
as Trustee either by declaration in writing or at a meeting called for such
purpose. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if requested in writing
to do so by the holders of not less than 10% of the
- 31 -
<PAGE> 95
outstanding shares of the Trust and in connection with such meeting to comply
with the shareholders' communications provisions of Section 16 (c) of the 1940
Act.
Shares entitle their holders to one vote per share (with proportionate
voting for fractional shares). As used in this Prospectus, the phrase "vote of
a majority of the outstanding shares" of the Fund means, with respect to the
approval of an investment advisory agreement, a distribution plan or a change
in a fundamental investment policy, the vote of the lesser of (1) 67% of the
shares of the Fund present at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (2) more than 50% of
the outstanding shares of the Fund. For purposes of the 1940 Act, any person
who owns either directly or through one or more controlled companies more than
25 percent of the voting securities of a company is presumed to "control" such
company. Under this definition, First Interstate Bancorp and its affiliates
may be deemed to be controlling persons of the Trust.
PERFORMANCE INFORMATION
The Fund may, from time to time, include yield data in advertisements
or reports to shareholders or prospective investors. The methods used to
calculate the yields of the Fund are mandated by the SEC. Yield and Total
Return are calculated separately for each class of share.
Quotations of "yield" for the Fund will be based on the income
received by a hypothetical investment (less a pro-rata share of Fund expenses)
over a particular seven-day period, which is then "annualized" (i.e., assuming
that the seven-day yield would be received for 52 weeks, stated in terms of an
annual percentage return on the investment).
"Effective yield" for the Fund is calculated in a manner similar to
that used to calculate yield, but includes the compounding effect of earnings
on reinvested dividends.
Quotations of yield reflect only the performance of the Fund during
the particular period on which the calculations are based. Yield and effective
yield for the Fund will vary based on changes in market conditions, the level
of interest rates and the level of the expenses of the Fund and no reported
performance figure should be considered an indication of performance which may
be expected in the future.
For purposes of comparison, the Fund may, from time to time, quote
performance information from IBC/Donoghue's MONEY FUND REPORT of Holliston,
Massachusetts 01746. IBC/Donoghue's MONEY MARKET AVERAGE is a widely
recognized index of money market fund performance. Figures reflect average
yields of all taxable money funds included in IBC/Donoghue's index.
IBC/Donoghue's 100% U.S. TREASURY MONEY FUND AVERAGE is a component of this
average and reflects average yields of all taxable U.S. Treasury money funds.
Any performance information should be considered in light of the Fund's
investment objective and policies,
- 32 -
<PAGE> 96
characteristics and quality of the Fund and the market conditions during the
time period indicated, and should not be considered to be representative of
what may be achieved in the future. For a description of the methods used to
determine yield for the Fund, see "Other Information -- Performance
Information" in the SAI.
ACCOUNT SERVICES
All transactions in shares of the Fund will be reflected in a
statement for each shareholder. In those cases where a Service Organization or
its nominee is shareholder of record of shares purchased for its customer, the
Fund has been advised that the statement may be transmitted to the customer at
the discretion of the Service Organization.
SHAREHOLDER INQUIRIES
All shareholder inquiries should be directed to the Fund at 237 Park
Avenue, Suite 910, New York, New York 10017.
General and Account Information: (800) 662-8417.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF
ADDITIONAL INFORMATION INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND
OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUND OR BY ITS DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED,
ENDORSED OR OTHERWISE SUPPORTED BY FIRST INTERSTATE BANCORP OR ITS AFFILIATES,
AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- 33 -
<PAGE> 97
INVESTMENT ADVISOR
First Interstate Capital Management, Inc.
7501 East McCormick Parkway
Scottsdale, Arizona 85258
ADMINISTRATOR
Furman Selz Incorporated
230 Park Avenue
New York, New York 10169
DISTRIBUTOR
Pacifica Funds Distributor Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, California 90017
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
<PAGE> 98
PACIFICA FUNDS TRUST
Pacifica 100% U.S. Treasury Money Market Fund
(Investor A and Investor B Shares)
237 Park Avenue
New York, New York 10017
General and Account Information: (800) 662-8417
-----------------------------------------------------------------
First Interstate Capital Management, Inc.--Investment Advisor
("FICM" or the "Advisor")
Furman Selz Incorporated--Administrator and Sponsor
("Furman Selz" or the "Sponsor")
Pacifica Funds Distributor Inc.--Distributor
("PFD Inc." or the Distributor")
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information ("SAI") describes the
Investor A and B classes of Shares of Pacifica 100% U.S. Treasury Money Market
Fund (the "Fund") which is managed by First Interstate Capital Management, Inc.
This SAI is not a prospectus and is only authorized for
distribution when preceded or accompanied by the prospectus for the Fund dated
February __, 1996, as may be revised from time to time (the "Prospectus").
This SAI contains additional and more detailed information than that set forth
in the Prospectus and should be read in conjunction with the Prospectus. The
Prospectus may be obtained without charge by writing or calling the Fund at the
address or information number printed above. Capitalized terms not otherwise
defined herein have the same meaning as in the Prospectus.
Shares of the Trust are not deposits or obligations of, or
guaranteed or endorsed by, any First Interstate or other bank, and are not
insured by the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other agency. Mutual fund shares involve certain investment
risks, including the possible loss of principal.
February __, 1996.
<PAGE> 99
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
U.S. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . 1
Stripped Treasury Securities . . . . . . . . . . . . . . . . . . . . 1
Investment Company Securities . . . . . . . . . . . . . . . . . . . 2
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . 5
Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Distribution of Fund Shares . . . . . . . . . . . . . . . . . . . . 8
Administrative Services . . . . . . . . . . . . . . . . . . . . . . 9
Service Organizations . . . . . . . . . . . . . . . . . . . . . . . 10
EXPENSES AND EXPENSE LIMITS . . . . . . . . . . . . . . . . . . . . . . . . . 11
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . 11
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . . . . 13
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Custodian, Transfer Agent and Dividend Disbursing Agent . . . . . . 21
Performance Information . . . . . . . . . . . . . . . . . . . . . . 21
Independent Accountants . . . . . . . . . . . . . . . . . . . . . . 23
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
- i -
<PAGE> 100
GENERAL
Pacifica Funds Trust (the "Trust") is an open-end management
investment company currently offering shares in a series of separately managed
investment portfolios. The Trust was organized on July 17, 1984 under the name
Fund Source. The Trust changed its name to "Pacifica Funds Trust" on February
9, 1993.
INVESTMENT POLICIES
The Prospectus discusses the investment objective of the Fund
and the policies to be employed to achieve its objective. This section
contains supplemental information concerning certain types of securities and
other instruments in which the Fund may invest, the investment policies and
portfolio strategies that the Fund may utilize, and certain risks attendant to
such investments, policies and strategies.
U.S. Treasury Securities. The Fund invests exclusively in
obligations of the U.S. Treasury which are backed by the full faith and credit
of the U.S. Government as to payment of principal and interest and which have
remaining maturities not exceeding 397 days. U.S. Treasury securities are
obligations issued by the U.S. Treasury. U.S. Treasury bills, which have a
maturity of up to one year, are direct obligations of the United States. The
U.S. Treasury also issues securities in the form of notes and bonds.
Stripped Treasury Securities. The Fund may invest in certain
U.S. Government Obligations referred to as "Stripped Treasury Securities."
Stripped Treasury Securities are U.S. Treasury securities that have been
stripped of their unmatured interest coupons (which typically provide for
interest payments semi-annually), interest coupons that have been stripped from
such U.S. Treasury securities, and receipts and certificates for such stripped
debt obligations and stripped coupons. Stripped bonds and stripped coupons are
sold at a deep discount because the buyer of those securities receives only the
right to receive a future fixed payment on the security and does not receive
any rights to periodic interest payments on the security.
Stripped Treasury Securities will include coupons that have been
stripped from U.S. Treasury bonds, which may be held through the Federal
Reserve Bank's book-entry system called "Separate Trading of Registered
Interest and Principal of Securities" ("STRIPS") or through a program entitled
"Coupon Under Book-Entry Safekeeping" ("CUBES").
- 1 -
<PAGE> 101
The U.S. Government does not issue Stripped Treasury Securities
directly. The STRIPS program, which is ongoing, is designed to facilitate the
secondary market in the stripping of selected U.S. Treasury notes and bonds
into separate interest and principal components. Under the program, the U.S.
Treasury continues to sell its notes and bonds through its customary auction
process. A purchaser of those specified notes and bonds who has access to a
book-entry account at a Federal Reserve bank, however, may separate the
Treasury notes and bonds into interest and principal components. The selected
Treasury securities thereafter may be maintained in the book-entry system
operated by the Federal Reserve in a manner that permits the separate trading
and ownership of the interest and principal payments.
CUBES, like STRIPS, are direct obligations of the U.S. Government.
CUBES are coupons that have previously been physically stripped from U.S.
Treasury notes and bonds, but which were deposited with the Federal Reserve
Bank's book-entry system and are now carried and transferable in book-entry
form only. Only stripped U.S. Treasury coupons maturing on or after January
15, 1988, that were stripped prior to January 5, 1987, were eligible for
conversion to book-entry form under the CUBES program.
Investment Company Securities. The Fund may invest in
securities issued by other investment companies. The Fund may only invest in
investment companies which restrict their portfolio investments solely to the
same investment instruments that are permissible investments for the Fund. The
Fund will limit its investments in securities issued by other investment
companies so that, as determined immediately after a purchase of such
securities is made: (i) not more than 5% of the value of the Fund's total
assets will be invested in the securities of any one investment company; (ii)
not more than 10% of the value of its total assets will be invested in the
aggregate in securities of investment companies as a group; and (iii) not more
than 3% of the outstanding voting stock of any one investment company will be
owned by the Fund or by the Trust as a whole. It is the Fund's policy not to
invest in securities issued by other investment companies which pay asset-based
fees to the Advisor, the Distributor or their affiliates.
INVESTMENT RESTRICTIONS
The Fund is subject to the investment limitations enumerated
below which may be changed only by a vote of a majority of the holders of the
Fund's outstanding shares (as defined under "Other Information -- Voting
Rights" below).
- 2 -
<PAGE> 102
The Fund may not:
1. Invest more than 10% of the aggregate value of its
total assets in investments which are illiquid, or not readily marketable;
2. Borrow money or pledge or mortgage its assets, except
that the Fund may borrow from banks up to 10% of the current value of its total
net assets for temporary or emergency purposes and those borrowings may be
secured by the pledge of not more than 15% of the current value of its total
net assets (but investments may not be purchased by the Fund while any such
borrowings exist);
3. Make loans, except loans of portfolio securities and
except that the Fund may purchase the types of debt instruments described in
the Prospectus or the SAI;
4. Invest in companies for the purpose of exercising
control or management;
5. Knowingly purchase securities of other investment
companies, except (i) in connection with a merger, consolidation, acquisition,
or reorganization; and (ii) the Fund may invest up to 10% of its net assets in
shares of other investment companies;
6. Invest in real property (including limited
partnership interests), commodities, commodity contracts, or oil, gas and other
mineral resource, exploration, development, lease or arbitrage transactions;
7. Acquire securities subject to restrictions on
disposition imposed by the Securities Act of 1933, if, immediately after and as
a result of such acquisition, the value of such restricted securities and all
other illiquid securities held by the Fund would exceed 10% of the value of the
Fund's total assets;
8. Engage in the business of underwriting securities of
other issuers, except to the extent that the disposal of an investment position
may technically cause it to be considered an underwriter as that term is
defined under the Securities Act of 1933;
9. Make loans, except that the Fund may purchase readily
marketable debt securities;
10. Sell securities short, except to the extent that the
Fund contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short;
- 3 -
<PAGE> 103
11. Purchase securities on margin, except that the Fund
may obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities;
12. Mortgage, pledge, or hypothecate any of its assets,
except as described in Investment Restriction No. 2;
13. Purchase or retain the securities of any issuer, if
those individual officers and Trustees of the Trust, its Advisor, the Sponsor,
or the Distributor, each owning beneficially more than 1/2 of 1% of the
securities of such issuer, together own more than 5% of the securities of such
issuer;
14. Invest more than 5% of its net assets in warrants
which are unattached to securities, included within that amount, no more than
2% of the value of the Fund's net assets, may be warrants which are not listed
on the New York or American Stock Exchanges;
15. Write, purchase or sell puts, calls or combinations
thereof; or
16. Invest more than 5% of the current value of its total
assets in the securities of companies which, including predecessors, have a
record of less than three years' continuous operation.
If a percentage limitation is satisfied at the time of
investment, a later increase or decrease in such percentage resulting from a
change in the value of the Fund's investments will not constitute a violation
of such limitation, except that any borrowing by the Fund that exceeds the
fundamental investment limitations stated above must be reduced to meet such
limitations within the period required by the 1940 Act (currently three days)
and the Fund will not at any time hold more than 10% of its net assets in
illiquid securities. Otherwise, the Fund may continue to hold a security even
though it causes the Fund to exceed a percentage limitation because of
fluctuation in the value of the Fund's assets.
In order to permit the sale of shares in certain states, the
Trust may make commitments more restrictive than the investment policies and
limitations described above. Should the Trust determine that these commitments
are no longer in the best interests of the Trust, it will revoke the commitment
by terminating sales of its shares in the states involved.
- 4 -
<PAGE> 104
MANAGEMENT
Trustees and Officers
The principal occupations of the Trustees and executive
officers of the Fund for the past five years and their ages are listed below.
None of the Trustees is deemed to be an "interested person" of the Trust for
purposes of the 1940 Act.
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s)
Name, Address and Age with Registrant During Past 5 Years
- --------------------- ----------------- -----------------------
<S> <C> <C>
Joseph N. Hankin Trustee President, Westchester Community College
75 Grasslands Road since 1971; President of Hartford Junior
Valhalla, NY 10595 College from 1967 to 1971; Adjunct Professor
Age: 54 of Columbia University Teachers College
since 1976.
Richard A. Wedemeyer Trustee Vice President of Performance Advantage,
17 High Street Inc., 17 High Street, Norwalk, CT 06851
Suite 301 since 1992; Vice President of Jim Henson
Norwalk, CT 06851 Productions from 1979 to 1992; Author of In
Age: 59 Transition (Harper Collins); co-founder and
coconductor of Harvard Business School Club
of New York Career Seminar; Trustee of Jim
Henson Legacy trust.
John E. Heilmann Trustee Retired; Chairman, President and Chief
Old Norwood Plantation Executive Officer,
Wingina, VA 24599 Distillers Somerset, Inc. and Norwood
Age: 63 Enterprises, Inc. from 1987 to 1992.
Dennis W. Draper Trustee Associate Professor of Finance, at
University of Southern University of Southern California since
California 1978; Director of Data Analysis, Inc.
School of Business Hoffman 701-F (financial services); and Editorial Board of
Los Angeles, CA 90089 Chicago Board of Trade.
Age: 45
</TABLE>
- 5 -
<PAGE> 105
<TABLE>
<CAPTION>
Position(s) Held Principal Occupation(s)
Name, Address and Age with Registrant During Past 5 Years
- --------------------- ----------------- -----------------------
<S> <C> <C>
Jack D. Henderson Trustee Partner of the law firm of Clanahan, Tanner,
1600 Broadway Downing Knowlton, P.C.
Denver, CO 80202
Age: 67
Michael C. Petrycki President Executive Vice President and Director of
230 Park Avenue Furman Selz since 1984.
New York, NY 10169
Age: 52
Steven D. Blecher Executive Vice Executive Vice President and Director of
230 Park Avenue President Furman Selz since 1983; Vice President,
New York, NY 10169 Secretary and Treasurer of Furman Selz
Age: 52 Capital Management, Inc. since 1984.
John J. Pileggi Vice President Managing Director of Furman Selz, from 1984
237 Park Avenue and Treasurer to 1992; Senior Managing Director since 1992
New York, NY 10169 and Director of Furman Selz since 1994.
Age: 36
Joan V. Fiore Vice President Managing Director and Counsel of Furman Selz
237 Park Avenue and Secretary since 1991; Staff Attorney at the U.S.
New York, NY 10017 Securities and Exchange Commission, Division
Age: 39 of Investment Management, from 1986 to 1991.
Donald E. Brostrom Assistant Director, Fund Services, Furman Selz
237 Park Avenue Treasurer Incorporated since 1986; Managing Director
New York, NY 10169 of Furman Selz since 1995.
Age: 36
</TABLE>
Trustees receive from the Trust an annual retainer of $5,000
and a fee of $1,000 for each Board of Trustees meeting and $500 for each Board
committee meeting attended, and are reimbursed for all out-of-pocket expenses
relating to attendance at such meetings.
- 6 -
<PAGE> 106
For the fiscal year ended September 30, 1995, the Trustees
received the following compensation from the Trust and from certain other
investment companies (as indicated) that have the same investment advisor as
the Trust or an investment advisor that is an affiliated person of the Trust's
investment advisor:
<TABLE>
<CAPTION>
==============================================================================================================
PENSION OR
RETIREMENT
AGGREGATE BENEFITS ACCRUED ESTIMATED TOTAL COMPENSATION
NAME OF COMPENSATION FROM AS PART OF TRUST ANNUAL BENEFITS FROM REGISTRANT
TRUSTEE THE TRUST EXPENSE UPON RETIREMENT AND FUND COMPLEX
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dennis W. $0 $0
Draper
- --------------------------------------------------------------------------------------------------------------
Joseph N. $0 $0
Hankin
- --------------------------------------------------------------------------------------------------------------
John E. $0 $0
Heilmann
- --------------------------------------------------------------------------------------------------------------
Jack D. $0 $0
Henderson
- --------------------------------------------------------------------------------------------------------------
Richard A. $0 $0
Wedemeyer
==============================================================================================================
</TABLE>
**Includes amounts received for service as a member of the Boards of Trustees
of Pacific American Fund and Westcore Trust.
The Trustees and officers of the Trust, as a group, own less
than 1% of the outstanding shares of the Funds as of the date of this SAI.
Advisor
First Interstate Capital Management, Inc., 7501 E. McCormick
Parkway, Scottsdale, Arizona 85258, serves as advisor to the Fund. FICM
manages the investment and reinvestment of the assets of the Fund and
continuously reviews, supervises and administers the Fund's investments. The
Advisor is responsible for placing orders for the purchase and sale of the
Fund's investments directly with brokers and dealers selected by it in its
discretion. See "Portfolio Transactions." FICM also furnishes to the Board of
Trustees, which has overall responsibility for the business and affairs of the
Trust, periodic reports on the investment performance of the Fund.
FICM is a wholly-owned subsidiary of First Interstate Bank of
California ("FICAL"). FICAL is the largest banking subsidiary of First
Interstate Bancorp. First Interstate Bancorp provides financial products and
services marketed at the local
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<PAGE> 107
level to nearly five million households in over 500 communities in 13 western
states.
Under the terms of the Investment Advisory Contract between
the Trust and FICM, FICM is obligated to manage the Fund's portfolio in
accordance with applicable laws and regulations. The investment advisory
services provided by FICM to the Fund are not exclusive under the terms of the
Investment Advisory Contract. FICM is free to, and does, render investment
advisory services to others. In making its investment decisions, FICM does not
use material inside information in the possession of its affiliates.
The Investment Advisory Contract for the Fund will continue in
effect for a period beyond more than two years from the date of its execution
only as long as such continuance is approved annually (i) by the holders of a
majority of the outstanding voting securities of the Fund or by the Board of
Trustees and (ii) by a majority of the Trustees who are not parties to such
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. The Investment Advisory Contract may be terminated without penalty by
vote of the Trustees or the shareholders of the Fund, or by the Advisor, on 60
days written notice by either party to the Contract and will terminate
automatically if assigned.
The Investment Advisory Contract provides that FICM shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the performance of such contract, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of FICM in the performance of its duties
or from reckless disregard of its duties and obligations under the Contracts.
Distribution of Fund Shares
The Trust has retained Pacifica Funds Distributor Inc., a
subsidiary of Furman Selz, to serve as principal underwriter for the shares of
the Fund pursuant to a Distribution Contract. The Distribution Contract
provides that the Distributor will use its best efforts to maintain a broad
distribution of the Fund's shares among bona fide investors and may enter into
selling group agreements with responsible dealers and dealer managers as well
as sell the Fund's shares to individual investors. The Distributor is not
obligated, however, to sell any specific amount of shares.
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<PAGE> 108
Under separate Investor Shares Distribution Plans, applicable
to Class A and Class B Investor Shares, the Fund pays the Distributor monthly
in amounts described in the Prospectuses for costs and expenses of marketing
the Investor A and Investor B Shares. The Board of Trustees has concluded that
there is a reasonable likelihood that each Plan will benefit the classes of the
Fund and their shareholders covered by the Plan.
Each Plan provides that it may not be amended to increase
materially the costs which a Fund may bear pursuant to the Plan without
approval of the shareholders of the class of shares to which the Plan relates,
and that other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are neither "interested persons" (as defined
in the 1940 Act) of the Trust nor have any direct or indirect financial
interest in the operation of the Plan or in any related agreement, by vote cast
in person at a meeting called for the purpose of considering such amendments.
The selection and nomination of the Trustees of the Trust have been committed
to the discretion of the Trustees who are not "interested persons" of the
Trust. The Plans have been approved and are subject to annual approval by the
Board of Trustees and by the Trustees who are neither "interested persons" of
the Trust nor have any direct or indirect financial interest in the operation
of the Plans, by vote cast in person at a meeting called for the purpose of
voting on the Plans.
Administrative Services
Furman Selz provides management and administrative services
necessary for the operation of the Fund, including among other things, (i)
preparation of shareholder reports and communications, (ii) regulatory
compliance, such as reports to and filings with the Securities and Exchange
Commission ("SEC") and state securities commissions and (iii) general
supervision of the operation of the Fund, including coordination of the
services performed by the Fund's advisor, distributor, transfer agent,
custodian, independent accountants, legal counsel and others. In addition,
Furman Selz furnishes office space and facilities required for conducting the
business of the Fund and pays the compensation of the Fund's officers,
employees and Trustees affiliated with Furman Selz. For these services, Furman
Selz is entitled to receive a fee, payable monthly, at the annual rate of 0.15%
of the average daily net assets of the Fund.
The Administrative Services Contract is terminable without
penalty, at any time, by vote of a majority of the Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the Administrative Services Contract upon not more than 60 days
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<PAGE> 109
written notice to Furman Selz or by vote of the holders of a majority of the
shares of the Fund, or, upon 60 days notice, by Furman Selz. The
Administrative Services Contract will terminate automatically in the event of
its assignment.
Service Organizations
The Trust may also contract with banks (including affiliates of First
Interstate Bancorp), trust companies, brokerdealers (other than Furman Selz) or
other financial organizations ("Service Organizations") to provide certain
administrative services with respect to the Fund. Services provided by Service
Organizations may include among other things: providing necessary personnel and
facilities to establish and maintain certain shareholder accounts and records;
assisting in processing purchase and redemption transactions; arranging for the
wiring of funds; transmitting and receiving funds in connection with client
orders to purchase or redeem shares; verifying and guaranteeing client
signatures in connection with redemption orders, transfers among and changes in
client-designating accounts; providing periodic statements showing a client's
account balance and, to the extent practicable, integrating such information
with other client transactions; furnishing periodic and annual statements and
confirmations of all purchases and redemptions of shares in a client's account;
transmitting proxy statements, annual reports, and updating prospectuses and
other communications from the Fund to clients; and providing such other
services as the Fund or a client reasonably may request, to the extent
permitted by applicable statute, rule or regulation.
Some Service Organizations may impose additional or different
conditions on their clients, such as requiring their clients to invest more
than the minimum initial or subsequent investments specified by the Fund or
charging a direct fee for servicing. If imposed, these fees would be in
addition to any amounts which might be paid to the Service Organization by the
Fund. Each Service Organization has agreed to transmit to its clients a
schedule of any such fees. Shareholders using Service Organizations are urged
to consult them regarding any such fees or conditions.
The Glass-Steagall Act and other applicable laws, among other
things, prohibit banks from engaging in the business of underwriting, selling
or distributing securities. There currently is no precedent prohibiting banks
from performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or
interpretations of such laws, as well as changes in either Federal or state
statutes or regulations relating to the permissible activities of banks and
their subsidiaries or
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<PAGE> 110
affiliates, could prevent a bank from continuing to perform all or a part of
its servicing activities. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law. If a bank were prohibited from so acting, its shareholder clients would
be permitted to remain shareholders of the Trust and alternative means for
continuing the servicing of such shareholders would be sought. In that event,
changes in the operation of the Trust might occur and a shareholder serviced by
such a bank might no longer be able to avail itself of any services then being
provided by the bank. It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
EXPENSES AND EXPENSE LIMITS
Except for the expenses paid by the Advisor, the Distributor
and Furman Selz, the Fund bears all costs of its operations.
Currently, California is the only state imposing limitations
on the expenses of the Fund. Those expense limitations are 2-1/2 percent of
the first $30 million of the Fund's average net assets, 2 percent of the next
$70 million and 1-1/2 percent of the Fund's remaining average net assets. If
in any fiscal year expenses of the Fund (excluding taxes, interest, expenses
under the Plan, brokerage commissions and other portfolio transaction expenses,
other expenditures which are capitalized in accordance with generally accepted
accounting principles and extraordinary expenses, but including the advisory
and administrative fees) exceed the expense limitations applicable to the Fund
imposed by the securities regulations of any state, Furman Selz and the FICM
each will reimburse the Fund for a portion of the excess as follows: Furman
Selz ___% and FICM ___%.
DETERMINATION OF NET ASSET VALUE
The portfolio instruments of the Fund are valued on the basis
of amortized cost. This technique involves valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if it sold the
instrument. During periods of declining interest rates, the daily yield on
shares of the Fund computed as described above may tend to be
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<PAGE> 111
higher than a like computation made by a fund with identical investments
utilizing a method of valuation based upon market prices and estimates of
market prices for all of its instruments. Thus, if the use of amortized cost
by the Fund resulted in a lower aggregate portfolio value on a particular day,
a prospective investor in the Fund would be able to obtain a somewhat higher
yield than would result from investment in a fund utilizing solely market
values and existing investors in the Fund would receive less investment
income. The converse would apply in a period of rising interest rates.
The valuation of the Fund's instruments, based upon their
amortized cost and the concomitant maintenance by the Fund of a net asset value
of $1.00, is permitted in accordance with Rule 2a-7 under the Act, pursuant to
which the Fund must adhere to certain conditions. The Fund must maintain a
dollarweighted average maturity of 90 days or less, purchase only instruments
having remaining maturities of thirteen months or less, and invest only in
securities which are determined to present minimal credit risks pursuant to
guidelines adopted by the Trustees. Instruments having variable or floating
interest rates or demand features may be deemed to have remaining maturities as
follows: (a) a government security with a variable rate of interest readjusted
no less frequently than every thirteen months may be deemed to have a maturity
equal to the period remaining until the next readjustment of the interest rate;
(b) an instrument with a variable rate of interest, the principal amount of
which is scheduled on the face of the instrument to be paid in thirteen months
or less, may be deemed to have a maturity equal to the period remaining until
the next readjustment of the interest rate; (c) an instrument with a variable
rate of interest that is subject to a demand feature may be deemed to have a
maturity equal to the longer of the period remaining until the next
readjustment of the interest rate or the period remaining until the principal
amount can be recovered through demand; (d) an instrument with a floating rate
of interest that is subject to a demand feature may be deemed to have a
maturity equal to the period remaining until the principal amount can be
recovered through demand; and (e) a repurchase agreement may be deemed to have
a maturity equal to the period remaining until the date on which the repurchase
of the underlying securities is scheduled to occur or, where no date is
specified but the agreement is subject to demand, the notice period applicable
to a demand for the repurchase of the securities.
The Trustees have established procedures designed to
stabilize, to the extent reasonably possible, the Fund's price per share as
computed for the purpose of sales and redemptions at a single value. Such
procedures will include the determination, at such intervals as the Trustees
deem appropriate, of the extent
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<PAGE> 112
to which the Fund's NAV as calculated by using available market quotations
deviates from $1.00 per share, such deviation may result in material dilution
or other unfair results to existing shareholders or investors. In the event
the Trustees determine that such a material deviation exists, they have agreed
to take such corrective action as they regard as necessary and appropriate,
which may include selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity; withholding
dividends; redeeming shares in kind or without monetary or other consideration;
or establishing a net asset value per share by using available market
quotations. It is the intention of the Fund to maintain a per share net asset
value of $1.00, but there can be no assurance that the Fund will do so.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Payment for shares may, in the discretion of the Advisor, be
made in the form of securities that are permissible investments for the Fund as
described in the Prospectus. For further information about this form of
payment please contact Furman Selz. In connection with an in-kind securities
payment, the Fund will require, among other things, that the securities be
valued on the day of purchase in accordance with the pricing methods used by
the Fund and that the Fund receive satisfactory assurances that (1) it will
have good and marketable title to the securities received by it; (2) that the
securities are in proper form for transfer to the Fund; and (3) adequate
information will be provided concerning the basis and other matters relating to
the securities.
Under the 1940 Act, the Fund may suspend the right of
redemption or postpone the date of payment upon redemption for any period
during which the New York Stock Exchange is closed (other than customary
weekend and holiday closings), or during which trading on said Exchange is
restricted, or during which as determined by the SEC by rule or regulation) an
emergency exists as a result of which disposal or valuation of portfolio
securities is not reasonably practicable, or for such other periods as the SEC
may permit. (The Fund may also suspend or postpone the recordation of the
transfer of its shares upon the occurrence of any of the foregoing conditions.)
The Trust may suspend redemption rights or postpone redemption
payments (as well as suspend the recordation of the transfer of shares) for
such periods as are permitted under the 1940 Act. The Trust may also redeem
shares involuntarily or make payment for redemption in securities or other
property if it appears appropriate to do so in light of the Trust's
responsibilities under the 1940 Act.
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<PAGE> 113
In addition, the Trust may redeem shares involuntarily to
reimburse the Fund for any loss sustained by reason of the failure of a
shareholder to make full payment for shares purchased by the shareholder or to
collect any charge relating to a transaction effected for the benefit of a
shareholder which is applicable to shares of the Fund as provided from time to
time in the Prospectus.
All redemptions of shares of the Fund will be made in cash,
except that the commitment to redeem shares in cash extends only to redemption
requests made by each shareholder of the Fund during any 90-day period of up to
the lesser of $250,000 or 1% of the net asset value of the Fund at the
beginning of such period. This commitment is irrevocable without the prior
approval of the SEC and is a fundamental policy of the Fund that may not be
changed without shareholder approval. In the case of redemption requests by
shareholders in excess of such amounts, the Board of Trustees reserves the
right to have the Fund make payment, in whole or in part in securities or other
assets, in case of an emergency or any time a cash distribution would impair
the liquidity of the Fund to the detriment of the existing shareholders. In
this event, the securities would be valued in the same manner as the securities
of the Fund are valued. If the recipient were to sell such securities, he or
she would incur brokerage charges.
WAIVER OF THE CONTINGENT DEFERRED SALES CHARGE -- CLASS B SHARES.
The contingent deferred sales charge is waived under
circumstances described in the Prospectus. See "Waiver of Contingent Deferred
Sales Charges -- Class B Shares" in the Prospectus. In connection with these
waivers, the Transfer Agent will require you to submit the supporting
documentation set forth below.
<TABLE>
<CAPTION>
CATEGORY OF WAIVER REQUIRED DOCUMENTATION
<S> <C>
Death A copy of the shareholder's death certificate or,
in the case of a trust, a copy of the grantor's
death certificate, plus a copy of the trust
agreement identifying the grantor.
</TABLE>
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<PAGE> 114
<TABLE>
<S> <C>
Disability -- An individual will be considered A copy of the Social Security Administration award
disabled if her or she is unable to engage in any letter or a letter from a physician on the
substantial gainful activity by reason of any physician's letterhead stating that the
medically determinable physical or mental shareholder (or, in the case of a trust, the
impairment which can be expected to result in grantor) is permanently disabled. The letter must
death or to be of long-continued and indefinite also indicate the date of disability.
duration.
Distribution from an IRA or 403(b) Custodial A copy of the distribution form from the custodial
Account firm indicating (i) the date of birth of the
shareholder and (ii) that the shareholder is over
age 59 1/2 and is taking a normal distribution --
signed by the shareholder.
Distribution from Retirement Plan A letter signed by the plan administrator/trustee
indicating the reason for the distribution.
Excess Contributions A letter from the shareholder (for an IRA) or the
plan administrator/trustee on company letterhead
indicating the amount of the excess and whether or
not taxes have been paid.
</TABLE>
PORTFOLIO TRANSACTIONS
Investment decisions for the Fund and for the other investment
advisory clients of the Advisor are made with a view to achieving their
respective investment objectives. Investment decisions are the product of many
factors in addition to basic suitability for the particular client involved.
Thus, a particular security may be bought or sold only for certain clients even
though it could have been bought or sold for other clients at the same time.
Likewise, a particular security may be bought for one or more clients while at
the same time one or more clients are selling the security. In some instances,
one client may sell a particular security to another client. It also sometimes
happens that two or more clients simultaneously
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<PAGE> 115
purchase or sell the same security, in which event each day's transactions in
such security are, insofar as possible, averaged as to price and allocated
between such clients in a manner which in the Advisor's opinion is equitable to
each and in accordance with the amount being purchased or sold by each. There
may be circumstances when purchases or sales of portfolio securities for one or
more clients will have an adverse effect on other clients.
The Fund has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees, the Advisor is primarily
responsible for portfolio decisions and the placing of portfolio transactions.
In placing orders, it is the policy of the Fund to obtain the best results
taking into account the broker-dealer's general execution and operational
facilities, the type of transaction involved and other factors such as the
dealer's risk in positioning the securities. While the Advisor generally seeks
reasonably competitive spreads or commissions, the Fund will not necessarily be
paying the lowest spread or commission available.
Purchases and sales of securities will primarily be principal
transactions. Debt securities normally will be purchased or sold from or to
issuers directly or to dealers serving as market makers for the securities at a
net price. Generally, money market securities are traded on a net basis and do
not involve brokerage commissions. Under the 1940 Act, persons affiliated with
the Fund or the Sponsor are prohibited from dealing with the Fund as a
principal in the purchase and sale of securities except in limited situations
permitted by SEC regulations, unless a permissive order allowing such
transactions is obtained from the SEC.
The Advisor may, in circumstances in which two or more
broker-dealers are in a position to offer comparable results, give preference
to a dealer which has provided statistical or other research services to the
Advisor. By allocating transactions in this manner, the Advisor is able to
supplement its research and analysis with the views and information of
securities firms. These services, which in some cases may also be purchased
for cash, include such matters as general economic and security market reviews,
industry and company reviews, evaluations of securities and recommendations as
to the purchase and sale of securities. Some of these services are of value to
the Advisor in advising various of its clients (including the Fund), although
not all of these services are necessarily useful and of value in managing the
Fund. The management fee paid by the Fund is not reduced because the Advisor
and its affiliates receive such services.
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<PAGE> 116
As permitted by Section 28(e) of the Securities Exchange Act
of 1934 (the "1934 Act"), the Advisor may cause the Fund to pay a broker-dealer
which provides "brokerage and research services" (as defined in the 1934 Act)
to the Advisor an amount of disclosed commission for effecting a securities
transaction for the Fund in excess of the commission which another
broker-dealer would have charged for effecting that transaction.
Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and subject to seeking the most
favorable price and execution available and such other policies as the Trustees
may determine, the Advisor may consider sales of shares of the Fund as a factor
in the selection of broker-dealers to execute portfolio transactions for the
Fund.
TAXATION
The Fund intends to qualify and elect annually to be treated
as a regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). To qualify as a regulated investment
company, the Fund must (a) distribute to shareholders at least 90% of its
investment company taxable income (which includes, among other items,
dividends, taxable interest and the excess of net short-term capital gains over
net long-term capital losses); (b) derive in each taxable year at least 90% of
its gross income from dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of stock, securities or
foreign currencies or other income derived with respect to its business of
investing in such stock, securities or currencies; (c) derive less than 30% of
its gross income from the sale or other disposition of certain assets (namely,
in the case of the Fund, (i) stock or securities; (ii) options, futures, and
forward contracts (other than those on foreign currencies), and (iii) foreign
currencies (including options, futures, and forward contracts on such
currencies) not directly related to the Fund's principal business of investing
in stock or securities (or options and futures with respect to stocks or
securities)) held less than 3 months; and (d) diversify its holdings so that,
at the end of each quarter of the taxable year, (i) at least 50% of the market
value of the Fund's assets is represented by cash and cash items (including
receivables), U.S. Government securities, the securities of other regulated
investment companies and other securities, with such other securities of any
one issuer limited for the purposes of this calculation to an amount not
greater than 5% of the value of the Fund's total assets and not greater than
10% of the outstanding voting securities of such issuer, and (ii) not more than
25% of the value of its total assets is invested in the securities of any one
issuer (other than U.S. Government securities or the
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<PAGE> 117
securities of other regulated investment companies). In addition, a Fund
earning tax-exempt interest must, in each year, distribute at least 90% of its
net tax-exempt income. By meeting these requirements, the Fund generally will
not be subject to Federal income tax on its investment company taxable income
and net capital gains which are distributed to shareholders. If the Fund does
not meet all of these Code requirements, it will be taxed as an ordinary
corporation and its distributions will be taxed to shareholders as ordinary
income.
Amounts, other than tax-exempt interest, not distributed on a
timely basis in accordance with a calendar year distribution requirement are
subject to a nondeductible 4% excise tax. To prevent imposition of the excise
tax, the Fund must distribute for each calendar year an amount equal to the sum
of (1) at least 98% of its ordinary income (excluding any capital gains or
losses) for the calendar year, (2) at least 98% of the excess of its capital
gains over capital losses (adjusted for certain ordinary losses) for the
one-year period ending October 31 of such year, and (3) all ordinary income and
capital gain net income (adjusted for certain ordinary losses) for previous
years that were not distributed during such years.
Distributions of investment company taxable income generally
are taxable to shareholders as ordinary income. All distributions are taxable
to the shareholder in the same manner whether reinvested in additional shares
or received in cash. Shareholders will be notified annually as to the Federal
tax status of distributions.
The Fund is required to report to the Internal Revenue Service
("IRS") all distributions except in the case of certain exempt shareholders.
All such distributions generally are subject to withholding of Federal income
tax at a rate of 31% ("backup withholding") in the case of non-exempt
shareholders if (1) the shareholder fails to furnish the Fund with and to
certify the shareholder's correct taxpayer identification number or social
security number, (2) the IRS notifies the Fund or a shareholder that the
shareholder has failed to report properly certain interest and dividend income
to the IRS and to respond to notices to that effect, or (3) when required to do
so, the shareholder fails to certify that he is not subject to backup
withholding. If the withholding provisions are applicable, any such
distributions, whether reinvested in additional shares or taken in cash, will
be reduced by the amounts required to be withheld. Backup withholding is not
an additional tax. Any amount withheld may be credited against the
shareholder's U.S. Federal income tax liability. Investors may wish to consult
their tax advisors about the applicability of the backup withholding
provisions.
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<PAGE> 118
The foregoing discussion relates only to Federal income tax
law as applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
corporations, partnerships, trusts and estates). Distributions by the Fund
also may be subject to state and local taxes and their treatment under state
and local income tax laws may differ from the Federal income tax treatment.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
from state and local taxes in certain states. Shareholders should consult
their tax advisors with respect to particular questions of Federal, state and
local taxation. Shareholders who are not U.S. persons should consult their tax
advisors regarding U.S. and foreign tax consequences of ownership of shares of
the Fund including the likelihood that distributions to them would be subject
to withholding of U.S. tax at a rate of 30% (or at a lower rate under a tax
treaty).
OTHER INFORMATION
Capitalization
The Trust is a Massachusetts business trust established under
a Declaration of Trust dated July 17, 1984, and consists of series of
separately managed portfolios. The capitalization of the Trust consists solely
of an unlimited number of shares of beneficial interest with a par value of
$0.001 each. The Board of Trustees may establish additional portfolios (with
different investment objectives and fundamental policies) at any time in the
future. Establishment and offering of additional portfolios will not alter the
rights of the Fund's shareholders. When issued, shares are fully paid,
non-assessable, redeemable and freely transferable. Shares do not have
preemptive rights or subscription rights.
In the event of a liquidation or dissolution of the Trust or
an individual Fund, shareholders of a particular Fund would be entitled to
receive the assets available for distribution belonging to such Fund, and a
proportionate distribution, based upon the relative net asset values of the
Trust's respective portfolios, of any general assets not belonging to any
particular portfolio which are available for distribution. Shareholders of a
Fund are entitled to participate in the net distributable assets of the Fund on
liquidation, based on the number of shares of the Fund that are held by each
shareholder, except that, in the case of a Fund offering more than one class of
shares, Institutional Shares, Investor Shares and Service Shares of a Fund will
each be solely responsible for Service Organization fees and other "class"
expenses, if any, that are attributable to the particular share class, and
Investor
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<PAGE> 119
Shares shall be solely responsible for payments made under the applicable
Distribution Plan.
Voting Rights
Under the Declaration of Trust, the Trust is not required to
hold annual meetings of its shareholders to elect Trustees or for other
purposes. It is not anticipated that the Trust will hold shareholders'
meetings unless required by law or the Declaration of Trust. In this regard,
the Trust will be required to hold a meeting to elect Trustees to fill any
existing vacancies on the Board if, at any time, fewer than a majority of the
Trustees have been elected by the shareholders of the Trust. In addition, the
Declaration of Trust provides that the holders of not less than two-thirds of
the outstanding shares of the Trust may remove persons serving as Trustee
either by declaration in writing or at a meeting called for such purpose. The
Trustees are required to call a meeting for the purpose of considering the
removal of persons serving as Trustee if requested in writing to do so by the
holders of not less than 10% of the outstanding shares of the Trust. To the
extent required by applicable law, the Trustees shall assist shareholders who
seek to remove any person serving as Trustee.
The Trust's shares do not have cumulative voting rights, so
that the holders of more than 50% of the outstanding shares may elect the
entire Board of Trustees, in which case the holders of the remaining shares
would not be able to elect any Trustees.
Holders of all outstanding shares of the Fund will vote
together in the aggregate and not by class on all matters, except that only
Institutional Shares and Service Shares will be entitled to vote on matters
submitted to a vote of shareholders pertaining to the Fund's arrangements with
Service Organizations with respect to Institutional Shares and Service Shares,
and only Investor Shares of the Fund will be entitled to vote on matters
submitted to a vote of shareholders pertaining to the Fund's Distribution Plan
and the Fund's arrangements with Service Organizations with respect to Investor
Shares. Further, shareholders of all of the Funds, as well as those of any
other investment portfolio now or hereafter offered by the Trust, will vote
together in the aggregate and not separately on a portfolio-by-portfolio basis,
except as otherwise required by law or when permitted by the Board of Trustees.
Rule 18f-2 under the 1940 Act provides that any matter required to be submitted
to the holders of the outstanding voting securities of an investment company
such as the Trust shall not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
Fund affected by the
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<PAGE> 120
matter. A portfolio is affected by a matter unless it is clear that the
interests of each portfolio in the matter are substantially identical or that
the matter does not affect any interest of the portfolio. Under the Rule, the
approval of an investment advisory agreement or any change in a fundamental
investment policy would be effectively acted upon with respect to a portfolio
only if approved by a majority of the outstanding shares of such portfolio.
However, the Rule also provides that the ratification of the appointment of
independent auditors, the approval of principal underwriting contracts and the
election of trustees may be effectively acted upon by shareholders of the Trust
voting together in the aggregate without regard to a particular portfolio.
The term "majority of the outstanding shares" of a portfolio
means the vote of the lesser of (i) 67% or more of the shares of the portfolio
present at a meeting, if the holders of more than 50% of the outstanding shares
of the portfolio are present or represented by proxy, or (ii) more than 50% of
the outstanding shares of the portfolio.
Custodian, Transfer Agent and Dividend Disbursing Agent
First Interstate Bank of California, 707 Wilshire Blvd., Los
Angeles, California 90017, acts as custodian of the Trust's assets, but plays
no role in making decisions as to the purchase or sale of portfolio securities
for the Fund. FICAL is entitled to receive a fee from the Trust, computed
daily and payable monthly, at the annual rate of 0.021% of the first $5 billion
in aggregate average daily net assets of the Funds; 0.0175% of the next $5
billion in aggregate average daily net assets of the Funds; and 0.015% of the
aggregate average daily net assets of the Funds in excess of $10 billion.
Furman Selz acts as transfer agent for the Fund. The Trust
compensates Furman Selz for providing personnel and facilities to perform
transfer agency related services for the Trust at a rate intended to represent
the cost of providing such services.
Performance Information
The Fund may, from time to time, include its yields in
advertisements or reports to shareholders or prospective investors.
Current yield for the Fund will be based on the change in the
value of a hypothetical investment (exclusive of capital changes) over a
particular seven-day period, less a pro-rata share of the Fund's expenses
accrued over that period (the "base
- 21 -
<PAGE> 121
period"), and stated as a percentage of the investment at the start of the base
period (the "base period return"). The base period return is then annualized
by multiplying by 365/7, with the resulting yield figure carried to at least
the nearest hundredth of one percent. "Effective yield" assumes that all
dividends received during an annual period have been reinvested. Calculation
of "effective yield" begins with the same "base period return" used in the
calculation of yield, which is then annualized to reflect weekly compounding
pursuant to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ] - 1.
Quotations of yield will reflect only the performance of a
hypothetical investment in the Fund during the particular time period shown.
Yield for the Fund will vary based on changes in the market conditions and the
level of the Fund's expenses, and no reported performance figure should be
considered an indication of performance which may be expected in the future.
In connection with communicating its yields to current or
prospective shareholders, the Fund also may compare these figures to the
performance of other mutual funds tracked by mutual fund rating services or to
other unmanaged indices which may assume reinvestment of dividends but
generally do not reflect deductions for administrative and management costs.
Performance information for the Fund may be compared, in
reports and promotional literature, to: (i) the Standard & Poor's 500 Stock
Index, Dow Jones Industrial Average, or other unmanaged indices so that
investors may compare the Funds' results with those of a group of unmanaged
securities widely regarded by investors as representative of the securities
markets in general; (ii) other groups of mutual funds tracked by Lipper
Analytical Services, a widely used independent research firm which ranks mutual
funds by overall performance, investment objectives, and assets, or tracked by
other services, companies, publications, or persons who rank mutual funds on
overall performance or other criteria; and (iii) the Consumer Price Index
(measure for inflation) to assess the real rate of return from an investment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.
Investors who purchase and redeem shares of the Funds through
a customer account maintained at a Service Organization may be charged one or
more of the following types of fees as agreed upon by the Service Organization
and the investor, with respect to the provision of customer services: account
fees (a fixed amount per month or per year); transaction fees (a fixed
- 22 -
<PAGE> 122
amount per transaction processed); compensating balance requirements (a minimum
dollar amount a customer must maintain in order to obtain the services
offered); or account maintenance fees (a periodic charge based upon a
percentage of the assets in the account or of the dividends paid on those
assets). Such fees are not reflected in the Fund's, performance quotations,
and will have the effect of reducing the yield of the Fund for those investors.
Independent Accountants
Ernst & Young LLP, 515 South Flower Street, Los Angeles,
California 90071 has been selected to serve as the independent accountants for
the Fund for the current fiscal year.
Registration Statement
This SAI and the Prospectus do not contain all the information
included in the Trust's Registration Statement filed with the SEC under the
Securities Act of 1933 with respect to the securities offered hereby. Certain
portions of the Trust's Registration Statement have been omitted pursuant to
the rules and regulations of the SEC. The Registration Statement, including
the exhibits filed therewith, may be examined at the office of the SEC in
Washington, D.C.
Statements contained herein and in the Prospectus as to the
contents of any contract or other documents referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other documents filed as an exhibit to the Trust's Registration Statement,
each such statement being qualified in all respects by such reference.
- 23 -
<PAGE> 123
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Financial Statements and Highlights will be filed by
amendment.
(b) Exhibits:
(1) Declaration of Trust of Registrant(1)
(2) By-laws of Registrant(1)
(3) Not applicable
(4) Specimen certificates of shares of beneficial
interest of Registrant(3)
(5) Investment Advisory Contract between the
Registrant and First Interstate Capital
Management, Inc. relating to the 100% U.S.
Treasury Money Market Fund(7)
(6) Distribution Contract Supplement between the
Registrant and Pacifica Funds Distributor,
Inc., relating to the 100% U.S. Treasury
Money Market Fund(7)
(7) Not applicable
(8) Custodian Contract Between the Registrant and
First Interstate Bank of California(4)
(9) (i) Service Agreement between the
Registrant and Furman Selz
Incorporated(5)
(ii) (a) Shareholder Services Plan
for Investor Shares(6)
(b) Form of Shareholder Servicing
Agreement for Investor
Shares(6)
(10) Filed on November 30, 1995 with the Trust's
Notices Pursuant to Rule 24f-2
(11) Consent of Independent Public Accountants(7)
(12) Not applicable
(13) Not applicable
<PAGE> 124
(14) Model retirement plans(2)
(15) Administrative Services Contract Supplement
between Registrant and Furman Selz
Incorporated relating to the 100% U.S.
Treasury Money Market Fund(7)
(16) Performance calculations for purposes of Item
22(7)
(17) Not Applicable
(18) Plan pursuant to Rule 18f-3 for Operation of
a Multi-Class System(5)
Item 25. Persons Controlled by or Under Common Control with Registrant
None
Item 26. Number of Holders of Securities as of October 26, 1995
Pacifica Money Market Trust - 15
Pacifica Money Market Fund - 720
Pacifica Government Money Market Fund - 176
Pacifica Prime Money Market Fund
Institutional Shares - 66
Investor Shares - 720
Service Shares - 5
- -------------------------
(1) Filed as an exhibit to Registration Statement No. 2-92260 on
July 17, 1984.
(2) Filed as an exhibit to Pre-Effective Amendment No. 4 to
Registration Statement No. 2-92260 on November 9, 1984.
(3) Filed as an exhibit to Post-Effective Amendment No. 4 to
Registration Statement No. 2-92260 on December 10, 1985.
(4) Filed as an exhibit to Post-Effective Amendment No. 33 to
Registration Statement No. 2-92260 on February 1, 1994.
(5) Filed as an exhibit to Registration Statement No. 33-95022 on
Form N-14 on July 26, 1995.
(6) Filed as an exhibit to Post-Effective Amendment No. 43 to
Registration Statement No. 2-92260 on August 24, 1995.
(7) To be filed by amendment.
- 2 -
<PAGE> 125
Pacifica Treasury Money Market Fund
Institutional Shares - 621
Investor Shares - 154
Service Shares - 5
Pacifica Short-Term Government Bond Fund
Institutional Shares - 758
Investor Shares - 690
Pacifica Intermediate Bond Fund
Institutional Shares - 8
Investor Shares - 225
Pacifica Intermediate Government Bond Fund
Institutional Shares - 1087
Investor Shares - 1175
Pacifica California Tax-Exempt Bond Fund
Institutional Shares - 68
Investor Shares - 857
Pacifica National Tax-Exempt Bond Fund
Institutional Shares - 6
Investor Shares - 196
Pacifica Oregon Tax-Exempt Fund
Institutional Shares - 0
Investor Shares - 1027
Pacifica Arizona Tax-Exempt Fund
Institutional Shares - 5
Investor Shares - 5
Pacifica Growth Fund
Institutional Shares - 54
Investor Shares - 66
Pacifica Equity Value Fund
Institutional Shares - 711
Investor Shares - 1482
Pacifica Balanced Fund
Institutional Shares - 1511
Investor Shares - 2570
Pacifica Asset Preservation Fund
Institutional Shares - 8
Investor Shares - 617
Pacifica Government Income Fund
Institutional Shares - 8
Investor Shares - 482
Pacifica California Short-Term Tax-Exempt Fund
Institutional Shares - 6
Investor Shares - 170
Item 27. Indemnification
Reference is made to Article IV of the Registrant's
Declaration of Trust.
- 3 -
<PAGE> 126
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant by the Registrant
pursuant to the Declaration of Trust or otherwise, the
Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public
policy as expressed in the Act and, therefore, is
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 trustees, officers
or controlling persons of the Registrant in connection with
the successful defense of any act, suit or proceeding) is
asserted by such trustees, officers or controlling persons in
connection with the shares 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
issues.
Item 28. Business and Other Connections of Investment Advisor
FIRST INTERSTATE CAPITAL MANAGEMENT, INC.
First Interstate Capital Management, Inc. serves as the
Registrant's Investment Adviser and, in addition, renders investment advisory
services to First Interstate Bancorp's employee benefit plans and various other
corporate and individual investors.
<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER: OTHER BUSINESSES:
- ----------------------- ----------------
<S> <C>
Tom Slonaker Executive Vice President, First Interstate Bancorp(2)
Director and
Chairman of the Board
Chief Investment Officer, First Interstate Bancorp(2)
Edward S. Claunch Senior Vice President, First Interstate Bank of Denver,
President and Chief N.A.(6)
Executive Officer
Deborah Goodman Senior Vice President, First Interstate Bank of
Senior Vice President California(1)
</TABLE>
- 4 -
<PAGE> 127
<TABLE>
<S> <C>
Walter Jim Brown Senior Vice President, First Interstate Bank of Texas,
Senior Vice President N.A.(3)
G. Edward Means Senior Vice President, First Interstate Bank of Arizona,
Senior Vice President N.A.(2)
G. David Underwood Senior Vice President, First Interstate Bank of Arizona,
Senior Vice President N.A.(2)
Barbara Walchli Senior Vice President, First Interstate Bank of Arizona,
Senior Vice President N.A.(2)
Richard A. Palmer Senior Vice President, First Interstate Management Services
Senior Vice President Company(1)
Chief Financial Officer
Senior Vice President, First Interstate Bancorp(2)
Chief Financial Officer, D.A.G. Management, Inc.
Russell K. Snow, Jr. Executive Vice President, First Interstate Bank of
Director California(1)
Director, First Interstate Portfolio Lending Services(1)
Vern Kozlen Executive Vice President, First Interstate Bank of
Director California(1)
President, First Interstate
Portfolio Lending Services(1)
Susan K. Riechel, Senior Vice President, First Interstate Bank of
Vice President California(1)
Michael Neitzke Vice President, First Interstate Bank of California(1)
Vice President
Dale Annis Vice President First Interstate Bank of Oregon, N.A.(5)
Vice President
Barbara Bruser Senior Vice President, First Interstate Bank of
Vice President California(1)
Thomas Hooker Vice President, First Interstate Bank of California(1)
Vice President
</TABLE>
- 5 -
<PAGE> 128
<TABLE>
<S> <C>
Michael Hughes Vice President, First Interstate Bank of California(1)
Vice President
David Williams Vice President, First Interstate Bank of California(1)
Vice President
Richard Ferguson Vice President, First Interstate Bank of Arizona, N.A.(2)
Vice President
Charlie Fish Vice President, First Interstate Bank of Oregon, N.A.(5)
Vice President
Robert O. Lindig Vice President, First Interstate Bank of Denver, N.A.(6)
Vice President
Gerald Wagner Vice President, First Interstate Bank of California(1)
Vice President
Robert Daviduk Vice President, First Interstate Bank of California(1)
Vice President
Roger S. Teetzel Vice President, First Interstate Bank of California(7)
Vice President
Richard Carhidi Assistant Vice President, First Interstate Bank of Arizona,
Assistant Vice President N.A.(2)
Marianne R. Minihane Assistant Vice President, First Interstate Bank of
Assistant Vice President California(7)
Sandra U. Torres Assistant Vice President, First Interstate Bank of
Assistant Vice President California(7)
Leon Newcomb Assistant Vice President, First Interstate Bank of Utah,
Assistant Vice President N.A.(2)
Mary Gail Walton Assistant Vice President, First Interstate Bank of
Assistant Vice President Washington, N.A.(8)
Thomesina Beagle Investment Officer, First Interstate Bank of California(7)
Investment Officer
William J. Souza Managing Counsel, First Interstate Management Services
Secretary Company(1)
Secretary, First Interstate Portfolio Lending Services(1)
</TABLE>
- 6 -
<PAGE> 129
- ----------------------------------
(1) The address of the office is indicated as 707 Wilshire Boulevard, Los
Angeles, California 90017.
(2) The address of the office is indicated as 7501 E. McCormick Parkway,
Scottsdale, Arizona 85258.
(3) The address of the office is indicated as 1000 Louisiana, Houston,
Texas 77002.
(4) The address of the office is indicated as 100 W. Washington, Phoenix,
Arizona 85003.
(5) The address of the office is indicated as 1300 S.W. Fifth Ave.,
Portland, Oregon 97201.
(6) The address of the office is indicated as 633 Seventeenth Street,
Denver, Colorado 80270.
(7) The address of the office is indicated as 4365 Executive Drive, Suite
1820, San Diego, California 92121.
(8) The address of the office is indicated as 999 Third Avenue,
Seattle, Washington 98104.
Item 29. Principal Underwriters
(a)(i) Premier Mutual Fund Services Inc., principal underwriter for
the Institutional and Service Shares of Registrant's Pacifica Prime Money
Market Fund and Pacifica Treasury Money Market Fund (exclusive distributor)
acts as principal underwriter or exclusive distributor for the investment
companies named below:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
- 7 -
<PAGE> 130
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus GNMA Fund, Inc.
26) Dreyfus Government Cash Management
27) Dreyfus Growth and Income Fund, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
34) Dreyfus Investors GNMA Fund
35) The Dreyfus/Laurel Funds, Inc.
36) The Dreyfus/Laurel Funds Trust
37) The Dreyfus/Laurel Tax-Free Municipal Funds
38) The Dreyfus/Laurel Investment Series
39) The Dreyfus Leverage Fund, Inc.
40) Dreyfus Life and Annuity Index Fund, Inc.
41) Dreyfus LifeTime Portfolios, Inc.
42) Dreyfus Liquid Assets, Inc.
43) Dreyfus Massachusetts Intermediate Municipal Bond Fund
44) Dreyfus Massachusetts Municipal Money Market Fund
45) Dreyfus Massachusetts Tax Exempt Bond Fund
46) Dreyfus Michigan Municipal Money Market Fund, Inc.
47) Dreyfus Money Market Instruments, Inc.
48) Dreyfus Municipal Bond Fund, Inc.
49) Dreyfus Municipal Cash Management Plus
50) Dreyfus Municipal Money Market Fund, Inc.
51) Dreyfus New Jersey Intermediate Municipal Bond Fund
52) Dreyfus New Jersey Municipal Bond Fund, Inc.
53) Dreyfus New Jersey Municipal Money Market Fund, Inc.
54) Dreyfus New Leaders Fund, Inc.
55) Dreyfus New York Insured Tax Exempt Bond Fund
56) Dreyfus New York Municipal Cash Management
57) Dreyfus New York Tax Exempt Bond Fund, Inc.
58) Dreyfus New York Tax Exempt Intermediate Bond Fund
59) Dreyfus New York Tax Exempt Money Market Fund
60) Dreyfus Ohio Municipal Money Market Fund, Inc.
61) Dreyfus 100% U.S. Treasury Intermediate Term Fund
62) Dreyfus 100% U.S. Treasury Long Term Fund
63) Dreyfus 100% U.S. Treasury Money Market Fund
64) Dreyfus 100% U.S. Treasury Short Term Fund
- 8 -
<PAGE> 131
65) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
66) Dreyfus Pennsylvania Municipal Money Market Fund
67) Dreyfus Short-Intermediate Government Fund
68) Dreyfus Short-Intermediate Municipal Bond Fund
69) Dreyfus Short-Term Income Fund, Inc.
70) The Dreyfus Socially Responsible Growth Fund, Inc.
71) Dreyfus Strategic Growth, L.P.
72) Dreyfus Strategic Income
73) Dreyfus Strategic Investing
74) Dreyfus Tax Exempt Cash Management
75) Dreyfus Treasury Cash Management
76) Dreyfus Treasury Prime Cash Management
77) Dreyfus Variable Investment Fund
78) Dreyfus-Wilshire Target Funds, Inc.
79) Dreyfus Worldwide Dollar Money Market Fund, Inc.
80) General California Municipal Bond Fund, Inc.
81) General California Municipal Money Market Fund
82) General Government Securities Money Market Fund, Inc.
83) General Money Market Fund, Inc.
84) General Municipal Bond Fund, Inc.
85) General Municipal Money Market Fund, Inc.
86) General New York Municipal Bond Fund, Inc.
87) General New York Municipal Money Market Fund
88) Pacifica Funds Trust -
Pacifica Prime Money Market Fund
Pacifica Treasury Money Market Fund
89) Peoples Index Fund, Inc.
90) Peoples S&P MidCap Index Fund, Inc.
91) Premier Insured Municipal Bond Fund
92) Premier California Municipal Bond Fund
93) Dreyfus Global Investing, Inc.
94) Premier GNMA Fund
95) Premier Growth Fund, Inc.
96) Premier Municipal Bond Fund
97) Premier New York Municipal Bond Fund
98) Premier State Municipal Bond Fund
(a)(ii) Pacifica Funds Distributor Inc. ("PFD Inc.") is the principal
underwriter for the Investor Shares of Pacifica Prime Money Market Fund and
Pacifica Treasury Money Market Fund and each class of each other series of the
Registrant. PFD Inc., a subsidiary of Furman Selz Incorporated, was organized
specifically to distribute shares of the Registrant.
(b)(i) Premier Mutual Fund Services Inc.:
- 9 -
<PAGE> 132
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH PFD, INC. WITH REGISTRANT
---------------- -------------- ---------------
<S> <C> <C>
Marie E. Connolly+ Director, President, None
Chief Operating Officer and Compliance
Officer
Joseph F. Tower, III+ Senior Vice President, None
Treasurer and Chief Financial Officer
John E. Pelletier+ Senior Vice President, None
General Counsel, Secretary and Clerk
Frederick C. Dey++ Senior Vice President None
Eric B. Fischman++ Vice President and Associate General Counsel None
Lynn H. Johnson+ Vice President None
Ruth D. Leibert++ Assistant Vice President None
Paul Prescott++ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson++ Assistant Treasurer None
John J. Pyburn++ Assistant Treasurer None
Jean M. O'Leary+ Assistant Secretary, and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
</TABLE>
- ----------------------------
+ Principal business address is One Exchange Place, Boston,
Massachusetts 02109.
++ Principal business address is 200 Park Avenue,
New York, New York 10166.
(b)(ii) PFD Inc.:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH PFD, INC. WITH REGISTRANT
---------------- -------------- ---------------
<S> <C> <C>
Michael C. Petrycki President and Director President
Steven D. Blecher Vice President, Secretary and Treasurer Executive Vice President*
</TABLE>
- 10 -
<PAGE> 133
<TABLE>
<S> <C> <C>
Robert J. Miller Chief Financial Officer and Vice President None
Elizabeth Q. Solazzo Assistant Secretary None
</TABLE>
- ----------------------------
* The authority of Mr. Blecher is limited to matters involving each
series of the Registrant other than the Pacifica Prime Money Market
Fund and Pacifica Treasury Money Market Fund.
(c)(i) Not Applicable
(ii) Not Applicable
Item 30. Location of Accounts and Records
<TABLE>
<S> <C> <C>
1. First Interstate Capital Records relating to its function
Management, Inc. as Adviser for each portfolio
7501 E. McCormick Parkway
Scottsdale, Arizona 85258
2. First Interstate Bank of Records relating to its function
California as Custodian for each portfolio
707 Wilshire Blvd, W10-6 and Transfer Agent for the
Los Angeles, California 90017 Service and Institutional Shares
of the Pacifica Prime Money
Market Fund and the Pacifica
Treasury Money Market Fund
3. The Dreyfus Corporation Records relating to its function
200 Park Avenue as Administrator for the Pacifica
New York, New York 10016 Prime Money Market Fund and the
Pacifica Money Market Treasury
Fund
4. Furman Selz Incorporated Records relating to its function
230 Park Avenue as Administrator for each
New York, New York 10169 portfolio other than the Pacifica
</TABLE>
- 11 -
<PAGE> 134
<TABLE>
<CAPTION>
<S> <C> <C>
Prime Money Market Fund and the
Pacifica Treasury Money Market Fund
5. Premier Mutual Fund Services, Inc. Records relating to its function
One Exchange Place as Sub-Administrator and
Boston, Massachusetts 02109 Distributor of the Service and
Institutional Shares for the
Pacifica Prime Money Market Fund
and the Pacifica Treasury Money
Market Fund
6. Pacifica Funds Distributor, Inc. Record relating to its function
230 Park Avenue as Distributor for each class of
New York, New York 10169 each series of the Registrant
other than the Service and
Institutional Shares of the
Pacifica Prime Money Market Fund
and the Pacifica Treasury Money
Market Fund
</TABLE>
Item 31. Management Services
Not applicable
Item 32. Undertakings
(a) Registrant undertakes to call a meeting of Shareholders for
the purpose of voting upon the question of removal of a
Trustee or Trustees when requested to do so by the holders of
at least 10% of the Registrant's outstanding shares and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940.
(b) Registrant undertakes to file a post-effective amendment,
using reasonably current financial statements which need not
be certified, within four to six months from the effective
- 12 -
<PAGE> 135
date of Registrant's Registration Statement under the
Securities Act of 1933.
(c) Registrant undertakes to provide its Annual Report upon
request without charge to any recipient of a Prospectus for
the Funds.
- 13 -
<PAGE> 136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 48 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Washington, District of Columbia on the 14th day of December, 1995.
PACIFICA FUNDS TRUST
--------------------
(REGISTRANT)
By: Michael C. Petrycki
-----------------------------------
Michael C. Petrycki, President*
By: Jeffrey L. Steele
--------------------------------
*Jeffrey L. Steele,
as attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment No. 48 to the Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Michael C. Petrycki President December 14, 1995
- ----------------------
Michael C. Petrycki*
Dennis W. Draper Trustee December 14, 1995
- ----------------------
Dennis W. Draper*
Joseph N. Hankin Trustee December 14, 1995
- ----------------------
Joseph N. Hankin*
John E. Heilmann Trustee December 14, 1995
- ----------------------
John E. Heilmann*
</TABLE>
<PAGE> 137
<TABLE>
<S> <C> <C>
Jack D. Henderson Trustee December 14, 1995
- ------------------------
Jack D. Henderson*
Richard A. Wedemeyer Trustee December 14, 1995
- -----------------------
Richard A. Wedemeyer*
John J. Pileggi Treasurer (Principal December 14, 1995
- ----------------------------- Financial and
John J. Pileggi* Accounting Officer)
By: Jeffrey L. Steele
-------------------------
*Jeffrey L. Steele,
as attorney-in-fact
</TABLE>
* Pursuant to power of attorney filed with Post-Effective Amendment No.
43 on August 24, 1995.
- 2 -
