As filed with the Securities and Exchange Commission on April 10, 1997
Registration No. 2-94932
811-4181
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 14 X
-
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 14 X
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FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
(Exact name of Registrant as specified in charter)
Ms. Concetta Durso
Secretary and Vice President
First Investors U.S. Government Plus Fund
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement
It is proposed that this filing will become effective on April 30, 1997 pursuant
to paragraph (b) of Rule 485.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of beneficial
interest, no par value, under the Securities Act of 1933. Registrant filed a
Rule 24f-2 Notice for its fiscal year ending December 31, 1996 on February 27,
1997.
<PAGE>
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
CROSS-REFERENCE SHEET
N-1A Item No. Location
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PART A: PROSPECTUS
1. Cover Page.................................... Cover Page
2. Synopsis...................................... Fee Table
3. Condensed Financial Information............... Financial Highlights
4. General Description of Registrant............. Investment Objectives
and Policies;
Investment Restrictions
5. Management of the Fund........................ Management of the Fund
5A. Management's Discussion
of Fund Performance.......................... Performance Information
6. Capital Stock and Other Securities............ Description of Shares;
Dividends and
Distributions
Determination of Net
Asset Value
7. Purchase of Securities Being Offered.......... Purchase of Shares
8. Redemption or Repurchase...................... Redemption of Shares
9. Pending Legal Proceedings..................... Not Applicable
PART B: STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page.................................... Cover Page
11. Table of Contents............................. Table of Contents
12. General Information and History............... General Information
13. Investment Objectives and Policies............ Investment Objectives
and Policies;
Investment Restrictions
14. Management of the Fund........................ Trustees and Officers
15. Control Persons and Principal Holders
of Securities................................. Not Applicable
16. Investment Advisory and Other Services........ Investment Adviser
17. Brokerage Allocation and
Other Practices.............................. Allocation of Portfolio
Brokerage
18. Capital Stock and Other Securities............ Determination of Net
Asset Value
19. Purchase, Redemption and Pricing of
Securities Being Offered..................... Purchase and Redemption
of Shares; Determination
of Net Asset Value
20. Tax Status.................................... Taxes
21. Underwriters.................................. Underwriters
22. Calculation of Performance Data............... Performance Information
23. Financial Statements.......................... Financial Statements;
Report of Independent
Accountants
PART C: OTHER INFORMATION
Information required to be included in Part C is set forth under the appropriate
item so numbered, in Part C hereof.
<PAGE>
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
95 Wall Street, New York, New York 10005/1-800-423-4026
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND (the "Government Plus Fund")
is an open-end diversified management investment company consisting of three
separate series of investments: 1st Fund, 2nd Fund and 3rd Fund (singularly,
"Fund," and collectively, "Funds"). The shares of the Funds may be redeemed at
any time at the shareholder's request. Redemptions will be made at the next
determined net asset value. (See "Determination of Net Asset Value" and
"Redemption of Shares.")
The objective of each Fund is first to generate income and, to a lesser
extent, achieve long-term capital appreciation, by investing no less than 65% of
its total assets in zero coupon securities representing future individual
payments of principal or interest on U.S. Treasury securities ("Zero Coupon
Securities") or other U.S. Government securities (together, "Government
Securities") and by investing the remainder of its assets in relatively small,
unseasoned or unknown companies, or those companies considered to be in an early
stage of development by the Funds' investment adviser, or selected other
investments ("Other Securities"). At a predetermined maturity date, each Fund
will terminate and liquidate as soon thereafter as possible. There can be no
assurance that the objectives of each Fund will be realized.
Each Fund is distinguished by the length of time its shares are offered
to the public, the dollar amount of such Fund's shares so offered, the
anticipated maturity date, or any or all of the foregoing. Each Fund has a
separate portfolio of investments. The maturity date of each Fund is: 1st Fund,
December 31, 2004; 2nd Fund, December 31, 1999; 3rd Fund, December 31, 1998.
An indefinite number of shares of each Fund was available during an
initial offering period. Government Plus Fund has terminated the initial
offering period of each Fund and no new shares of any existing Fund will be
issued, except in connection with reinvestment of dividends and capital gain
distributions. To the extent that a Fund repurchases shares of such Fund from
individual investors who wish to redeem their shares, the Fund will make
available such shares at the next determined public offering price (see
"Purchase of Shares").
This Prospectus sets forth concisely the information about the Funds
that a prospective investor should know before investing and should be retained
for future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Funds and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of the Funds' shares.
A Statement of Additional Information, dated April 30, 1997 (which is
incorporated by reference herein), has been filed with the Securities and
Exchange Commission. The Statement of Additional Information is available at no
charge upon request to the Fund at the address or telephone number indicated
above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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 April 30, 1997
<PAGE>
FEE TABLE
The following table has been prepared to assist the investor in
understanding the various costs and expenses a shareholder of each Fund will
directly or indirectly bear.
1st 2nd 3rd
Fund Fund Fund
---- ---- ----
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............. 8.00% 8.00% 8.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees.................................. 1.00% 1.00% 1.00%
12b-1 Fees....................................... -0- -0- -0-
Other Expenses................................... 0.60%* 0.85% 0.95%
Total Fund Operating Expenses.................... 1.60%*+ 1.85%+ 1.95%+
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* Net of reimbursement. Absent such reimbursement, Other Expenses would
have been 0.98%.
+ If certain expenses had not been reimbursed, Total Fund Operating
Expenses for the 1st Fund would have been 1.98%. Each Fund has an
expense offset arrangement that may reduce the Fund's custodian fee
based on the amount of cash maintained by the Fund with its custodian.
Any such fee reductions are not reflected under Total Fund Operating
Expenses.
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period:
1st 2nd 3rd
Fund Fund Fund
---- ---- ----
1 year $95 $97 $98
3 years 126 134 136
5 years 160 172 177
10 years 255 280 289
The Example is based on expense data for each Fund's fiscal year ended December
31, 1996. For more complete descriptions of the various costs and expenses, see
"Management of the Fund," "Purchase of Shares" and "Redemption of Shares." THE
EXPENSES IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION BY THE FUNDS
OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES IN FUTURE YEARS MAY BE GREATER OR
LESS THAN THOSE SHOWN.
2
<PAGE>
FINANCIAL HIGHLIGHTS
The following table sets forth the per share operating performance data
for a share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated. The table has been derived from
financial statements which have been examined by Tait, Weller & Baker,
independent certified public accountants, whose report thereon appears in the
Statement of Additional Information ("SAI"). This information should be read in
conjunction with the Financial Statements and Notes thereto, which also appear
in the SAI, available at no charge upon request to the Funds.
3
<PAGE>
<TABLE>
<CAPTION>
P E R S H A R E D A T A
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS FROM
------------------------------------------------- ------------------------------
NET
REALIZED
AND
NET NET UNREALIZED NET NET
ASSET VALUE INVEST- GAIN INVEST- TOTAL ASSET VALUE
----------- MENT ---------- TOTAL FROM MENT DISTRI- -----------
BEGINNING INCOME (LOSS) ON INVESTMENT INCOME REALIZED CAPITAL BUTIONS END
OF YEAR INVESTMENTS OPERATIONS GAINS SURPLUS OF YEAR
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1ST FUND
- --------
1987 $16.08 $1.061 $(2.931) $(1.870) $2.260 $2.040 $ -- $4.300 $9.91
1988 9.91 .796 .464 1.260 .810 .190 -- 1.000 10.17
1989 10.17 .722 1.398 2.120 .703 .093 .044 .840 11.45
1990 11.45 .707 (.587) .120 .707 .409 .024 1.140 10.43
1991 10.43 .686 1.670 2.356 .686 .270 -- .956 11.83
1992 11.83 .715 .042 .757 .715 .532 -- 1.247 11.34
1993 11.34 .670 1.535 2.205 .670 .525 -- 1.195 12.35
1994 12.35 .690 (2.035) (1.345) .690 .484 .001 1.175 9.83
1995 9.83 .667 2.114 2.781 .667 .364 -- 1.031 11.58
1996 11.58 .648 (.863) (.215) .648 .347 -- .995 10.37
2ND FUND
- --------
1987 11.54 .954 (1.754) (.800) 1.480 .050 -- 1.530 9.21
1988 9.21 .762 .058 .820 .770 -- -- .770 9.26
1989 9.26 .737 .963 1.700 .718 -- .032 .750 10.21
1990 10.21 .706 (.296) .410 .706 -- .004 .710 9.91
1991 9.91 .663 1.240 1.903 .663 -- -- .663 11.15
1992 11.15 .656 .130 .786 .656 -- -- .656 11.28
1993 11.28 .643 .770 1.413 .643 -- -- .643 12.05
1994 12.05 .660 (1.484) (.824) .660 -- .006 .666 10.56
1995 10.56 .646 .970 1.616 .646 -- -- .646 11.53
1996 11.53 .675 (.560) .115 .675 -- -- .675 10.97
3RD FUND
- --------
1987 11.22 .680 (1.650) (.970) .840 .240 -- 1.080 9.17
1988 9.17 .605 .185 .790 .610 -- .070 .680 9.28
1989 9.28 .622 .888 1.510 .611 -- .019 .630 10.16
1990 10.16 .598 (.308) .290 .598 -- .012 .610 9.84
1991 9.84 .676 1.211 1.887 .676 -- .001 .677 11.05
1992 11.05 .576 .120 .696 .576 -- -- .576 11.17
1993 11.17 .544 1.110 1.654 .544 -- -- .544 12.28
1994 12.28 .610 (1.307) (.697) .610 -- .013 .623 10.96
1995 10.96 .568 .980 1.548 .568 -- -- .568 11.94
1996 11.94 .593 (.480) .113 .593 -- -- .593 11.46
<CAPTION>
R A T I O S / S U P P L E M E N T A L D A T A
RATIO TO AVERAGE ASSETS
-----------------------
NET NET ASSETS NET PORTFOLIO
TOTAL END OF INVESTMENT TURNOVER
RETURN+ YEAR (IN EXPENSES INCOME RATE
(%) THOUSANDS) (%) (%) (%)
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<S> <C> <C> <C> <C> <C>
1ST FUND
- --------
1987 (13.28) $1,710 1.74 7.16 3
1988 12.71 1,701 1.69 7.21 9
1989 20.85 1,833 1.61 6.08 9
1990 1.05 1,591 1.90 6.16 14
1991 22.59 1,758 1.86 5.95 8
1992 6.40 1,599 1.75 5.62 8
1993 19.44 1,732 1.59(a) 4.94(a) 7
1994 (10.90) 1.330 1.60(a) 5.73(a) 8
1995 28.29 1,524 1.60(a) 5.60(a) 7
1996 (1.86) 1,359 1.60(a) 5.70(a) 7
2ND FUND
- --------
1987 (7.38) 3,874 1.76 7.33 2
1988 8.90 3,561 1.65 7.10 9
1989 18.36 3,492 1.66 6.53 11
1990 4.02 2,943 1.88 6.46 12
1991 19.20 2,946 1.91 5.87 8
1992 7.05 2,784 1.77 5.46 7
1993 12.53 2,756 1.70 4.93 7
1994 (6.89) 2,360 1.78 5.48 8
1995 15.30 2,475 1.93 5.35 7
1996 1.00 2,168 1.85 5.50 8
3RD FUND
- --------
1987 (8.81) 2,121 1.61 5.92 23
1988 8.62 2,038 1.54 5.76 22
1989 16.27 2,067 1.60 5.82 25
1990 2.85 1,777 1.74 5.53 20
1991 19.18 1,355 1.83 5.17 11
1992 6.30 1,185 1.88 4.61 8
1993 14.81 1,258 1.68 4.27 11
1994 (5.78) 1,032 1.74 4.77 10
1995 14.12 1,130 1.89 4.68 8
1996 .95 1,025 1.95 4.77 12
</TABLE>
- ----------
+ Calculated without sales charge
(a) For the years 1993, 1994, 1995 and 1996, the investment adviser assumed
expenses of the 1st Fund of $2,744, $2,594, $3,588 and $4,770
respectively. The ratios of expenses and net investment income to
average net assets before the assumption of these expenses were as
follows:
1993 1994 1995 1996
---- ---- ---- ----
Expenses 1.75% 1.78% 1.87% 1.98%
Net Investment Income 4.79% 5.56% 5.32% 5.35%
4
<PAGE>
THE FUNDS
Each Fund has the same investment objectives. Each Fund is
distinguished by the dollar amount of the initial offering, the maturity date or
the anticipated minimum return, or any or all of the foregoing.
An indefinite number of shares of each Fund was available during an
initial offering period. Government Plus Fund has terminated the initial
offering period of each Fund and no new shares of any existing Fund will be
issued, except in connection with reinvestment of dividends and capital gains
distributions. To the extent that a Fund repurchases shares of such Fund from
individual investors who wish to redeem their shares, the Fund will make
available such shares at the next determined public offering price (see
"Purchase of Shares").
Because each existing Fund will not offer new shares to the public,
investors are urged to consider the effects of the closing of the offerings,
including liquidity demands created by redemptions and the sale of securities at
unfavorable prices to meet redemption requests. Redemptions of each Fund's
shares prior to the maturity date will raise the remaining shareholders' pro
rata share of expenses for the Fund.
MATURITY DATE. The maturity dates of the 1st, 2nd and 3rd Funds will be
December 31 of the years 2004, 1999 and 1998, respectively. In July of the year
in which each Fund will mature, shareholders of that Fund will be notified of
that Fund's pending liquidation. Liquidation of each Fund's portfolio will
commence the following January, and it is expected that trades and transactions
in each Fund's portfolio will be completed in order to pay cash redemptions to
shareholders no later than January 31 following the maturity date. A
shareholder's right to redemption will remain in effect until the Fund has
automatically redeemed his or her account. In addition, a shareholder's
investment will remain in his or her account until the time of payment of
liquidation proceeds, and any income thereon will be added to his or her
proceeds.
INVESTMENT OBJECTIVES AND POLICIES
Each Fund seeks first to generate income and, to a lesser extent,
achieve long-term capital appreciation, by investing no less than 65% of its
total assets in zero coupon securities representing future individual payments
of principal or interest on U.S. Treasury securities ("Zero Coupon Securities")
or other U.S. Government securities (together, "Government Securities"), and by
investing the remainder of its assets in relatively small, unseasoned or unknown
companies, or those companies considered to be in an early stage of development
by the Adviser or selected other investments ("Other Securities"). At a
predetermined maturity date, each Fund will terminate and liquidate as soon
thereafter as possible. There is no assurance that these objectives will be
achieved. The investment objectives of each Fund may not be changed unless
approved by a majority of the outstanding voting securities of that Fund.
Each Fund does not intend to trade its portfolio of Zero Coupon
Securities for short-term market considerations. No Fund will purchase a Zero
Coupon Security (defined under the heading "Government Securities") which
matures on a date following the maturity date for that Fund. Additionally, the
proceeds of any maturing Zero Coupon Security held by any Fund, which are
5
<PAGE>
received by that Fund prior to its maturity date, will only be held as cash or
invested in Government Securities, certificates of deposit, prime commercial
paper or bankers' acceptances. Such investments will be made in accordance with
each Fund's investment objectives and will mature on or before the maturity date
for the corresponding Fund. The Adviser may trade Zero Coupon Securities for
long-term market considerations to fulfill each Fund's investment objective.
GOVERNMENT SECURITIES. Each Fund seeks to achieve its objectives by
investing no less than 65% of its assets in Government Securities which are
issued or guaranteed by the U.S. Treasury. Government Securities, also known as
Treasury Securities, are debt obligations issued by the U.S. Treasury to finance
the activities of the U.S. Government. Government Securities come in the form of
Treasury bills, notes and bonds. Treasury bills mature (are payable) within one
year from the date of issuance and are issued on a discount basis. That is,
Treasury bills do not make interest payments. Rather, an investor pays less than
the face (or par) value of the Treasury bill and, by holding it to maturity,
will receive the face value. Treasury notes and bonds are intermediate and
long-term obligations, respectively, and entitle the holder to periodic interest
payments from the U.S. Treasury. Accordingly, Treasury notes and bonds are
usually issued at a price close to their face value at maturity.
Zero Coupon Securities is the term used by the Funds to describe U.S.
Treasury notes and bonds which have been stripped of their unmatured interest
payments. A Zero Coupon Security pays no cash interest to its holder during its
life. Its value to an investor consists of the difference between its face value
at the time of maturity and the price for which it was acquired, which is
generally an amount much less than its face value (sometimes referred to as a
"deep discount" price).
In the last few years a number of banks and brokerage firms have
separated ("stripped") the principal portions ("corpus") from the interest
portions of U.S. Treasury bonds and notes and sold them separately in the form
of receipts or certificates representing undivided interests in these
instruments (which instruments are generally held by a bank in a custodial or
trust account). More recently, the U.S. Treasury Department has facilitated the
stripping of Treasury notes and bonds by permitting the separated corpus and
interest to be transferred directly through the Federal Reserve Bank's
book-entry system. This program, which eliminates the need for custodial or
trust accounts to hold the Treasury securities, is called "Separate Trading of
Registered Interest and Principal of Securities" ("STRIPS"). Each such stripped
instrument (or receipt) entitles the holder to a fixed amount of money from the
Treasury at a single, specified future date. The U.S. Treasury redeems Zero
Coupon Securities consisting of the corpus for the face value thereof at
maturity, and those consisting of stripped interest for the amount of interest,
and at the date, stated thereon.
The amount of the discount each Fund will receive will depend upon the
length of time to maturity of the separated U.S. Treasury security and
prevailing market interest rates when the separated U.S. Treasury security is
purchased. Separated U.S. Treasury securities can be considered a zero coupon
investment because no payment is made to a Fund until maturity. These securities
are purchased with original issue discount and such discount is includable as
gross income to a Fund as it accrues over the life of the security. Because
interest on Zero Coupon Securities is compounded over the life of the
instrument, there is more income in later years, compared with earlier years,
6
<PAGE>
with these securities. Although each Fund intends to hold all Zero Coupon
Securities until maturity, Government Securities' market prices move inversely
with respect to changes in interest rates prior to their maturity.
RISK FACTORS. The market prices of Zero Coupon Securities generally are
more volatile than the prices of securities that pay interest periodically and
in cash and are likely to respond to changes in interest rates to a greater
degree than do other types of debt securities having similar maturities and
credit quality. The value of Zero Coupon Securities is likely to decline in
times of rising interest rates and to rise in time of falling interest rates.
Consequently, this could affect the net asset value of your Fund shares. The
income on Zero Coupon Securities is accrued by each Fund prior to the receipt of
actual payments. Federal income tax law requires holders of Zero Coupon
Securities to report as interest income each year the portion of the original
issue discount on such securities (other than tax-exempt original issue discount
from a Zero Coupon Security) that accrues that year, even though the holders
receive no cash payments of interest during the year. Each Fund, however, must
distribute substantially all of its income to shareholders under the Federal tax
law. Therefore, a Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash to satisfy its distribution
requirements. These actions are also likely to reduce the assets to which Fund
expenses could be allocated and reduce the rate of return of a Fund. In
addition, shareholders are taxed on distributions of this interest even if the
Fund does not receive the actual payments of interest.
OTHER SECURITIES. Although each Fund intends to invest no less than 65%
of its assets in Government Securities, each Fund may invest the remainder of
its assets in securities consisting of:
Equities (described below);
prime commercial paper;
certificates of deposit of domestic branches of U.S. Banks;
bankers' acceptances;
repurchase agreements; and
participation interests.
Equities in which each Fund will invest are common stocks or securities
convertible into common stock issued by small, unseasoned or relatively unknown
companies, or those which are in the early stages of development, including
securities which represent a special situation. A "special situation" is one
where an unusual and possibly non-repetitive development may be occurring which,
in the opinion of the Adviser, could cause a security's price to outperform the
securities market in general.
RISK FACTORS. These Equities are more speculative than Zero Coupon
Securities or securities issued by established and well-seasoned issuers. The
risks connected with these Equities may include the availability of less
information about the issuer, the absence of a track record or historical
pattern of performance, as well as normal risks which accompany the development
of new products, markets or services. Equities purchased by the Funds which
represent a special situation bear the risk that the special situation will not
develop as favorably as expected, or the situation may deteriorate. For example,
a merger with favorable implications may be blocked, an industrial development
may not enjoy anticipated market acceptance, or a bankruptcy may not be as
profitably
7
<PAGE>
resolved as had been expected. Although these risks could have a significant
negative impact on that portion of each Fund's assets invested in Equities which
represent special situations, there may be instances of greater financial reward
from these investments when compared with other securities.
The proportion of each Fund's assets invested in various Other
Securities will shift from time to time in accordance with the judgment of the
Adviser, up to the 35% limit. The Adviser expects to have substantially all of
this portion of each Fund's assets invested in Equities. Each Fund, may,
however, invest all of this portion of its assets in prime commercial paper,
certificates of deposit, bankers' acceptances, repurchase agreements and
participation interests (as described below) when the Adviser believes market
conditions warrant such action or to satisfy redemption requests.
Investments in commercial paper are limited to obligations rated
Prime-1 by Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard &
Poor's Ratings Group ("S&P"). A description of commercial paper ratings is
contained in Appendix A to the SAI. Commercial paper includes notes, drafts or
similar instruments payable on demand or having a maturity at the time of
issuance not exceeding nine months, exclusive of days of grace or any renewal
thereof, payable on demand or having a maturity likewise limited.
Investments in certificates of deposit will be made only at domestic
institutions with assets in excess of $500 million. Under a repurchase agreement
a Fund acquires a debt instrument for a relatively short period (usually not
more than one week) subject to the obligations of the seller to repurchase and
the Fund to resell such debt instrument at a fixed price. Bankers' acceptances
are short-term credit instruments used to finance commercial transactions.
Participation interests that may be held by the Funds are pro rata
interests in securities otherwise qualified for purchase by the Funds which are
held either by banks which are members of the Federal Reserve System or
securities dealers who are members of a national securities exchange or are
market makers in government securities, which are represented by an agreement in
writing between a Fund and the entity in whose name the security is issued,
rather than possession by the Funds. Each Fund will purchase participation
interests only in securities otherwise permitted to be purchased by the Fund,
and only when they are evidenced by deposit, safekeeping receipts, or book-entry
transfer, indicating the creation of a security interest in favor of the Fund in
the underlying security. Additionally, the Adviser will monitor the
creditworthiness of entities which are not banks, from which each Fund purchases
participation interests. However, the issuer of the participation interest to
the Funds will agree in writing, among other things: to remit promptly all
payments of principal, interest and premium, if any, to the Funds once received
by the issuer; to repurchase the participation interest upon seven days' notice;
and to otherwise service the investment physically held by the issuer, a portion
of which has been sold to the Funds.
RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 15% of
its net assets in illiquid securities, including (1) securities that are
illiquid due to the absence of a readily available market or due to legal or
contractual restrictions on resale and (2) repurchase agreements maturing in
more than seven days. However, illiquid securities for purposes of this
limitation do not include securities eligible for resale under Rule 144A under
the Securities Act of 1933, as amended, which Government Plus Fund's Board of
Trustees or the Adviser has determined are liquid under Board-approved
guidelines. See the SAI for more information regarding restricted and illiquid
securities.
8
<PAGE>
WHEN-ISSUED SECURITIES. Government Securities or Other Securities may
be acquired by each Fund on a when-issued basis. Under such an arrangement,
delivery of, and payment for, the instruments occur up to 45 days after the
agreement to purchase the instruments is made by a Fund. The purchase price to
be paid by a Fund and the interest rate on the instruments to be purchased are
both selected when the Fund agrees to purchase the securities "when-issued."
Each Fund is permitted to sell when-issued securities prior to issuance of such
securities, but will not purchase such securities with that purpose intended.
Securities purchased on a when-issued basis are subject to the additional risk
that yields available in the market, in the period between the purchase of such
securities and when delivery takes place, may be higher or lower than the rate
to be received on the securities a Fund has purchased. After a Fund is committed
to purchase when-issued securities, but prior to the issuance of said
securities, it is subject to adverse changes in the value of these securities
based upon changes in interest rates, as well as changes based upon the public's
perception of the issuer and its creditworthiness. When-issued securities'
market prices move inversely with respect to changes in interest rates.
Purchases of securities by each Fund on a when-issued basis are restricted as
more fully set forth in the SAI.
MANAGEMENT
BOARD OF TRUSTEES. Government Plus Fund's Board of Trustees, as part of
its overall management responsibility, oversees various organizations
responsible for each Fund's day-to-day management.
ADVISER. First Investors Management Company, Inc. supervises and
manages each Fund's investments, supervises all aspects of each Fund's
operations and determines each Fund's portfolio transactions. The Adviser is a
New York corporation located at 95 Wall Street, New York, NY 10005. The Adviser
presently acts as investment adviser to 14 mutual funds. First Investors
Consolidated Corporation ("FICC") owns all of the voting common stock of the
Adviser and all of the outstanding stock of FIC and the Transfer Agent. Mr.
Glenn O. Head controls FICC and, therefore, controls the Adviser.
As compensation for its services, the Adviser receives an annual fee
from each of the Funds, which is payable monthly. For the fiscal year ended
December 31, 1996, each of 1st Fund, 2nd Fund and 3rd Fund paid 1.00% of its
average daily net assets in advisory fees.
Each Fund bears all expenses of its operations other than those
incurred by the Adviser or Underwriter under the terms of its advisory or
underwriting agreements. Fund expenses include, but are not limited to: the
advisory fee; shareholder servicing fees and expenses; custodian fees and
expenses; legal and auditing fees; expenses of communicating to existing
shareholders, including preparing, printing and mailing prospectuses and
shareholder reports to such shareholders; and proxy and annual meeting expenses.
PORTFOLIO MANAGER. Patricia D. Poitra, Director of Equities, has been
primarily responsible for the day-to-day management of each Fund since 1988. Ms.
Poitra is assisted by a team of portfolio analysts. Ms. Poitra is responsible
for the management of the Special Situations Fund and the equity portion of
Total Return Fund, all series of First Investors Series Fund. Ms. Poitra also is
responsible for the management of the Discovery Fund of First Investors Life
Series Fund and the
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U.S.A. Mid-Cap Opportunity Fund of First Investors Series Fund II, Inc. In
addition, Ms. Poitra co-manages the Blue Chip Fund of First Investors Series
Fund, the Blue Chip Fund of First Investors Life Series Fund and the Blue Chip
Fund of First Investors Series Fund. Ms. Poitra joined FIMCO in 1985 as a Senior
Equity Analyst.
UNDERWRITER. Government Plus Fund has entered into an Underwriting
Agreement with First Investors Corporation, 95 Wall Street, New York, NY 10005,
as Underwriter. The Underwriter receives all sales charges in connection with
the sale of the Funds' shares. See "Purchase of Shares."
PURCHASE OF SHARES
An indefinite number of shares of each Fund was available during an
initial offering period. Government Plus Fund terminated the initial offering
period of each Fund and no new shares of any existing Fund will be issued,
except in connection with reinvestment of dividends and capital gain
distributions. To the extent that a Fund repurchases shares of such Fund from
individual investors who wish to redeem their shares, the Fund will make
available such shares at the public offering price, which is the sum of the net
asset value per share (determined as described under "Determination of Net Asset
Value") next determined after an order is received, plus a maximum sales charge
of 8.00%, as set forth below.
Concession
Sales Charge as % of to Dealers
Offering Net Amount as % of
Amount of Investment Price Invested Offering Price
- -------------------- -------- --------- --------------
Less than $10,000 8.00% 8.70% 6.50%
$10,000 but under $25,000 7.75 8.40 6.30
$25,000 but under $50,000 6.25 6.67 5.10
$50,000 but under $100,000 5.50 5.82 4.50
$100,000 but under $250,000 4.50 4.71 3.70
$250,000 but under $500,000 3.50 3.63 2.80
$500,000 but under $1,000,000 2.50 2.56 2.00
$1,000,000 or over 1.50 1.52 1.20
Orders for the purchase of shares of the Funds will be invested at the
public offering price (net asset value plus applicable sales charge) next
determined after receipt by FIC in their offices at 581 Main Street, Woodbridge,
New Jersey 07095-1198. For a discussion of pricing practices when FIC's
Woodbridge offices are closed due to an emergency, please see the SAI.
The sales charge varies depending on the size of the purchase, the
value of shares an investor owns or a Letter of Intent to purchase additional
shares during a thirteen-month period. Reductions in sales charges apply to
purchases of shares by "any person," including an individual, members of a
family unit comprising husband, wife and minor children, or a trustee or other
fiduciary purchasing for a single fiduciary account.
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<PAGE>
REDEMPTION OF SHARES
You may redeem your shares at the next determined net asset value any
day the New York Stock Exchange ("NYSE") is open, directly through
Administrative Data Management Corp., the Funds' transfer agent. Your First
Investors Representative may help you with this transaction. If the shares being
redeemed were recently purchased by check, payment may be delayed to verify that
the check has been honored, normally not more than fifteen days. Upon receipt of
your redemption request in good order, as described below, shares will be
redeemed at the net asset value next determined and payment will be made within
three days.
REDEMPTIONS BY MAIL. Written redemption requests should be mailed to
Administrative Data Management Corp., 581 Main Street, Woodbridge, NJ
07095-1198. For your redemption request to be in good order, you must include:
(1) the name of the Fund; (2) your account number; (3) the dollar amount, number
of shares or percentage of the account you want redeemed; (4) share
certificates, if issued; (5) the original signatures of all registered owners
exactly as the account is registered; and (6) signature guarantees, if required.
If your redemption request is not in good order or information is missing, the
Transfer Agent will seek additional information and process the redemption on
the day it receives such information. To review these requirements, please call
Shareholder Services at 1-800-423-4026.
SIGNATURE GUARANTEES. The words "Signature Guaranteed" must appear in
direct association with the signature of the guarantor. Members of the STAMP
(Securities Transfer Agents Medallion Program), MSP (New York Stock Exchange
Medallion Signature Program), SEMP (Stock Exchanges Medallion Program) and FIC
are eligible signature guarantors. A notary public is not an acceptable
guarantor. Although each Fund reserves the right to require signature guarantees
at any other time, signature guarantees are required whenever: (1) the amount of
the redemption is over $50,000, (2) a redemption check is to be made payable to
someone other than the registered accountholder, other than major financial
institutions, as determined solely by the Fund and its agent, on behalf of the
shareholder, (3) a redemption check is to be mailed to an address other than the
address of record, preauthorized bank account, or to a major financial
institution for the benefit of a shareholder, (4) an account registration is
being transferred to another owner, (5) a transaction requires additional legal
documentation; (6) the redemption request is for certificated shares; (7) your
address of record has changed within 60 days prior to a redemption request; (8)
multiple owners have a dispute or give inconsistent instructions; and (9) the
authority of a representative of a corporation, partnership, association or
other entity has not been established to the satisfaction of a Fund or its
agents.
SYSTEMATIC WITHDRAWAL PLAN. If you own noncertificated shares, you may
set up a plan for redemptions to be made automatically at regular intervals. See
the SAI for more information on the Systematic Withdrawal Plan or call
Shareholder Services at 1-800-423-4026.
REPURCHASE THROUGH UNDERWRITER. You may redeem shares through a Dealer.
In this event, the Underwriter, acting as agent for each Fund, will offer to
repurchase or accept an offer to sell such shares at a price equal to the net
asset value next determined after the making of such offer. While the
Underwriter does not charge for this service, the Dealer may charge you a
commission for handling the transaction.
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<PAGE>
REDEMPTION OF LOW BALANCE ACCOUNTS. Because of the high cost of
maintaining smaller shareholder accounts, each Fund may redeem without your
consent, on at least 60 days' prior written notice (which may appear on your
account statement), any Fund account which has a net asset value of less than
$500. To avoid such redemption, you may, during such 60-day period, purchase
additional Fund shares (provided such shares are available) so as to increase
your account balance to the required minimum. Each Fund does not apply this
minimum account balance requirement to accounts that fall below the minimum for
reasons other than share redemptions or to accounts that have never had a net
asset value of at least $500. Accounts established under a Systematic Investing
plan which have been discontinued prior to meeting the $1,000 minimum are
subject to this policy.
Additional information concerning how to redeem shares of the Funds is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.
DETERMINATION OF NET ASSET VALUE
The net asset value of shares of each Fund is determined as of the
close of regular trading on the NYSE (generally 4:00 P.M., New York City time)
on each day the NYSE is open for trading, and at such other times as the Board
of Trustees deems necessary, by dividing the market value of the securities held
by a Fund, plus any cash and other assets, less all liabilities, by the number
of shares outstanding. If there is no available market value, securities will be
valued at their fair value as determined in good faith pursuant to procedures
adopted by the Board of Trustees. The NYSE currently observes the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
DIVIDENDS AND OTHER DISTRIBUTIONS
Dividends from net investment income are generally declared annually by
each Fund and paid in additional shares of the distributing Fund at the net
asset value (without sales charge) generally determined as of the close of
business on the business day immediately following the record date of such
distribution. Net investment income includes interest and dividends, earned
discount and other income earned on portfolio securities less expenses. Each
Fund also distributes substantially all of its net capital gain (the excess of
net long-term capital gain over net short-term capital loss) and net short-term
capital gain, if any, after deducting any available capital loss carryovers,
with its regular dividend at the end of the year. A Fund may make an additional
distribution if necessary to avoid a Federal excise tax on certain undistributed
income and capital gain.
In order to be eligible to receive a dividend or other distribution,
you must own Fund shares as of the close of business on the record date of the
distribution. You may elect to receive dividends and/or other distributions in
cash by notifying the Transfer Agent by telephone or in writing prior to the
record date of any such distribution. If you elect this form of payment, the
payment date generally is two weeks following the record date of any such
distribution. Your election remains in effect until you revoke it by notifying
the Transfer Agent.
A distribution by a Fund will be paid in additional Fund shares and not
in cash if any of the following events occurs: (1) the total amount of the
distribution is under $5, (2) the Fund has
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<PAGE>
received notice of your death on an individual account (until written alternate
payment instructions and other necessary documents are provided by the
deceased's legal representative), or (3) a distribution check is returned to the
Transfer Agent, marked as being undeliverable, by the U.S. Postal Service after
two consecutive mailings.
TAXES
Each Fund has qualified and intends to continue to qualify for
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended, so that it will be relieved of Federal income tax on that part
of its investment company taxable income (consisting generally of net investment
income and net short-term capital gain) and net capital gain that is distributed
to its shareholders.
Dividends from a Fund's investment company taxable income are taxable
to you as ordinary income, to the extent of the Fund's earnings and profits,
whether paid in cash or in additional Fund shares. Distributions of a Fund's net
capital gain, when designated as such, are taxable to you as long-term capital
gain, whether paid in cash or in additional Fund shares, regardless of the
length of time you have owned your shares. If you purchase shares shortly before
the record date for a dividend or other distribution, you will pay full price
for the shares and receive some portion of the price back as a taxable
distribution. You will receive an annual statement following the end of each
calendar year describing the tax status of distributions paid by the Funds
during that year.
Each Fund is required to withhold 31% of all dividends, capital gain
distributions and redemption proceeds payable to you (if you are an individual
or certain other non-corporate shareholder) if the Fund is not furnished with
your correct taxpayer identification number, and 31% of dividends and such
distributions in certain other circumstances.
Your redemption of Fund shares will result in taxable gain or loss to
you, depending on whether the redemption proceeds are more or less than your
adjusted basis for the redeemed shares (which normally includes any sales charge
paid).
The foregoing is only a summary of some of the important Federal tax
considerations generally affecting each Fund and its shareholders; see the SAI
for a further discussion. There may be other Federal or state and local tax
considerations applicable to a particular investor. You therefore are urged to
consult your own tax adviser.
PERFORMANCE INFORMATION
For purposes of advertising, a Fund's performance may be calculated
based on average annual total return and total return. Average annual total
return represents the average annual percentage change in an assumed $1,000
investment including the effect of receiving payment of dividends and other
distributions in additional Fund shares, net of the Fund's maximum 8.00% sales
charge. It reflects the hypothetical annually compounded return that would have
produced the same total return if the Fund's performance had been constant over
the entire period. Because average annual total return tends to smooth out
variations in the Fund's return, you should recognize that it is not the same as
actual year-by-year results. Total return is computed using the same
calculations
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<PAGE>
as average annual total return. However, the rate expressed is the percentage
change from the initial $1,000 invested to the value of the investment at the
end of the stated period.
A Fund also may advertise its yield. Yield reflects investment income
net of expenses over a 30-day (or one-month) period on a Fund share, expressed
as an annualized percentage of the maximum offering price per share at the end
of the period. Yield computations differ from other accounting methods and
therefore may differ from dividends actually paid or reported net income. Each
Fund may also advertise its "actual distribution rate" for each class of shares.
This is computed in the same manner as yield except that actual income dividends
declared per share during the period in questions are substituted for net
investment income per share.
Each of the above performance calculations may be advertised based on
investment at reduced sales charge levels or at net asset value. Any quotation
of performance figures not reflecting the maximum sales charge will be greater
than if the maximum sales charge were used. Each performance figure reflects
past performance and does not necessarily indicate future results. Additional
performance information is contained in the Funds' Annual Report, which may be
obtained without charge by contacting the Funds at 1-800-423-4026.
GENERAL INFORMATION
ORGANIZATION. Government Plus Fund is a Massachusetts business trust
organized on July 8, 1985. The three series of Government Plus Fund may be
referred to as First Investors U.S. Government Plus Fund I, First Investors U.S.
Government Plus Fund II and First Investors U.S. Government Plus Fund III.
The Board of Trustees of Government Plus Fund has authority to issue an
unlimited number of shares of beneficial interest of separate series, no par
value. Shares of each Fund have equal dividend, voting, liquidation and
redemption rights. Government Plus Fund does not hold annual shareholder
meetings. If requested to do so by the holders of at least 10% of Government
Plus Fund's outstanding shares, the Board of Trustees will call a special
meeting of shareholders for any purpose, including the removal of Trustees.
CUSTODIAN. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund.
TRANSFER AGENT. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer agent
for each Fund and as redemption agent for regular redemptions. The Transfer
Agent's telephone number is 1-800-423-4026.
SHARE CERTIFICATES. The Funds do not issue share certificates unless
requested to do so. Ownership of shares of each Fund is recorded on a stock
register by the Transfer Agent and shareholders have the same rights of
ownership with respect to such shares as if certificates had been issued.
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<PAGE>
CONFIRMATIONS AND STATEMENTS. You will receive confirmations of
purchases and redemptions of shares of a Fund. Generally, confirmation
statements will be sent to you following a transaction in the account, including
payment of a dividend or capital gain distribution in additional shares or cash.
SHAREHOLDER INQUIRIES. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. It is the Funds'
practice to mail only one copy of their annual and semi-annual reports to any
address at which more than one shareholder with the same last name has indicated
that mail is to be delivered. Additional copies of the reports will be mailed if
requested in writing or by telephone by any shareholder.
15
<PAGE>
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
PROSPECTUS
INVESTMENT ADVISER
First Investors Management Company, Inc.
95 Wall Street, New York, NY 10005
UNDERWRITER
First Investors Corporation
95 Wall Street, New York, NY 10005
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP 1800 Massachusetts Avenue, N.W.
Washington, DC 20036
CUSTODIAN
The Bank of New York
48 Wall Street
New York, New York 10286
TRANSFER AGENT
Administrative Data Management Corp.
581 Main Street
Woodbridge, New Jersey 07095-1198
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania 19102
PROSPECTUS
April 30, 1997
This Prospectus is intended to constitute an offer by Government Plus Fund only
of the securities of which it is the issuer and is not intended to constitute an
offer by any Fund of the securities of any other Fund whose securities are also
offered by this Prospectus. No Fund intends to make any representation as to the
accuracy or completeness of the disclosure in this Prospectus relating to any
other Fund. No dealer, salesman or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representation must not be relied upon as having been
authorized by Government Plus Fund, First Investors Corporation, or any
affiliate thereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the shares offered hereby in any state to
any person to whom it is unlawful to make such offer in such state.
<PAGE>
TABLE OF CONTENTS PAGE
- -----------------
Fee Table....................................................... 2
Financial Highlights............................................ 3
The Funds....................................................... 5
Investment Objectives and Policies.............................. 5
Management...................................................... 9
Purchase of Shares.............................................. 10
Redemption of Shares............................................ 11
Determination of Net Asset Value................................ 12
Dividends and Other Distributions............................... 12
Taxes........................................................... 13
Performance Information......................................... 13
General Information............................................. 14
<PAGE>
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 30, 1997
95 Wall Street 1-800-423-4026
New York, New York 10005
First Investors U.S. Government Plus Fund ("Government Plus Fund") is
an open-end diversified management investment company consisting of three
separate series of investment. The investment objectives of each Fund of
Government Plus Fund is first to generate income, and, to a lesser extent,
achieve long-term capital appreciation. There can be no assurances that the
objectives of each Fund will be realized.
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Funds' Prospectus dated April --, 1997, which
may be obtained free of cost from the Funds at the address or telephone number
noted above.
TABLE OF CONTENTS
Page
Investment Objectives and Policies..................................... 2
Investment Restrictions................................................ 4
Trustees and Officers.................................................. 5
Management............................................................. 7
Underwriter............................................................ 8
Determination of Net Asset Value....................................... 9
Allocation of Portfolio Brokerage...................................... 9
Purchase and Redemption of Shares...................................... 10
Taxes.................................................................. 11
Performance Information................................................ 12
General Information.................................................... 15
Appendix A............................................................. 17
Financial Statements................................................... 18
1
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INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Fund of Government Plus
Fund is fully set forth in the Funds' Prospectus. The following information is
provided for those investors desiring additional information to that contained
in the Funds' Prospectus.
WHEN-ISSUED SECURITIES. Each Fund may invest up to 5% of its net assets
in securities issued on a when-issued or delayed delivery basis at the time the
purchase is made. The Fund generally would not pay for such securities or start
earning interest on them until they are issued or received. However, when the
Fund purchases debt obligations on a when-issued basis, it assumes the risks of
ownership, including the risk of price fluctuation, at the time of purchase, not
at the time of receipt. Failure of the issuer to deliver a security purchased by
the Fund on a when-issued basis may result in the Fund's incurring a loss or
missing an opportunity to make an alternative investment. When the Fund enters
into a commitment to purchase securities on a when-issued basis, it establishes
a separate account with its custodian consisting of cash or liquid high-grade
debt securities equal to the amount of the Fund's commitment, which are valued
at their fair market value. If on any day the market value of this segregated
account falls below the value of the Fund's commitment, the Fund will be
required to deposit additional cash or qualified securities into the account
until equal to the value of the Fund's commitment. When the securities to be
purchased are issued, the Fund will pay for the securities from available cash,
the sale of securities in the segregated account, sales of other securities and,
if necessary, from sale of the when-issued securities themselves although this
is not ordinarily expected. Securities purchased on a when-issued basis are
subject to the risk that yields available in the market, when delivery takes
place, may be higher than the rate to be received on the securities the Fund is
committed to purchase. Sale of securities in the segregated account or sale of
the when-issued securities may cause the realization of a capital gain or loss.
REPURCHASE AGREEMENTS. Each Fund will enter into repurchase agreements
only with banks who are members of the Federal Reserve System or securities
dealers who are members of a national securities exchange or are market makers
in government securities and, in either case, only where the debt instrument
subject to the repurchase agreement is a security which is issued by the U.S.
Government, its agencies or instrumentalities, and is backed by the full faith
and credit of the U.S. Government ("U.S. Obligation"). A repurchase agreement is
an agreement in which the seller of a security agrees to repurchase the security
sold at a mutually agreed-upon time and price. It may also be viewed as the loan
of money by the Fund to the seller. The resale price normally is in excess of
the purchase price, reflecting an agreed upon interest rate. The rate is
effective for the period of time the Fund is invested in the agreement and is
not related to the coupon rate on the underlying security. The period of these
repurchase agreements will usually be short, from overnight to one week, and at
no time will the Fund invest in repurchase agreements with more than one year in
time to maturity. The securities subject to repurchase agreements, however, may
have maturity dates in excess of one year from the effective date of the
repurchase agreement. The Fund will always receive, as collateral, securities
whose market value, including accrued interest, will at all times be at least
equal to 100% of the dollar amount invested by the Fund in each agreement, and
the Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the Custodian. If the seller
defaults, the Fund might incur a loss if the value of the collateral securing
the repurchase agreement declines, and might incur disposition costs in
connection with liquidating the collateral. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization upon the collateral by the Fund may be delayed or limited. Each Fund
may not enter into a repurchase agreement with more than seven days to maturity
if, as a result, more than 15% of the market value of the Fund's net assets
would be invested in such repurchase agreements together with any other illiquid
assets. No Fund may enter into a repurchase agreement with more than seven days
to maturity if, as a result, more than 15% of such Fund's assets would be
invested in such repurchase agreements and other illiquid securities.
2
<PAGE>
RESTRICTED AND ILLIQUID SECURITIES. No Fund will purchase or otherwise
acquire any security if, as a result, more than 15% of its net assets (taken at
current value) would be invested in securities that are illiquid by virtue of
the absence of a readily available market or legal or contractual restrictions
on resale. This policy includes repurchase agreements maturing in more than
seven days. This policy does not include restricted securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933, as amended ("1933
Act"), which the Board of Trustees or the Adviser has determined under
Board-approved guidelines are liquid.
Restricted securities which are illiquid may be sold only in privately
negotiated transactions or in public offerings with respect to which a
registration statement is in effect under the 1933 Act. Such securities include
those that are subject to restrictions contained in the securities laws of other
countries. Securities that are freely marketable in the country where they are
principally traded, but would not be freely marketable in the United States,
will not be subject to the 15% limitation, as noted above. Where registration is
required, a Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, a Fund might obtain a less favorable price than
prevailed when it decided to sell.
In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including private
placements, repurchase agreements, commercial paper, foreign securities and
corporate bonds and notes. These instruments are often restricted securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Fund, however, could affect adversely the marketability of
such portfolio securities and a Fund might be unable to dispose of such
securities promptly or at reasonable prices.
PORTFOLIO TURNOVER. Although the Funds generally do not invest for
short-term trading purposes, portfolio securities may be sold from time to time
without regard to the length of time they have been held when, in the opinion of
the Funds' investment adviser, First investors Management Company, Inc.
("Adviser" or "FIMCO") investment considerations warrant such action. Portfolio
turnover rate is calculated by dividing (a) the lesser of purchases or sales of
portfolio securities for the fiscal year by (b) the monthly average of the value
of portfolio securities owned during the fiscal year. A 100% turnover rate would
occur if all the securities in a Fund's portfolio, with the exception of
securities whose maturities at the time of purchase were one year or less, were
sold and either repurchased or replaced within one year. A high rate of
portfolio turnover generally leads to transaction costs and may result in a
greater number of taxable transactions. See "Allocation of Portfolio Brokerage."
For the fiscal year ended December 31, 1995, the 1st Fund, 2nd Fund and 3rd Fund
had a portfolio turnover rate of 7%, 7% and 8%, respectively. For the fiscal
year ended December 31, 1996, the 1st Fund, 2nd Fund and 3rd Fund had a
portfolio turnover rate of 7%, 8% and 12%, respectively.
3
<PAGE>
INVESTMENT RESTRICTIONS
Each Fund has adopted the investment restrictions set forth below,
which cannot be changed without the approval of a vote of a majority of the
outstanding shares of each Fund, voting separately from any other Fund. As
provided in the Investment Company Act of 1940, as amended (the "1940 Act"), and
used in the Prospectus and this Statement of Additional Information, a "vote of
a majority of the outstanding shares of each Fund" means the affirmative vote of
the lesser of (i) more than 50% of the outstanding shares of the Fund or (ii)
67% or more of the shares present at a meeting, if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy.
The investment restrictions provide that, among other things, each Fund
will not:
1. Purchase securities on margin (but any Fund may obtain such credits
as may be necessary for the clearance of purchases and sales of securities).
2. Make short sales of securities.
3. Write put or call options.
4. With respect to 75% of the Fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than 5%
of the Fund's total assets would be invested in the securities of that issuer,
or (b) the Fund would hold more than 10% of the outstanding voting securities of
that issuer.
5. Purchase the securities of other investment companies or investment
trusts, except as they may be acquired as part of a merger, consolidation or
acquisition of assets.
6. Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under Federal securities laws.
7. Buy or sell real estate, commodities, or commodity contracts (unless
acquired as a result of ownership of securities) or interests in oil, gas or
mineral explorations, provided, however, the Fund may invest in securities
secured by real estate or interest in real estate.
8. Issue any "senior security" as such term is defined by the 1940 Act
except as expressly permitted by the 1940 Act.
9. Invest more than 25% of its assets in securities of issuers in a
single industry, excluding Government Securities.
10. Borrow money, except as a temporary or emergency measure in an
amount not to exceed 5% of the value of its assets.
11. Pledge assets, except that the Fund may pledge its assets to secure
borrowings made in accordance with investment restriction (10) above, provided
that the Fund maintains asset coverage of at least 300% for pledged assets.
12. Make loans, except by purchase of debt obligations and through
repurchase agreements. However, Government Plus Fund's Board of Trustees may, on
the request of broker-dealers or other institutional investors that they deem
qualified, authorize the Fund to loan securities to cover the borrower's short
position; provided, however, the borrower pledges to and agrees to maintain at
all times with the Fund cash collateral equal to not less than 100% of the value
of the securities loaned, the loan is terminable at will by the Fund, the Fund
receives interest on the loan as
4
<PAGE>
well as any distributions upon the securities loaned, the Fund retains voting
rights associated with the securities, the Fund pays only reasonable custodian
fees in connection with the loan, and the Adviser monitors the creditworthiness
of the borrower throughout the life of the loan; provided further, that such
loans will not be made if the value of all loans, repurchase agreements with
more than seven days to maturity, and other illiquid assets is greater than an
amount equal to 15% of the Fund's net assets.
13. Purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of the value of the Fund's total assets to be
invested in securities of issuers that, including predecessors, have a record of
less than three years' continuous operation.
Government Plus Fund, on behalf of each Fund, has filed the following
undertakings to comply with requirements of certain states in which shares of
the Funds are sold, which may be changed without shareholder approval:
1. Notwithstanding investment restriction (7) above, each Fund will not
invest in real estate limited partnership interests or in interests in real
estate investment trusts that are not readily marketable and will not buy or
sell interests in oil, gas or mineral leases.
2. Each Fund's investment in warrants, valued at the lower of cost or
market, shall not exceed 5% of the value of such Fund's net assets. Included
within that amount but not to exceed 2% of the value of such Fund's net assets,
may be warrants which are not listed on the New York or American Stock Exchange.
Warrants acquired by the Fund in units or attached to securities may be deemed
to be without value.
3. Each Fund will not purchase or retain the securities of any issuer
if the officers, directors or trustees of Government Plus Fund, the Adviser, or
managers own beneficially more than one-half of one percent of the securities
and together own beneficially more than five per cent of such securities.
4. Each Fund, with respect to 100% of each of its assets, will not (a)
invest more than 5% in the securities of any one issuer (exclusive of U.S.
Government securities), or (b) hold more than 10% of any class of securities
(including any class of voting securities) of any issuer (exclusive of U.S.
Government securities).
Government Plus Fund, on behalf of each Fund, has adopted the following
non-fundamental investment restriction, which may be changed without shareholder
approval. This restriction provides that each Fund will not:
Purchase any security if, as a result, more than 15% of its net assets
would be invested in illiquid securities, including repurchase agreements not
entitling the holder to payment of principal and interest within seven days and
any securities that are illiquid by virtue of legal or contractual restrictions
on resale or the absence of a readily available market. The Trustees, or the
Funds' investment adviser acting pursuant to authority delegated by the
Trustees, may determine that a readily available market exists for securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, as
amended, or any other applicable rule, and therefore that such securities are
not subject to the foregoing limitation.
TRUSTEES AND OFFICERS
The following table lists the Trustees and executive officers of
Government Plus Fund, their age, business address and principal occupations
during the past five years. Unless otherwise noted, an individual's business
address is 95 Wall Street, New York, New York 10005.
5
<PAGE>
GLENN O. HEAD*+ (71), President and Trustee. Chairman of the Board and Director,
Administrative Data Management Corp. ("ADM"), FIMCO, Executive Investors
Management Company, Inc. ("EIMCO"), First Investors Corporation ("FIC"),
Executive Investors Corporation ("EIC") and First Investors Consolidated
Corporation ("FICC").
ROGER L. GRAYSON* (40), Trustee, FIC and FICC; President and Director, First
Investors Resources, Inc.; Commodities Portfolio Manager.
KATHRYN S. HEAD*+ (41), Trustee, 581 Main Street, Woodbridge, NJ 07095.
President, FICC, EIMCO, ADM and FIMCO; Vice President, Chief Financial Officer
and Trustee, FIC and EIC; President and Trustee, First Financial Savings Bank,
S.L.A.
REX R. REED (75), Trustee, 259 Governors Drive, Kiawah Island, SC 29455.
Retired; formerly Senior Vice President, American Telephone & Telegraph Company.
HERBERT RUBINSTEIN (75), Trustee, 145 Elm Drive, Roslyn, NY 11576. Retired;
formerly President, Belvac International Industries, Ltd. and President, Central
Dental Supply.
NANCY SCHAENEN (65), Trustee, 56 Midwood Terrace, Madison, NJ 07940. Trustee,
Drew University and DePauw University.
JAMES M. SRYGLEY (64), Trustee, 33 Hampton Road, Chatham, NJ 07982. Principal,
Hampton Properties, Inc. (property investment company).
JOHN T. SULLIVAN* (65), Trustee and Chairman of the Board; Director, FIMCO, FIC,
FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.
ROBERT F. WENTWORTH (67), Trustee, RR1, Box 2554, Upland Downs Road, Manchester
Center, VT 05255. Retired; formerly financial and planning executive with
American Telephone & Telegraph Company.
JOSEPH I. BENEDEK (39), Treasurer, 581 Main Street, Woodbridge, NJ 07095.
Treasurer, FIC, FIMCO, EIMCO and EIC; Comptroller and Treasurer, FICC.
CONCETTA DURSO (62), Vice President and Secretary. Vice President, FIMCO, EIMCO
and ADM; Assistant Vice President and Assistant Secretary, FIC and EIC.
PATRICIA D. POITRA (42), Vice President. Vice President, First Investors Series
Fund II, Inc., First Investors Series Fund and Executive Investors Trust;
Director of Equities, FIMCO.
- ----------
* These Trustees may be deemed to be "interested persons," as defined in
the 1940 Act.
+ Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.
All of the officers and Trustees, except for Ms. Poitra, hold identical
or similar positions with 14 other registered investment companies in the First
Investors Family of Funds. Mr. Head is also an officer and/or Director of First
Investors Asset Management Company, Inc., First Investors Credit Funding
Corporation, First Investors Leverage Corporation, First Investors Realty
Company, Inc., First Investors Resources, Inc., N.A.K. Realty Corporation, Real
Property Development Corporation, Route 33 Realty Corporation, First Investors
Life Insurance Company, First Financial Savings Bank, S.L.A., First Investors
Credit Corporation, School Financial Management Services, Inc. and Specialty
Insurance Group, Inc. Ms. Head is also an officer and/or Director of First
Investors Life Insurance Company, First Investors Credit Corporation, School
Financial Management Services, Inc.,
6
<PAGE>
First Investors Credit Funding Corporation, N.A.K. Realty Corporation, Real
Property Development Corporation, First Investors Leverage Corporation, Route 33
Realty Corporation and Specialty Insurance Group, Inc.
The following table lists compensation paid to the Trustees of
Government Plus Fund for the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
TOTAL COMPENSATION
RETIREMENT PENSION OR ESTIMATED
AGGREGATE BENEFITS ACCRUED ANNUAL FROM FIRST INVESTORS
COMPENSATION AS PART OF BENEFITS UPON FAMILY OF FUNDS PAID
TRUSTEE** FROM FUND* FUND EXPENSES RETIREMENT TO TRUSTEES*
- --------- ------------ ---------------- ------------- --------------------
<S> <C> <C> <C> <C>
James J. Coy*** $1,800 $-0- $-0- $37,200
Roger L. Grayson -0- -0- -0- -0-
Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-
Rex R. Reed 1,800 -0- -0- 37,200
Herbert Rubinstein 1,800 -0- -0- 37,200
James M. Srygley 1,650 -0- -0- 34,100
John T. Sullivan -0- -0- -0- -0-
Robert F. Wentworth 1,800 -0- -0- 37,200
</TABLE>
- ----------
* Compensation to officers and interested Trustees of Government Plus
Fund is paid by the Adviser. In addition, compensation to
non-interested Trustees of Government Plus Fund is currently
voluntarily paid by the Adviser.
** Nancy Schaenen was not a Trustee in 1996.
*** On March 27, 1997 Mr. Coy resigned as a Trustee of the Government Plus
Fund. Mr. Coy did not resign due to a disagreement with the Government
Plus Fund's management on any matter relating to the Government Plus
Fund's operations, policies or practices. Mr. Coy currently serves as
an emeritus Trustee.
MANAGEMENT
Investment advisory services to the Funds are provided by First
Investors Management Company, Inc. pursuant to an Investment Advisory Agreement
("Advisory Agreement") dated June 13, 1994. The Advisory Agreement was approved
by the Board of Trustees of Government Plus Fund, including a majority of the
Trustees who are not parties to the Advisory Agreement or "interested persons"
(as defined in the 1940 Act) of any such party ("Independent Trustees"), in
person at a meeting called for such purpose and by a majority of the public
shareholders of each Fund.
Pursuant to the Advisory Agreement, FIMCO shall supervise and manage
each Fund's investments, determine each Fund's portfolio transactions and
supervise all aspects of each Fund's operations, subject to review by the
Trustees. The Advisory Agreement also provides that FIMCO shall provide
Government Plus Fund and each Fund with certain executive, administrative and
clerical personnel, office facilities and supplies, conduct the business and
details of the operation of Government Plus Fund and each Fund and assume
certain expenses thereof, other than obligations or liabilities of the Fund. The
Advisory Agreement may be terminated at any time without penalty by the Trustees
or by a majority of the outstanding voting securities of the applicable Fund, or
by FIMCO, in each instance on not less than 60 days' written notice, and shall
automatically terminate in the event of its assignment (as defined in the 1940
Act). The Advisory Agreement also provides that it will continue in effect, with
respect to a Fund, for a period of over two years only if such continuance is
approved annually either by the Trustees or by a majority of the outstanding
voting securities of that Fund, and, in either case, by a vote of a majority of
the Independent Trustees voting in person at a meeting called for the purpose of
voting on such approval.
7
<PAGE>
Under the Advisory Agreement, each Fund pays the Adviser an annual fee,
paid monthly, according to the following schedule:
Annual
Average Daily Net Assets Rate
- ------------------------ -----
Up to $200 million................................................... 1.00%
In excess of $200 million up to $500 million......................... 0.75
In excess of $500 million up to $750 million......................... 0.72
In excess of $750 million up to $1.0 billion......................... 0.69
Over $1.0 billion.................................................... 0.66
For the fiscal year ended December 31, 1994, the 1st Fund, 2nd Fund and
3rd Fund paid $14,550, $25,158 and $11,190, respectively, in advisory fees. For
the fiscal year ended December 31, 1995, the 1st Fund, 2nd Fund and 3rd Fund
paid $14,409, $24,641 and $11,075, respectively, in advisory fees. For the
fiscal year ended December 31, 1996, the 1st Fund, 2nd Fund and 3rd Fund paid
$13,608, $22,888 and $10,613, respectively, in advisory fees.
The Adviser has an Investment Committee composed of George V. Ganter,
Margaret Haggerty, Glenn O. Head, Nancy W. Jones, Patricia D. Poitra, Michael
O'Keefe, Clark D. Wagner and Richard Guinnessey. The Committee usually meets
weekly to discuss the composition of the portfolio of each Fund and to review
additions to and deletions from the portfolios.
UNDERWRITER
Government Plus Fund has entered into an Underwriting Agreement
("Underwriting Agreement") with First Investors Corporation ("Underwriter")
which requires the Underwriter to use its best efforts to sell shares of the
Funds. Pursuant to the Underwriting Agreement, the Underwriter shall bear all
fees and expenses incident to the registration and qualification of the Funds'
shares. In addition, the Underwriter shall bear all expenses of sales material
or literature, including prospectuses and proxy materials, to the extent such
materials are used in connection with the sale of the Funds' shares. The
Underwriting Agreement was approved by the Board of Trustees, including a
majority of the Trustees who are not interested persons (as defined in the 1940
Act) of Government Plus Fund, and have no direct or indirect financial interest
in the operation of the Underwriting Agreement ("Disinterested Trustees"). The
Underwriting Agreement provides that it will continue in effect, with respect to
a Fund, from year to year only so long as such continuance is specifically
approved at least annually by the Board of Trustees or by a vote of a majority
of the outstanding voting securities of that Fund, and in either case by the
vote of a majority of the Disinterested Trustees, voting in person at a meeting
called for the purpose of voting on such approval. The Underwriting Agreement
will terminate automatically in the event of its assignment.
For the fiscal years ended December 31, 1994 and 1995, FIC received no
underwriting commissions with respect to the Funds. For the fiscal year ended
December 31, 1996, FIC received underwriting commissions with respect to the 2nd
Fund in the amount of $18. For the fiscal year ended December 31, 1996, FIC
received no underwriting commissions with respect to the 1st Fund and the 3rd
Fund.
8
<PAGE>
DETERMINATION OF NET ASSET VALUE
Except as provided herein, a security listed or traded on an exchange
or the Nasdaq Stock Market is valued at its last sale price on the exchange or
market where the security is principally traded, and lacking any sales on a
particular day, the security is valued at the mean between the closing bid and
asked prices. The Treasury STRIPS in which the Funds invest are traded primarily
in the over-the-counter markets. Such securities are valued at the mean between
the last bid and asked prices based upon quotes furnished by a market maker for
such securities. Securities for which market quotations are not readily
available are valued on a consistent basis at fair value as determined in good
faith by or under the direction of Government Plus Fund's officers in a manner
specifically authorized by the Board of Trustees. "When-issued securities" are
reflected in the assets of the Fund as of the date the securities are purchased.
Such investments are valued thereafter at the mean between the most recent bid
and asked prices obtained from recognized dealers in such securities. Short-term
debt securities that mature in 60 days or less are valued at amortized cost if
their original term to maturity from the date of purchase was 60 days or less,
or by amortizing their value on the 61st day prior to maturity if their term to
maturity from the date of purchase exceeded 60 days, unless the Trustees
determine that such valuation does not represent fair value.
The Board of Trustees may suspend the determination of net asset value
for the whole or any part of any period (1) during which trading on the New York
Stock Exchange is restricted as determined by the Securities and Exchange
Commission or such Exchange is closed for other than weekend and holiday
closings, (2) during which an emergency, as defined by rules of the Commission
in respect to the U.S. market, exists as a result of which disposal by the Funds
of securities owned by them is not reasonably practicable for the Funds fairly
to determine the value of their net assets, or (3) for such other period as the
Commission has by order permitted such suspension. During any such period the
Funds may suspend redemption privileges or postpone the date of payment.
ALLOCATION OF PORTFOLIO BROKERAGE
Purchases and sales of portfolio securities by the Funds generally will
be principal transactions. In principal transactions, portfolio securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage commission paid by
the Funds for such purchases. Purchases from underwriters will include the
underwriter's commission or concession and purchases from dealers serving as
market makers will include the spread between the bid and asked price.
In effecting portfolio transactions for the Funds, the Adviser seeks
best execution of trades either (1) at the most favorable and competitive rate
of commission charged by any broker or member of an exchange, or (2) with
respect to agency transactions, at a higher rate of commission if reasonable in
relation to brokerage and research services provided to a Fund or its Adviser,
by such member or broker. In addition, upon the instruction of the Board of
Trustees, the Adviser may use dealer concessions available in fixed-price
underwritings to pay for research services. Such services may include, but are
not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale and statistical or factual
information or opinions pertaining to investments. The Adviser may use research
and services provided to it by brokers and dealers in servicing all the funds in
the First Investors Group of Funds; however, not all such services may be used
by the Adviser in connection with the Funds. No portfolio orders are placed with
an affiliated broker, nor does any affiliated broker participate in these
commissions.
The Adviser may combine transaction orders placed on behalf of a Fund,
any other fund in the First Investors Group of Funds, any fund of Executive
Investors Trust and First Investors Life
9
<PAGE>
Insurance Company, affiliates of the Funds, for the purpose of negotiating
brokerage commissions or obtaining a more favorable transaction price; and where
appropriate, securities purchased or sold may be allocated in accordance with
written procedures approved by the Board of Trustees.
For the fiscal year ended December 31, 1994, the 1st Fund, 2nd Fund and
3rd Fund paid $8, $141 and $137, respectively, in brokerage commissions, none of
which was paid to brokers who furnished research services on portfolio
transactions.
For the fiscal year ended December 31, 1995, the 1st Fund did not pay
brokerage commissions. For the fiscal year ended December 31, 1995, the 2nd
Series paid $21 in brokerage commissions, all of which was paid in brokerage
commissions to brokers who furnished research services on portfolio transactions
in the amount of $12,019. For the fiscal year ended December 31, 1995, the 3rd
Series paid $21 in brokerage commissions, none of which was paid to brokers who
furnished research services on portfolio transactions.
For the fiscal year ended December 31, 1996, the 1st Fund paid $41 in
brokerage commissions, all of which was paid to brokers who furnished research
services on portfolio transactions in the amount of $7,106. For the fiscal year
ended December 31, 1996, the 2nd Fund paid $91 in brokerage commissions. Of that
amount, $70 was paid in brokerage commissions to brokers who furnished research
services on portfolio transactions in the amount of $24,825. For the fiscal year
ended December 31, 1996, the 3rd Fund paid $292 in brokerage commissions. Of
that amount, $70 was paid in brokerage commissions to brokers who furnished
research services on portfolio transactions in the amount of $15,399.
PURCHASE AND REDEMPTION OF SHARES
CUMULATIVE PURCHASE PRIVILEGE. Upon written notice to FIC, shares of a
Fund are also available at a quantity discount on new purchases if the then
current value at the current public offering price (i.e., net asset value plus
applicable sales charge) of all shares of the Fund previously purchased or
acquired and then owned, plus the value of shares being purchased at the current
public offering price, amount to $10,000 or more. Such quantity discounts may be
modified or terminated at any time by the Underwriter.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders who own noncertificated shares
may establish a Systematic Withdrawal Plan ("Withdrawal Plan"). If you have a
Fund account with a value of at least $5,000, you may elect to receive monthly,
quarterly, semi-annual or annual checks for any designated amount (minimum $25).
The $5,000 minimum account balance is currently being waived for required
minimum distributions on retirement plan accounts. You may have the payments
sent directly to you or persons you designate. Shareholders may add shares to
the Withdrawal Plan or terminate the Withdrawal Plan at any time. Withdrawal
Plan payments will be suspended when a distributing Fund has received notice of
a shareholder's death on an individual account. Payments may recommence upon
receipt of written alternate payment instructions and other necessary documents
from the deceased's legal representative. Withdrawal payments will also be
suspended when a payment check is returned to the Transfer Agent marked as
undeliverable by the U.S. Postal Service after two consecutive mailings.
The withdrawal payments derived from the redemption of sufficient
shares in the account to meet designated payments in excess of dividends and
other distributions may deplete or possibly extinguish the initial investment,
particularly in the event of a market decline, and may result in a capital gain
or loss depending on the shareholder's cost. Purchases of additional shares of a
Fund concurrent with withdrawals are ordinarily disadvantageous to shareholders
because of tax liabilities and sales charges. To establish a Withdrawal Plan,
call Shareholder Services at 1-800-423-4026.
10
<PAGE>
EMERGENCY PRICING PROCEDURES. In the event that the Funds must halt
operations during any day that they would normally be required to price under
Rule 22c-1 under the Investment Company of 1940 due to an emergency ("Emergency
Closed Day"), the Funds will apply the following procedures:
1. The Funds will make every reasonable effort to segregate orders
received on the Emergency Closed Day and give them the price that they would
have received but for the closing. The Emergency Closed Day price will be
calculated as soon as practicable after operations have resumed and will be
applied equally to sales, redemptions and repurchases that were in fact received
in the mail or otherwise on the Emergency Closed Day.
2. For purposes of paragraph 1, an order will be deemed to have been
received by the Funds on an Emergency Closed Day, even if neither the Funds nor
the Transfer Agent is able to perform the mechanical processing of pricing on
that day, under the following circumstances:
(a) In the case of a mail order, the order will be considered
received by a Fund when the postal service has delivered it to FIC's Woodbridge
offices prior to the close of regular trading on the NYSE, or such other time as
may be prescribed in the Funds' Prospectus; and
(b) In the case of a wire order, including a Fund/SERV order,
the order will be considered received when it is received in good form by a FIC
branch office or an authorized dealer prior to the close of regular trading on
the NYSE, or such other time as may be prescribed in the Funds' Prospectus.
3. If the Funds are unable to segregate orders received on the
Emergency Closed Day from those received on the next day the Funds are open for
business, the Funds may give all orders the next price calculated after
operations resume.
4. Notwithstanding the foregoing, on business days in which the NYSE is
not open for regular trading, the Funds may determine not to price their
portfolio securities if such prices would lead to a distortion of the net asset
value for the Funds and their shareholders.
TAXES
Each Fund is treated as a separate corporation for Federal income tax
purposes. In order to continue to qualify for treatment as a regulated
investment company ("RIC") under the Code, a Fund must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income and net short-term
capital gain ("Distribution Requirement") and must meet several additional
requirements. For each Fund these requirements include the following: (1) the
Fund must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities loans and gains from
the sale or other disposition of securities or other income derived with respect
to its business of investing in securities ("Income Requirement"); (2) the Fund
must derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities that were held for less than three months
("Short-Short Limitation"); (3) at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, U.S. Government securities, securities of other RICs and
other securities, with those other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the issuer's outstanding
voting securities; and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. Government securities or the securities of other
RICs) of any one issuer.
11
<PAGE>
Dividends and other distributions declared by a Fund in October,
November or December of any year and payable to shareholders of record on a date
in any of those months are deemed to have been paid by the Fund and received by
the shareholders on December 31 of that year if the distributions are paid by
the Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise
Tax") to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary income for that year and capital gain net
income for the one-year period ending on October 31 of that year, plus certain
other amounts.
If shares of a Fund are sold at a loss after being held for six months
or less, the loss will be treated as long-term, instead of short-term, capital
loss to the extent of any capital gain distributions received on those shares.
Each Fund may acquire zero coupon securities issued with original issue
discount. As a holder of those securities, each such Fund must include in its
income the portion of the original issue discount that accrues on the securities
during the taxable year, even if it receives no corresponding payment on them
during the year. Similarly, each such Fund must include in its gross income
securities it receives as "interest" on pay-in-kind securities. Because each
Fund annually must distribute substantially all of its investment company
taxable income, including any original issue discount and other non-cash income,
to satisfy the Distribution Requirement and avoid imposition of the Excise Tax,
either Fund may be required in a particular year to distribute as a dividend an
amount that is greater than the total amount of cash it actually receives. Those
distributions will be made from a Fund's cash assets or from the proceeds of
sales of portfolio securities, if necessary. A Fund may realize capital gains or
losses from those sales, which would increase or decrease its investment company
taxable income and/or net capital gain. In addition, any such gains may be
realized on the disposition of securities held for less than three months.
Because of the Short-Short Limitation, any such gains would reduce a Fund's
ability to sell other securities held for less than three months that it might
wish to sell in the ordinary course of its portfolio management.
PERFORMANCE INFORMATION
A Fund may advertise its performance in various ways.
Each Fund's "average annual total return" ("T") is an average annual
compounded rate of return. The calculation produces an average annual total
return for the number of years measured. It is the rate of return based on
factors which include a hypothetical initial investment of $1,000 ("P") over a
number of years ("n") with an Ending Redeemable Value ("ERV") of that
investment, according to the following formula:
T=[(ERV/P)caret pointing up(1/n)]-1
The "total return" uses the same factors, but does not average the rate
of return on an annual basis. Total return is determined as follows:
(ERV-P)/P = TOTAL RETURN
In providing such performance data, a Fund will assume the payment of
the maximum sales charge of 8.00% (as a percentage of the offering price) on the
initial investment ("P"). The Fund will assume that during the period covered
all dividends and capital gain distributions are reinvested at net asset value
per share, and that the investment is redeemed at the end of the period. Total
return may also be based on investment at reduced sales charge levels or at net
asset value. Any quotation of total
12
<PAGE>
return not reflecting the maximum sales charge will be greater than if the
maximum sales charge were used.
Total return information may be useful to investors in reviewing a
Fund's performance. However, certain factors should be taken into account before
using this information as a basis for comparison with alternative investments.
No adjustment is made for taxes payable on distributions. The total return will
fluctuate over time and the total return for any given past period is not an
indication or representation by the Fund of future rates of return on its
shares.
At times, the Adviser may reduce its compensation or assume expenses of
a Fund in order to reduce the Fund's expenses. Any such waiver or reimbursement
would increase the Fund's total return and yield during the period of the waiver
or reimbursement.
Each Fund may include in advertisements and sales literature
information, examples and statistics to illustrate the effect of compounding
income at a fixed rate of return to demonstrate the growth of an investment over
a stated period of time resulting from the payment of dividends and capital
gains distributions in additional shares. The examples used will be for
illustrative purposes only and are not representations by the Funds of past or
future yield or return.
From time to time, in reports and promotional literature, each Fund may
compare their performance to, or cite the historical performance of, Overnight
Government repurchase agreements, U.S. Treasury bills, notes and bonds,
certificates of deposit, and six-month money market certificates or indices of
broad groups of unmanaged securities considered to be representative of, or
similar to, the Fund's portfolio holdings, such as:
Lipper Analytical Services, Inc. ("Lipper") is a widely-recognized
independent service that monitors and ranks the performance of
regulated investment companies. The Lipper performance analysis
includes the reinvestment of capital gain distributions and income
dividends but does not take sales charges into consideration. The
method of calculating total return data on indices utilizes actual
dividends on ex-dividend dates accumulated for the quarter and
reinvested at quarter end.
Morningstar Mutual Funds ("Morningstar"), a semi-monthly publication of
Morningstar, Inc. Morningstar proprietary ratings reflect historical
risk-adjusted performance and are subject to change every month. Funds
with at least three years of performance history are assigned ratings
from one star (lowest) to five stars (highest). Morningstar ratings are
calculated from the Fund's three-, five-, and ten-year average annual
returns (when available) and a risk factor that reflects fund
performance relative to three-month Treasury bill monthly returns.
Fund's returns are adjusted for fees and sales loads. Ten percent of
the funds in an investment category receive five stars, 22.5% receive
four stars, 35% receive three stars, 22.5% receive two stars, and the
bottom 10% receive one star.
Salomon Brothers Inc., "Market Performance," a monthly publication
which tracks principal return, total return and yield on the Salomon
Brothers Broad Investment-Grade Bond Index and the components of the
Index.
Telerate Systems, Inc., a computer system to which the Adviser
subscribes which daily tracks the rates on money market instruments,
public corporate debt obligations and public obligations of the U.S.
Treasury and agencies of the U.S. Government.
13
<PAGE>
THE WALL STREET JOURNAL, a daily newspaper publication which lists the
yields and current market values on money market instruments, public
corporate debt obligations, public obligations of the U.S. Treasury and
agencies of the U.S. Government as well as common stocks, preferred
stocks, convertible preferred stocks, options and commodities; in
addition to indices prepared by the research departments of such
financial organizations as Lehman Bros., Merrill Lynch, Pierce, Fenner
and Smith, Inc., First Boston, Salomon Brothers, Morgan Stanley,
Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette, Value Line,
Datastream International, James Capel, S.G. Warburg Securities, County
Natwest and UBS UK Limited, including information provided by the
Federal Reserve Board, Moody's, and the Federal Reserve Bank.
Merrill Lynch, Pierce, Fenner & Smith, Inc., "Taxable Bond Indices," a
monthly corporate government index publication which lists principal,
coupon and total return on over 100 different taxable bond indices
which Merrill Lynch tracks. They also list the par weighted
characteristics of each Index.
Lehman Brothers, Inc., "The Bond Market Report," a monthly publication
which tracks principal, coupon and total return on the Lehman
Govt./Corp. Index and Lehman Aggregate Bond Index, as well as all the
components of these Indices.
Standard & Poor's 500 Composite Stock Price Index and the Dow Jones
Industrial Average of 30 stocks are unmanaged lists of common stocks
frequently used as general measures of stock market performance. Their
performance figures reflect changes of market prices and quarterly
reinvestment of all distributions but are not adjusted for commissions
or other costs.
The Consumer Price Index, prepared by the U.S. Bureau of Labor
Statistics, is a commonly used measure of inflation. The Index shows
changes in the cost of selected consumer goods and does not represent a
return on an investment vehicle.
The NYSE composite of component indices--unmanaged indices of all
industrial, utilities, transportation, and finance stocks listed on the
NYSE.
The Russell 2500 Index, prepared by the Frank Russell Company, consists
of U.S. publicly traded stocks of domestic companies that rank from 500
to 3000 by market capitalization. The Russell 2500 tracks the return on
these stocks based on price appreciation or depreciation and does not
include dividends and income or changes in market values caused by
other kinds of corporate changes.
The Russell 2000 Index, prepared by the Frank Russell Company, consists
of U.S. publicly traded stocks of domestic companies that rank from
1000 to 3000 by market capitalization. The Russell 2000 tracks the
return on these stocks based on price appreciation or depreciation and
does not include dividends and income or changes in market values
caused by other kinds of corporate changes.
Reuters, a wire service that frequently reports on global business.
Standard & Poor's Utilities Index is an unmanaged capitalization
weighted index comprising common stock in approximately 40 electric,
natural gas distributors and pipelines, and telephone companies. The
Index assumes the reinvestment of dividends.
Moody's Stock Index, an unmanaged index of utility stock performance.
From time to time, in reports and promotional literature, performance
rankings and ratings reported periodically in national financial publications
such as MONEY, FORBES, BUSINESS WEEK,
14
<PAGE>
BARRON'S, FINANCIAL TIMES and FORTUNE may also be used. In addition,
quotations from articles and performance ratings and ratings appearing
in daily newspaper publications such as THE WALL STREET JOURNAL, THE
NEW YORK TIMES and NEW YORK DAILY NEWS may be cited.
GENERAL INFORMATION
AUDITS AND REPORTS. The accounts of the Funds are audited twice a year
by Tait, Weller & Baker, independent certified public accountants. Shareholders
receive semi-annual and annual reports of the Fund, including audited financial
statements, and a list of securities owned.
TRANSFER AGENT. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer agent
for the Funds and as redemption agent for regular redemptions. The fees charged
to each Fund by the Transfer Agent are $5.00 to open an account; $3.00 for each
certificate issued; $.75 per account per month; $10.00 for each legal transfer
of shares; $.45 per account per dividend declared; $5.00 for each exchange of
shares into a Fund; $5.00 for each partial withdrawal or complete liquidation;
$1.00 for each Systematic Withdrawal Plan check; $4.00 for each shareholder
services call; $20.00 for each item of correspondence; and $1.00 per account per
report required by any governmental authority. Additional fees charged to the
Funds by the Transfer Agent are assumed by the Underwriter. The Transfer Agent
reserves the right to change the fees on prior notice to the Funds. Upon request
from shareholders, the Transfer Agent will provide an account history. For
account histories covering the most recent three year period, there is no
charge. The Transfer Agent charges a $5.00 administrative fee for each account
history covering the period 1983 through 1994 and $10.00 per year for each
account history covering the period 1974 through 1982. Account histories prior
to 1974 will not be provided. If any communication from the Transfer Agent to a
shareholder is returned from the U.S. Postal Service marked as "Undeliverable"
two consecutive times, the Transfer Agent will cease sending any further
materials to the shareholder until the Transfer Agent is provided with a correct
address. Furthermore, if there is no known address for a shareholder for at
least one year, the Transfer Agent will charge such shareholder's account $40 to
cover the Transfer Agent's expenses in trying to locate the shareholder's
correct address. For the fiscal year ended December 31, 1996, the 1st Fund, 2nd
Fund and 3rd Fund paid $2,104, $5,071 and $1,548, respectively, in transfer
agency fees and expenses. The Transfer Agent's telephone number is
1-800-423-4026.
5% SHAREHOLDERS. As of March 31, 1997, the following beneficially owned
more than 5% of the outstanding shares of the 3RD FUND:
SHAREHOLDER % OF SHARES
----------- -----------
Dermot F. Walsh 5.9
22 Benjamin Street
Old Greenwich, CT 06870-1832
Lew Hong Lee 13.4
1629 Telegraph Ave
Oakland, CA 94612-2197
Pulmonary Specialists Ltd. 7.4
Carrl Linquist
14860 N. Moon Valley Drive
Phoenix, AZ 85022-3662
Sharon Klay 5.6
1336 Eton Drive
Arlington Heights, IL 60004-1832
15
<PAGE>
PURCHASES MADE DURING THE INITIAL OFFERING PERIOD. At the end of the
initial offering period of each Fund's shares, the Adviser invested a sufficient
portion of each Fund's assets in Zero Coupon Securities in order to provide an
anticipated minimum return for shareholders who invested during such period. The
anticipated minimum returns were and continue to be: $4.00 for each $1.00 with a
maturity date of December 31, 2004 for the 1st Fund; $2.00 for each $1.00
invested with a maturity date of December 31, 1999 for the 2nd Fund; and $1.50
for each $1.00 with a maturity date of December 31, 1998 for the 3rd Fund. In
order to achieve these goals, at the close of each Fund's initial offering
period the Adviser made investments yielding 8.04%, 5.92% and 3.98% for the 1st
Fund, 2nd Fund and 3rd Fund, respectively, over the life of each Fund. The
Adviser does not intend to sell these investments until their ultimate maturity
date, except to meet certain redemption requests.
The Adviser was able to establish these goals because yields of Zero
Coupon Securities available in the marketplace at the time of investment
exceeded the yields necessary to produce these returns. These results will occur
even if all Other Securities purchased by each Fund pay no dividends or interest
or are worthless at the maturity date for each Fund, provided that every Zero
Coupon Security purchased by each Fund is held to maturity and the issuers of
such securities do not default.
SHAREHOLDER LIABILITY. Government Plus Fund is organized as an entity
known as a "Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally liable for
the obligations of Government Plus Fund. The Declaration of Trust however,
contains an express disclaimer of shareholder liability for acts or obligations
of Government Plus Fund and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by Government
Plus Fund or the Trustees. The Declaration of Trust provides for indemnification
out of the property of Government Plus Fund of any shareholder held personally
liable for the obligations of Government Plus Fund. The Declaration of Trust
also provides that Government Plus Fund shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of
Government Plus Fund and satisfy any judgment thereon. Thus, the risk of a
shareholder's incurring financial loss on account of shareholder liability is
limited to circumstances in which Government Plus Fund itself would be unable to
meet its obligations. The Adviser believes that, in view of the above, the risk
of personal liability to shareholders is immaterial and extremely remote. The
Declaration of Trust further provides that the Trustees will not be liable for
errors of judgment or mistakes of fact or law, but nothing in the Declaration of
Trust protects a Trustee against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
Government Plus Fund may have an obligation to indemnify Trustees and officers
with respect to litigation.
TRADING BY PORTFOLIO MANAGERS AND OTHER ACCESS PERSONS. Pursuant to
Section 17(j) of the 1940 Act and Rule 17j-1 thereunder, Government Plus Fund
and the Adviser have adopted Codes of Ethics restricting personal securities
trading by portfolio managers and other access persons of the Fund. Among other
things, such persons, except the Trustees: (a) must have all non-exempt trades
pre-cleared; (b) are restricted from short-term trading; (c) must have duplicate
statements and transactions confirmations reviewed by a compliance officer; and
(d) are prohibited from purchasing securities of initial public offerings.
16
<PAGE>
APPENDIX A
DESCRIPTION OF COMMERCIAL PAPER RATINGS
STANDARD & POOR'S RATINGS GROUP
Standard & Poor's Rating Group ("S&P") commercial paper rating is a
current assessment of the likelihood of timely payment of debt considered
short-term in the relevant market. Ratings are graded into several categories,
ranging from "A-1" for the highest quality obligations to "D" for the lowest.
A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.
MOODY'S INVESTORS SERVICE, INC.
Moody's Investors Service, Inc. ("Moody's") short-term debt ratings are
opinions of the ability of issuers to repay punctually senior debt obligations
which have an original maturity not exceeding one year. Obligations relying upon
support mechanisms such as letters-of-credit and bonds of indemnity are excluded
unless explicitly rated.
PRIME-1 Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability for repayment of senior short-term debt obligations. P-1
repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance
on debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.
17
<PAGE>
Financial Statements
as of December 31, 1996
Registrant incorporates by reference the financial statements and report of
independent auditors contained in the Annual Report to shareholders for the
fiscal year ended December 31, 1996 electronically filed with the Commission on
March 5,1997 (Accession Number: 0000928816-97-00070.
18
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Financial Statements are set forth in Part B, Statement of
Additional Information.
(b) Exhibits:
(1)a./3/ Declaration of Trust
b./3/ Supplement to Declaration of Trust
(2)/2/ By-laws
(3) Not Applicable
(4) Shareholders' rights are contained in
(a) Articles III, VIII, X, XI and XII
of Registrant's Declaration of Trust
dated June 18, 1985, previously filed
as Exhibit 99.B1.1 to Registrant's
Registration Statement and (b) Articles
III and V of Registrant's By-laws,
previously filed as Exhibit 99.B2 to
Registrant's Registration Statement
(5)/2/ Investment Advisory Agreement
(6)/3/ Underwriting Agreement
(7) Not Applicable
(8)/3/ Custodian Agreements
(9)a.3 Administration Agreements
b. Amended Schedule A to Administration
Agreements
(10)/1/ Opinion of Counsel
(11)a. Consent of independent accountants
b./3/ Powers of Attorney
(12) Not Applicable
(13) No Undertaking in effect
(14) Not Applicable
<PAGE>
(15) Not Applicable
(16) Not Applicable
(17) Financial Data Schedule (filed as
Exhibit 27 for electronic filing
purposes)
(18) Not Applicable
- ----------
/1/ Incorporated by reference from registrant's Rule 24f-2 Notice for its
fiscal year ended December 31, 1996 filed on February 27, 1997.
/2/ Incorporated by reference from Post-Effective Amendment No. 12 to
Registrant's Registration Statement (File No. 2-94932) filed on April 20,
1995.
/3/ Incorporated by reference from Post-Effective Amendment No. 13 to
Registrant's Registration Statement (File No. 2-94932) filed on April 18,
1996.
Item 25. Persons Controlled by or Under Common Control with Registrant
There are no persons controlled by or under common control with the
Registrant.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class February 9, 1997
-------------- ----------------
Shares of Beneficial
Interest, no par value
1st Fund 166
2nd Fund 387
3rd Fund 117
Item 27. Indemnification
Article XI, Section 2 of Registrant's Declaration of Trust provides as
follows:
"Section 1.
Provided they have exercised reasonable care and have acted under the
reasonable belief that their actions are in the best interest of the Trust, the
Trustees shall not be responsible for or liable in any
<PAGE>
event for neglect or wrongdoing of them or any officer, agent, employee of
investment adviser of the Trust, but nothing contained herein shall protect any
Trustee against any liability to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office."
"Section 2.
"(a) Subject to the exceptions and limitations contained in Section
(b) below:
"(i) every person who is, or has been, a Trustee or officer of the Trust (a
"Covered Person") shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or proceeding in which
he becomes involved as a party or otherwise by virtue of his being or having
been a Trustee or officer and against amounts paid or incurred by him in the
settlement thereof;
"(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other, including
appeals), actual or threatened, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fine, penalties and other liabilities.
"(b) No indemnification shall be provided hereunder to a Covered Person:
"(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Trust; or
"(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office,
(A) by the court or other body approving the settlement; or
(B) by at least a majority of those Trustees who are neither interested
persons of the Trust nor are parties to the matter based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); or
(C) by written opinion of independent legal counsel based upon a review
of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any Shareholder may, by
<PAGE>
appropriate legal proceedings, challenge any such determination by
the Trustees, or by independent counsel.
"(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under the
law.
"(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 2 may be paid by the Trust from time to time prior
to final disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the Trust if it
is ultimately determined that he is not entitled to indemnification under this
Section 2; provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c) either a majority
of the Trustees who are neither interested persons of the Trust nor are parties
to the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a full
trail-type inquiry), that there is a reason to believe that such Covered Person
will be found entitled to indemnification under this Section 2."
The general effect of this Indemnification will be to indemnify the officers
and Trustees of the Registrant from costs and expenses arising from any action,
suit or proceeding to which they may be made a party by reason of their being or
having been a trustee or officer of the Registrant, except where such action is
determined to have arisen out of the willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
trustee's or officer's office.
The Registrant's Investment Advisory Agreement provides as follows:
The Manager shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company or any Series in connection with the
matters to which this Agreement relate except a loss resulting from the willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, partner, employee, or agent
of the Manager, who may be or become an officer, Board member, employee or agent
of the Company shall be deemed, when rendering services to the Company or acting
in any business of the
<PAGE>
Company, to be rendering such services to or acting solely for the Company and
not as an officer, partner, employee, or agent or one under the control or
direction of the Manager even though paid by it.
The Registrant's Underwriting Agreement provides as follows:
The Underwriter agrees to use its best efforts in effecting the sale and
public distribution of the shares of the Fund through dealers and to perform its
duties in redeeming and repurchasing the shares of the Fund, but nothing
contained in this Agreement shall make the Underwriter or any of its officers
and directors or shareholders liable for any loss sustained by the Fund or any
of its officers, trustees, or shareholders, or by any other person on account of
any act done or omitted to be done by the Underwriter under this Agreement
provided that nothing herein contained shall protect the Underwriter against any
liability to the Fund or to any of its shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties as Underwriter or by reason of its
reckless disregard of its obligations or duties as Underwriter under this
Agreement. Nothing in this Agreement shall protect the Underwriter from any
liabilities which it may have under the Securities Act of 1933 or the Investment
Company Act of 1940.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. See Item 32 herein.
Item 28. Business and Other Connections of Investment Adviser
First Investors Management Company, Inc., the Investment Adviser to each
Series of the Registrant, also serves as Investment Adviser to:
First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Global Fund, Inc.
First Investors Life Series Fund
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors Series Fund II, Inc.
Affiliations of the officers and directors of the Investment Adviser are set
forth in Part B, Statement of Additional Information,
<PAGE>
under "Trustees and Officers."
Item 29. Principal Underwriters
(a) First Investors Corporation, Underwriter of each Series of the
Registrant, is also underwriter for:
First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Global Fund, Inc.
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors Series Fund II, Inc.
(b) The following persons are the officers and directors of the
Underwriter:
Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ------------------ --------------------- ------------
Glenn O. Head Chairman President
95 Wall Street and Director and Trustee
New York, NY 10005
Marvin M. Hecker President None
95 Wall Street
New York, NY 10005
John T. Sullivan Director Chairman of the
95 Wall Street Board of Trustees
New York, NY 10005
Roger L. Grayson Director Trustee
95 Wall Street
New York, NY 10005
Joseph I. Benedek Treasurer Treasurer
581 Main Street
Woodbridge, NJ 07095
Robert Murphy Comptroller None
581 Main Street
Woodbridge, NJ 07095
Lawrence A. Fauci Senior Vice President None
95 Wall Street and Director
New York, NY 10005
<PAGE>
Kathryn S. Head Vice President, Trustee
581 Main Street Chief Financial
Woodbridge, NJ 07095 Officer and Director
Louis Rinaldi Senior Vice None
581 Main Street President
Woodbridge, NJ 07095
Frederick Miller Vice President None
581 Main Street
Woodbridge, NJ 07095
Howard M. Factor Vice President None
95 Wall Street
New York, NY 10005
Larry R. Lavoie Secretary and None
95 Wall Street General Counsel
New York, NY 10005
Matthew Smith Vice President None
581 Main Street
Woodbridge, NJ 07095
Jeremiah J. Lyons Director None
56 Weston Avenue
Chatham, NJ 07928
Anne Condon Vice President None
581 Main Street
Woodbridge, NJ 07095
Jane W. Kruzan Director None
232 Adair Street
Decatur, GA 30030
(c) Not applicable
Item 30. Location of Accounts and Records
Physical possession of the books, accounts and records of the Registrant
are held by First Investors Management Company, Inc. and its affiliated
companies, First Investors Corporation and Administrative Data Management Corp.,
at their corporate headquarters, 95 Wall Street, New York, NY 10005 and
administrative offices, 581 Main Street, Woodbridge, NJ 07095, except for those
maintained by the Registrant's Custodian, The Bank of New York, 48 Wall Street,
New York, NY 10286.
Item 31. Management Services
Inapplicable
<PAGE>
Item 32. Undertakings
The Registrant undertakes to carry out all indemnification
provisions of its Declaration of Trust, Advisory Agreement and Underwriting
Agreement in accordance with Investment Company Act Release No. 11330 (September
4, 1980) and successor releases.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the provisions under Item 27 herein, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Registrant hereby undertakes to furnish a copy of its latest
annual report to shareholders, upon request and without charge, to each person
to whom a prospectus is delivered.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents that this Amendment
meets all of the requirements for effectiveness pursuant to Rule 485(b) under
the Securities Act of 1933, and has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
9th day of April, 1997.
FIRST INVESTORS U.S. GOVERNMENT
PLUS FUND
(Registrant)
By: /s/ Glenn O. Head
----------------
Glenn O. Head
President and Trustee
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
/s/Glenn O. Head Principal Executive April 9, 1997
- ------------------------- Officer and Trustee
Glenn O. Head
/s/Joseph I. Benedek Principal Financial April 9, 1997
- ------------------------- and Accounting Officer
Joseph I. Benedek
* Trustee April 9, 1997
- -------------------------
Kathryn S. Head
* Trustee April 9, 1997
- -------------------------
Roger L. Grayson
* Trustee April 9, 1997
- -------------------------
Herbert Rubinstein
* Trustee April 9, 1997
- -------------------------
Nancy Schaenen
* Trustee April 9, 1997
- -------------------------
James M. Srygley
* Trustee April 9, 1997
- -------------------------
John T. Sullivan
* Trustee April 9, 1997
- -------------------------
Rex R. Reed
* Trustee April 9, 1997
- -------------------------
Robert F. Wentworth
*By: /s/Larry R. Lavoie
------------------
Larry R. Lavoie
Attorney-in-fact
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------- -----------
99.B11.1 Consent of accountants
99.B11.2 Power of Attorney
27.001 FDS-1st Series
27.002 FDS-2nd Series
27.003 FDS-3rd Series
Consent of Independent Certified Public Accountants
First Investors U.S. Government Plus Fund
95 Wall Street
New York, New York 10005
We consent to the use in Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A (File No. 2-94932) of our report dated
January 31, 1997 relating to the December 31, 1996 financial statements of First
Investors U.S. Government Plus Fund, which are included in said Registration
Statement.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
April 10, 1997
First Investors U.S. Government Plus Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or
trustee of First Investors U.S. Government Plus Fund hereby appoints Larry R.
Lavoie or Glenn O. Head, and each of them, his true and lawful attorney to
execute in his name, place and stead and on his behalf a Registration Statement
on Form N-1A for the registration pursuant to the Securities Act of 1933 and the
Investment Company Act of 1940 of shares of beneficial interest of said
Massachusetts business trust, and any and all amendments to said Registration
Statement (including post-effective amendments), and all instruments necessary
or incidental in connection therewith and to file the same with the Securities
and Exchange Commission. Said attorney shall have full power and authority to do
and perform in the name and on behalf of the undersigned every act whatsoever
requisite or desirable to be done in the premises, as fully and to all intents
and purposes as the undersigned might or could do, the undersigned hereby
ratifying and approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
3rd day of April, 1997.
/s/ Nancy Schaenen
Nancy Schaenen
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000759696
<NAME> FIRST INVESTORS GOVERNMENT PLUS SERIES FUND, INC.
<SERIES>
<NUMBER> 1
<NAME> 1ST SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1030
<INVESTMENTS-AT-VALUE> 1357
<RECEIVABLES> 0
<ASSETS-OTHER> 9
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1366
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6
<TOTAL-LIABILITIES> 6
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1032
<SHARES-COMMON-STOCK> 131
<SHARES-COMMON-PRIOR> 132
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 327
<NET-ASSETS> 1359
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 99
<OTHER-INCOME> 0
<EXPENSES-NET> (22)
<NET-INVESTMENT-INCOME> 77
<REALIZED-GAINS-CURRENT> 41
<APPREC-INCREASE-CURRENT> (172)
<NET-CHANGE-FROM-OPS> (54)
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