File No. 2-95548
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 12 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X ]
Amendment No. 12 [X ]
(Check appropriate box or boxes.)
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip
Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b) of Rule 485
----
on (date) pursuant to paragraph (b) of Rule 485
----
X 60 days after filing pursuant to paragraph (a) of Rule 485
----
on (date) pursuant to paragraph (a) of Rule 485
----
Registrant has registered an indefinite number of shares of its
Beneficial Interest under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for the fiscal year ended December 31, 1993 was filed on February
23, 1994.
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
- --------- ------- ----
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 10, 41
5 Management of the Fund 20
6 Capital Stock and Other Securities 41
7 Purchase of Securities Being Offered 24
8 Redemption or Repurchase 32
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-22
13 Investment Objectives and Policies B-2
14 Management of the Fund B-8
15 Control Persons and Principal B-10
Holders of Securities
16 Investment Advisory and Other B-10
Services
_________________________________
NOTE: * Omitted since answer is negative or inapplicable.
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
- --------- ------- ----
17 Brokerage Allocation B-21
18 Capital Stock and Other Securities B-22
19 Purchase, Redemption and Pricing B-13, 15 & 19
of Securities Being Offered
20 Tax Status *
21 Underwriters B-13
22 Calculations of Performance Data B-20
23 Financial Statements B-32
Items in
Part C of
Form N-1A
- ---------
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-4
28 Business and Other Connections of C-5
the Manager
29 Principal Underwriters C-9
30 Location of Accounts and Records C-17
31 Management Services C-17
32 Undertakings C-17
_________________________________
NOTE: * Omitted since answer is negative or inapplicable.
<PAGE>
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FIRST
First Prairie [LOGO] PRAIRIE
Municipal Money Market Fund FUNDS
PROSPECTUS
The First National Bank of Chicago
MANAGER
Dreyfus Service Corporation
DISTRIBUTOR
Prospectus begins on page one.
[PICTURE]
369pros10
<PAGE>
FIRST
First Prairie [LOGO] PRAIRIE
Municipal Money Market Fund FUNDS
- --------------------------------------------------------------------------------
PROSPECTUS--April 29, 1994
First Prairie Municipal Money Market Fund (the "Fund") is an open-end,
diversified, management investment company, known as a money market mutual fund.
Its goal is to provide investors with as high a level of current income exempt
from Federal income tax as is consistent with the preservation of capital and
the maintenance of liquidity.
Investors can invest, reinvest or redeem shares at any time without
charge or penalty imposed by the Fund.
The First National Bank of Chicago (the "Manager") serves as the Fund's
investment adviser. Dreyfus Service Corporation (the "Distributor"), a
wholly-owned subsidiary of The Dreyfus Corporation, serves as the Fund's
distributor.
The Fund bears certain costs of advertising, administration and/or
distribution pursuant to a plan adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that the Fund will be able to maintain a
stable net asset value of $1.00 per share.
The Fund's shares are not deposits or obligations of, or guaranteed by,
the Manager or any of its affiliates or any bank, and are not insured by the
Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any
other agency. The Fund's shares involve certain investment risks, including the
possible loss of principal. The Fund's yield fluctuates and is not guaranteed.
------------------------------------------
This Prospectus sets forth concisely information about the Fund that an investor
should know before investing. It should be read and retained for future
reference.
Part B (also known as the Statement of Additional Information), dated
April 29, 1994, which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. For a free copy, write to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call
1-800-346-3621. When telephoning, ask for Operator 666.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PAGE 1
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Annual Fund Operating Expenses................ 3
Condensed Financial Information............... 4
Highlights.................................... 6
Yield Information............................. 9
Description of the Fund....................... 10
Management of the Fund........................ 20
How to Buy Fund Shares........................ 24
Shareholder Services.......................... 28
How to Redeem Fund Shares..................... 32
Service Plan.................................. 37
Dividends, Distributions and Taxes............ 39
General Information........................... 42
</TABLE>
PAGE 2
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
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Management Fee .55%
12b-1 Fees (distribution and servicing) .25%
Other Expenses .15%
Total Fund Operating Expenses .95%
- --------------------------------------------------------------------------------
EXAMPLE
An investor 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:
1 YEAR $ 10
3 YEARS $ 30
5 YEARS $ 53
10 YEARS $117
- --------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE
WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER OR LESS
THAN 5%.
- --------------------------------------------------------------------------------
The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by the Fund,
and therefore indirectly by investors, the payment of which will
reduce investors' return on an annual basis. Long-term investors
could pay more in 12b-1 fees than the economic equivalent of
paying a front-end sales charge. The information in the foregoing
table does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. The Manager, affiliates of
the Manager and certain Service Agents (as defined below) may
charge their clients direct fees for effecting transactions in
Fund shares; such fees are not reflected in the foregoing table.
See "Management of the Fund," "How to Buy Fund Shares" and
"Service Plan."
PAGE 3
<PAGE>
Condensed Financial Information
The information in the following table has been audited by Ernst & Young, the
Fund's independent auditors, whose report on the five years in the period ended
December 31, 1993, appears in the Statement of Additional Information. Further
financial data and related notes are included in the Statement of Additional
Information, available upon request.
FINANCIAL HIGHLIGHTS Contained below is per share operating performance
data for a share of beneficial interest outstanding, total investment return,
ratios to average net assets and other supplemental data for each year
indicated. This information has been derived from information provided in the
Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------
1986* 1987 1988 1989
------- ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
year $1.0000 $.9998 $.9999 $.9999
------- ------ ------ ------
INVESTMENT OPERATIONS:
Investment income--net .0383 .0410 .0480 .0580
Net realized and unrealized
gain (loss) on
investments (.0002) .0001 -- --
------- ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS .0381 .0411 .0480 .0580
------- ------ ------ ------
DISTRIBUTIONS;
Dividends from investment
income--net (.0383) (.0410) (.0480) (.0580)
------- ------ ------ ------
Net asset value, end of year $ .9998 $.9999 $.9999 $.9999
------- ------ ------ ------
TOTAL INVESTMENT RETURN 4.30% 4.18% 4.91% 5.96%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets .71% .96% .98% .98%
Ratio of net investment income
to average net assets 4.02% 4.08% 4.79% 5.79%
Decrease reflected in above
expense ratios due to
expense reimbursement .34% -- -- --
Net Assets, end of year (000's
omitted) $211,271 $145,524 $142,806 $158,515
<FN>
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*From February 5, 1986 (commencement of operations) to December 31, 1986.
</TABLE>
PAGE 4
<PAGE>
Financial Highlights (continued)
Selected data for a share of beneficial interest outstanding throughout each
year.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1990 1991 1992 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of
year $.9999 $.9999 $.9999 $.9999
------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income--net .0527 .0413 .0236 .0174
Net realized and unrealized
gain (loss) on
investments -- -- -- --
------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS .0527 .0413 .0236 .0174
------ ------ ------ ------
DISTRIBUTIONS;
Dividends from investment
income-- net (.0527) (.0413) (.0236) (.0174)
------ ------ ------ ------
Net asset value, end of year $.9999 $.9999 $.9999 $.9999
------ ------ ------ ------
TOTAL INVESTMENT RETURN 5.40% 4.21% 2.38% 1.75%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets 1.00% .98% .95% .79%
Ratio of net investment income
to average net assets 5.27% 4.11% 2.38% 1.74%
Decrease reflected in above
expense ratios due to
expense reimbursement -- -- .01% .16%
Net Assets, end of year (000's
omitted) $176,009 $233,675 $210,000 $177,698
</TABLE>
PAGE 5
<PAGE>
Highlights
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus.
THE FUND The Fund is an open-end, diversified, management investment
company, known as a money market mutual fund.
INVESTMENT OBJECTIVE The Fund's goal is to provide investors with as high
a level of current income exempt from Federal income tax as is consistent with
the preservation of capital and the maintenance of liquidity.
MANAGEMENT POLICIES The Fund will invest at least 80% of its net assets
(except when maintaining a temporary defensive position) in Municipal
Obligations.
The Fund seeks to maintain a stable net asset value of $1.00 per share
for purchases and redemptions. There can be no assurance that it will be able to
do so.
In accordance with Rule 2a-7 under the Investment Company Act of 1940,
the Fund will maintain a dollar-weighted average portfolio maturity of 90 days
or less, purchase only instruments with remaining maturities of 13 months or
less, and purchase only instruments which are rated in one of the two highest
rating categories by at least two nationally recognized independent rating
agencies (or of comparable quality).
MUNICIPAL OBLIGATIONS Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States, by the District of
Columbia, and by their political subdivisions, agencies and instrumentalities or
multistate agencies or authorities, the interest from which, in the opinion of
bond counsel to the issuer, is exempt from Federal income tax.
Municipal Obligations are generally issued to obtain funds for various
public purposes. They also include certain industrial development bonds issued
by or on behalf of public authorities. Municipal Obligations are classified as
general obligation bonds, revenue bonds and notes.
PAGE 6
<PAGE>
MANAGER AND MANAGEMENT FEE The First National Bank of Chicago ("Manager")
is the Fund's investment adviser.
The Fund has agreed to pay the Manager a monthly fee at the annual
rate of .55 of 1% of the value of the Fund's average daily net assets.
SALES CHARGES AND EXPENSES Investors may invest, reinvest or redeem shares
at any time without charge or penalty imposed by the Fund.
All expenses incurred in the operation of the Fund are borne by the
Fund, including investment advisory fees. Shareholders also bear certain costs
of administration and/or distribution pursuant to a plan adopted in accordance
with Rule 12b-1 under the Investment Company Act of 1940.
HOW TO BUY FUND SHARES Orders for the purchase of shares may be placed
through a number of institutions including the Manager, the Distributor and
affiliates of the Manager including First Chicago Investment Services, Inc., a
registered broker-dealer, and through certain other banks, securities dealers
and other industry professionals, such as investment advisers, accountants and
estate planning firms (collectively, "Service Agents").
The minimum initial investment is $1,000. All subsequent investments
must be at least $100.
See "How to Buy Fund Shares."
SHAREHOLDER SERVICES The Fund offers its shareholders certain services and
privileges including: Exchange Privilege, Auto-Exchange Privilege, Automatic
Asset Builder, Government Direct Deposit Privilege, Dividend Sweep Privilege,
Automatic Withdrawal Plan and TeleTransfer Privilege. (Certain services and
privileges may not be available through all Service Agents.)
FREE CHECKWRITING Investors may request on the Account Application that
the Fund provide Redemption Checks drawn on the Fund's account. Redemption
Checks may be made payable to any person in the amount of $500 or more. There is
no charge for this service.
PAGE 7
<PAGE>
MONTHLY DIVIDENDS The Fund ordinarily declares dividends from its net
investment income daily. Dividends are usually paid on the last calendar day of
each month, and are automatically reinvested in additional shares unless the
investor elects payment in cash.
TAXES Substantially all dividends derived from Municipal Obligations are
not subject to Federal income tax. However, certain types of income from the
Fund may not be tax exempt. Notice as to the tax status of an investor's
dividends will be mailed annually.
HOW TO REDEEM FUND SHARES Generally, investors should contact their
representatives at the Manager or appropriate Service Agent for redemption
instructions. Investors who are not clients of the Manager or a Service Agent
may redeem Fund shares by written request, through the Wire Redemption
Privilege, Telephone Redemption Privilege, or through the TeleTransfer
Privilege.
See "How to Redeem Fund Shares."
RISKS AND SPECIAL CONSIDERATIONS Moneys invested in the Fund are not bank
deposits or obligations of, or guaranteed by, the Manager or any of its
affiliates and are not insured by the FDIC or any other governmental agency.
There can be no assurance the Fund will be able to maintain a stable
net asset value of $1.00 per share.
See "Description of the Fund--Investment Considerations."
PAGE 8
<PAGE>
Yield Information
From time to time, the Fund advertises its yield and effective yield. Both yield
figures are based on historical earnings and are not intended to indicate future
performance. It can be expected that these yields will fluctuate substantially.
The yield of the Fund refers to the income generated by an investment in the
Fund over a seven-day period (which period will be stated in the advertisement).
This income is then annualized. That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The effective yield is
calculated similarly, but, when annualized, the income earned by an investment
in the Fund is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment. The Fund's yield and effective yield may reflect absorbed expenses
pursuant to any undertaking that may be in effect. See "Management of the Fund."
"Yield" refers to the Fund's income over a
7-day period, which is then annualized.
"Effective yield" assumes that income is reinvested; it will be slightly higher
than "yield" because of the effect of compounding reinvested income.
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated yield
or effective yield calculated as described above.
"Tax equivalent yield" is the pre-tax yield of a taxable investment which equals
the stated yield or effective yield after being taxed at a given rate.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information may not
provide a basis for comparison with domestic bank deposits, other investments
which pay a fixed yield for a stated period of time, or other investment
companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate MonitorTM, N. Palm Beach, Fla. 33408,
IBC/Donoghue's Money Fund Report, Morningstar, Inc. and other
industry publications.
Yields fluctuate, so this information may not be directly comparable to bank
deposits or other investments which pay a fixed yield for a stated period
of time.
PAGE 9
<PAGE>
Description of the Fund
INVESTMENT OBJECTIVE The Fund's goal is to provide investors with as high
a level of current income exempt from Federal income tax as is consistent with
the preservation of capital and the maintenance of liquidity. To accomplish this
goal, the Fund invests primarily in Municipal Obligations (described below). The
Fund's investment objective cannot be changed without approval by the holders of
a majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's investment
objective will be achieved. Securites in which the Fund invests may not earn as
high a level of current income as long-term or lower quality securities which
generally have less liquidity, greater market risk and more fluctuation in
market value.
The Fund's goal is to provide as high a level of current income exempt from
Federal income tax as is consistent with preservation of capital and maintenance
of liquidity.
MUNICIPAL OBLIGATIONS Municipal Obligations are debt obligations issued by
states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which is, in the opinion
of bond counsel to the issuer, exempt from Federal income tax. Municipal
Obligations generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development bonds issued
by or on behalf of public authorities. Municipal Obligations are classified as
general obligation bonds, revenue bonds and notes. General obligation bonds are
secured by the issuer's pledge of its faith, credit and taxing power for the
payment of principal and interest. Revenue bonds are payable from the revenue
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue source, but not
from the general taxing power. Tax exempt industrial development bonds, in most
cases, are revenue bonds that generally do not carry the pledge of the credit of
the issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other revenues.
Municipal Obliga-
The Fund invests primarily in a portfolio of Municipal Obligations, the interest
from which is exempt from Federal income tax.
PAGE 10
<PAGE>
tions include municipal lease/purchase agreements which are similar to
installment purchase contracts for property or equipment issued by
municipalities. Municipal Obligations bear fixed, floating or variable rates of
interest.
MANAGEMENT POLICIES It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing its securities pursuant to Rule 2a-7 under the Investment Company Act of
1940, certain requirements of which are summarized as follows. In accordance
with Rule 2a-7, the Fund will maintain a dollar-weighted average portfolio
maturity of 90 days or less, purchase only instruments having remaining
maturities of 13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established by the Board of
Trustees to present minimal credit risks and which are rated in one of the two
highest rating categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating organization if the
instrument was rated only by one such organization) or, if unrated,
are of comparable quality as determined in accordance with
procedures established by the Board of Trustees. The
nationally recognized statistical rating organizations
currently instruments of the type the Fund may
purchase are Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P"),
Fitch Investors Service, Inc. ("Fitch"), and IBCA Limited
and IBCA Inc. ("IBCA") and their rating criteria are
described in the Appendix to the Fund's Statement of Additional
Information. For further information regarding the amortized cost method of
valuing securities, see "Determination of Net Asset Value" in the Fund's
Statement of Additional Information. There can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per share.
The Fund seeks to maintain a net asset value of $1.00 per share for purchases
and redemptions. There can be no assurance it will be able to do so.
The Fund purchases debt obligations rated in one of the two highest
rating rating categories by at least two nationally recognized statistical
rating organizations, or of comparable rating.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic, business
or political development or change affecting one such security also would affect
the other
PAGE 11
<PAGE>
securities; for example, securities the interests upon which is paid from
revenues of similar types of projects, or securities whose issuers are located
in the same state. As a result, the Fund may be subject to greater risk as
compared to a fund that does not follow this practice.
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended (the
"Code"), issued after August 7, 1986, while exempt from Federal income tax, is a
preference item for the purpose of the alternative minimum tax. Where a
regulated investment company receives such interest, a proportionate share of
any exempt-interest dividend paid by the investment company may be treated as
such a preference item to shareholders. The Fund may invest without limitation
in such Municipal Obligations if the Manager determines their purchase is
consistent with the Fund's investment objective.
The Fund may purchase floating and variable rate demand notes and
bonds, which are tax exempt obligations ordinarily having stated maturities in
excess of 13 months, but which permit the holder to demand payment of principal
at any time, or at specified intervals not exceeding 13 months, in each case
upon not more than 30 days' notice. Variable rate demand obligations include
master demand notes which are obligations that permit the Fund to invest
fluctuating amounts, which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. The interest rates
on these notes fluctuate from time to time. Frequently, such obligations are
secured by letters of credit or other credit support arrangements provided by
banks. Use of letters of credit or other credit support arrangements will not
adversely affect the tax exempt status of these obligations. Because these
obligations are direct lending arrangements between the lender and borrower, it
is not contemplated that such instruments generally will be traded, and there
generally is no established secondary market for these obligations, although
they are redeemable at face value. Accordingly, where these
Some municipal obligations are secured by letters of credit or other credit
support arrangements provided by banks.
PAGE 12
<PAGE>
obligations are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Each obligation purchased by
the Fund will meet the quality criteria established for the purchase of
Municipal Obligations. The Manager, on behalf of the Fund, will consider on an
ongoing basis the creditworthiness of the issuers of the floating and variable
rate demand obligations in the Fund's portfolio. The Fund will not invest more
than 10% of the value of its net assets in floating or variable rate demand
obligations as to which the Fund cannot exercise the demand feature on not more
than seven days' notice if there is no secondary market available for these
obligations, and in other illiquid securities.
The Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the Fund's
participation interest bears to the total principal amount of the Municipal
Obligation. These instruments may have fixed, floating or variable rates of
interest, with remaining maturities of 13 months or less. If the participation
interest is unrated, or has been given a rating below that which otherwise is
permissible for purchase by the Fund, the participation interest will be backed
by an irrevocable letter of credit or guarantee of a bank that the Board of
Trustees has determined meets the prescribed quality standards for banks set
forth below, or the payment obligation otherwise will be collateralized by U.S.
Government securities, or, in the case of an unrated participation interest, the
Manager must have determined that the instrument is of comparable quality to
those instruments in which the Fund may invest. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest in
the Municipal Obligation, plus accrued interest. As to these instruments, the
Fund intends to exercise its right to demand payment only upon a default under
the terms of the Municipal Obligation, as needed to provide liquidity to meet
redemptions, or to maintain or improve the quality of its investment portfolio.
The
PAGE 13
<PAGE>
Fund will not invest more than 10% of the value of its net assets in
participation interests that do not have this demand feature, and in other
illiquid securities.
The Fund may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, the Fund
obligates a broker, dealer or bank to repurchase, at the Fund's option,
specified securities at a specified price and, in this respect, stand-by
commitments are comparable to put options. The exercise of a stand-by
commitment, therefore, is subject to the ability of the seller to make payment
on demand. The Fund will acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder for
trading purposes. The Fund may pay for stand-by commitments if such action is
deemed necessary, thus increasing to a degree the cost of the underlying
Municipal Obligation and similarly decreasing such security's yield to
investors.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement) having
a relatively long maturity and bearing interest at a fixed rate substantially
higher than prevailing short-term tax exempt rates, that has been coupled with
the agreement of a third party, such as a bank, broker-dealer or other financial
institution, pursuant to which such institution grants the security holders the
option, at periodic intervals, to tender their securities to the institution and
receive the face value thereof. As consideration for providing the option, the
financial institution receives periodic fees equal to the difference between the
Municipal Obligation's fixed coupon rate and the rate, as determined by a
remarketing or similar agent at or near the commencement of such period, that
would cause the securities, coupled with the tender option, to trade at par on
the date of such determination. Thus, after payment of this fee, the security
holder effectively holds a demand obligation that bears interest at the
prevailing short-term tax exempt rate. The Manager, on behalf of the Fund, will
consider on an ongoing basis the creditworthiness of the issuer of the
underlying Municipal Obligation, of any custodian and of the third party
provider of the tender option. In certain instances and for
PAGE 14
<PAGE>
certain tender option bonds, the option may be terminable in the event of a
default in payment of principal or interest on the underlying Municipal
Obligations and for other reasons. The Fund will not invest more than 10% of the
value of its net assets in securities that are illiquid, which would include
tender option bonds as to which it cannot exercise the tender feature on not
more than seven days' notice if there is no secondary market available for these
obligations.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net assets)
or for temporary defensive purposes, the Fund may invest in taxable short-term
investments ("Taxable Investments") consisting of: notes of issuers having, at
the time of purchase, a quality rating within the two highest grades of Moody's,
S&P, Fitch or IBCA; obligations of the U.S. Government, its agencies or
instrumentalities; commercial paper; certificates of deposit of U.S. domestic
banks, including foreign branches of domestic banks, with assets of one billion
dollars or more; time deposits; bankers' acceptances and other short-term bank
obligations; and repurchase agreements in respect of any of the foregoing.
Dividends paid by the Fund that are attributable to income earned by the Fund
from Taxable Investments will be taxable to investors. See "Dividends,
Distributions and Taxes." Except for temporary defensive purposes, at no time
will more than 20% of the value of the Fund's net assets be invested in Taxable
Investments. If the Fund purchases Taxable Investments, it will value them using
the amortized cost method and comply with the provisions of Rule 2a-7 relating
to purchases of taxable instruments. Under normal market conditions, the Fund
anticipates that not more than 5% of the value of its total assets will be
invested in any one category of Taxable Investments. Taxable Investments are
more fully described in the Statement of Additional Information, to which
reference hereby is made.
The Fund may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such securities
may include securities that are not readily marketable, such as certain
securities that are
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subject to legal or contractual restrictions on resale and repurchase agreements
providing for settlement in more than seven days after notice. As to these
securities, the Fund is subject to a risk that should the Fund desire to sell
them when a ready buyer is not available at a price that the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected. However, if a substantial market of qualified institutional
buyers develops pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain of these securities held by the Fund, the Fund intends to
treat such securities as liquid securities in accordance with procedures
approved by the Fund's Board of Trustees. Because it is not possible to predict
with assurance how the market for restricted securities pursuant to Rule 144A
will develop, the Fund's Board of Trustees has directed the Manager to monitor
carefully the Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other relevant
information. To the extent that for a period of time qualified institutional
buyers cease purchasing such restricted securities pursuant to Rule 144A, the
Fund's investing in such securities may have the effect of increasing the level
of illiquidity in the Fund's portfolio during such period.
From time to time, the Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to borrow securities
to complete certain transactions. Such loans may not exceed 33 1/3% of the value
of the Fund's total assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or irrevocable letters
of credit issued by financial institutions. Such collateral will be maintained
at all times in an amount equal to at least 100% of the current market value of
the loaned securities. The Fund can increase its income through the investment
of such collateral. The Fund continues to be entitled to payments in amounts
equal to the interest or other distributions payable on the loaned security and
receives interest on the amount of the loan. Such loans will be terminable at
any time upon specified notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction breaches
its agreement with the
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Fund. The Fund will limit the entities with which it will enter into securities
lending transactions to those whose securities are eligible for purchase by the
Fund.
CERTAIN FUNDAMENTAL POLICIES The Fund may (i) borrow money from banks
(other than the Manager or its affiliates), but only for temporary or emergency
(not leveraging) purposes, in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's total assets, the
Fund will not make any additional investments; (ii) invest up to 5% of its total
assets in the obligations of any single issuer, except that up to 25% of the
value of the Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities may be
purchased for temporary defensive purposes, without regard to any such
limitation; and (iii) invest up to 25% of its total assets in the securities of
issuers in any single industry, provided that there shall be no such limitation
on investments in Municipal Obligations and, for temporary defensive purposes,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities (industrial development bonds, where the payment of principal
and interest is the ultimate responsibility of companies within the same
industry, are grouped together as an "industry"). This paragraph describes
fundamental policies that cannot be changed
without approval by the holders of a majority (as defined
in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objective and Management
Policies--Investment Restrictions" in the Statement of Additional Information.
The Fund has adopted certain fundamental policies intended to limit the risk of
its investment portfolio.
Fundamental policies cannot be changed without approval by a majority of
shareholders.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings and to the extent related to the deposit of assets in
escrow in connection with the purchase of securities on a when-issued or
delayed-delivery basis; and (ii) invest up to 10% of its net assets in
repurchase agreements providing for settlement in more than
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seven days after notice and in other illiquid securities (which securities could
include participation interests (including municipal lease/purchase agreements)
that are not subject to the demand feature described above and floating and
variable rate demand obligations as to which the Fund cannot exercise the
related demand feature described above and as to which there is no secondary
market). See "Investment Objective and Management Policies--Investment
Restrictions" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS Even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price fluctuations. The value of fixed-income
securities also may be affected by changes in the credit rating or financial
condition of the issuing entities.
The Fund's investments are subject to the
risk of market price fluctuations.
New issues of Municipal Obligations usually are offered on a
when-issued basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate that will
be received on the Municipal Obligations are fixed at the time the Fund enters
into the commitment. The Fund will make commitments to purchase such Municipal
Obligations only with the intention of actually acquiring the securities, but
the Fund may sell these securities before the settlement date if it is deemed
advisable, although any gain realized on such sale would be taxable. The Fund
will not accrue income in respect of a when-issued security prior to its stated
delivery date. No additional when-issued commitments will be made if more than
20% of the value of the Fund's net assets would be so committed.
Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in value (both
generally changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Municipal Obligations purchased on
a when-issued basis may expose the Fund to risk because they may experience such
fluctuations prior to their actual delivery. Purchasing Municipal Obligations on
a when-
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issued basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that obtained
in the transaction itself. A segregated account of the Fund consisting of cash,
cash equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the when-issued
commitments will be established and maintained at the Fund's custodian bank.
Purchasing Municipal Obligations on a when-issued basis when the Fund is fully
or almost fully invested may result in greater potential fluctuation in the
value of the Fund's net assets and its net asset value per share.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure might
prove difficult. In evaluating the credit quality of a municipal lease/purchase
obligation that is unrated, the Manager will consider, on an ongoing basis, a
number of factors including the likelihood that the issuing municipality will
discontinue appropriating funding for the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase the
cost of the Municipal Obligations available for purchase by the Fund and thus
reduce the available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for interest
on Municipal Obligations may be introduced in the future. If any such proposal
were enacted that would reduce the availability of Municipal Obligations for
investment by the Fund so as to adversely affect Fund shareholders, the Fund
would reevaluate its investment objective and policies and submit possible
changes in the Fund's structure to shareholders for their consideration. If
legislation were enacted that would treat a type of Municipal Obligation
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<PAGE>
as taxable, the Fund would treat such security as a permissible Taxable
Investment within the applicable limits set forth herein.
Investment decisions for the Fund are made independently from those of
other investment companies, investment advisory accounts, custodial accounts,
individual trust accounts and commingled funds that may be advised by the
Manager. However, if such other investment companies or managed accounts are
prepared to invest in, or desire to dispose of, Municipal Obligations or Taxable
Investments at the same time as the Fund, available investments or opportunities
for sales will be allocated equitably to each of them. In some cases, this
procedure may adversely affect the size of the position obtained for or disposed
of by the Fund or the price paid or received by the Fund.
Management of the Fund
MANAGER The Manager, located at Three First National Plaza, Chicago,
Illinois 60670, is the Fund's investment adviser. The Manager, a wholly-owned
subsidiary of First Chicago Corporation, a registered bank holding company, is a
commercial bank offering a wide range of banking and investment services to
customers throughout the United States and around the world. As of December 31,
1993, it was one of the largest commercial banks in the United States and the
largest in the mid-Western United States in terms of assets ($52.5 billion) and
in terms of deposits ($28.1 billion). As of December 31, 1993, the Manager
provided investment management services to portfolios containing approximately
$11.8 billion in assets. The Manager serves as investment adviser for the Fund
pursuant to a Management Agreement dated April 30, 1993. Prior thereto, the
Manager provided investment advisory services to the Fund pursuant to an
Investment Advisory Agreement (the "Prior Advisory Agreement"). Under the
Management Agreement, the Manager, subject to the supervision of the Fund's
Board of Trustees and in conformity with Massachusetts law and the stated
policies of the Fund, manages the investment of the Fund's assets. The Manager
is responsible for making investment decisions for the Fund, placing purchase
and sale
The investment adviser, The First National Bank of Chicago, is one of the
largest commercial banks in the United States and the largest in the mid-Western
United States and manages $11.8 billion of investment assets.
PAGE 20
<PAGE>
orders and providing research, statistical analysis and continuous supervision
of the investment portfolio. The Manager provides these services through its
Investment Management Department. The investment advisory services of the
Manager are not exclusive under the terms of the Management Agreement. The
Manager is free to, and does, render investment advisory services to others,
including other investment companies as well as commingled trust funds and a
broad spectrum of individual trust and investment management portfolios, which
have varying investment objectives. The Manager has advised the Fund that in
making its investment decisions the Manager does not obtain or use material
inside information in the possession of any other division or department of the
Manager or in the possession of any affiliate of the Manager.
The Manager and its affiliates underwrite, deal, trade and invest for
their own accounts in Municipal Obligations and may have deposit, loan and
commercial banking relationships with the issuers of securities purchased by the
Fund. The Manager and its affiliates sell and purchase Municipal Obligations to
and from other investment companies. The Manager will not invest any Fund assets
in any Municipal Obligations purchased directly or indirectly from itself or any
affiliate, although under certain circumstances the Fund may purchase such
securities from other members of an underwriting syndicate in which the Manager
or an affiliate is a member. This restriction may limit the amount or type of
Municipal Obligations available to be purchased by the Fund. In addition, the
Manager and its affiliates from time to time issue letters of credit securing
obligations of certain corporate guarantors of industrial revenue bonds issued
by various state municipalities. The Manager will not invest any Fund assets in
any such obligations and this restriction also may limit the amount or type of
such obligations available for purchase by the Fund.
The Manager and its affiliates presently intend to continue to charge
and collect customary account and account transaction fees with respect to
accounts through which or for which Fund shares are purchased or redeemed. This
will result in the receipt by the Manager and its affiliates of customer account
fees in addition to advisory and Service Agent fees from the Fund with respect
to assets in certain accounts. See "Service Plan."
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<PAGE>
The Manager has engaged The Dreyfus Corporation ("Dreyfus"), located
at 200 Park Avenue, New York, New York 10166, to assist it in providing certain
administrative services for the Fund pursuant to a Master Administration
Agreement between the Manager and Dreyfus effective April 30, 1993. Prior
thereto, Dreyfus provided administrative services to the Fund pursuant to an
Administration Agreement with the Fund (the "Prior Administration Agreement").
Dreyfus was formed in 1947 and, as of December 31, 1993, managed or administered
approximately $78 billion in assets for more than 1.9 million investor accounts
nationwide.
The Dreyfus Corporation, which manages or administers approximately $78 billion
in mutual fund assets, will assist the Manager in providing certain
administrative services for the Fund.
Under the terms of the Prior Advisory Agreement and Prior
Administration Agreement, which were terminated on April 30, 1993, the Fund
agreed to pay the Manager and Dreyfus monthly fees at the annual rate of .40 and
.20, respectively, of 1% of the value of the Fund's average daily net assets.
Under the terms of the Management Agreement, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .55 of 1% of the value of
the Fund's average daily net assets, which is .05 of 1% less than the combined
fees payable by the Fund to the Manager and Dreyfus under the Prior Advisory
Agreement and Prior Administration Agreement. Pursuant to its agreement with
Dreyfus, the Manager, from its own funds, will pay Dreyfus for Dreyfus'
services. For the fiscal year ended December 31, 1993, the Fund paid the Manager
pursuant to the Management Agreement and Prior Advisory Agreement a monthly fee
at the effective aggregate annual rate of .41 of 1% of the value of the Fund's
average daily net assets pursuant to an undertaking in effect. For the period
January 1, 1993 to April 29, 1993, the Fund paid Dreyfus pursuant to the Prior
Administration Agreement a monthly administration fee at the annual rate of .20
of 1% of the value of the Fund's average daily net assets.
GLASS-STEAGALL ACT The Glass-Steagall Act and other applicable laws
prohibit Federally chartered or supervised banks from engaging in certain
aspects of the business of issuing, underwriting, selling and/or distributing
securities, although banks such as the Manager are permitted to purchase and
sell securities upon the order and for the account of their customers. The
Manager has advised the Fund of its belief that it may
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<PAGE>
perform the services for the Fund contemplated by the Management Agreement and
this Prospectus without violating the Glass-Steagall Act or other applicable
banking laws or regulations. The Manager has pointed out, however, that there
are no cases deciding whether a bank such as the Manager may perform services
comparable to those performed by the Manager and that future changes in either
Federal or state statutes and regulations relating to permissible activities of
banks and their subsidiaries and affiliates, as well as future judicial or
administrative decisions or interpretations of present and future statutes and
regulations, could prevent the Manager from continuing to perform such services
for the Fund. If the Manager were to be prevented from providing such services
to the Fund, the Fund's Board of Trustees would review the Fund's relationship
with the Manager and consider taking all actions necessary in the circumstances.
For a discussion of the Glass-Steagall Act in connection with the
Fund's Service Plan, see "Service Plan."
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN
The Shareholder Services Group, Inc., a subsidiary of First Data Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's Transfer and
Dividend Disbursing Agent (the "Transfer Agent"). The Bank of New York, 110
Washington Street, New York, New York 10286, is the Fund's Custodian.
The Shareholder Services Group, Inc. keeps the Fund's records and pays dividends
to shareholders.
EXPENSES All expenses incurred in the operation of the Fund are borne by
the Fund, except to the extent specifically assumed by the Manager. The expenses
borne by the Fund include the following: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors, employees
or holders, directly or indirectly, of 5% or more of the outstanding voting
securities of the Manager or Dreyfus, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Fund's existence, costs
attributable to investor services (including,
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<PAGE>
without limitation, telephone and personnel expenses), costs of shareholders'
reports and meetings and any extraordinary expenses.
In addition, the Fund bears certain costs of distributing Fund shares
in accordance with a plan (the "Service Plan") adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940. See "Annual Fund Operating Expenses"
and "Service Plan."
The imposition of the management fee, as well as other operating
expenses, including the fees paid under the Fund's Service Plan, will have the
effect of reducing the yield to investors.
How to Buy Fund Shares
INFORMATION APPLICABLE TO ALL PURCHASERS The Fund's distributor is Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus, located at 200 Park
Avenue, New York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. or the Manager and
therefore are not insured by the FDIC.
The Fund offers a number of convenient ways to purchase shares.
Fund shares may be purchased by all clients of the Manager and its
affiliates, including qualified custody, agency and trust accounts, through
their accounts with the Manager and its affiliates, or by clients of certain
Service Agents through their accounts with the Service Agent. Fund shares also
may be purchased directly through the Distributor. Share certificates will not
be issued. It is not recommended that the Fund be used as a vehicle for Keogh,
IRA or other qualified retirement plans. The Fund reserves the right to reject
any purchase order.
The minimum initial investment is $1,000. All subsequent investments
must be at least $100. The initial investment must be accompanied by the Fund's
Account Application. The Manager and Service Agents may impose initial or
subsequent investment minimums which are higher or lower than those specified
above and may impose different minimums for different types of accounts or
purchase arrangements.
You can open an account with as little as $1,000. Subsequent investments can be
as little as $100.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies of
member banks within the Federal Reserve System which are held on deposit at a
Federal
PAGE 24
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Reserve Bank) are received by the Transfer Agent. If an investor does not remit
Federal Funds, his payment must be converted into Federal Funds. This usually
occurs within one business day of receipt of a bank wire and within two business
days of receipt of a check drawn on a member bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal Reserve System may
take considerably longer to convert into Federal Funds. Prior to receipt of
Federal Funds, the investor's money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon,
New York time, on each day the New York Stock Exchange is open for business,
except on Martin Luther King, Jr. Day, Columbus Day and Veterans Day. Net asset
value per share is computed by dividing the value of the Fund's net assets
(i.e., the value of its assets less liabilities) by the total number of shares
outstanding. See "Determination of Net Asset Value" in the Fund's Statement of
Additional Information.
Federal regulations require that an investor provide a certified
Taxpayer Identification Number ("TIN") upon opening or reopening an account. See
"Dividends, Distributions and Taxes" and the Fund's Account Application for
further information concerning this requirement. Failure to furnish a certified
TIN to the Fund could subject an investor to a $50 penalty imposed by the
Internal Revenue Service (the "IRS").
PURCHASING SHARES THROUGH ACCOUNTS WITH THE MANAGER OR A SERVICING
AGENT Investors who desire to purchase shares through their accounts at
the Manager or its affiliates or a Service Agent should contact such entity
directly for appropriate instructions, as well as for information about
conditions pertaining to the account and any related fees. Service Agents and
the Manager may charge clients direct fees for effecting transactions in Fund
shares, as well as fees for other services provided to clients in connection
with accounts through which Fund shares are purchased. These fees, if any, would
be in addition to fees received by a Service Agent under the Service Plan or
management fees received by the Manager under the Management Agreement. Each
Service Agent has agreed to transmit to its clients a schedule of such fees. In
addition, Service Agents and the Manager may impose minimum account and other
conditions, including conditions
Contact your investment representative or Service Agent to learn how to purchase
shares.
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<PAGE>
which might affect the availability of certain shareholder privileges described
in this Prospectus. Certain investor accounts with the Manager and its
affiliates and certain Service Agents may be eligible for an automatic
investment privilege, commonly called a "sweep," under which amounts in excess
of a certain minimum held in these accounts will be invested automatically in
Fund shares at predetermined intervals. Each investor desiring to use this
privilege should consult the Manager or his Service Agent for details. It is the
responsibility of the Manager and Service Agents to transmit client orders on a
timely basis.
Copies of the Fund's Prospectus and Statement of Additional
Information may be obtained from the Distributor, the Manager, certain
affiliates of the Manager or certain Service Agents, as well as from the Fund.
PURCHASING SHARES THROUGH THE DISTRIBUTOR Fund shares also may be
purchased directly through the Distributor by check or wire, or through the
TeleTransfer Privilege described below. The initial investment must be
accompanied by the Fund's Account Application which can be obtained from the
Distributor and certain Service Agents. Checks should be made payable to "The
First Prairie Family of Funds." Payments to open new accounts which are mailed
should be sent to The First Prairie Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with the investor's Account Application. For
subsequent investments, the investor's Fund account number should appear on the
check and an investment slip should be enclosed and sent to The First Prairie
Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial
nor subsequent investments should be made by third party check. A charge will be
imposed if any check used for investment in an investor's account does not
clear. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks.
Fund shares may be purchased directly through the Distributor by check or wire,
or through the TeleTransfer Privilege.
Wire payments may be made if the investor's bank account is in a
commercial bank that is a member of the Federal Reserve System or any other bank
having a correspondent bank in New York City or Chicago. Immediately available
funds may be transmitted by wire to The Bank of New York, DDA #8900052074/First
Prairie Municipal Money Market Fund, for purchase of Fund shares in the
investor's name. The
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wire must include the investor's account number (for new accounts, the
investor's TIN should be included instead), account registration and dealer
number, if applicable. If the investor's initial purchase of Fund shares is by
wire, the investor should call 1-800-645-6561 after completing his wire payment
to obtain a Fund account number. An investor must include his Fund account
number on the Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted until the Account
Application is received. Further information about remitting funds in this
manner is provided in "Payment and Mailing Instructions" on the Fund's Account
Application.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. The investor must direct
the institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit the
investor's Fund account. The instruction must specify the investor's Fund
account registration and the investor's Fund account number preceded by the
digits "1111."
TELETRANSFER PRIVILEGE An investor may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if he has checked the appropriate box and
supplied the necessary information on the Fund's Account Application or has
filed a Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between the bank account designated in one of these documents and
the investor's Fund account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be so
designated. The Fund may modify or terminate this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated.
Call 1-800-227-0072 for TeleTransfer transactions.
Investors who have selected the TeleTransfer Privilege may request
TeleTransfer purchase of Fund shares by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309.
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<PAGE>
Shareholder Services
The services and privileges described under this heading may not be available to
clients of certain Service Agents and some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus. Each investor should consult his Service Agent in this regard.
EXCHANGE PRIVILEGE The Exchange Privilege enables an investor to purchase,
in exchange for shares of the Fund, shares of certain other funds advised by the
Manager, or shares of certain funds advised by Dreyfus, to the extent such
shares are offered for sale in the investor's state of residence. These funds
have different investment objectives that may be of interest to investors. The
Exchange Privilege may be expanded to permit exchanges between the Fund and
other funds that, in the future, may be advised by the Manager. Investors will
be notified of any such change. If an investor desires to use this Privilege, he
should consult his Service Agent or the Distributor to determine if it is
available and whether any conditions are imposed on its use.
You can exchange your shares for shares of other eligible First Prairie funds.
To use this Privilege, an investor or his Service Agent acting on his
behalf must give exchange instructions to the Transfer Agent in writing, by wire
or by telephone. If an investor previously has established the Telephone
Exchange Privilege, he may telephone exchange instructions by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309. See "How to Redeem
Fund Shares--Procedures." Before any exchange, the investor must obtain and
should review a copy of the current prospectus of the fund into which the
exchange is being made. Prospectuses may be obtained from the Distributor, the
Manager, certain affiliates of the Manager or certain Service Agents. The shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have a
value of at least the minimum initial investment required for the fund into
which the exchange is being made. Telephone exchanges may be made only if the
appropriate "YES" box has been checked on the Account Application, or a separate
signed Shareholder Services Form is on file with the Transfer Agent.
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Upon an exchange into a new account, the following shareholder
services and privileges, as applicable and where available, will be
automatically carried over to the fund into which the exchange is made: Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, TeleTransfer Privilege and the dividend/ capital gain
distribution option (except for the Dividend Sweep Privilege) selected by the
investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds sold
with a sales load. If an investor is exchanging into a fund that charges a sales
load, the investor may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from which
the investor is exchanging were: (a) purchased with a sales load, (b) acquired
by a previous exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to the
foregoing categories of shares. To qualify, at the time of an exchange, the
investor must notify the Transfer Agent or the investor's Service Agent must
notify the Distributor. Any such qualification is subject to confirmation of the
investor's holdings through a check of appropriate records. See "Shareholder
Services" in the Statement of Additional Information. No fees currently are
charged shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated by the
Securities and Exchange Commission. The Fund reserves the right to reject any
exchange request in whole or in part. The Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable gain
or loss.
AUTO-EXCHANGE PRIVILEGE The Auto-Exchange Privilege enables an investor to
invest regularly (on a semi-monthly, monthly, quarterly or annual basis), in
exchange for shares of the Fund, in shares of certain other funds in the First
Prairie Family of Funds or certain other funds advised by Dreyfus of
You can exchange Fund shares automatically at regular intervals which you
select.
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which he is currently an investor. The amount an investor designates, which can
be expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth of the
month according to the exchange schedule that the investor has selected. Shares
will be exchanged at the then-current net asset value; however, a sales load may
be charged with respect to exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional Information. The right to
exercise this Privilege may be modified or cancelled by the Fund or the Transfer
Agent. The investor or the investor's Service Agent may modify or cancel this
Privilege at any time by writing to The First Prairie Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. The Fund may charge a service fee for
the use of this Privilege. No such fee currently is contemplated. The exchange
of shares of one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain or loss. For
more information concerning this Privilege and the funds eligible to participate
in this Privilege, or to obtain an Auto-Exchange Authorization Form, please call
toll free in Illinois 1-800-621-6592, or, outside Illinois 1-800-537-4938 if
Fund shares were purchased through First Chicago Investment Services, Inc. or
1-800-645-6561 if Fund shares were purchased through the Distributor.
AUTOMATIC ASSET BUILDER Automatic Asset Builder permits an investor to
purchase Fund shares (minimum of $100 and maximum of $150,000 per transaction)
at regular intervals selected by the investor. Fund shares are purchased by
transferring funds from the bank account designated by an investor. At the
investor's option, the bank account designated by the investor will be debited
in the specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only an
account maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. To establish an Automatic Asset
Builder account, the investor must file an authorization form with the Transfer
Agent. The necessary authorization form may be obtained from the Distributor,
the Manager, certain affiliates of the Manager or certain Service
You can purchase shares automatically at regular intervals which you select.
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Agents. An investor may cancel this Privilege or change the amount of purchase
at any time by mailing written notification to The First Prairie Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, and the notification
will be effective three business days following receipt. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE Government Direct Deposit Privilege
enables an investor to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social Security or certain
veterans', military or other payments from the Federal government automatically
deposited into the investor's Fund account. An investor may deposit as much of
such payments as he elects. To enroll in Government Direct Deposit, the investor
must file with the Transfer Agent a completed Direct Deposit Sign-Up form for
each type of payment that the investor desires to include in this Privilege. The
appropriate form may be obtained from the Distributor, the Manager, certain
affiliates of the Manager or certain Service Agents. Death or legal incapacity
will terminate an investor's participation in this Privilege. An investor may
elect at any time to terminate his participation by notifying in writing the
appropriate Federal agency. Further, the Fund may terminate an investor's
participation upon 30 days' notice to the investor.
Many Federal payments are eligible for full or partial direct deposit into your
account to purchase shares.
DIVIDEND SWEEP PRIVILEGE The Dividend Sweep Privilege enables an investor
to invest automatically dividends or dividends and capital gain distributions,
if any, paid by the Fund in shares of another fund in the First Prairie Family
of Funds or certain other funds advised or administered by Dreyfus of which the
investor is a shareholder. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with respect
to investments in shares of a fund sold with a sales load. If an investor is
investing in a fund that charges a sales load, the investor may qualify for
share prices which do not include the sales load or which reflect a reduced
sales load. If an investor is investing in a fund that charges a contingent
deferred sales charge, the shares purchased will be subject to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services"
You can "sweep" your dividends and capital gain distributions into
certain other First Prairie funds.
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in the Statement of Additional Information. For more information concerning this
Privilege and the funds eligible to participate in this Privilege, or to request
a Dividend Option Form, investors should call toll free in Illinois
1-800-621-6592; or, outside Illinois, 1-800-537-4938 if Fund shares were
purchased through First Chicago Investment Services, Inc., or 1-800-645-6561 if
Fund shares were purchased through the Distributor. To cancel this Privilege,
the investor or the investor's Service Agent must mail written notification to
The First Prairie Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. To select a new fund after cancellation, the investor or the
investor's Service Agent must submit a new authorization form to the Transfer
Agent. Enrollment in or cancellation of this Privilege is effective three
business days following receipt by the Transfer Agent. This Privilege is
available only for existing accounts and may not be used to open new accounts.
Minimum subsequent investments do not apply. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently is
contemplated.
AUTOMATIC WITHDRAWAL PLAN The Automatic Withdrawal Plan permits an
investor to request withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis if the investor has a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be obtained from
the Distributor, the Manager, certain affiliates of the Manager or certain
Service Agents. The Automatic Withdrawal Plan may be ended at any time by the
investor, the Fund or the Transfer Agent.
You can withdraw a specified dollar amount from your account every month or
quarter.
How to Redeem Fund Shares
GENERAL An investor may request redemption of his shares at any time.
Redemption requests should be transmitted to the Transfer Agent as described
below. When a request is received in proper form, the Fund will redeem the
shares at the next determined net asset value.
You can redeem Fund shares at any time.
The Fund imposes no charges when shares are redeemed. Service Agents
may charge a nominal fee for effecting redemptions of Fund shares. The value of
the shares
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redeemed may be more or less than their original cost, depending upon the Fund's
then-current net asset value. As described in "Determination of Net Asset Value"
in the Statement of Additional Information, the Fund seeks to maintain a net
asset value of $1.00 per share for purchases and redemptions.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in proper
form, except as provided by the rules of the Securities and Exchange Commission.
HOWEVER, IF AN INVESTOR HAS PURCHASED FUND SHARES BY CHECK, BY TELETRANSFER
PRIVILEGE OR THROUGH AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMITS A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, THE REDEMPTION WILL BE EFFECTIVE AND
THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO THE INVESTOR PROMPTLY UPON BANK
CLEARANCE OF THE INVESTOR'S PURCHASE CHECK, TELETRANSFER PURCHASE OR AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION
PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR
PURSUANT TO THE TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS
AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER
PURCHASE OR THE AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF THE INVESTOR'S SHARES WERE
PURCHASED BY WIRE PAYMENT, OR IF THE INVESTOR OTHERWISE HAS A SUFFICIENT
COLLECTED BALANCE IN HIS ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE
TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND THE INVESTOR WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF
BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the Transfer Agent
has received the investor's Account Application.
The Fund reserves the right to redeem an investor's account at the
Fund's option upon not less than 30 days' written notice if the account's net
asset value is $500 or less and remains so during the notice period.
PROCEDURES An investor who has purchased shares through his account at the
Manager or a Service Agent must redeem shares by following instructions
pertaining to such account. If an investor has given his Service Agent authority
to instruct the Transfer Agent to redeem shares and to credit the proceeds of
The Fund offers a number of convenient ways to access your investment.
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such redemptions to a designated account at the Service Agent, the investor may
redeem shares only in this manner and in accordance with a written redemption
request pursuant to the regular redemption procedure described below. Investors
who wish to use the other redemption methods described below, must arrange with
their Service Agent for delivery of the required application(s) to the Transfer
Agent. It is the responsibility of the Manager or the Service Agent, as the case
may be, to transmit the redemption order and credit the investor's account with
the redemption proceeds on a timely basis. Other investors may redeem shares by
using the regular redemption procedure through the Transfer Agent, using the
Check Redemption Privilege, through the Wire Redemption Privilege, through the
Telephone Redemption Privilege, or through the TeleTransfer Privilege, as
described below.
An investor may redeem or exchange shares by telephone if the investor
has checked the appropriate box on the Fund's Account Application or has filed a
Shareholder Services Form with the Transfer Agent. By selecting a telephone
redemption or exchange privilege, an investor authorizes the Transfer Agent to
act on telephone instructions from any person representing himself or herself to
be the investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. The Fund will require
the Transfer Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions. Neither the Fund
nor the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption or exchange of Fund shares. In such cases, investors should consider
using the other redemption procedures described herein. Use of these other
redemption procedures may result in the investor's redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
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REGULAR REDEMPTION Under the regular redemption procedure, an investor may
redeem shares by written request mailed to The First Prairie Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption requests must be
signed by the individual shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP") and the Stock Exchanges Medallion Program. For more
information with respect to signature-guarantees, please call the telephone
number shown on the front cover.
Shares may be redeemed by written request.
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE An investor may request on the Account
Application, Shareholder Services Form or by later written request to the Fund
that the Fund provide Redemption Checks drawn on the Fund's account. Redemption
Checks may be made payable to the order of any person in the amount of $500 or
more. Redemption Checks should not be used to close an account. Redemption
Checks are free, but the Transfer Agent will impose a fee for stopping payment
of a Redemption Check at the investor's request or if the Transfer Agent cannot
honor the Redemption Check due to insufficient funds or other valid reason. An
investor should date his Redemption Checks with the current date when the
investor writes them. Investors should not postdate Redemption Checks. If an
investor does, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise in
good order. This Privilege may be modified or terminated at any time by the Fund
or the Transfer Agent upon notice to shareholders.
You can write checks of $500 or more using a special checkbook provided by the
Fund, if you request it on your Account Application.
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WIRE REDEMPTION PRIVILEGE An investor may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to his account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if the
investor's bank is not a member. To establish the Wire Redemption Privilege, an
investor must check the appropriate box and supply the necessary information on
the Fund's Account Application or file a Shareholder Services Form with the
Transfer Agent. An investor may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and mailed to the
investor's address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts may
have redemption proceeds of only up to $250,000 wired within any 30-day period.
An investor may telephone redemption requests by calling 1-800-227-0072 or, if
calling from overseas, 1-401-455-3309. The Fund reserves the right to refuse any
redemption request, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. This Privilege
may be modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
transmitting redemption requests by wire.
You can redeem shares by wire if you check the appropriate box on your Account
Application.
TELEPHONE REDEMPTION PRIVILEGE An investor may redeem Fund shares (maximum
$150,000 per day) by telephone if he has checked the appropriate box on the
Fund's Account Application or has filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to the
investor's address. An investor may telephone redemption instructions by calling
1-800-227-0072 or, if calling from overseas, 1-401-455-3309. The Fund reserves
the right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or the
number of telephone redemption requests. This Privilege may be modified or
terminated at any time by the Transfer Agent or the Fund.
You can redeem shares by telephone if you have checked the appropriate box on
your Account Application.
TELETRANSFER PRIVILEGE An investor may redeem Fund shares (minimum $500
per day) by telephone if he has checked the appropriate box and supplied the
necessary information on
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the Fund's Account Application or has filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between the investor's Fund
account and the bank account designated in one of these documents. Only such an
account maintained in a domestic financial institution which is an Automated
Clearning House member may be so designated. Redemption proceeds will be on
deposit in the investor's account at an Automated Clearning House member bank
ordinarily two days after receipt of the redemption request or, at the
investor's request, paid by check (maximum $150,000 per day) and mailed to his
address. Holders of jointly registered Fund or bank accounts may redeem through
the TeleTransfer Privilege for transfer to their bank account only up to
$250,000 within any 30-day period. The Fund reserves the right to refuse any
request made by telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests. The
Fund may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
Investors who have selected the TeleTransfer Privilege may request a
TeleTransfer redemption of Fund shares by telephoning 1-800-227-0072 or, if
calling from overseas, 1-401-455-3309.
Service Plan
Under the Service Plan, adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, the Fund bears the costs and expenses in connection with
advertising and marketing its shares and pays the fees of Service Agents for
Servicing, as defined below, at a rate not exceeding .25 of 1% per annum of the
value of the Fund's average daily net assets. Service Agents receive fees based
upon the average daily value of the Fund's shares owned by shareholders for
which the Service Agent is the dealer or holder of record, or for which the
Service Agent has a Servicing relationship. The Service Plan provides that the
Manager, Dreyfus and the Distributor may act as Service Agents and receive fees
under the Service Plan. From time to time, the Manager, Dreyfus and/or the
Distributor may defer or waive receipt of fees under the Service Plan while
retaining the ability
The Fund has adopted a plan so that it can pay for advertising and marketing and
to compensate others for providing services to you.
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to be paid by the Fund under the Service Plan thereafter. The fees payable to
the Manager, Dreyfus and/or the Distributor for Servicing are payable without
regard to actual expenses incurred.
The Fund also bear the costs of preparing and printing prospectuses
and statements of additional information used for regulatory purposes and for
distribution to existing shareholders. Under the Service Plan, the Fund bears
(a) the costs of preparing, printing and distributing prospectuses and
statements of additional information used for other purposes and (b) the costs
associated with implementing and operating the Service Plan (such as costs of
printing and mailing service agreements), the aggregate of such amounts not to
exceed in any fiscal year of the Fund the greater of $100,000 or .005 of 1% of
the value of the Fund's average daily net assets for such fiscal year. Each item
for which a payment may be made under the Service Plan may constitute an expense
of distributing Fund shares as the Securities and Exchange Commission construes
such term under Rule 12b-1.
Expenses under the Service Plan may be carried forward from one year
to another to the extent they remain unpaid. All or part of any such amount will
be paid at such time, if ever, as the Board of Trustees determines to pay it.
The Fund will not be charged for interest, carrying or other finance charges on
any unreimbursed distribution or other expense incurred and not paid in a prior
year.
Servicing may include, among other things, one or more of the
following: answering client inquiries regarding the Fund; assisting clients in
changing dividend options, account designations and addresses; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing purchase and redemption transactions; investing client cash account
balances automatically in Fund shares; providing periodic statements showing a
client's account balance and integrating such statements with those of other
transactions and balances in the client's other accounts serviced by the Service
Agent; arranging for bank wires; and such other services as the Fund may
request, to the extent the Service Agent is permitted by applicable statute,
rule or regulation.
The Glass-Steagall Act and other applicable laws prohibit Federally
chartered or supervised banks from engaging in certain aspects of the business
of issuing, underwriting, selling
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and/or distributing securities. Accordingly, banks will be engaged to act as
Service Agents only to perform administrative and shareholder servicing
functions. While the matter is not free from doubt, the Fund's Board of Trustees
believes that such laws should not preclude a bank from acting as a Service
Agent. However, judicial or administrative decisions or interpretations of such
laws, as well as changes in either Federal or state statutes or regulations
relating to the permissible activities of banks or their subsidiaries or
affiliates, could prevent a bank from continuing to perform all or a part of its
Servicing activities. If a bank were prohibited from so acting, its shareholder
clients would be permitted to remain Fund shareholders and alternative means for
continuing the Servicing of such shareholders would be sought. In such event,
changes in the operation of the Fund might occur and shareholders serviced by
such bank might no longer be able to avail themselves of any automatic
investment or other services then being provided by such bank. The Fund does not
expect that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences.
Dividends, Distributions
and Taxes
The Fund ordinarily declares dividends from net investment income on each day
the New York Stock Exchange is open for business, except on Martin Luther King,
Jr. Day, Columbus Day and Veterans Day. Dividends usually are paid on the last
calendar day of each month, and are automatically reinvested in additional Fund
shares unless the investor elects payment in cash, or the investor's customer
arrangement with the Manager or a Service Agent provides for payment in cash.
Fund shares begin earning income dividends on the day the purchase order is
effective. The Fund's earnings for Saturdays, Sundays and holdays are declared
as dividends on the preceding business day. If an investor redeems all shares in
his account at any time during the month, all dividends to which the investor is
entitled are paid along with the proceeds of the redemption. Distributions from
net realized securities gains, if any, generally are declared and paid once a
year, but the Fund may make
The Fund declares dividends from net invetment income on each business day.
Dividends are usually paid on the last day of each month.
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distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital loss carryovers,
if any, have been utilized or have expired. Investors may choose whether to
receive distributions in cash or to reinvest in additional Fund shares at net
asset value. All expenses are accrued daily and deducted before declaration of
dividends to investors.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends paid by the Fund will not be subject to Federal
income tax. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and all or a
portion of gains realized from the sale or other disposition of certain market
discount bonds, are taxable as ordinary income whether or not reinvested. No
dividend paid by the Fund will qualify for the dividends received deduction
allowable to certain U.S. corporations. Distributions from net realized long-
term securities gains of the Fund generally are taxable as long-term capital
gains for Federal income tax purposes, if you are a citizen or resident of the
United States. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of 28%.
Under the Code, interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest dividends is not
deductible. Dividends and distributions may be subject to state and local taxes.
Substantially all dividends derived from Municipal Obligations are not subject
to Federal income tax. However, certain types of income dividends may not be tax
exempt.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private activity
bonds, the interest from which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted current earnings"
preference item for purposes of the corporate alternative minimum tax as well as
a component in computing the corporate environmental tax or (iii) a factor in
determining the extent to which a shareholder's Social Security benefits are
taxable. If the Fund purchases such securities, the portion of the Fund's
dividends related thereto will not necessarily be tax
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exempt to an investor who is subject to the alternative minimum tax and/or tax
on Social Security benefits and may cause an investor to be subject to such
taxes.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a portion
of gains realized from the sale or other dispositions of certain market discount
bonds, paid by the Fund to a foreign investor, generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the foreign investor
claims the benefit of a lower rate specified in a tax treaty. Distributions from
net realized long-term securities gains paid by the Fund to a foreign investor
generally will not be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below, unless
the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of an investor's dividends and
distributions will be mailed to such investor annually. Each investor also will
receive periodic summaries of his account which will include information as to
dividends and distributions from securities gains, if any, paid during the year.
These statements set forth the dollar amount of income exempt from Federal tax
and the dollar amount, if any, subject to Federal tax. These dollar amounts will
vary depending on the size and length of time of the investor's investment in
the Fund. If the Fund pays dividends derived from taxable income, it intends to
designate as taxable the same percentage of the day's dividend as the actual
taxable income earned on that day bears to total income earned on that day.
Thus, the percentage of the dividend designated as taxable, if any, may vary
from day to day.
Notice as to the tax status of your dividends and distributions will be mailed
to you each year. You'll also receive regular summaries of your account.
Federal regulations generally require the Fund to with31% of taxable
dividends and distributions from net realized securities gains of the Fund paid
to a shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may notify
the Fund to institute backup withholding if the IRS determines a
If you have not furnished us with a correct
Taxpayer Identification Number, you may be subject to tax
withholding of 31% of all taxable dividends and distributions.
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shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the record
owner of the account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended December 31, 1993 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is in
the best interests of its shareholders. Such qualification relieves the Fund of
any liability for Federal income tax to the extent its earnings are distributed
in accordance with applicable provisions of the Code. The Fund is subject to a
non-deductible 4% excise tax, measured with respect to certain undistributed
amounts of taxable investment income and capital gains.
Consult your tax adviser regarding specific questions about Federal, state or
local taxes.
Each investor should consult his tax adviser regarding specific
questions as to Federal, state or local taxes.
General Information
The Fund was organized as an unincorporated business trust under the laws of the
Commonwealth of Massachusetts pursuant to an Agreement and Declaration of Trust
(the "Trust Agreement") dated October 8, 1985, and commenced operations on
February 5, 1986. Effective February 1, 1994, the Fund's name was changed from
First Prairie Tax Exempt Money Market Fund to First Prairie Municipal Money
Market Fund. The Fund is authorized to issue an unlimited number of shares of
beneficial interest, par value $.01 per share. Each share has one vote.
On February 19, 1993, Fund shareholders voted to (a) approve a
Management Agreement between the Fund and the Manager to replace the Prior
Advisory Agreement and the Prior Administration Agreement; and (b) change
certain of the Fund's fundamental policies and investment restrictions, among
other things, to (i) increase the amount the Fund may borrow for temporary or
emergency purposes from 10% to
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15% of the Fund's total assets, (ii) increase the amount of the Fund's assets
which it may pledge to the extent necessary to secure such borrowings and make
such policy non-fundamental, (iii) permit the Fund to invest up to 10% of its
net assets in illiquid securities and make such policy non-fundamental and (iv)
permit the Fund to lend its portfolio securities in an amount not to exceed
33 1/3% of the value of the Fund's total assets.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Fund or
a Trustee. The Trust Agreement provides for indemnification from the Fund's
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Fund. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund itself would be unable to meet its obligations, a possibility
which management believes is remote. Upon payment of any liability incurred by
the Fund, the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Trustees intend to
conduct the operations of the Fund in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities of the Fund. As
discussed under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings; however,
shareholders under certain circumstances may have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each investor's ownership and
sends confirmations and statements of account.
Investor inquiries may be made to the investor's Service Agent,
including the Manager, or by writing to the Fund at the address shown on the
front cover or by calling the appropriate telephone number.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.
PAGE 44
__________________________________________________________________________
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 29, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of First Prairie Municipal Money Market Fund (the "Fund"), dated April 29,
1994, as it may be revised from time to time. To obtain a copy of the
Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call toll free 1-800-346-
3621.
The First National Bank of Chicago (the "Manager") serves as the
Fund's investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of The Dreyfus Corporation ("Dreyfus"), is the distributor of
the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . B-8
Management Agreement . . . . . . . . . . . . . . . . . . . . B-11
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . B-13
Service Plan . . . . . . . . . . . . . . . . . . . . . . . . B-14
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . B-15
Shareholder Services . . . . . . . . . . . . . . . . . . . . B-17
Determination of Net Asset Value . . . . . . . . . . . . . . B-19
Dividends, Distributions and Taxes . . . . . . . . . . . . . B-20
Yield Information. . . . . . . . . . . . . . . . . . . . . . B-20
Portfolio Transactions . . . . . . . . . . . . . . . . . . . B-21
Information About the Fund . . . . . . . . . . . . . . . . . B-22
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . . . B-22
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . B-24
Financial Statements . . . . . . . . . . . . . . . . . . . . B-32
Report of Independent Auditors . . . . . . . . . . . . . . . B-40
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The distribution of investments (at value) in Municipal Obligations
by ratings for the fiscal year ended December 31, 1993, computed on a
monthly basis, was as follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. or Service, Inc. or Corporation Percentage
("Fitch") ("Moody's") ("S&P") of Value
VMIG 1\MIG1, SP-1+\SP-1,
F-1+\F-1 P-1 A1+/A1 87.1%
AAA/AA Aaa/Aa AAA/AA 1.4%
Not Rated Not Rated Not Rated 11.5%
------
100.0%
======
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity or sewage or solid waste disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of 13 months,
but which permit the holder to demand payment of principal at any time, or
at specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
Municipal lease/purchase agreements take the form of a lease for
accounting purposes but are considered installment purchase contracts
issued by state or local governmental authorities to obtain funds to
acquire a wide variety of equipment and facilities such as fire and
sanitation vehicles, computer equipment and other capital assets. These
obligations make it possible for state or local governmental authorities
to acquire property and equipment without being required to meet
constitutional and statutory requirements for the issuance of debt. Thus,
municipal leases have special risks not ordinarily associated with
Municipal Obligations. These obligations frequently contain
"non-appropriation" clauses that provide that the governmental issuer of
the obligation has no obligation to make future payments under the lease
or contract unless money is appropriated for such purposes by the
legislative body on a yearly or other periodic basis. However, such
instruments typically contain a "non-substitution" clause which prohibits
the municipality from substituting other assets for those underlying the
obligation. Although the obligations will be secured by the financed
equipment, the disposition of the equipment in the event of foreclosure
might prove difficult. The Fund will seek to minimize these risks by
investing only in those municipal lease obligations that (1) are rated in
one of the two highest rating categories for debt obligations by at least
two nationally recognized statistical rating organizations (or one rating
organization if the obligation was rated only by one such organization) or
(2) if unrated, are purchased principally from the issuer or domestic
banks or other responsible third parties, in each case only if the seller
shall have entered into an agreement with the Fund providing that the
seller or other responsible third party will either remarket or repurchase
the lease obligation within a short period after demand by the Fund. The
staff of the Securities and Exchange Commission currently considers
certain municipal lease obligations to be illiquid. Accordingly, not more
than 10% of the value of the Fund's net assets will be invested in
municipal lease obligations that are illiquid and in other illiquid
securities. See "Investment Restriction No. 12" below.
For the purpose of diversification under the Investment Company Act
of 1940, as amended (the "Act"), the identification of the issuer of
Municipal Obligations depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the
non-governmental user, then such non-governmental user would be deemed to
be the sole issuer. If, however, in either case, the creating government
or some other entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue of such
government or other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, including fees paid under the Fund's Service Plan, will have the
effect of reducing the yield to investors.
The Fund will not purchase tender option bonds unless (a) the demand
feature applicable thereto is exercisable by the Fund within 13 months of
the date of such purchase upon no more than 30 days' notice and thereafter
is exercisable by the Fund no less frequently than annually upon no more
than 30 days' notice and (b) at the time of such purchase, the Manager
reasonably expects (i) based upon its assessment of current and historical
interest rate trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal Obligations at
the time of the next tender fee adjustment, and (ii) that the
circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. At the time of each tender opportunity, the Fund will
exercise the tender option with respect to any tender option bonds unless
the Manager reasonably expects, (x) based upon its assessment of current
and historical interest rate trends, that short-term tax exempt rates will
not exceed the stated interest rate on the underlying Municipal
Obligations at the time of the next tender fee adjustment, and (y) that
the circumstances which might entitle the grantor of a tender option to
terminate the tender option would not occur prior to the time of the next
tender opportunity. The Fund will exercise the tender feature with
respect to tender option bonds, or otherwise dispose of its tender option
bonds, prior to the time the tender option is scheduled to expire pursuant
to the terms of the agreement under which the tender option is granted.
The Fund otherwise will comply with the provisions of Rule 2a-7 in
connection with the purchase of tender option bonds, including, without
limitation, the requisite determination that the tender option bonds in
question meet the quality standards described in Rule 2a-7, which, in the
case of a tender option bond subject to a conditional demand feature,
would include a determination that the security has received both the
required short-term and long-term quality rating or is determined to be of
comparable quality. In the event of a default of the Municipal Obligation
underlying a tender option bond, or the termination of the tender option
agreement, the Fund would look to the maturity date of the underlying
security for purposes of compliance with Rule 2a-7 and, if its remaining
maturity was greater than 13 months, the Fund would sell the security as
soon as would be practicable. The Fund will purchase tender option bonds
only when it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not adversely
affect the tax exempt status of the underlying Municipal Obligations and
that payment of any tender fees will not have the effect of creating
taxable income for the Fund. Based on the tender option bond agreement,
the Fund expects to be able to value the tender option bond at par;
however, the value of the instrument will be monitored to assure that it
is valued at fair value.
Ratings of Municipal Obligations. If, subsequent to its purchase by
the Fund, (a) an issue of rated Municipal Obligations ceases to be rated
in the highest rating category by at least two rating organizations (or
one rating organization if the instrument was rated by only one such
organization) or the Fund's Board determines that it is no longer of
comparable quality or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly whether
such security presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the Fund and its
shareholders; provided that the reassessment required by clause (b) is not
required if the portfolio security is disposed of or matures within five
business days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P, Fitch or IBCA
for Municipal Obligations may change as a result of changes in such
organizations or their rating systems, the Fund will attempt to use
comparable ratings as standards for its investments in accordance with the
investment policies contained in the Fund's Prospectus and this Statement
of Additional Information. The ratings of Moody's, S&P, Fitch and IBCA
represent their opinions as to the quality of the Municipal Obligations
which they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for selection
of portfolio investments, the Manager also will evaluate these securities
and the creditworthiness of the issuers of such securities.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral.
For the purposes of this policy, the Fund considers collateral consisting
of U.S. Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by the Fund to be
the equivalent of cash. Such loans may not exceed 33 1/3% of the value of
the Fund's total assets. From time to time, the Fund may return to the
borrower and/or a third party, which is unaffiliated with the Fund, and
which is acting as a "placing broker," a part of the interest earned from
the investment of collateral received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value
of the securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks,
by the right of the issuer to borrow from the U.S. Treasury; others, such
as those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Interest may fluctuate based on generally
recognized reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will
always do so, since it is not so obligated by law. The Fund will invest
in such securities only when it is satisfied that the credit risk with
respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of $1 billion. Time
deposits which may be held by the Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
or sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the Securities and
Exchange Commission to be loans by the Fund. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, the Fund will enter
into repurchase agreements only with domestic banks with total assets in
excess of $1 billion or primary government securities dealers reporting to
the Federal Reserve Bank of New York, with respect to securities of the
type in which the Fund may invest, and will require that additional
securities be deposited with it if the value of the securities purchased
should decrease below resale price. The Manager will monitor on an
ongoing basis the value of the collateral to assure that it always equals
or exceeds the repurchase price. Certain costs may be incurred by the
Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited. The Fund will consider on an ongoing basis the creditworthiness
of the institutions with which it enters into repurchase agreements.
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 8 as fundamental policies. These
restrictions cannot be changed without approval by the holders of a
majority (as defined in the Act) of the Fund's outstanding voting shares.
Investment restrictions numbered 9 through 13 are not fundamental policies
and may be changed by a vote of a majority of the Trustees at any time.
The Fund may not:
1. Invest more than 5% of its assets in the obligations of any
single issuer, except that up to 25% of the value of the Fund's total
assets may be invested, and securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities may be purchased for
temporary defensive purposes, without regard to any such limitation.
2. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by banks and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
3. Borrow money, except from banks (other than the Manager or its
affiliates) for temporary or emergency (not leveraging) purposes in an
amount up to 15% of the value of the Fund's total assets (including the
amount borrowed) based on the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made.
While borrowings exceed 5% of the value of the Fund's total assets, the
Fund will not make any additional investments.
4. Purchase or sell real estate, commodities or commodities
contracts, or oil and gas interests, but this shall not prevent the Fund
from investing in Municipal Obligations secured by real estate or
interests therein.
5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take
advantage of the lower purchase price available, and except to the extent
the Fund may be deemed an underwriter under the Securities Act of 1933, as
amended, by virtue of disposing of portfolio securities.
6. Make loans to others except through the purchase of debt
obligations and the entry into repurchase agreements; however, the Fund
may lend its portfolio securities in an amount not to exceed 33 1/3% of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board of Trustees.
7. Issue any senior security (as such term is defined in Section
18(f) of the Act), except to the extent that the activities permitted in
Investment Restriction Nos. 3 and 11 may be deemed to give rise to a
senior security.
8. Sell securities short or purchase securities on margin.
9. Purchase securities other than Municipal Obligations and Taxable
Investments.
10. Invest in securities of other investment companies, except to
the extent permitted under the Act.
11. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery basis.
12. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid (which securities could include participation interests
(including municipal lease/purchase agreements) that are not subject to
the demand feature described in the Fund's Prospectus and floating and
variable rate demand obligations as to which the Fund cannot exercise the
demand feature described in the Fund's Prospectus on less than seven days'
notice and as to which there is no secondary market) if, in the aggregate,
more than 10% of its net assets would be so invested.
13. Invest in companies for the purpose of exercising control.
While not a fundamental policy, the Fund will not invest in oil, gas
or other mineral leases, or real estate limited partnerships.
Notwithstanding any of the foregoing Investment Restrictions, the
Fund reserves the right to enter into interest rate futures contracts, and
municipal bond index futures contracts, and any options that may be
offered in respect thereof, subject to the restrictions then in effect of
the Securities and Exchange Commission and the Commodity Futures Trading
Commission and to the receipt or taking, as the case may be, of
appropriate consents, approvals and other actions from or by those regula-
tory bodies. In any event, no such contracts or options will be entered
into until a general description of the terms thereof is set forth in a
subsequent prospectus and statement of additional information, and a
registration statement with respect thereto has been filed with and
declared effective by the Securities and Exchange Commission.
For purposes of Investment Restriction No. 2, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry."
If a percentage restriction is adhered to at the time of investment,
a later increase in percentage resulting from a change in values or assets
will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. The Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees and Officers of the Fund
*JOSEPH S. DiMARTINO, President and Trustee. President, Chief Operating
Officer and a Director of Dreyfus, Executive Vice President and a
Director of the Distributor and an officer, director or trustee of
other investment companies advised or administered by Dreyfus. He is
also a Director of Noel Group, Inc., Director and Corporate Member of
The Muscular Dystrophy Association and a Trustee of Bucknell
University. His address is 200 Park Avenue, New York, New York
10166.
JOHN P. GOULD, Trustee. Distinguished Service Professor of Economics of
the University of Chicago Graduate School of Business. Since 1988, a
Director of Vulcan Materials Company, a chemicals manufacturer and
producer of construction aggregates. Since 1986, Director of
Argonne-Chicago Development Corporation, an affiliate of, and the
entity responsible for commercializing the technology of, both the
University of Chicago and Argonne National Laboratory. Since 1986,
Dean Gould also has served as a Director of DFA Investment Dimensions
Group, a series mutual fund. From 1983 to 1993, Dean of the
University of Chicago Graduate School of Business. His address is
1101 East 58th Street, Chicago, Illinois 60637.
RAYMOND D. ODDI, Trustee. Private consultant. A Director of Caremark
International, Inc. and Medisense, Inc., companies in the health care
industry and Baxter Credit Union. From 1978 to 1986, Senior Vice
President of Baxter International, Inc., a company engaged in the
production of medical care products. He also is a member of the
Illinois Society of Certified Public Accountants. His address is
1181 Loch Lane, Lake Forest, Illinois 60045.
Each of the "non-interested" Trustees also is a trustee of First
Prairie Cash Management, First Prairie Diversified Asset Fund, First
Prairie Money Market Fund, First Prairie U.S. Government Income Fund and
First Prairie U.S. Treasury Securities Cash Management and a director of
First Prairie Municipal Bond Fund.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
Manager or Dreyfus or any affiliate of either of them, which totalled
$9,247 for the fiscal year ended December 31, 1993 for all such Trustees
as a group.
Trustees were elected at the meeting of shareholders held on
September 28, 1987. No further shareholder meetings will be held for the
purpose of electing Trustees unless and until such time as less than a
majority of the Trustees holding office have been elected by shareholders,
at which time the Trustees then in office will call a shareholders'
meeting for the election of Trustees. Under the Act, shareholders of
record of not less than two-thirds of the outstanding shares of the Fund
may remove a Trustee through a declaration in writing or by vote cast in
person or by proxy at a meeting called for that purpose. Under the Fund's
Agreement and Declaration of Trust, the Trustees are required to call a
meeting of shareholders for the purpose of voting upon the question of
removal of any such Trustee when requested in writing to do so by the
shareholders of record of not less than 10% of the Fund's outstanding
shares.
For so long as the Fund's plan described in the section captioned
"Service Plan" remains in effect, the Trustees of the Fund who are not
"interested persons" of the Fund, as defined in the Act, will be selected
and nominated by the Trustees who are not "interested persons" of the
Fund.
Officers of the Fund Not Listed Above
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
Dreyfus, Secretary of the Distributor and an officer of other
investment companies advised or administered by Dreyfus.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President-Mutual Fund
Accounting of Dreyfus and an officer of other investment companies
advised or administered by Dreyfus.
JOHN J. PYBURN, Treasurer. Assistant Vice President of Dreyfus and an
officer of other investment companies advised or administered by
Dreyfus.
PAUL T. MOLLOY, Controller. Senior Accounting Manager of the Fund
Accounting Department of Dreyfus and an officer of other investment
companies advised or administered by Dreyfus.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of
Dreyfus and an officer of other investment companies advised or
administered by Dreyfus.
ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General Counsel
of Dreyfus and an officer of other investment companies advised or
administered by Dreyfus.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of Dreyfus,
the Distributor and other investment companies advised or
administered by Dreyfus.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on February 9, 1994.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
Management Agreement. The Manager provides management services to
the Fund pursuant to the Management Agreement (the "Management Agreement")
dated April 30, 1993 with the Fund, which is subject to annual approval by
(i) the Fund's Board of Trustees or (ii) vote of a majority (as defined in
the Act) of the outstanding voting securities of the Fund, provided that
in either event the continuance also is approved by a majority of the
Trustees who are not "interested persons" (as defined in the Act) of the
Fund or the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval. Shareholders last approved the
Management Agreement on February 19, 1993 and the Board of Trustees,
including a majority of the Trustees who are not "interested persons" of
any party to the Management Agreement last voted to renew the Management
Agreement, at a meeting held on December 10, 1993. The Management
Agreement is terminable without penalty, on not more than 60 days' notice,
by the Fund's Board of Trustees or by vote of the holders of a majority of
the Fund's shares or, upon not less than 90 days' notice, by the Manager.
The Management Agreement will terminate automatically in the event of its
assignment (as defined in the Act).
The Manager is responsible for the Fund's investment decisions and
manages the Fund's portfolio of investments in accordance with the stated
policies of the Fund, subject to the approval of the Fund's Board of
Trustees. All purchases and sales are reported for the Trustees' review
at the meeting subsequent to such transactions.
The Manager pays the salaries of all officers and employees employed
by both it and the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
The Manager has engaged Dreyfus to assist it in providing certain
administrative services to the Fund. Pursuant to its agreement with the
Manager, Dreyfus furnishes the Fund clerical help and accounting, data
processing, bookkeeping, internal auditing and legal services and certain
other services required by the Fund, prepares reports to the Fund's
shareholders, tax returns, reports to and filings with the Securities and
Exchange Commission and state Blue Sky authorities, calculates the net
asset value of the Fund's shares and generally assists the Manager in
providing for all aspects of the Fund's operation, other than providing
investment advice. The fees payable to Dreyfus for its services are paid
by the Manager.
The Fund has agreed that the Manager will not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which the Manager's agreement with the Fund
relates, except for a loss resulting from wilful misfeasance, bad faith or
gross negligence on the part of the Manager in the performance of its
obligations or from reckless disregard by it of its obligations and duties
under its agreement with the Fund.
As compensation for the Manager's services to the Fund, the Fund has
agreed to pay the Manager a monthly management fee at the annual rate of
.55 of 1% of the value of the Fund's average daily net assets. Prior to
April 30, 1993, the Manager provided investment advisory services to the
Fund pursuant to an Investment Advisory Agreement (the "Prior Advisory
Agreement") with the Fund dated December 16, 1985 and Dreyfus provided
administration services to the Fund pursuant to an Administration
Agreement (the "Prior Administration Agreement") with the Fund dated
December 16, 1985. Pursuant to the Prior Advisory Agreement, the Fund
agreed to pay the Manager an advisory fee at the annual rate of .40 of 1%
of the value of the Fund's average daily net assets. Pursuant to the
Prior Administration Agreement, the Fund agreed to pay Dreyfus an
administration fee at the annual rate of .20 of 1% of the value of the
Fund's average daily net assets. Pursuant to the Prior Advisory
Agreement, the fees payable to the Manager for the fiscal years ended
December 31, 1991 and December 31, 1992 and for the period January 1, 1993
through April 29, 1993 were $878,703, $914,834, and $266,582,
respectively. For the period from April 30, 1993 (effective date of
Management Agreement) through December 31, 1993, the fee payable to the
Manager pursuant to the Management Agreement was $699,072. For the fiscal
years ended December 31, 1992 and 1993, the fees payable to the Manager
were reduced pursuant to undertakings in effect resulting in net fees paid
of $895,911 in fiscal 1992 and $647,661 in fiscal 1993. The fees paid to
Dreyfus pursuant to the Prior Administration Agreement for the fiscal
years ended December 31, 1991 and 1992 and for the period January 1, 1993
through April 29, 1993 were $439,352, $457,417 and $133,291, respectively.
Expenses and Expense Information. All expenses incurred in the
operation of the Fund are borne by the Fund, except to the extent
specifically assumed by the Manager. The expenses borne by the Fund
include the following: taxes, interest, brokerage fees and commissions, if
any, fees of Trustees who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of the Manager
or Dreyfus, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
maintaining the Fund's existence, costs of independent pricing services,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
meetings, and any extraordinary expenses. The Fund bears certain
advertising, marketing and Servicing expenses in accordance with the
Fund's Service Plan and also bears costs of preparing, printing and
distributing certain prospectuses and statements of additional information
and costs associated with implementing and operating such plan. See
"Service Plan."
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund (including management fees, but excluding taxes,
brokerage, interest on borrowings and, with the prior written consent of
the necessary state securities commissions, extraordinary expenses) exceed
the expense limitation of any state having jurisdiction over the Fund, the
Fund may deduct from the fees to be paid to the Manager, or the Manager
will bear, such excess expense, to the extent required by state law. Such
deduction or payment, if any, will be estimated daily and reconciled and
effected or paid, as the case may be, on a monthly basis.
The fee payable to the Manager is not subject to reduction as the
value of the Fund's net assets increases.
Glass-Steagall Act. For an additional discussion of the
Glass-Steagall Act in connection with the Fund's operations, see the
Fund's Prospectus.
From time to time, legislation has been introduced and may be
reintroduced in Congress, which would permit a bank, a bank holding
company or a subsidiary thereof to organize, sponsor, control and
distribute shares of an investment company such as the Fund,
notwithstanding present restrictions under the Glass-Steagall Act and the
Federal Bank Holding Company Act of 1956. As described herein, the Fund
is currently distributed by the Distributor, and Dreyfus, its parent,
sponsors the Fund and provides it with administrative services. If
current restrictions preventing a bank from legally sponsoring,
organizing, controlling or distributing shares of an investment company
were relaxed, the Fund expects that the Manager would consider the
possibility of offering to perform some or all of the services now
provided by Dreyfus or the Distributor. It is not possible, of course, to
predict whether or in what form such legislation might be enacted or the
terms upon which the Manager might offer to provide services.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the First Prairie Family
of Funds, the funds in the Dreyfus Family of Funds and certain other
investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or
the Fund may attempt to notify the investor upon receipt of checks drawn
on banks that are not members of the Federal Reserve System as to the
possible delay in conversion into Federal Funds and may attempt to arrange
for a better means of transmitting the money. If the investor is a
customer of a securities dealer, bank or other financial institution and
his order to purchase Fund shares is paid for other than in Federal Funds,
the securities dealer, bank or other financial institution, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer order. The order is effective only when so converted and
received by the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with sufficient Federal Funds or cash balance in his
brokerage account with a securities dealer, bank or other financial
institution will become effective on the day that the order, including
Federal Funds, is received by the Transfer Agent.
TeleTransfer Privilege. TeleTransfer purchase orders may be made
between the hours of 8:00 a.m. and 4:00 p.m., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open, except Martin Luther King, Jr. Day, Columbus Day and Veterans Day.
Such purchases will be credited to the shareholder's Fund account on the
next bank business day. To qualify to use the TeleTransfer Privilege, the
initial payment for purchase of Fund shares must be drawn on, and
redemption proceeds paid to, the same bank and account as are designated
on the Account Application or Shareholder Services Form on file. If the
proceeds of a particular redemption are to be wired to an account at any
other bank, the request must be in writing and signature-guaranteed. See
"Redemption of Fund Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
SERVICE PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the Act, provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a
plan adopted in accordance with the Rule. Because some or all of the fees
paid for advertising or marketing the Fund's shares and the fees paid to
certain financial institutions (which may include banks), securities
dealers and other industry professionals (collectively, "Service Agents")
could be deemed to be payment of distribution expenses, the Fund's Board
of Trustees has adopted such a plan (the "Plan"). The Fund's Board of
Trustees believes that there is a reasonable likelihood that the Plan will
benefit the Fund and its shareholders. In some states, banks or other
financial institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board of Trustees for its review. In addition, the Plan provides that it
may not be amended to increase materially the costs which the Fund may
bear for distribution pursuant to the Plan without shareholder approval
and that other material amendments of the Plan must be approved by the
Board of Trustees, and by the Trustees who are not "interested persons"
(as defined in the Act) of the Fund and have no direct or indirect
financial interest in the operation of the Plan or in the related service
agreements, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan and the related service agreements
are subject to annual approval by such vote of the Trustees cast in person
at a meeting called for the purpose of voting on the Plan. The Plan was
so approved by the Board of Trustees at a meeting held on December 10,
1993. The Plan may be terminated at any time by vote of a majority of the
Trustees who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Plan or in any of the related
service agreements or by vote of a majority of the Fund's shares. Any
service agreement may be terminated without penalty, at any time, by such
vote of the Trustees or, upon not more than 60 days' written notice to the
Service Agent, by vote of the holders of a majority of the Fund's shares.
Each service agreement will terminate automatically in the event of its
assignment (as defined in the Act).
During the fiscal year ended December 31, 1993, an aggregate of
$484,374 was charged to the Fund under the Plan, of which $387,499 was
paid to the Manager and its affiliates, $9,092 was paid for preparing,
printing and distributing prospectuses and operating the Plan, and $96,875
was charged for advertising, marketing and Servicing the Fund's shares.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only
to the registered owner(s) of the account and only to the address of
record. The Account Application or later written request must be manually
signed by the registered owner(s). Checks may be made payable to the
order of any person in an amount of $500 or more. When a Check is
presented to the Transfer Agent for payment, the Transfer Agent, as the
investor's agent, will cause the Fund to redeem a sufficient number of
full or fractional shares in the investor's account to cover the amount of
the Check. Dividends are earned until the Check clears. After clearance,
a copy of the Check will be returned to the investor. Investors generally
will be subject to the same rules and regulations that apply to checking
accounts, although election of this Privilege creates only a
shareholder-transfer agent relationship with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the same business day if the Transfer Agent receives the redemption
request in proper form prior to Noon on such day; otherwise the Fund will
initiate payment on the next business day. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder
Services Form. Redemption proceeds, if wired, must be in the amount of
$1,000 or more and will be wired to the investor's account at the bank of
record designated in the investor's file at the Transfer Agent, if the
investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmission:
Transfer Agent's
Transmittal Code Answer Back Sign
---------------- ----------------
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator toll free at
1-800-654-7171. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Signatures."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption
will be effected as a TeleTransfer transaction through the Automated
Clearing House ("ACH") system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in the investor's
account at an ACH member bank ordinarily two business days after receipt
of the redemption request. See "Purchase of Fund Shares--TeleTransfer
Privilege."
Signatures. Written redemption requests must be signed by the
individual shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. Guarantees must be signed by an authorized signatory
of the guarantor and "Signature-Guaranteed" must appear with the
signature. The Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians, and may
accept other suitable verification arrangements from foreign investors,
such as consular verification. For more information with respect to
signature-guarantees, please call the telephone number listed on the
cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In such event,
the securities would be valued in the same manner as the Fund's portfolio
is valued. If the recipient sold such securities, brokerage charges would
be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Exchange Privilege. The Exchange Privilege permits investors to
purchase, in exchange for all or part of their shares of the Fund, shares
of certain other funds advised by the Manager or shares of certain funds
advised by Dreyfus, on the basis of relative net asset value per share at
the time of the exchange, as follows:
A. Exchanges for shares of any funds that are offered without a'
sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased
Shares (at the time the Purchased Shares were acquired), without
giving effect to any reduced loads, the difference will be
deducted.
To accomplish an exchange under item D above, an investor must notify
the Transfer Agent of his prior ownership of fund shares and his account
number.
To use this Privilege, an investor or the investor's Service Agent
acting on the investor's behalf must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. Telephone exchanges
may be made only if the appropriate "YES" box has been checked on the
Account Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on telephonic, telegraphic or written
exchange instructions from any person representing himself or herself to
be the investor or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted.
Auto-Exchange Privilege. Auto-Exchange permits an investor to
purchase, in exchange for shares of the Fund, shares of certain other
funds in the First Prairie Family of Funds or certain other funds advised
by Dreyfus. This Privilege is available only for existing accounts.
Shares will be exchanged on the basis of relative net asset value as
described above under "Exchange Privilege." Enrollment in or modification
or cancellation of this Privilege is effective three business days
following notification by the investor. An investor will be notified if
his account falls below the amount designated to be exchanged under this
Privilege. In this case, an investor's account will fall to zero unless
additional investments are made in excess of the designated amount prior
to the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA
accounts, but not from IRA accounts to regular accounts. With respect to
all other retirement accounts, exchanges may be made only among those
accounts.
The Exchange Privilege and Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Dividend Sweep Privilege. The Dividend Sweep Privilege enables
investors to invest automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund in the
First Prairie Family of Funds or certain other funds advised or
administered by Dreyfus of which the investor is a shareholder. Shares of
other funds purchased pursuant to this Privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge and the applicable contingent deferred sales charge, if
any, will be imposed upon redemption of such shares.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available from the
Distributor, the Manager, certain affiliates of the Manager or certain
Service Agents. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost, which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Trustees has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed
for the purpose of sales and redemptions at $1.00. Such procedures
include review of the Fund's portfolio holdings by the Board of Trustees,
at such intervals as it deems appropriate, to determine whether the Fund's
net asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market
quotations and market equivalents used in such review are obtained from an
independent pricing service (the "Service") approved by the Board of
Trustees. The Service values the Fund's investments based on methods
which include consideration of: yields or prices of municipal obligations
of comparable quality, coupon, maturity and type; indications of values
from dealers; and general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to determine
valuations.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees promptly will
consider what action, if any, will be initiated. In the event the Board
of Trustees determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it deems
necessary and appropriate, including: selling portfolio instruments prior
to maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations or market
equivalents.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of the
gain realized from the disposition of certain market discount bonds will
be treated as ordinary income under Section 1276 of the Internal Revenue
Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended December 31, 1993, the Fund's yield
was 2.09% and its effective yield was 2.11%. These yields reflect the
waiver of a portion of the management fee, without which the Fund's yield
and effective yield for the seven-day period ended December 31, 1993 would
have been 1.82% and 1.84%, respectively. Yield is computed in accordance
with a standardized method which involves determining the net change in
the value of a hypothetical pre-existing Fund account having a balance of
one share at the beginning of a seven calendar day period for which yield
is to be quoted, dividing the net change by the value of the account at
the beginning of the period to obtain the base period return, and
annualizing the results (i.e., multiplying the base period return by
365/7). The net change in the value of the account reflects the value of
additional shares purchased with dividends declared on the original share
and any such additional shares and fees that may be charged to shareholder
accounts, in proportion to the length of the base period and the Fund's
average account size, but does not include realized gains and losses or
unrealized appreciation and depreciation. Effective yield is computed by
adding 1 to the base period return (calculated as described above),
raising that sum to a power equal to 365 divided by 7, and subtracting 1
from the result.
Based upon a 1993 Federal tax rate of 39.60% and a yield of 2.09% for
the seven-day period ended December 31, 1993 the Fund's tax equivalent
yield for this period was 3.46%. Without the management fee waiver then
in effect, the Fund's tax equivalent for the seven-day period ended
December 31, 1993 would have been 3.01%. Tax equivalent yield is computed
by dividing that portion of the yield or effective yield (calculated as
described above) which is tax exempt by 1 minus a stated tax rate and
adding the quotient to that portion, if any, of the yield of the Fund that
is not tax exempt.
The tax equivalent yield noted above represents the application of
the highest Federal marginal personal income tax rate presently in effect.
The tax equivalent figure, however, does not include the potential effect
of any state or local (including, but not limited to, county, district or
city) taxes, including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rates or yields.
Each investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
Yields will fluctuate and are not necessarily representative of
future results. Each investor should remember that yield is a function of
the type and quality of the instruments in the portfolio, portfolio
maturity and operating expenses. An investor's principal in the Fund is
not guaranteed. See "Determination of Net Asset Value" for a discussion
of the manner in which the Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and not as representative of
the Fund's past or future performance.
From time to time, advertising for the Fund may describe the costs of
a college education at public or private institutions; how such costs may
increase over time, based on an assumed rate of growth; and how
investments in the Fund can be used to help pay for such costs.
Advertisements for the Fund also may refer to how an investment in the
Fund may be used as a savings vehicle for various purposes such as a down
payment on the purchase price of a home or to fund retirement or medical
costs. Advertisements for the Fund may also refer to comparisons of the
Fund's performance with historical rates of inflation.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities are
purchased directly from the issuer or from an underwriter; other purchases
and sales usually are placed with those dealers from which it appears that
the best price or execution will be obtained. Ordinarily, no brokerage
commissions, as such, are paid by the Fund for such purchases and sales,
although the price paid usually includes an undisclosed compensation to
the dealer acting as agent. The prices paid to underwriters of
newly-issued securities usually include a concession paid by the issuer to
the underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's
investment personnel in their best judgment. The primary consideration is
prompt and effective execution of orders at the most favorable price.
Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the Manager to
supplement its own research and analysis with the views and information of
other securities firms and may be selected based upon their sales of Fund
shares.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
or accounts it may advise and, conversely, research services furnished to
the Manager by brokers in connection with other funds or accounts the
Manager may advise may be used by the Manager in advising the Fund.
Although it is not possible to place a dollar value on these services, it
is the opinion of the Manager that the receipt and study of such services
should not reduce its overall research expenses.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders and sends statements concerning shareholder accounts monthly.
On March 15, 1989, the Fund's name was changed from First Lakeshore
Tax Exempt Money Market Fund to First Prairie Tax Exempt Money Market
Fund. On February 1, 1994, the Fund changed its name from First Prairie
Tax Exempt Money Market Fund to First Prairie Municipal Money Market Fund.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
<TABLE>
<CAPTION>
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS-100.0% AMOUNT VALUE
------------ ------------
ALABAMA-2.0%
<S> <C> <C>
Phenix Industrial Development Board, EIR, Refunding, VRDN
(Mead Coated Board Project) 4.75% (LOC; Sumitomo Bank) (a,b)............... $ 1,500,000 $ 1,500,000
Port City Medical Clinic Board of Mobile, HR, CP
2.40%, 2/1/94 (LOC: Fuji Bank and Mitsubishi Bank) (b)..................... 2,075,000 2,075,000
ARIZONA-2.8%
Maricopa County Pollution Control Corp., PCR, CP (Southern California Edison-
Paloverdi) 2.50%, 1/27/94 (Guaranteed by; Southern California Edison Co.).. 4,000,000 4,000,000
City of Mesa Municipal Development, Special Tax, CP
2.60%, 1/12/94 (LOC; Union Bank of Switzerland) (b)........................ 1,000,000 1,000,000
CALIFORNIA-3.0%
State of California, GO, RAN 3.50%, 6/28/94.................................... 1,600,000 1,604,302
Orange County, TRAN 3%, 6/30/94................................................ 3,750,000 3,759,012
COLORADO-1.9%
Regional Transportation District, Special Passenger Fare Revenue, VRDN:
3.20% (LOC; Banque Nationale de Paris) (a,b)............................... 2,000,000 2,000,000
3.30% (LOC; Bank of Tokyo) (a,b)........................................... 1,400,000 1,400,000
CONNECTICUT-1.7%
Connecticut Development Authority, PCR, VRDN (Connecticut Light and Power)
3.10% (LOC; Deutsche Bank) (a,b)........................................... 3,000,000 3,000,000
DELAWARE-1.1%
Delaware Economic Development Authority, IDR, CP (WL Gore and Associates-Barksdale)
2.60%, 2/24/94 (LOC; Morgan Guaranty Trust Co.) (b)........................ 2,000,000 2,000,000
DISTRICT OF COLUMBIA-2.9%
District of Columbia, Revenue Bonds (Supplemental Student Loan-Consern)
2.80%, 7/1/94 (LOC; Mitsubishi Bank) (b)................................... 5,065,000 5,065,000
FLORIDA-5.0%
Palm Beach County Health Facilities Authority, Revenue, Refunding, CP
(Pooled Hospital Loan Program) 2.20%, 2/15/94
(Insured; MBIA and Liquidity; Credit Suisse)............................... 2,000,000 2,000,000
Sarasota County Public Hospital District, HR, CP (Sarasota Memorial Hospital Project)
2.60%, 1/26/94 (LOC; Sumitomo Bank) (b).................................... 2,080,000 2,080,000
West Orange Memorial Hospital Tax District, Revenue, CP:
2.60%, Series A-1, 1/5/94 (LOC; Societe Generale) (b)...................... 1,100,000 1,100,000
2.35%, Series A-2, 1/6/94 (LOC; Societe Generale) (b)...................... 1,700,000 1,700,000
2.45%, Series A-2, 3/22/94 (LOC; Societe Generale) (b)..................... 2,000,000 2,000,000
GEORGIA-1.9%
Peachtree City Development Authority, Revenue, VRDN (Hoshizaki American Inc.)
3.05% (LOC; Bank of Tokyo) (a,b)........................................... 3,300,000 3,300,000
ILLINOIS-3.4%
Decatur, Water Revenue, CP (Newsouth Water Treatment)
2.30%, 3/7/94 (LOC; Sumitomo Bank) (b)..................................... 1,000,000 1,000,000
State of Illinois, GO, Notes:
3.25%, 5/16/94............................................................. 2,000,000 2,002,540
3.50%, 6/15/94............................................................. 3,000,000 3,007,277
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
INDIANA-2.9%
Indiana Development Finance Authority, Solid Waste Disposal Revenue, CP
(Pure Air On Lake Project) 2.50%, 1/5/94 (LOC; Fuji Bank) (b).............. $ 1,100,000 $ 1,100,000
Jasper County, PCR, Refunding, CP (Northern Indiana Public Service)
2.40%, 3/8/94 (LOC; Barclays Bank) (b)..................................... 4,000,000 4,000,000
KANSAS-2.8%
Burlington, PCR, Refunding, CP (Kansas City Power and Light Project)
2.30%, 2/16/94 (LOC; Deutsche Bank) (b).................................... 4,900,000 4,900,000
KENTUCKY-1.7%
Trimble County, PCR, CP 2.55%, 1/25/94 (LOC; Louisville Gas and Electric Co.) (b) 3,000,000 3,000,000
LOUISIANA-.6%
East Baton Rouge Parish, PCR, VRDN (Georgia-Pacific Corp.)
2.85% (LOC; Toronto-Dominion Bank) (a,b)................................... 1,000,000 1,000,000
MINNESOTA-1.1%
City of Rochester, Health Care Facilities, Revenue, CP
(Mayo Foundation Project) 2.45%, 3/2/94 (Guaranteed by; Mayo Foundation)... 2,000,000 2,000,000
MISSOURI-3.7%
City of Columbia, Special Obligation, VRDN 3.20% (LOC; Toronto-Dominion Bank) (a,b) 1,500,000 1,500,000
Missouri Environmental Improvement and Energy Resource Authority, PCR, CP
(Union Electric Co. Project):
2.60%, 1/5/94 (LOC; Union Bank of Switzerland) (b)..................... 1,000,000 1,000,000
2.55%, 3/10/94 (LOC; Union Bank of Switzerland) (b).................... 4,000,000 4,000,000
MONTANA-3%
City of Forsyth, PCR, VRDN (Portland General Electric)
3.40% (LOC; Banque Nationale de Paris) (a,b)............................... 5,200,000 5,200,000
NEBRASKA-.9%
Nebraska Public Power District, Revenue, CP
2.75%, 1/11/94 (LOC; Morgan Guaranty Trust) (b)............................ 1,500,000 1,500,000
NEW HAMPSHIRE-.6%
New Hampshire Business Finance Authority, PCR, Refunding, VRDN (Connecticut Power
and Light Co. Project) 3.40% (LOC; Canadian Imperial Bank of Commerce) (a,b) 1,000,000 1,000,000
NEW JERSEY-2.8%
State of New Jersey, TRAN 3%, 6/15/94.......................................... 5,000,000 5,023,521
NEW MEXICO-3.8%
Hurley, PCR, CP (Kennecott Sante Fe):
2.35%, 1/11/94 (Guaranteed by; British Petroleum).......................... 3,000,000 3,000,000
2.40%, 3/9/94 (Guaranteed by; British Petroleum)........................... 3,700,000 3,700,000
NEW YORK-1.1%
New York State Energy, Research and Development Authority, PCR Bonds
(Electric and Gas Co.) 2.85%, 10/15/94 (LOC; Union Bank of Switzerland) (b) 2,000,000 2,000,000
NORTH CAROLINA-4.7%
North Carolina Municipal Power Agency, Power System Revenue
2.50%, 2/9/94 (LOC; Industrial Bank of Japan) (b).......................... 5,000,000 5,000,000
Wake County Industrial Facilities and Pollution Control Financing Authority,
Revenue, VRDN (Carolina Power and Light Co.) 4.40% (LOC; Sumitomo Bank) (a,b) 3,200,000 3,200,000
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
Allen County, IDR, VRDN (Nickles Bakery) 3% (LOC; Society National Bank) (a,b) $ 4,200,000 $ 4,200,000
City of Bedford Heights, IDR, VRDN (Olympic Steel Inc. Project)
3% (LOC; Society National Bank) (a,b)...................................... 900,000 900,000
Village of Brooklyn Heights, IDR, VRDN (Keynote Office Centre Limited Project)
3% (LOC; Society National Bank) (a,b)...................................... 3,500,000 3,500,000
Cuyahoga County, IDR, VRDN:
(Puritas Association Project) 3% (LOC; Society National Bank) (a,b)........ 2,125,000 2,125,000
(Suburban Pavillion) 3% (LOC; Society National Bank) (a,b)................. 4,450,000 4,450,000
Hancock County, EDR, VRDN (Quality Material Equipment)
3% (LOC; Society National Bank) (a,b)...................................... 2,300,000 2,300,000
Village of Oakwood, IDR, VRDN (Oakleaf Industrial Mall Project)
3% (LOC; Society National Bank) (a,b)...................................... 1,800,000 1,800,000
Ohio Air Quality Development Authority, PCR, CP (Cleveland Electric)
2.70%, 2/1/94 (Insured; FGIC).............................................. 4,000,000 4,000,000
OKLAHOMA-1.6%
Oklahoma Industries Authority, Health Revenue, CP (Saint Anthony's Hospital Project)
2.60% 1/3/94 (LOC; Mitsubishi Bank) (a,b).................................. 2,900,000 2,900,000
OREGON-.6%
State of Oregon, EDR, VRDN (Stagg Foods Inc. Project)
3.50% (LOC; Bank of America) (a,b)......................................... 1,050,000 1,050,000
PENNSYLVANIA-7.9%
Beaver County Industrial Development Authority, PCR, Refunding, VRDN
(Duquesne-Beaver UV) 3.40% (LOC; Barclays Bank) (a,b)...................... 700,000 700,000
Carbon County Industrial Development Authority, RRR, CP (Panther Creek
Partners Project) 2.30%, 2/2/94 (LOC; National Westminster Bank) (b)....... 4,000,000 4,000,000
Emmaus General Authority, Local Government Revenue, VRDN:
3.40% (LOC; Canadian Imperial Bank of Commerce) (a,b)...................... 2,000,000 2,000,000
3.45% (LOC; Hong Kong Shanghai Banking Corp.) (a,b)........................ 3,700,000 3,700,000
Montgomery County Industrial Development Authority, IDR, VRDN
(Valley Square Association) 3.30% (LOC: Banca Nazionale del
Lavoro and Mellon Bank) (a,b).............................................. 2,500,000 2,500,000
City of Philadelphia, TRAN 3.25%, 6/15/94
(LOC; Canadian Imperial Bank of Commerce) (b).............................. 1,000,000 1,002,200
SOUTH CAROLINA-1.1%
York County, PCR, Refunding, CP (Duke Power Co. Project)
2.40%, 1/11/94 (Guaranteed by; Duke Power Co. Project)..................... 2,000,000 2,000,000
TEXAS-15.8%
Austin County Industrial Corp., IDR, CP (Travis and Williamson Counties
Combined Utilities) 2.60%, 1/24/94 (LOC; Swiss Bank Corp.) (b)............. 4,050,000 4,050,000
Capital Industrial Development Corp., PCR, VRDN (Motorola Inc. Project)
3.10% (Guaranteed by; Motorola Inc.) (a)................................... 2,100,000 2,100,000
Grapevine Industrial Development Corp., Revenue, VRDN
(Multiple Mode-American Airlines):
4.75%, Series A-3 (LOC; Sanwa Bank) (a,b).............................. 1,500,000 1,500,000
4.75%, Series A-4 (LOC; Sanwa Bank) (a,b).............................. 2,900,000 2,900,000
4.75%, Series B-2 (LOC; Sanwa Bank) (a,b).............................. 800,000 800,000
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
TEXAS (CONTINUED)
Harris County Industrial Development Corp., IDR, VRDN (Zeon Chemicals Project)
3.30% (LOC; Industrial Bank of Japan) (a,b)................................ $ 4,100,000 $ 4,100,000
North Central Health Facility Development Corp., HR, VRDN
(Presbyterian Medical Center) 4.30% (Insured; MBIA and BPA; Nations Bank) (a) 4,100,000 4,100,000
State of Texas, TRAN 3.25%, 8/31/94............................................ 4,000,000 4,013,849
Texas Health Facilities Development, Revenue, VRDN (Aces North Texas Pooled Health)
3.50% (LOC; Banque Paribas) (a,b).......................................... 4,200,000 4,200,000
UTAH-2.3%
Intermountain Power Agency, Power Supply Revenue Bonds
2.70%, 6/15/94 (SBPA; Bank of America) (b)................................. 4,000,000 4,000,000
WASHINGTON-.9%
Student Loan Finance Association of Washington, Guaranteed Student Loan Program
Revenue, VRDN (Second Series) 2.90% (LOC; Sanwa Bank) (a,b)................ 1,500,000 1,500,000
WEST VIRGINIA-.6%
Marshall County, PCR, CP (Mountaineer Carbon Co.)
2.40%, 3/9/94 (Guaranteed by; British Petroleum)........................... 1,000,000 1,000,000
WYOMING-.6%
Lincoln County, PCR, Refunding, CP (Pacificorp Project)
2.20%, 1/27/94 (LOC; Union Bank of Switzerland) (b)........................ 1,000,000 1,000,000
------------
TOTAL INVESTMENTS (cost $176,107,701).......................................... $176,107,701
============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
BPA Bond Purchase Agreement LOC Letter of Credit
CP Commercial Paper MBIA Municipal Bond Insurance Association
EDR Economic Development Revenue PCR Pollution Control Revenue
EIR Environmental Improvement Revenue RAN Revenue Anticipation Notes
FGIC Financial Guaranty Insurance Corporation RRR Resources Recovery Revenue
GO General Obligation SBPA Standby Bond Purchase Agreeement
HR Hospital Revenue TRAN Tax and Revenue Anticipation Notes
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
</TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 88.0%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 1.1
Not Rated (f) Not Rated (f) Not Rated (f) 10.9
------
100.0%
======
NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market
interest rates.
(b) Secured by letters of credit. At December 31, 1993, 70.2% of the Fund's
net assets are backed by letters of credit issued by domestic
banks, foreign banks and corporations, of which Society National Bank
provided letters of credit to 10.9% of the Fund's net assets.
(c) Fitch currently provides creditworthiness information for a limited
amount of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper
by Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings
of the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard & Poor's
have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a).............................. $176,107,701
Cash....................................................................... 1,077,961
Interest receivable........................................................ 704,194
Prepaid expenses........................................................... 60,072
------------
177,949,928
LIABILITIES:
Due to The First National Bank of Chicago.................................. $ 88,169
Due to The Dreyfus Corporation............................................. 96,875
Accrued expenses........................................................... 66,950 251,994
------------ ------------
NET ASSETS..................................................................... $177,697,934
============
REPRESENTED BY:
Paid-in capital............................................................ $177,715,005
Accumulated net realized (loss) on investments............................. (17,071)
------------
NET ASSETS at value applicable to 177,715,005 shares outstanding (unlimited
number of $.01 par value shares of Beneficial Interest authorized)......... $177,697,934
============
NET ASSET VALUE, offering and redemption price per share
($177,697,934 / 177,715,005 shares)........................................ $1.00
=====
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 4,883,738
EXPENSES:
Management fee-Note 2(a)............................................... $1,098,945
Shareholder servicing costs-Note 2(b).................................. 562,984
Professional fees...................................................... 82,390
Custodian fees......................................................... 36,925
Prospectus and shareholders' reports-Note 2(b)......................... 22,225
Registration fees...................................................... 18,465
Trustees' fees and expenses-Note 2(c).................................. 9,247
Miscellaneous.......................................................... 8,116
------------
1,839,297
Less-reduction in investment advisory fee
due to undertakings-Note 2(a)...................................... 317,993
------------
TOTAL EXPENSES................................................. 1,521,304
------------
INVESTMENT INCOME-NET.......................................................... 3,362,434
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................... (2,293)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 3,360,141
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
-----------------------------
1992 1993
------------ ------------
OPERATIONS:
<S> <C> <C>
Investment income-net...................................................... $ 5,443,268 $ 3,362,434
Net realized (loss) on investments......................................... (2,293)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 5,443,268 3,360,141
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net...................................................... (5,443,268) (3,362,434)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.............................................. 562,179,580 409,972,617
Dividends reinvested....................................................... 2,618,570 1,647,251
Cost of shares redeemed.................................................... (588,473,031) (443,919,511)
------------ ------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS......... (23,674,881) (32,299,643)
------------ ------------
TOTAL (DECREASE) IN NET ASSETS.................................... (23,674,881) (32,301,936)
------------ ------------
NET ASSETS:
Beginning of year.......................................................... 233,674,751 209,999,870
------------ ------------
End of year................................................................ $209,999,870 $177,697,934
============ ============
</TABLE>
CONDENSED FINANCIAL INFORMATION
Reference is made to pages 4 and 5 of the Fund's Prospectus dated
April 29, 1994.
See notes to financial statements.
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified open-end management investment company. The
First National Bank of Chicago ("Manager") serves as the Fund's
investment adviser. The Dreyfus Corporation ("Dreyfus") provides certain
administrative services to the Fund-see Note 2(a). Dreyfus Service
Corporation ("Distributor"), a wholly-owned subsidiary of Dreyfus, acts
as the distributor of the Fund's shares, which are sold without a sales
load.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so.
Effective February 1, 1994 the Fund changed its name from "First
Prairie Tax Exempt Money Market" to "First Prairie Municipal Money
Market."
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost,
which has been determined by the Fund's Board of Trustees to represent
the fair value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income, adjusted
for amortization of premiums and, when appropriate, discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Realized gain and loss from securities transactions are recorded on
the identified cost basis.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain, if any, are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the
Internal Revenue Code. To the extent that net realized capital gain can be
offset by capital loss carryovers, it is the policy of the Fund not to
distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax
exempt dividends, by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from all, or substantially all, Federal income
taxes.
The Fund has an unused capital loss carryover of approximately $17,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1993. If
not applied, $14,000 of the carryover expires in 1994, $1,000 expires in
1999, and $2,000 expires in 2001.
At December 31, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2-INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .55 of 1%
of the average daily value of the Fund's net assets and is payable monthly.
The Agreement further provides that if in any full fiscal year the
aggregate expenses of the Fund exclusive of taxes, brokerage, interest on
borrowings and extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over the Fund, the Fund may deduct from the
payments to be made to the Manager, or the Manager will bear such excess
to the extent required by state law. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement of
expenses in any full year that such expenses (exclusive of distribution
expenses and certain expenses as described above) exceed 2 1/2% of the
first $30 million, 2% of the next $70 million and
1 1/2% of the excess over $100 million of the average value of the Fund's
net assets in accordance with California "blue sky" regulations. However,
the Manager has undertaken from January 1, 1993 through December 19,
1993
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
to reduce the management fee paid by the Fund to the extent that the
Fund's aggregate expenses (excluding certain expenses as described above)
exceeded specified annual percentages of the Fund's average daily net
assets. The Manager has currently undertaken from December 20, 1993 to
assume all expenses of the Fund in excess of an annual rate of .65 of 1% of
the Fund's average daily net assets. The reduction in management fee,
pursuant to the undertakings, amounted to $317,993 for the year ended
December 31, 1993.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense
reimbursement would not be less than the amount required pursuant to the
Agreement.
Effective April 30, 1993 the Manager has engaged Dreyfus to assist it
in providing certain administrative services for the Fund pursuant to a
Master Administration Agreement between the Manager and Dreyfus.
Pursuant to its agreement with Dreyfus, the Manager has agreed to pay
Dreyfus for Dreyfus' services.
Prior to April 30, 1993, pursuant to an Investment Advisory Agreement
with the Manager and an Administration Agreement with Dreyfus, the
Investment Advisory Fee and the Administration Fee were computed at
annual rates of .40 of 1% and .20 of 1%, respectively, of the average daily
value of the Fund's net assets. The agreements provided that if in any full
year the aggregate expenses of the Fund (excluding certain expenses as
described above), exceeded the expense limitation of any state having
jurisdiction over the Fund, the Fund could deduct from the payments to be
made to the Manager and Dreyfus, or the Manager and Dreyfus would bear
their proportionate share of such excess to the extent required by state
law.
(B) The Fund has adopted a Service Plan (the "Plan") pursuant to which
it has agreed to pay costs and expenses in connection with advertising and
marketing shares of the Fund and payments made to one or more Service
Agents (which may include the Manager, Dreyfus and the Distributor) based
on the value of the Fund's shares owned by clients of the Service Agent.
These advertising and marketing expenses and fees of the Service Agents
may not exceed an annual rate of .25 of 1% of the Fund's average daily net
assets. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of
$100,000 or .005 of 1% of the Fund's average daily net assets for any full
year. For the year ended December 31, 1993, the Fund was charged
$493,466 pursuant to the Plan, substantially all of which was retained by
the Manager and Dreyfus.
(C) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager or Dreyfus. Each trustee who is not
an "affiliated person" receives an annual fee of $2,500 and an attendance
fee of $500 per meeting.
(D) On December 5, 1993, Dreyfus entered into an Agreement and Plan of
Merger providing for the merger of Dreyfus with a subsidiary of Mellon
Bank Corporation ("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including the receipt of certain regulatory
approvals and the approvals of the stockholders of the Manager and of
Mellon. The merger is expected to occur in mid-1994, but could occur
significantly later.
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities
of First Prairie Tax Exempt Money Market Fund, including the statement of
investments, as of December 31, 1993, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of First Prairie Tax Exempt Money Market Fund at December 31,
1993, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
February 4, 1994
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the calendar year ended
December 31, 1993 as "exempt-interest dividends" (not generally subject
to regular Federal income tax).
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
PART C. OTHER INFORMATION
--------------------------
Item 24. Financial Statements and Exhibits
- ------- ---------------------------------
(a) Financial Statements:
--------------------
Included in Part A of the Registration Statement:
Condensed Financial Information - for the period from
February 5, 1986 (commencement of operations) to December
31, 1986 and for each of the seven years in the period
ended December 31, 1993.
Included in Part B of the Registration Statement:
Statement of Investments - December 31, 1993.
Statement of Assets and Liabilities - December 31, 1993.
Statement of Operations - year ended December 31, 1993.
Statement of Changes in Net Assets - for each of the years
ended December 31, 1992 and 1993.
Notes to Financial Statements.
Report of Ernst & Young Independent Auditors, dated
February 4, 1994.
Schedule Nos. I through VII and other financial statement
information, for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are either omitted because they are not required under the
related instructions, they are inapplicable, or the required
information is presented in the financial statements or notes
which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits (continued)
- ------- ---------------------------------------------
(b) Exhibits:
--------
(1) (a) The Registrant's Agreement and Declaration of Trust, as
amended.
(b) Amendment dated March 15, 1989 to the Registrant's
Agreement and Declaration of Trust is incorporated
by reference to Exhibit (1) (b) of Post-Effective
Amendment No. 7 to the Registration Statement on
Form N-1A, filed on April 26, 1990.
(2) (a) The Registrant's By-Laws.
(4) The specimen certificate for shares issued by the
Registrant is incorporated by reference to Exhibit (4) of
Pre-Effective Amendment No. 2 to the Registration Statement
on Form N-1A, filed on December 30, 1985.
(5) The Management Agreement.
(6) (a) The Distribution Agreement, as revised, is incorporated by
reference to Exhibit (6) (a) of Post-Effective Amendment
No. 7 to the Registration Statement on Form N-1A, filed on
April 26, 1990.
(b) Forms of Service Agreements, as amended, are incorporated
by reference to Exhibit (6) (b) of Post-Effective Amendment
No. 4 to the Registration Statement on Form N-1A, filed on
April 26, 1988.
(8) (a) The Custody Agreement, as amended and restated, is
incorporated by reference to Exhibit (8) (a) of
Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A, filed on April 26, 1990.
Item 24. Financial Statements and Exhibits (continued)
- ------- ---------------------------------------------
(b) The Sub-Custodian Agreements are incorporated by reference
to Exhibit (8) (b) of Post-Effective Amendment Nos. 2, 3
and 5 to the Registration Statement on Form N-1A, filed on
April 30, 1987, April 26, 1988 and March 22, 1989,
respectively.
(10) The opinion and consent of Registrant's counsel is
incorporated by reference to Exhibit (10) of Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-1A,
filed on December 30, 1985.
(11) Consent of Independent Auditors.
(15) The Registrant's Service Plan, as revised, is incorporated
by reference to Exhibit (15) of Post-Effective Amendment
No. 7 to the Registration Statement on Form N-1A, filed on
April 26, 1990.
(16) Yield Computation Schedule.
Other Exhibits: (a) Powers of Attorney are incorporated by reference
- -------------- to Other Exhibits (a) of Post-Effective Amendment
No. 7 to the Fund's Registration Statement on
Form N-1A, filed on April 26, 1990.
(b) Registrant's Certificate of Assistant Secretary is
incorporated by reference to Other Exhibits (b) of
Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A, filed on March 22, 1989.
Item 25. Persons Controlled by or Under Common Control with Registrant
- ------- -------------------------------------------------------------
Not Applicable
Item 26. Number of Holders of Securities
- ------- -------------------------------
(1) (2)
Number of Record
Title of Class Holders as of February 9, 1994
-------------- ------------------------------
Shares of 1,898
beneficial
interest, par value
$.01
per share
Item 27. Indemnification
- ------- ---------------
Reference is made to Article VIII of the Registrant's Agreement
and Declaration of Trust, as amended, incorporated by reference
to Exhibit (1) of Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A, filed on December 30, 1985.
The application of these provisions is limited by Article 10 of
the Registrant's By-Laws incorporated by reference to Exhibit
(2) of Pre-Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on December 30, 1985 and the
following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in such 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
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement, as
amended, incorporated by reference to Exhibit (6) (a) of
Post-Effective Amendment No. 7 to the Registration Statement on
Form N-1A, filed on April 26, 1990.
Item 28. Business and Other Connections of the Manager
- ------- ---------------------------------------------
Officers and Directors of the Manager:
The Manager is a commercial bank providing a wide range of
banking and investment services.
To the knowledge of the Registrant, none of the directors or
executive officers of the Manager, except those described below,
are or have been, at any time during the past two years, engaged
in any other business, profession, vocation or employment of a
substantial nature, except that certain directors and executive
officers of the Manager also hold or have held various positions
with bank and non-bank affiliates of the Manager, including its
parent, First Chicago Corporation.
Position Principal Occupation
with the or Other Employment
Name Manager of a Substantial Nature
---- -------- -----------------------
Richard Chairman of Also serves as
L. the Board, Chairman of the Board,
Thomas Chief Execu- Chief Executive Officer
tive Officer of First Chicago
Corporation*
John H. Director Chairman of the Board
Bryan and Chief Executive
Officer, Sara Lee
Corporation*
Dean L. Director Chairman of the Board
Buntrock and Chief Executive
Officer, Waste
Management, Inc.*
Frank W. Director Honarary Chairman of
Considine the Board and Chairman
of the Executive
Committee, American
National Can Company*
James S. Director General Partner,
Crown Henry Crown and
Company (Not
Incorporated)*
______________________________________________
*Serves as a Director of First Chicago Corporation.
Donald Director Dean of the J.L.
P. Jacobs Kellogg Graduate
School of Manage-
Ment, Northwestern
University*
Charles Director Chairman of the
S. Locke Board and Chief
Executive Officer,
Morton
International, Inc.*
Richard Director Retired Chairman and
M. Morrow Chief Executive
Officer, Amoco
Corporation*
Leo F. Chief Operat- President and Chief
Mullin ing Officer Operating Officer of
First Chicago Corporation
and Chairman, American
National Corporation
Earl L. Director Principal, Earl L.
Neal Neal & Associates, a
Law Firm
James J. Director Chairman and Chief
O'Connor Executive Officer,
Commonwealth Edison
Company*
Jerry K. Director Chairman, President
Pearlman and Chief Executive
Officer, Zenith
Electronics
Corporation*
______________________________________________
*Serves as a Director of First Chicago Corporation.
Jack F. Director Chairman of the
Reichert Board, President and
Chief Executive
Officer, Brunswick
Corporation
Patrick G. Director President and Chief
Ryan Executive Officer,
Aon Corporation*
George A. Director Chairman of the
Shaefer Board, Retired, and
Director,
Caterpillar Inc.*
Adele Director President, John D.
Simmons and Catherine T.
MacAuthur Foundation
Roger W. Director Chairman of the
Stone Board, President and
Chief Executive
Officer, Stone
Container
Corporation*
David J. Vice Chairman Vice Chairman of
Vitale and Director First Chicago
Corporation*
__________________________________________________
*Serves as a Director of First Chicago Corporation
Item 28. Business and Other Connections of the Manager (continued)
- ------- ---------------------------------------------------------
Position with
Name the Manager
---- -------------
Marvin J. Alef, Jr. Executive Vice President
John W. Ballantine Executive Vice President
Jerry C. Bradshaw Executive Vice President
Sherman I. Goldberg Executive Vice President,
General Counsel and Secretary
Donald R. Hollis Executive Vice President
W.G. Jurgensen Executive Vice President
Scott P. Marks, Jr. Executive Vice President
Robert A. Rosholt Executive Vice President and
Chief Financial Officer
J. Mikesell Thomas Executive Vice President
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Money Market Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) The Dreyfus Fund Incorporated
21) Dreyfus Global Investing, Inc.
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth Opportunity Fund, Inc.
26) Dreyfus Institutional Money Market Fund
27) Dreyfus Institutional Short Term Treasury Fund
28) Dreyfus Insured Municipal Bond Fund, Inc.
29) Dreyfus Intermediate Municipal Bond Fund, Inc.
30) Dreyfus International Equity Fund, Inc.
31) Dreyfus Investors GNMA Fund, L.P.
32) The Dreyfus Leverage Fund, Inc.
33) Dreyfus Life and Annuity Index Fund, Inc.
34) Dreyfus Liquid Assets, Inc.
35) Dreyfus Massachusetts Intermediate Municipal Bond Fund
36) Dreyfus Massachusetts Municipal Money Market Fund
37) Dreyfus Massachusetts Tax Exempt Bond Fund
38) Dreyfus Michigan Municipal Money Market Fund, Inc.
39) Dreyfus Money Market Instruments, Inc.
40) Dreyfus Municipal Bond Fund, Inc.
41) Dreyfus Municipal Cash Management Plus
42) Dreyfus Municipal Money Market Fund, Inc.
43) Dreyfus New Jersey Intermediate Municipal Bond Fund
44) Dreyfus New Jersey Municipal Bond Fund, Inc.
45) Dreyfus New Jersey Municipal Money Market Fund, Inc.
46) Dreyfus New Leaders Fund, Inc.
47) Dreyfus New York Insured Tax Exempt Bond Fund
48) Dreyfus New York Municipal Cash Management
49) Dreyfus New York Tax Exempt Bond Fund, Inc.
50) Dreyfus New York Tax Exempt Intermediate Bond Fund
51) Dreyfus New York Tax Exempt Money Market Fund
52) Dreyfus Ohio Municipal Money Market Fund, Inc.
53) Dreyfus 100% U.S. Treasury Intermediate Term Fund, L.P.
54) Dreyfus 100% U.S. Treasury Long Term Fund, L.P.
55) Dreyfus 100% U.S. Treasury Money Market Fund, L.P.
56) Dreyfus 100% U.S. Treasury Short Term Fund, L.P.
57) Dreyfus Pennsylvania Municipal Money Market Fund
58) Dreyfus Short-Intermediate Government Fund
59) Dreyfus Short-Intermediate Municipal Bond Fund
60) Dreyfus Short-Term Income Fund, Inc.
61) Dreyfus Strategic Growth, L.P.
62) Dreyfus Strategic Income
63) Dreyfus Strategic Investing
64) Dreyfus Strategic World Investing, L.P.
65) Dreyfus Tax Exempt Cash Management
66) The Dreyfus Third Century Fund, Inc.
67) Dreyfus Treasury Cash Management
68) Dreyfus Treasury Prime Cash Management
69) Dreyfus Variable Investment Fund
70) Dreyfus-Wilshire Target Funds, Inc.
71) Dreyfus Worldwide Dollar Money Market Fund, Inc.
72) First Prairie Cash Management
73) First Prairie Diversified Asset Fund
74) First Prairie Money Market Fund
75) First Prairie Tax Exempt Bond Fund, Inc.
76) First Prairie U.S. Government Income Fund
77) First Prairie U.S. Treasury Securities Cash Management
78) FN Network Tax Free Money Market Fund, Inc.
79) General California Municipal Bond Fund
80) General California Municipal Money Market Fund
81) General Government Securities Money Market Fund, Inc.
82) General Money Market Fund, Inc.
83) General Municipal Bond Fund, Inc.
84) General Municipal Money Market Fund, Inc.
85) General New York Municipal Bond Fund, Inc.
86) General New York Municipal Money Market Fund
87) Pacific American Fund
88) Peoples Index Fund, Inc.
89) Peoples S&P MidCap Index Fund, Inc.
90) Premier California Insured Municipal Bond Fund
91) Premier California Municipal Bond Fund
92) Premier GNMA Fund
93) Premier Growth Fund, Inc.
94) Premier Municipal Bond Fund
95) Premier New York Municipal Bond Fund
96) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board None
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director President
and
Trustee
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President Vice
President
Hank Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President Vice
President
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President None
and Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Vice
President
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President Vice
President
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
Edward Donley
Latham, NY Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Mary Rogers** Assistant Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President Vice
President
Donald A. Nanfeldt* Executive Vice President Vice
President
Charles Cardona** Senior Vice President None
Stacy Alexander* Vice President None
Eric Almquist* Vice President None
James E. Baskin+++++++ Vice President None
Kenneth Bernstein
Boca Raton, FL Vice President-Institutional Sales None
Stephen Burke* Vice President None
Laurel A. Diedrick
Burrows*** Vice President None
Daniel L. Clawson++++ Vice President None
Michael Caraboolad
Gates Mills, OH Vice President-Institutional Sales None
Laura Caudillo++ Vice President-Institutional Sales None
Steven Faticone***** Vice-President-Institutional Sales None
William E. Findley**** Vice President None
Mary Genet***** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Institutional Sales None
Nancy Knee++++ Vice President-Institutional Sales None
Bradford Lange* Vice President-Institutional Sales None
Kathleen McIntyre
Lewis++ Vice President None
Eva Machek***** Vice President-Institutional Sales None
Mary McCabe*** Vice President-Institutional Sales None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President None
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President None
Lorianne Pinto* Vice President-Institutional Sales None
Douglas Rentschler
Grosse Point Park, MI Vice President-Institutional Sales None
Leah Ryan**** Vice President-Institutional Sales None
Emil Samman* Vice President-Institutional
Marketing None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President None
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Carolyn Warren++ Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President Vice
President
Robert W. Stone* Executive Vice President None
Paul Allen* Executive Vice President-
National Sales None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
Wendy Holcomb++ Vice President-Sales None
William Gallagher* Vice President-Sales None
Brent Glading* Vice President-Sales None
Gerald Goz* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in
connection with such meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to
shareholder communications.
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State
of New York on the 28th day of February, 1994.
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
BY: /s/Joseph S. DiMartino
-------------------------------------------
JOSEPH S. DIMARTINO, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
Signatures Title Date
- --------------------------- --------------------- ------------
/s/Joseph S. DiMartino* President (Principal Executive 02/28/94
- ----------------------- Officer) and Trustee
Joseph S. DiMartino
/s/John J. Pyburn* Treasurer (Principal Financial 02/28/94
- ------------------ and Accounting Officer)
John J. Pyburn
/s/Paul T. Molloy* Controller (Principal Accounting 02/28/94
- ------------------ Officer)
Paul T. Molloy
/s/John P. Gould* Trustee 02/28/94
- -----------------
John P. Gould
/s/Raymond D. Oddi* Trustee 02/28/94
- -------------------
Raymond D. Oddi
*BY: ___________________________
Robert I. Frenkel
Attorney-in-Fact
EXHIBIT (1)(a)
MICHIGAN AVENUE TAX EXEMPT MONEY MARKET FUND
Declaration of Trust
Dated: October 8, 1985
THIS AGREEMENT AND DECLARATION OF TRUST made at Boston,
Massachusetts, this 8th day of October, 1985, by Mark N. Jacobs
(hereinafter with any additional and successor trustees referred to as
"the Trustees") and the holders of shares of beneficial interest to be
issued hereunder as hereinafter provided.
W I T N E S S E T H :
WHEREAS, the Trustees have agreed to manage all property coming
into their hands as trustees of a Massachusetts business trust in
accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold
all cash, securities and other assets, which they may from time to time
acquire in any manner as Trustees hereunder IN TRUST to manage and dispose
of the same upon the following terms and conditions for the pro rata
benefit of the holders from time to time of Shares, whether or not
certificated, in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as "Michigan Avenue
Tax Exempt Money Market Fund."
Section 2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The term "Commission" shall have the meaning provided in
the 1940 Act;
(b) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended from
time to time;
(c) "Shareholder" means a record owner of Shares of the Trust;
(d) "Shares" means the equal proportionate transferable units
of interest into which the beneficial interest in the Trust shall be
divided from time to time or, if more than one series of Shares is
authorized by the Trustees, the equal proportionate transferable units
into which each series of Shares shall be divided from time to time, and
includes a fraction of a Share as well as a whole Share;
(e) The "1940 Act" refers to the Investment Company Act of
1940, and the Rules and Regulations thereunder, all as amended from time
to time;
(f) The term "Manager" is defined in Article IV, Section 5; and
(g) The term "Person" shall mean an individual or any
corporation, partnership, joint venture, trust or other enterprise.
ARTICLE II
Purposes of Trust
This Trust is formed for the following purpose or purposes:
(a) to conduct, operate and carry on the business of an
investment company;
(b) to subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, lend, write
options on, exchange, distribute or otherwise dispose of and deal in and
with securities of every nature, kind, character, type and form,
including, without limitation of the generality of the foregoing, all
types of stocks, shares, futures contracts, bonds, debentures, notes,
bills and other negotiable or non-negotiable instruments, obligations,
evidences of interest, certificates of interest, certificates of
participation, certificates, interests, evidences of ownership,
guarantees, warrants, options or evidences of indebtedness issued or
created by or guaranteed as to principal and interest by any state or
local government or any agency or instrumentality thereof, by the United
States Government or any agency, instrumentality, territory, district or
possession thereof, by any foreign government or any agency,
instrumentality, territory, district or possession thereof, by any
corporation organized under the laws of any state, the United States or
any territory or possession thereof or under the laws of any foreign
country, bank certificates of deposit, bank time deposits, bankers'
acceptances and commercial paper; to pay for the same in cash or by the
issue of stock, including treasury stock, bonds or notes of the Trust or
otherwise; and to exercise any and all rights, powers and privileges of
ownership or interest in respect of any and all such investments of every
kind and description, including, without limitation, the right to consent
and otherwise act with respect thereto, with power to designate one or
more persons, firms, associations or corporations to exercise any of said
rights, powers and privileges in respect of any said instruments;
(c) to borrow money or otherwise obtain credit and to secure
the same by mortgaging, pledging or otherwise subjecting as security the
assets of the Trust;
(d) to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in, Shares including Shares in fractional denominations, and to apply to
any such repurchase, redemption, retirement, cancellation or acquisition
of Shares of any funds or other assets of the appropriate series of
Shares, whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of The Commonwealth of Massachusetts;
(e) to conduct its business, promote its purposes, and carry on
its operations in any and all of its branches and maintain offices both
within and without The Commonwealth of Massachusetts, in any and all
States of the United States of America, in the District of Columbia, and
in any other parts of the world; and
(f) to do all and everything necessary, suitable, convenient,
or proper for the conduct, promotion, and attainment of any of the
businesses and purposes herein specified or which at any time may be
incidental thereto or may appear conducive to or expedient for the
accomplishment of any of such businesses and purposes and which might be
engaged in or carried on by a Trust organized under the Massachusetts
General Laws, and to have and exercise all of the powers conferred by the
laws of The Commonwealth of Massachusetts upon a Massachusetts business
trust.
The foregoing provisions of this Article II shall be construed
both as purposes and powers and each as an independent purpose and power.
ARTICLE III
Beneficial Interest
Section 1. Shares of Beneficial Interest. The Shares of the
Trust shall be issued in one or more series as the Trustees may, without
Shareholder approval, authorize. Each series shall be preferred over all
other series in respect of the assets allocated to that series. The
beneficial interest in each series at all times shall be divided into
Shares, with or without par value as the Trustees may from time to time
determine, each of which shall represent an equal proportionate interest
in the series with each other Share of the same series, none having
priority or preference over another. The number of Shares authorized
shall be unlimited, and the Shares so authorized may be represented in
part by fractional shares. From time to time, the Trustees may divide or
combine the Shares of any series into a greater or lesser number without
thereby changing the proportionate beneficial interests in the series.
Section 2. Ownership of Shares. The ownership of Shares will
be recorded in the books of the Trust or a transfer agent. The record
books of the Trust or any transfer agent, as the case may be, shall be
conclusive as to who are the holders of Shares of each series and as to
the number of Shares of each series held from time to time by each. No
certificates certifying the ownership of Shares need be issued except as
the Trustees may otherwise determine from time to time.
Section 3. Issuance of Shares. The Trustees are authorized,
from time to time, to issue or authorize the issuance of Shares at not
less than the par value thereof, if any, and to fix the price or the
minimum price or the consideration (in cash and/or such other property,
real or personal, tangible or intangible, as from time to time they may
determine) or minimum consideration for such Shares. Anything herein to
the contrary notwithstanding, the Trustees may issue Shares pro rata to
the Shareholders at any time as a stock dividend.
All consideration received by the Trust for the issue or sale of
Shares of each series, together with all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange
or liquidation thereof, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
belong irrevocably to the series of Shares with respect to which the same
were received by the Trust for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of the Trust
and are herein referred to as "assets of" such series.
Shares may be issued in fractional denominations to the
same extent as whole Shares, and Shares in fractional denominations shall
be Shares having proportionately to the respective fractions represented
thereby all the rights of whole Shares, including, without limitation, the
right to vote, the right to receive dividends and distributions, and the
right to participate upon liquidation of the Trust or of a particular
series of Shares.
Section 4. No Preemptive Rights. Shareholders shall have no
preemptive or other right to subscribe for any additional Shares or other
securities issued by the Trust.
Section 5. Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed
to the terms hereof and to have become a party hereto. The death of a
Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or elsewhere
against the Trust or the Trustees, but only to the rights of said decedent
under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right
to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders partners.
Neither the Trust nor the Trustees, nor any officer, employee or agent of
the Trust shall have any power to bind any Shareholder or Trustee
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder at any
time personally may agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or
on behalf of the Trust shall include a recitation limiting the obligation
represented thereby to the Trust and its assets (but the omission of such
a recitation shall not operate to bind any Shareholder or Trustee
personally).
ARTICLE IV
Trustees
Section 1. Election. A Trustee may be elected either by the
Trustees or the Shareholders. The Trustees named herein shall serve until
the first meeting of the Shareholders or until the election and
qualification of their successors. Prior to the first meeting of
Shareholders the initial Trustees hereunder may elect additional Trustees
to serve until such meeting and until their successors are elected and
qualified. The Trustees also at any time may elect Trustees to fill
vacancies in the number of Trustees. The number of Trustees shall be
fixed from time to time by the Trustees and, at or after the commencement
of the business of the Trust, shall be not less than three. Each Trustee,
whether named above or hereafter becoming a Trustee, shall serve as a
Trustee during the lifetime of this Trust, until such Trustee dies,
resigns, retires, or is removed, or, if sooner, until the next meeting of
Shareholders called for the purpose of electing Trustees and the election
and qualification of his successor. Subject to Section 16(a) of the 1940
Act, the Trustees may elect their own successors and, pursuant to this
Section, may appoint Trustees to fill vacancies.
Section 2. Powers. The Trustees shall have all powers
necessary or desirable to carry out the purposes of the Trust, including,
without limitation, the powers referred to in Article II hereof. Without
limiting the generality of the foregoing, the Trustees may adopt By-Laws
not inconsistent with this Declaration of Trust providing for the conduct
of the business of the Trust and may amend and repeal them to the extent
that they do not reserve that right to the Shareholders; they may fill
vacancies in their number, including vacancies resulting from increases in
their own number, and may elect and remove such officers and employ,
appoint and terminate such employees or agents as they consider
appropriate; they may appoint from their own number and terminate any one
or more committees; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ subcustodians and
to deposit all or any part of such assets in a system or systems for the
central handling of securities, retain a transfer agent and a Shareholder
servicing agent, or both, provide for the distribution of Shares through a
principal underwriter or otherwise, set record dates, and in general
delegate such authority as they consider desirable (including, without
limitation, the authority to purchase and sell securities and to invest
funds, to determine the net income of the Trust for any period, the value
of the total assets of the Trust and the net asset value of each Share,
and to execute such deeds, agreements or other instruments either in the
name of the Trust or the names of the Trustees or as their attorney or
attorneys or otherwise as the Trustees from time to time may deem
expedient) to any officer of the Trust, committee of the Trustees, any
such employee, agent, custodian or underwriter or to any Manager.
Without limiting the generality of the foregoing, the
Trustees shall have full power and authority:
(a) To invest and reinvest cash and to hold cash uninvested;
(b) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to
execute and deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities or property
as the Trustees shall deem proper;
(c) To hold any security or property in a form not indicating
any trust whether in bearer, unregistered or other negotiable form or in
the name of the Trust or a custodian, subcustodian or other depository or
a nominee or nominees or otherwise;
(d) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or concern, and
to pay calls or subscriptions with respect to any security held in the
Trust;
(e) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and
to pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(f) To compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy, including, but
not limited to, claims for taxes;
(g) To allocate assets, liabilities and expenses of the Trust
to a particular series of Shares or to apportion the same among two or
more series, provided that any liabilities or expenses incurred by a
particular series of Shares shall be payable solely out of the assets of
that series;
(h) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(i) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or Managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such
person as Shareholder, Trustee, officer, employee, agent, investment
adviser or Manager, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify
such person against such liability; and
(j) To pay pensions for faithful service, as deemed appropriate
by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions, including
the purchasing of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all of the
Trustees, officers, employees and agents of the Trust.
Further, without limiting the generality of the foregoing, the
Trustees shall have full power and authority to incur and pay out of the
principal or income of the Trust such expenses and liabilities as may be
deemed by the Trustees to be necessary or proper for the purposes of the
Trust; provided, however, that all expenses and liabilities incurred or
arising in connection with a particular series of Shares, as determined by
the Trustees, shall be payable solely out of the assets of that series.
Any determination made in good faith and, so far as accounting
matters are involved, in accordance with generally accepted accounting
principles by or pursuant to the authority granted by the Trustees, as to
the amount of the assets, debts, obligations or liabilities of the Trust;
the amount of any reserves or charges set up and the propriety thereof;
the time of or purpose for creating such reserves or charges; the use,
alteration or cancellation of any reserves or charges (whether or not any
debt, obligation or liability for which such reserves or charges shall
have been created shall have been paid or discharged or shall be then or
thereafter required to be paid or discharged); the price or closing bid or
asked price of any investment owned or held by the Trust; the market value
of any investment or fair value of any other asset of the Trust; the
number of Shares outstanding; the estimated expense to the Trust in
connection with purchases of its Shares; the ability to liquidate
investments in an orderly fashion; the extent to which it is practicable
to deliver a cross-section of the portfolio of the Trust in payment for
any such Shares, or as to any other matters relating to the issue, sale,
purchase and/or other acquisition or disposition of investments or Shares
of the Trust, shall be final and conclusive, and shall be binding upon the
Trust and its Shareholders, past, present and future, and Shares are
issued and sold on the condition and understanding that any and all such
determinations shall be binding as aforesaid.
Section 3. Meetings. At any meeting of the Trustees, a
majority of the Trustees then in office shall constitute a quorum. Any
meeting may be adjourned from time to time by a majority of the votes cast
upon the question, whether or not a quorum is present, and the meeting may
be held as adjourned without further notice.
When a quorum is present at any meeting, a majority of the
Trustees present may take any action, except when a larger vote is
required by this Declaration of Trust, the By-Laws or the 1940 Act.
Any action required or permitted to be taken at any meeting of
the Trustees or of any committee thereof may be taken without a meeting,
if a written consent to such action is signed by a majority of the
Trustees or members of any such committee then in office, as the case may
be, and such written consent is filed with the minutes of proceedings of
the Trustees or any such committee.
The Trustees or any committee designated by the Trustees may
participate in a meeting of the Trustees or such committee by means of a
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at
a meeting.
Section 4. Ownership of Assets of the Trust. Title to all of
the assets of each series of Shares of the Trust at all times shall be
considered as vested in the Trustees.
Section 5. Investment Advice and Management Services. The
Trustees shall not in any way be bound or limited by any present or future
law or custom in regard to investments by trustees. The Trustees from
time to time may enter into a written contract or contracts with any
person or persons (herein called the "Manager"), including any firm,
corporation, trust or association in which any Trustee or Shareholder may
be interested, to act as investment advisers and/or managers of the Trust
and to provide such investment advice and/or management as the Trustees
from time to time may consider necessary for the proper management of the
assets of the Trust, including, without limitation, authority to determine
from time to time what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust shall be
held uninvested and to make changes in the Trust's investments. Any such
contract shall be subject to the requirements of the 1940 Act with respect
to its continuance in effect, its termination and the method of
authorization and approval of such contract, or any amendment thereto or
renewal thereof.
Any Trustee or any organization with which any Trustee may be
associated also may act as broker for the Trust in making purchases and
sales of securities for or to the Trust for its investment portfolio, and
may charge and receive from the Trust the usual and customary commission
for such service. Any organization with which a Trustee may be associated
in acting as broker for the Trust shall be responsible only for the proper
execution of transactions in accordance with the instructions of the Trust
and shall be subject to no further liability of any sort whatever.
The Manager, or any affiliate thereof, also may be a distributor
for the sale of Shares by separate contract or may be a person controlled
by or affiliated with any Trustee or any distributor or a person in which
any Trustee or any distributor is interested financially, subject only to
applicable provisions of law. Nothing herein contained shall operate to
prevent any Manager, who also acts as such a distributor, from also
receiving compensation for services rendered as such distributor.
Section 6. Removal and Resignation of Trustees. The Trustees
or the Shareholders (by vote of 66-2/3% of the outstanding shares entitled
to vote thereon) may remove at any time any Trustee with or without cause,
and any Trustee may resign at any time as Trustee, without penalty by
written notice to the Trust; provided that sixty days' advance written
notice shall be given in the event that there are only three or less
Trustees at the time a notice of resignation is submitted.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. The Shareholders shall have power to
vote only (i) for the election of Trustees as provided in Article IV,
Section 1, of this Declaration of Trust; provided, however, that no
meeting of Shareholders is required to be called for the purpose of
electing Trustees unless and until such time as less than a majority of
the Trustees have been elected by the Shareholders, (ii) for the removal
of Trustees as provided in Article IV, Section 6, (iii) with respect to
any Manager as provided in Article IV, Section 5, (iv) with respect to any
amendment of this Declaration of Trust as provided in Article IX, Section
8, (v) with respect to a consolidation, merger or certain sales of assets
as provided in Article IX, Section 4, (vi) with respect to the termination
of the Trust or a series of Shares as provided in Article IX, Section 5,
(vii) to the same extent as the stockholders of a Massachusetts business
corporation, as to whether or not a court action, proceeding or claim
should be brought or maintained derivatively or as a class action on
behalf of the Trust or the Shareholders, and (viii) with respect to such
additional matters relating to the Trust as may be required by law, by
this Declaration of Trust, or the By-Laws of the Trust or any registration
of the Trust with the Commission or any state, or as the Trustees may
consider desirable. Each whole Share shall be entitled to one vote as to
any matter on which it is entitled to vote (except that in the election of
Trustees said vote may be cast for as many persons as there are Trustees
to be elected), and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provision of
this Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall be voted
by individual series, except (i) when required by the 1940 Act, Shares
shall be voted in the aggregate and not by individual series and (ii) when
the Trustees have determined that the matter affects only the interests of
one or more series, then only Shareholders of such series shall be
entitled to vote thereon. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy
with respect to Shares held in the name of two or more persons shall be
valid if executed by any one of them, unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary
from any one of them. A proxy purporting to be executed by or on behalf
of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the
challenger. Until Shares are issued, the Trustees may exercise all rights
of Shareholders and may take any action required by law, this Declaration
of Trust or any By-Laws of the Trust to be taken by Shareholders.
Section 2. Meetings. Meetings of the Shareholders may be
called by the Trustees or such other person or persons as may be specified
in the By-Laws and shall be called by the Trustees upon the written
request of Shareholders owning at least 25% of the outstanding Shares
entitled to vote. Shareholders shall be entitled to at least ten days'
prior notice of any meeting.
Section 3. Quorum and Required Vote. Thirty percent (30%) of
the outstanding Shares shall be a quorum for the transaction of business
at a Shareholders' meeting, except that where any provision of law or of
this Declaration of Trust permits or requires that holders of any series
shall vote as a series, then thirty percent (30%) of the aggregate number
of Shares of that series entitled to vote shall be necessary to constitute
a quorum for the transaction of business by that series. Any lesser
number, however, shall be sufficient for adjournment and any adjourned
session or sessions may be held within 90 days after the date set for the
original meeting without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of Trust or
the By-Laws of the Trust and subject to any applicable requirements of
law, a majority of the Shares voted shall decide any question and a
plurality shall elect a Trustee, provided that where any provision of law
or of this Declaration of Trust permits or requires that the holders of
any series shall vote as a series, then a majority of the Shares of that
series voted on the matter (or a plurality with respect to the election of
a Trustee) shall decide that matter insofar as that series is concerned.
Section 4. Action by Written Consent. Any action required or
permitted to be taken at any meeting may be taken without a meeting if a
consent in writing, setting forth such action, is signed by all the
Shareholders entitled to vote on the subject matter thereof and such
consent is filed with the records of the Trust.
Section 5. Additional Provisions. The By-Laws may include
further provisions for Shareholders' votes and meetings and related
matters.
ARTICLE VI
Distributions and Redemptions
Section 1. Distributions. The Trustees shall distribute
periodically to the Shareholders of each series of Shares an amount
approximately equal to the net income of that series, determined by the
Trustees or as they may authorize and as herein provided. Distributions
of income may be made in one or more payments, which shall be in Shares,
cash or otherwise, and on a date or dates and as of a record date or dates
determined by the Trustees. At any time and from time to time in their
discretion, the Trustees also may cause to be distributed to the
Shareholders of any one or more series as of a record date or dates
determined by the Trustees, in Shares, cash or otherwise, all or part of
any gains realized on the sale or disposition of the assets of the
series or all or part of any other principal of the Trust attributable to
the series. Each distribution pursuant to this Section 1 shall be made
ratably according to the number of Shares of the series held by the
several Shareholders on the record date for such distribution, provided
that no distribution need be made on Shares purchased pursuant to orders
received, or for which payment is made, after such time or times as the
Trustees may determine.
Section 2. Determination of Net Income. In determining the net
income of each series of Shares for any period, there shall be deducted
from income for that period (a) such portion of all charges, taxes,
expenses and liabilities due or accrued as the Trustees shall consider
properly chargeable and fairly applicable to income for that period or any
earlier period and (b) whatever reasonable reserves the Trustees shall
consider advisable for possible future charges, taxes, expenses and
liabilities which the Trustees shall consider properly chargeable and
fairly applicable to income for that period or any earlier period. The
net income of each series for any period may be adjusted for amounts
included on account of net income in the net asset value of Shares issued
or redeemed or repurchased during that period. In determining the net
income of a series for a period ending on a date other than the end of its
fiscal year, income may be estimated as the Trustees shall deem fair.
Gains on the sale or disposition of assets shall not be treated as income,
and losses shall not be charged against income unless appropriate under
applicable accounting principles, except in the exercise of the
discretionary powers of the Trustees. Any amount contributed to the Trust
which is received as income pursuant to a decree of any court of competent
jurisdiction shall be applied as required by the said decree.
Section 3. Redemptions. Any Shareholder shall be entitled to
require the Trust to redeem and the Trust shall be obligated to redeem at
the option of such Shareholder all or any part of the Shares owned by said
Shareholder, at the redemption price, pursuant to the method, upon the
terms and subject to the conditions hereinafter set forth:
(a) Certificates for Shares, if issued, shall be presented for
redemption in proper form for transfer to the Trust or the agent of the
Trust appointed for such purpose, and these shall be presented with a
written request that the Trust redeem all or any part of the Shares
represented thereby.
(b) The redemption price per Share shall be the net asset value
per Share when next determined by the Trust at such time or times as the
Trustees shall designate, following the time of presentation of
certificates for Shares, if issued, and an appropriate request for
redemption, or such other time as the Trustees may designate in accordance
with any provision of the 1940 Act, or any rule or regulation made or
adopted by any securities association registered under the Securities
Exchange Act of 1934, as determined by the Trustees.
(c) Net asset value of each series of Shares (for the purpose
of issuance of Shares as well as redemptions thereof) shall be determined
by dividing:
(i) the total value of the assets of such series
determined as provided in paragraph (d) below less, to
the extent determined by or pursuant to the direction
of the Trustees in accordance with generally accepted
accounting principles, all debts, obligations and
liabilities of such series (which debts, obligations
and liabilities shall include, without limitation of
the generality of the foregoing, any and all debts,
obligations, liabilities, or claims, of any and every
kind and nature, fixed, accrued and otherwise,
including the estimated accrued expenses of management
and supervision, administration and distribution and
any reserves or charges for any or all of the
foregoing, whether for taxes, expenses, or otherwise,
and the price of Shares redeemed but not paid for) but
excluding the Trust's liability upon its Shares and
its surplus, by
(ii) the total number of Shares of such series
outstanding.
The Trustees are empowered, in their absolute discretion, to
establish other methods for determining such net asset value whenever such
other methods are deemed by them to be necessary to enable the Trust to
comply with, or are deemed by them to be desirable, provided they are not
inconsistent with any provision of the 1940 Act.
(d) In determining for the purposes of this Declaration of
Trust the total value of the assets of each series of Shares at any time,
investments and any other assets of such series shall be valued in such
manner as may be determined from time to time by or pursuant to the order
of the Trustees.
(e) Payment of the redemption price by the Trust may be made
either in cash or in securities or other assets at the time owned by the
Trust or partly in cash and partly in securities or other assets at the
time owned by the Trust. The value of any part of such payment to be made
in securities or other assets of the Trust shall be the value employed in
determining the redemption price. Payment of the redemption price shall
be made on or before the seventh day following the day on which the Shares
are properly presented for redemption hereunder, except that delivery of
any securities included in any such payment shall be made as promptly as
any necessary transfers on the books of the issuers whose securities are
to be delivered may be made and, except as postponement of the date of
payment may be permissible under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may deduct
from the payment made for any Shares redeemed a liquidating charge not in
excess of one percent (1%) of the redemption price of the Shares so
redeemed, and the Trustees may alter or suspend any such liquidating
charge from time to time.
(f) The right of any holder of Shares redeemed by the Trust as
provided in this Article VI to receive dividends or distributions thereon
and all other rights of such Shareholder with respect to such Shares shall
terminate at the time as of which the redemption price of such Shares is
determined, except the right of such Shareholder to receive (i) the
redemption price of such Shares from the Trust in accordance with the
provisions hereof, and (ii) any dividend or distribution to which such
Shareholder previously had become entitled as the record holder of such
Shares on the record date for such dividend or distribution.
(g) Redemption of Shares by the Trust is conditional upon the
Trust having funds or other assets legally available therefor.
(h) The Trust, either directly or through an agent, may
repurchase its Shares, out of funds legally available therefor, upon such
terms and conditions and for such consideration as the Trustees shall deem
advisable, by agreement with the owner at a price not exceeding the net
asset value per Share as determined by or pursuant to the order of the
Trustees at such time or times as the Trustees shall designate, less a
charge not to exceed one percent (1%) of such net asset value, if and as
fixed by resolution of the Trustees from time to time, and to take all
other steps deemed necessary or advisable in connection therewith.
(i) Shares purchased or redeemed by the Trust shall be
cancelled or held by the Trust for reissue, as the Trustees from time to
time may determine.
(j) The obligations set forth in this Article VI may be
suspended or postponed, (1) for any period (i) during which the New York
Stock Exchange is closed other than for customary weekend and holiday
closings, or (ii) during which trading on the New York Stock Exchange is
restricted, (2) for any period during which an emergency exists as a
result of which (i) the disposal by the Trust of investments owned by it
is not reasonably practicable, or (ii) it is not reasonably practicable
for the Trust fairly to determine the value of its net assets, or (3) for
such other periods as the Commission or any successor governmental
authority by order may permit.
Notwithstanding any other provision of this Section 3 of Article
VI, if certificates representing such Shares have been issued, the
redemption or repurchase price need not be paid by the Trust until such
certificates are presented in proper form for transfer to the Trust or the
agent of the Trust appointed for such purpose; however, the redemption or
repurchase shall be effective, in accordance with the resolution of the
Trustees, regardless of whether or not such presentation has been made.
Section 4. Redemptions at the Option of the Trust. The Trust
shall have the right at its option and at any time to redeem Shares of any
Shareholder at the net asset value thereof as determined in accordance
with Section 3 of Article VI of this Declaration of Trust: (i) if at such
time such Shareholder owns fewer Shares than, or Shares having an
aggregate net asset value of less than, an amount determined from time to
time by the Trustees; or (ii) to the extent that such Shareholder owns
Shares of a particular series of Shares equal to or in excess of a
percentage of the outstanding Shares of that series determined from time
to time by the Trustees; or (iii) to the extent that such Shareholder owns
Shares of the Trust representing a percentage equal to or in excess of
such percentage of the aggregate number of outstanding Shares of the Trust
or the aggregate net asset value of the Trust determined from time to time
by the Trustees.
Section 5. Dividends, Distributions, Redemptions and
Repurchases. No dividend or distribution (including, without limitation,
any distribution paid upon termination of the Trust or of any series) with
respect to, nor any redemption or repurchase of, the Shares of any series
shall be effected by the Trust other than from the assets of such series.
ARTICLE VII
Compensation and Limitation of
Liability of Trustees
Section 1. Compensation. The Trustees shall be entitled to
reasonable compensation from the Trust and may fix the amount of their
compensation.
Section 2. Limitation of Liability. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any
officer, agent, employee or Manager of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee, but nothing
herein contained 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.
Every note, bond, contract, instrument, certificate, share, or
undertaking and every other act or thing whatsoever executed or done by or
on behalf of the Trust or the Trustees or any of them in connection with
the Trust, shall be deemed conclusively to have been executed or done only
in their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
Section 1. Indemnification of Trustees, Officers, Employees and
Agents. Each person who is or was a Trustee, officer, employee or agent
of the Trust shall be entitled to indemnification out of the assets of the
Trust to the extent provided in, and subject to the provisions of, the
By-Laws, provided that no indemnification shall be granted by the Trust in
contravention of the 1940 Act.
Section 2. Merged Corporations. For the purposes of this
Article VIII references to "the Trust" include any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation
or merger which, if its separate existence had continued, would have had
power and authority to indemnify its directors, officers, employees or
agents as well as the resulting or surviving entity; so that any person
who is or was a director, officer, employee or agent of such a constituent
corporation or is or was serving at the request of such a constituent
corporation as a trustee, director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise shall
stand in the same position under the provisions of this Article VIII with
respect to the resulting or surviving entity as he would have with respect
to such a constituent corporation if its separate existence had continued.
Section 3. Shareholders. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder
(or his heirs, executors, administrators or other legal representatives or
in the case of a corporation or other entity, its corporate or other
general successor) shall be entitled out of the assets of the Trust to be
held harmless from and indemnified against all losses and expenses arising
from such liability. Upon request, the Trust shall cause its counsel to
assume the defense of any claim which, if successful, would result in an
obligation of the Trust to indemnify the Shareholder as aforesaid.
ARTICLE IX
Status of the Trust and Other General Provisions
Section 1. Trust Not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby. Neither
the Trust nor the Trustees, nor any officer, employee or agent of the
Trust shall have any power to bind personally either the Trust's Trustees
or officers or any Shareholders. All persons extending credit to,
contracting with or having any claim against the Trust or a particular
series of Shares shall look only to the assets of the Trust or the assets
of that particular series for payment under such credit, contract or
claim; and neither the Shareholders nor the Trustees, nor any of the
Trust's officers, employees or agents, whether past, present or future,
shall be personally liable therefor. Nothing in this Declaration of Trust
shall protect any Trustee against any liability to which such Trustee
otherwise would be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond
or Surety. The exercise by the Trustees of their powers and discretion
hereunder under the circumstances then prevailing, shall be binding upon
everyone interested. A Trustee shall be liable for his or her own willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing
else, and shall not be liable for errors of judgment or mistakes of fact
or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and
subject to the provisions of Section 1 of this Article IX shall be under
no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Section 3. Liability of Third Persons Dealing with Trustees.
No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the
Trustees pursuant hereto or to see to the application of any payments made
or property transferred to the Trust or upon its order.
Section 4. Trustees, Shareholders, etc. Not Personally Liable:
Notice. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series of Shares shall look only
to the assets of the Trust or the assets of that particular series of
Shares for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees
or agents, whether past, present or future, shall be personally liable
therefor.
Section 5. Consolidation, Merger, Sale of Assets. The Trust
may, in accordance with the provisions of this Section:
(1) Consolidate with one or more corporations or trusts to form
a new consolidated corporation or trust; or
(2) Merge into a corporation or trust, or have merged into it
one or more corporations or trusts; or
(3) Sell, lease, exchange or transfer all, or substantially
all, its property and assets, including its good will and franchises.
Any such consolidation, merger, sale, lease, exchange or other
transfer of all or substantially all of the property and assets of the
Trust may be made only upon substantially the terms and conditions set
forth in a proposed form of articles of consolidation, articles of merger
or articles of sale, lease, exchange or transfer, as the case may be,
which are approved by votes of the Trustees and Shareholders holding a
majority of the Shares entitled to vote thereon, provided that in the case
of a merger in which the Trust is the surviving entity which effects no
reclassification or change of any outstanding shares of the Trust or other
amendment of this Declaration of Trust, no vote of the Shareholders shall
be necessary (and in lieu thereof, the proposed articles of merger shall
be approved by a majority of the Trustees) if the number of Shares, if
any, of the Trust to be issued or delivered in the merger does not exceed
fifteen percent of the number of Shares outstanding (before giving effect
to the merger) on the effective date of the merger. Any articles of
consolidation, merger, sale, lease, exchange or transfer shall constitute
a supplemental Declaration of Trust, copies of which shall be filed as
specified in Section 7 of this Article IX.
Section 6. Termination of Trust. Unless terminated as provided
herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of each series entitled to vote or by the Trustees
by written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority
of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of
Shares, after paying or otherwise providing for all charges, taxes,
expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall reduce, in accordance with
such procedures as the Trustees consider appropriate, the remaining assets
to distributable form in cash or shares or other securities, or any
combination thereof, and distribute the proceeds to the Shareholders of
the series involved, ratably according to the number of Shares of such
series held by the several Shareholders of such series on the date of
termination.
Section 7. Filing of Copies, References, Headings. The
original or a copy of this instrument and of each amendment hereto and of
each Declaration of Trust supplemental hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each such amendment and supplemental Declaration of
Trust shall be filed by the Trust with the Secretary of The Commonwealth
of Massachusetts and the Boston City Clerk, as well as any other
governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of
the Trust as to whether or not any such amendments or supplemental
Declarations of Trust have been made and as to matters in connection with
the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of
this instrument or of any such amendment or supplemental Declaration of
Trust. In this instrument or in any such amendment or supplemental
Declaration of Trust, references to this instrument, and all expressions
like "herein," "hereof," and "hereunder," shall be deemed to refer to this
instrument as amended or affected by any such amendment or supplemental
Declaration of Trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed
in any number of counterparts each of which shall be deemed an original.
Section 8. Applicable Law. The Trust set forth in this
instrument is made in The Commonwealth of Massachusetts, and it is created
under and is to be governed by and construed and administered according to
the laws of said Commonwealth. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily exercised
by such a trust.
Section 9. Amendments. This Declaration of Trust may be
amended at any time by an instrument in writing signed by a majority of
the then Trustees when authorized so to do by a vote of Shareholders
holding a majority of the Shares of each series entitled to vote, except
that an amendment which shall affect the holders of one or more series of
Shares but not the holders of all outstanding series shall be authorized
by vote of the Shareholders holding a majority of the Shares entitled to
vote of each series affected and no vote of Shareholders of a series not
affected shall be required. Amendments having the purpose of changing the
name of the Trust or of supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent
provision contained herein shall not require authorization by Shareholder
vote.
IN WITNESS WHEREOF, Mark N. Jacobs has hereunto set his hand and
seal in the City of Boston, Massachusetts, for himself and his assigns as
of the day and year first above written.
____________________________________
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, October 8, 1985
Then personally appeared the above-named Mark N. Jacobs, and
acknowledged the foregoing instrument to be his free act and deed, before
me.
____________________________________
Notary Public
My Commission expires: 2/20/92
(Notarial Seal)
SECOND CITY TAX EXEMPT MONEY MARKET FUND
ARTICLES OF AMENDMENT
SECOND CITY TAX EXEMPT MONEY MARKET FUND, a business trust
formed by an Agreement and Declaration of Trust dated October 8, 1985
pursuant to the laws of the Commonwealth of Massachusetts (the "Trust"),
hereby certifies to the Secretary of State of Commonwealth of
Massachusetts and to the City Clerk of the City of Boston that:
FIRST: The Agreement and Declaration of Trust of the Trust is
hereby amended by striking out Article I, Section 1 and inserting in lieu
thereof the following:
"Section 1. Name. This Trust shall be known as 'First
Lakeshore Tax Exempt Money Market Fund.'"
SECOND: The amendment to the Agreement and Declaration of Trust
herein made was duly approved by the written consent of the sole Trustee
of the Trust dated as of December 11, 1985 pursuant to Article IX, Section
9 of the Agreement and Declaration of Trust.
IN WITNESS WHEREOF, SECOND CITY TAX EXEMPT MONEY MARKET FUND has
caused these Articles to be signed in its name and on behalf of its sole
Trustee.
SECOND CITY TAX EXEMPT MONEY MARKET FUND
By:_______________________________________
Mark N. Jacobs
Trustee
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named Mark N. Jacobs, and
acknowledged the foregoing instrument to be his free act and deed, before
me.
_____________________________________
Notary Public
MICHIGAN AVENUE TAX EXEMPT MONEY MARKET FUND
ARTICLES OF AMENDMENT
Michigan Avenue Tax Exempt Money Market Fund, a business trust
formed by an Agreement and Declaration of Trust dated October 8, 1985
pursuant to the laws of the Commonwealth of Massachusetts (the "Trust"),
hereby certifies to the Secretary of State of Commonwealth of
Massachusetts and to the City Clerk of the City of Boston that:
FIRST: The Agreement and Declaration of Trust of the Trust is
hereby amended by striking out Article I, Section 1 and inserting in lieu
thereof the following:
"Section 1. Name. This Trust shall be known as 'Second
City Tax Exempt Money Market Fund.'"
SECOND: The amendment to the Agreement and Declaration of Trust
herein made was duly approved by the written consent of the sole Trustee
of the Trust dated as of December 11, 1985 pursuant to Article IX, Section
9 of the Agreement and Declaration of Trust.
IN WITNESS WHEREOF, Michigan Avenue Tax Exempt Money Market Fund
has caused these Articles to be signed in its name and on behalf of its
sole Trustee.
MICHIGAN AVENUE TAX EXEMPT MONEY MARKET FUND
By:_______________________________________
Mark N. Jacobs, Trustee
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named Mark N. Jacobs, and
acknowledged the foregoing instrument to be his free act and deed, before
me.
_____________________________________
Notary Public
FIRST LAKESHORE TAX EXEMPT MONEY MARKET FUND
ARTICLES OF AMENDMENT
First Lakeshore Tax Exempt Money Market Fund, a business trust
formed by an Agreement and Declaration of Trust dated October 8, 1985
pursuant to the laws of the Commonwealth of Massachusetts (the "Trust"),
hereby certifies to the Secretary of State of the Commonwealth of
Massachusetts and to the City Clerk of the City of Boston that:
FIRST: The Agreement and Declaration of Trust of the Trust is
hereby amended by striking out Article I, Section 1 and inserting in lieu
thereof the following:
"Section 1. Name. This Trust shall be known as 'First
Prairie Tax Exempt Money Market Fund.'"
SECOND: The amendment to the Agreement and Declaration of Trust
herein made was duly approved at a meeting of the Board of Trustees held
on March 15, 1989 pursuant to Article IX, Section 9 of the Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, First Lakeshore Tax Exempt Money Market Fund
has caused these Articles to be signed in its name and on its behalf by
its Board of Trustees.
FIRST LAKESHORE TAX EXEMPT MONEY MARKET
FUND
__________________________________
Joseph S. DiMartino
__________________________________
John P. Gould
__________________________________
Raymond D. Oddi
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named Trustee and
acknowledged the foregoing instrument to be his free act and deed, before
me.
__________________________________
Notary Public
-2-
IN WITNESS WHEREOF, First Lakeshore Tax Exempt Money Market Fund
has caused these Articles to be signed in its name and on its behalf by
its Board of Trustees.
FIRST LAKESHORE TAX EXEMPT MONEY MARKET
FUND
__________________________________
Joseph S. DiMartino
__________________________________
John P. Gould
__________________________________
Raymond D. Oddi
STATE OF ILLINOIS )
: ss.:
COUNTY OF COOK )
Then personally appeared the above-named Trustee and
acknowledged the foregoing instrument to be his free act and deed, before
me.
__________________________________
Notary Public
-2-
IN WITNESS WHEREOF, First Lakeshore Tax Exempt Money Market Fund
has caused these Articles to be signed in its name and on its behalf by
its Board of Trustees.
FIRST LAKESHORE TAX EXEMPT MONEY MARKET
FUND
__________________________________
Joseph S. DiMartino
__________________________________
John P. Gould
__________________________________
Raymond D. Oddi
STATE OF ILLINOIS )
: ss.:
COUNTY OF LAKE )
Then personally appeared the above-named Trustee and
acknowledged the foregoing instrument to be his free act and deed, before
me.
__________________________________
Notary Public
-2-
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
ARTICLES OF AMENDMENT
First Prairie Tax Exempt Money Market Fund, a business trust formed by
an Agreement and Declaration of Trust dated October 8, 1985, pursuant to
the laws of the Commonwealth of Massachusetts (the "Trust"), hereby
certifies to the Secretary of State of the Commonwealth of Massachusetts
that:
FIRST: The Agreement and Declaration of Trust of the Trust is hereby
amended by striking out Article I, Section 1 and inserting in lieu thereof
the following:
"Section 1. Name. This Trust shall be known as
'First Prairie Municipal Money Market Fund.'"
SECOND: The amendment to the Agreement and Declaration of Trust
herein made was duly approved by a majority of the Board of Trustees of the
trust as of February 1, 1994 pursuant to Article IX, Section 8 of the
Agreement and Declaration of Trust.
IN WITNESS WHEREOF, First Prairie Tax Exempt Money Market Fund has
caused these Articles to be signed in its name and on its behalf by its
Board of Trustees.
FIRST PRAIRIE TAX EXEMPT MONEY
MARKET FUND
___________________________________
Joseph S. DiMartino, Trustee
___________________________________
John P. Gould, Trustee
___________________________________
Raymond D. Oddi, Trustee
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 1st day of February, 1994, before me personally came
Joseph S. DiMartino, John P. Gould and Raymond D. Oddi, Trustees of the
Fund, to me known, and known to me to be the persons described in and who
executed the foregoing instrument, and who duly acknowledged to me that
they had executed the same.
___________________________________
Notary Public
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated February 4, 1994 in this Registration Statement (Form N-1A No.
2-95548) of First Prairie Tax Exempt Money Market Fund.
ERNST & YOUNG
New York, New York
February 23, 1994
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
Value of Account 12/24/93 $ 1.000000000
+ Dividend on 12/25/93 $ 0.000114177
+ Dividend on 12/27/93 0.000054391
+ Dividend on 12/28/93 0.000055223
+ Dividend on 12/29/93 0.000058239
+ Dividend on 12/30/93 0.000058306
+ Dividend on 12/31/93 0.000060882 0.000401218
-------------
Value of Account 12/31/93 1.000401218
Less the value of account 12/24/93 (1.000000000)
-------------
Change in Account 0.000401218
Divided by value of account 12/24/93 1.000000000
-------------
Base Period Return 0.000401218
=============
Annualized Seven Day Yield ( 0.000401218 x 365 / 7) 2.09%
=============
Value of Account 12/24/93 $ 1.000000000
+ Dividend on 12/25/93 $ 0.000114177
+ Dividend on 12/27/93 0.000054391
+ Dividend on 12/28/93 0.000055223
+ Dividend on 12/29/93 0.000058239
+ Dividend on 12/30/93 0.000058306
+ Dividend on 12/31/93 0.000060882 0.000401218
-------------
Value of Account 12/31/93 1.000401218
Less the value of account 12/24/93 (1.000000000)
-------------
Change in Account 0.000401218
Divided by value of account 12/24/93 1.000000000
-------------
Base Period Return 0.000401218
=============
365/7
Annualized Effective Yield [( 0.000401218 +1) ]-1 2.11%
=============
TAX EQUIVALENT YIELD
Yield = 2.09%
Taxable portion of yield = 0.00%
------
Tax exempt portion of yield = 2.09%
======
Federal Tax Bracket = 39.60%
======
Tax
Equivalent Yield = 2.09 / (1- 0.3960 ) = 3.46%
======
