Registration Nos. 2-95548
811-4213
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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. 13 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 [ X ]
Amendment No. 13 [ X ]
(Check appropriate box or boxes)
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(Exact Name of Registrant as Specified in Charter)
c/o First Chicago Investment Management Company
Three First National Plaza
Chicago, Illinois 60670
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number,
including Area Code: (312) 732-4231
Bradford M. Markham, Esq.
Three First National Plaza
Chicago, Illinois 60670
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
(check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new
effective date for a previously filed post-
effective amendment.
Registrant has registered an indefinite number of shares
of its beneficial interests 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, 1994 was filed on or about
February 16, 1995.
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, 42
5 Management of the Fund 20
5(a) Management's Discussion of Fund's
Performance *
6 Capital Stock and Other
Securities 42
7 Purchase of Securities Being
Offered 24
8 Redemption or Repurchase 32
9 Pending Legal Proceedings *
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[FN] NOTE: Omitted since answer is negative or
inapplicable.
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-8
14 Management of the Fund B-10
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other
Services B-21
<PAGE>
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
of Securities Being Offered B-13,
B-15,
B-19
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-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-4
30 Location of Accounts and Records C-5
31 Management Services C-5
32 Undertakings C-5
_________________________
NOTE: * Omitted since answer is negative or inapplicable.
<PAGE>
May 1, 1995
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
SUPPLEMENT TO PROSPECTUS
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY
CONTRARY INFORMATION CONTAINED IN THE PROSPECTUS.
ANNUAL FUND OPERATING EXPENSES*
(as a percentage of average daily net assets)
Management Fees. . . . . . . . . . . . . . . . . . . . .55%
12b-1 Fees (distribution and servicing). . . . . . . . .25%
Other Expenses. . . . . . . . . . . . . . . . . . . . . .13%
Total Fund Operating Expenses . . . . . . . . . . . . . .93%
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. . . . . . . . . . . . . . . . . . . . $ 9
3 YEARS . . . . . . . . . . . . . . . . . . . $ 30
5 YEARS . . . . . . . . . . . . . . . . . . . $ 51
10 YEARS. . . . . . . . . . . . . . . . . . . $114
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[FN] The information in the foregoing table does not reflect
any fee waivers or expense reimbursement arrangements that
may be in effect.
<PAGE>
CONDENSED FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS. Contained below is per share
operating performance data for a shares of Beneficial Interest
outstanding, total investment return, ratios to average net
assets and other supplemental data for the fiscal year ended
December 31, 1994. This information has been derived from the
Fund's financial statements which have been audited by Ernst &
Young LLP, the Fund's independent auditors.
PER SHARE DATA:
Net asset value, beginning of year. . . . . . $ .9999
INVESTMENT OPERATIONS:
Investment income--net. . . . . . . . . . . . .0234
Net realized gain (loss) on investments . . . (.0002)
TOTAL FROM INVESTMENT OPERATIONS . . . . . .0232
DISTRIBUTIONS:
Dividends from investment income--net . . . . (.0234)
Net asset value, end of year. . . . . . . . . $ .9997
TOTAL INVESTMENT RETURN. . . . . . . . . . . . . 2.36%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net
assets. . . . . . . . . . . . . . . . . . . .68%
Ratio of net investment income to
average net assets. . . . . . . . . . . . . 2.33%
Decrease reflected in above expense
ratios due to undertakings by the Manager . .25%
Net Assets, end of year (000's Omitted) . . . $173,130
MANAGEMENT OF THE FUND
INVESTMENT ADVISER AND ADMINISTRATOR. The Fund's
investment adviser and administrator is First Chicago
Investment Management Company ("FCIMCO"), a newly formed
registered, investment adviser and a wholly-owned subsidiary of
The First National Bank of Chicago ("FNBC"). FCIMCO employs
substantially all the investment personnel who previously
provided advisory services to the Fund.
The Fund has agreed to pay FCIMCO a monthly advisory
fee at the annual rate of .40% of the value of the Fund's
average daily net assets, and a monthly administration fee at
the annual rate of .15% of the value of the Fund's average
daily net assets. FCIMCO has engaged Concord Holding
Corporation (the "Sub-Administrator") to assist it in providing
certain administrative services for the Fund. FCIMCO, from its
own funds, will pay the Sub-Administrator for the Sub-
Administrator's services.
Prior to January 17, 1995, FNBC served as the Fund's
manager pursuant to a Management Agreement. Under the terms of
the Management Agreement, the Fund agreed to pay FNBC a monthly
management fee at the annual rate of .55 of 1% of the value of
the Fund's average daily net assets. For the fiscal year ended
December 31, 1994, the Fund paid FNBC pursuant to the
Management Agreement a monthly fee at the effective annual rate
of .30 of 1% of the value of the Fund's average daily net
assets, pursuant to undertakings in effect.
DISTRIBUTOR. The Fund's distributor is Concord
Financial Group, Inc. (the "Distributor"). The Distributor,
located at 125 West 55th Street, New York, New York 10019, is a
wholly-owned subsidiary of the Sub-Administrator and currently
distributes the shares of other investment companies with
aggregate assets of over $21 billion.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Management of the Fund believes that the Fund qualified
for the fiscal year ended December 31, 1994 as a regulated
investment company under the Internal Revenue Code of 1986, as
amended.
GENERAL INFORMATION
The Fund's Board and shareholders have approved the
reorganization of the Fund as a separate series of Prairie
Funds named Municipal Money Market Fund (the "New Series").
Prairie Funds is a newly-formed registered investment company.
Upon consummation of the transaction, former Fund shareholders
will receive the same number of shares of the New Series as
they owned of the Fund immediately before the transaction was
consummated. These shares initially will have the same net
asset value as the shares of the Fund owned before the
transaction was consummated. The transaction is expected to be
tax free for Federal income tax purposes. After the
transaction is consummated, the Fund will be liquidated and its
existence terminated. Consummation of the transaction is
anticipated to occur in late May 1995.
<PAGE>
- ---------------------------------------------------------------
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.
[ARTWORK]
<PAGE>
FIRST
First Prairie [LOGO] PRAIRIE
Municipal Money Market Fund FUNDS
- ---------------------------------------------------------------
PROSPECTUS
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.
- ---------------------------------------------------------------
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>
Table of Contents
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
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
- ---------------------------------------------------------------
- -----------------
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>
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
</TABLE>
[FN]
- ------------------------
*From February 5, 1986 (commencement of operations) to December
31, 1986.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<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>
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.
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 Options privileges,
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.
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 or through the Wire Redemption Privilege, Telephone
Redemption Privilege, or 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."
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."
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.
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.
"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 the pre-tax yield of a taxable
investment which equals the stated yield or effective yield
after
being taxed at a given rate.
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.
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.
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.
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.
The Fund invests primarily in a portfolio of Municipal
Obligations, the interest from which is exempt from Federal
income tax.
Municipal Obligations 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 rating 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 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
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.
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 categories by at least two nationally recognized
statistical rating organizations, or of comparable rating.
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 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. Some Municipal Obligations are secured by
letters of credit or other credit support arrangements provided
by banks.
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 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
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
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 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
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-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 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 March
31, 1994, 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 ($59.8 billion) and in terms of deposits ($28.8
billion). As of March 31, 1994, the Manager provided investment
management services to portfolios containing approximately
$15.5 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
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 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 $15.5 billion of investment assets.
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."
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 March 31, 1994, managed or administered
approximately $74 billion in assets for more than 1.9 million
investor accounts nationwide.
The Dreyfus Corporation, which manages or administers
approximately $74 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 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. is the Fund's transfer
agent.
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, 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 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
SERVICE 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 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. Contact
your
investment representative or Service Agent to learn how to
purchase shares.
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.
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 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.
You can purchase additional shares by telephone after you
supply the necessary information on your Account Application.
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.
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.
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 Dividend Sweep)
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 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. You can
exchange Fund shares automatically at regular intervals
which you select.
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 Agents. An investor may cancel his participation
in 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. You can purchase shares
automatically
at regular intervals which you select.
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 OPTIONS Dividend Sweep 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" in the Statement of
Additional
Information. Dividend ACH permits a shareholder to
transfer electronically on the payment date their dividends or
dividends and capital gain distributions, if any, from the Fund
to a designated bank account. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. Banks may charge a fee for
this service. You can "sweep" your dividends and capital
gain distributions into certain other First Prairie funds.
For more information concerning these privileges,
or to request a Dividend Options 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
these privileges, 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.
Enrollment in or cancellation of these privileges is
effective three business days following receipt by the Transfer
Agent. These privileges are available only for existing accounts
and may not be used to open new accounts. Minimum subsequent
investments do not apply for Dividend Sweep.
The Fund may modify or terminate these privileges 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 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
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, the
Wire Redemption Privilege, the Telephone Redemption Privilege,
or the TeleTransfer Privilege, as described below.
The Fund offers a number of convenient ways to access your
investment.
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.
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.
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
(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 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.
Call 1-800-227-0072 for TeleTransfer transactions.
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 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 has adopted a plan so that it can pay for
advertising and marketing and to compensate others for providing
services to you.
The Fund also bears 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
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 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.
The Fund declares dividends from net investment income on each
business day. Dividends are usually paid on the last day of each
month.
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 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
withhold ("backup withholding") and remit to the U.S. Treasury
31% 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 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. 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.
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 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.
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>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1995
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of Prairie Municipal Money Market Fund
(the "Fund"), dated May 1, 1995, as it may be revised from time
to time. To obtain a copy of the Fund's Prospectus, please
write to the Fund at Three First National Plaza, Chicago,
Illinois 60670, or call toll free 1-800-370-9446.
First Chicago Investment Management Company ("FCIMCO" or
the "Manager") serves as the Fund's investment adviser and
administrator.
Concord Financial Group, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
PAGE
Investment Objective and Management Policies . . . . . . . .B-2
Management of the Fund . . . . . . . . . . . . . . . . . . .B-7
Management Arrangements. . . . . . . . . . . . . . . . . . .B-9
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . .B-11
Service Plan . . . . . . . . . . . . . . . . . . . . . . . .B-11
Redemption of Fund Shares. . . . . . . . . . . . . . . . . .B-12
Determination of Net Asset Value . . . . . . . . . . . . . .B-12
Dividends, Distributions and Taxes . . . . . . . . . . . . .B-13
Yield Information. . . . . . . . . . . . . . . . . . . . . .B-13
Portfolio Transactions . . . . . . . . . . . . . . . . . . .B-14
Information About the Fund . . . . . . . . . . . . . . . . .B-15
Counsel and Independent Auditors . . . . . . . . . . . . . .B-15
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . .B-16
Financial Statements . . . . . . . . . . . . . . . . . . . .B-22
Report of Independent Auditors . . . . . . . . . . . . . . .B-34
<PAGE>
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<F1> for the fiscal year ended December
31, 1994, computed on a monthly basis, was as follows:
- ----------------
[FN] The Fund may use IBCA Limited and IBCA, Inc. ("IBCA") as
an additional nationally statistical rating organization.
As of December 31, 1994, none of the Fund's investments
were rated by IBCA.
<PAGE>
<TABLE>
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. or Service, Inc. or Corporation Percentage
("FITCH") ("MOODY'S") ("S&P") of Value
<S> <C> <C> <C>
VMIG 1\MIG1, SP-1+\SP-1,
F-1+\F-1 P-1 A1+/A1 100%
</TABLE>
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 Restric-
tions, 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 regulatory 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.
TRUSTEES OF THE FUND
JOHN P. GOULD, TRUSTEE. Distinguished Service Professor of
Economics of the University of Chicago Graduate School of
Business. From 1983 to 1993, Dean of the University of
Chicago Graduate School of Business. Dean Gould also
serves as Director of Harpor Capital Advisors. Mr. Gould
is also a Board member of five other funds in the Prairie
Family of Funds. He is 55 years old and his address is
1101 East 58th Street, Chicago, Illinois 60637.
MARILYN McCOY, TRUSTEE. Vice President of Administration
and Planning of Northwestern University. From 1981
to 1985, she was the Director of Planning and Policy
Development for the University of Colorado. She also
serves on the Board of Directors of Evanston
Hospital, the Chicago Metropolitan YMCA, the Chicago
Network and United Charities. Mrs. McCoy is a member
of the Chicago Economics Club. Mrs. McCoy is also a
Board member of five other funds in the Prairie
Family of Funds. She is 46 years old and her address
is 1100 North Lake Shore Drive, Chicago, Illinois
60611.
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.
Mr. Oddi is also a Board member of five other funds in the
Prairie Family of Funds. He is 66 years old and his
address is 1181 Loch Lane, Lake Forest, Illinois 60045.
For so long as the 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 1940 Act, will be selected and nominated by the Trustees
who are not "interested persons" of the Fund.
OFFICERS OF THE FUND
JOSEPH F. KISSEL, PRESIDENT. Executive Vice President of
Concord
Holding Corporation, the Fund's sub-administrator (the "Sub-
Administrator"), and an officer of other investment
companies administered by the Sub-Administrator. His
address is 125 West 55th Street, New York, New York 10019.
He is 47 years old.
ANN E. BERGIN, VICE PRESIDENT. Senior Vice President of the
Sub-Administrator and an officer of other investment
companies administered by the Sub-Administrator. Her
address is 125 West 55th
Street, New York, New York 10019. She is 35 years old.
STEPHEN A. SMITH, VICE PRESIDENT. Senior Vice President of the
Distributor and an
officer of other investment companies distributed by the
Distributor. His address is 125 West 55th Street, New
York, New York 10019. He is 41 years old.
RICHARD A. FABIETTI, TREASURER. Senior Vice President and
Treasurer of the Sub-
Administrator and the Distributor and an officer of other
investment companies administered by the Sub-
Administrator. His address is 125 West 55th Street, New
York, New York 10019. He is 36 years old.
MARTIN G. FLANIGAN, ASSISTANT TREASURER. Mutual Funds
Accounting Manager of the
Sub-Administrator and an officer of other investment
companies administered by the Sub-Administrator. His
address is 125 West 55th Street, New York, New York 10019.
He is 31 years old.
DOMENICK PUGLIESE, SECRETARY. Vice President and Counsel--
Mutual Funds of the Sub-
Administrator and Distributor, since November 1994, and an
officer of other investment companies administered by the
Sub-Administrator. He was Vice President and Associate
General Counsel of Prudential Mutual Funds, from July 1992
to November 1994, and of Prudential Securities, from March
1992 to July 1992. For more than five years prior
thereto, he was an associate with the law firm of Battle
Fowler. His address is 125 West 55th Street, New York,
New York 10019. He is 33 years old.
LINDA MAHON, ASSISTANT SECRETARY. Vice President of the Sub-
Administrator and
Distributor, since January 1994, and an officer of other
investment companies administered by the Sub-
Administrator. From 1991 to 1994, she was Corporate
Secretary of J.&W. Seligman & Co. Incorporated. From 1989
to 1991, she was Vice President of Paribas Asset
Management, Inc. Her address is 125 West 55th Street, New
York, New York 10019. She is 40 years old.
The Fund pays its Trustees its allocable share of the
aggregate of a fixed fee of $25,000 per annum and a per meeting
fee of $1,000 for all funds in the Prairie Family of Funds.
The estimated aggregate amount of compensation payable to each
Trustee by the Fund and all other funds in the Prairie Family
of Funds for which such person is a Board member for the fiscal
year ending December 31, 1995 are as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual From Fund and
Name of Board Compensation from Accrued as Part of Benefits Upon Fund Complex Paid
Member Fund* Fund's Expenses Retirement to Board Member
<S> <C> <C> <C> <C>
John P. Gould $8,000 None None $30,000
Marilyn McCoy $8,000 None None $30,000
Raymond D. Oddi $8,000 None None $30,000
</TABLE>
______________________________
* Amount does not include reimbursed expenses for attending
Board meetings, which are estimated to be approximately $745
for all Trustees as a group.
MANAGEMENT ARRANGEMENTS
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE
READ IN CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED
"MANAGEMENT OF THE FUND."
INVESTMENT ADVISORY AGREEMENT. FCIMCO provides
investment advisory services pursuant to the Investment
Advisory Agreement (the "Agreement") dated January 17, 1995,
with the Fund. The Agreement is subject to annual approval by
(i) the Fund's Board of Trustees or (ii) vote of a majority (as
defined in the 1940 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 1940 Act) of the Fund
or FCIMCO, by vote cast in person at a meeting called for the
purpose of voting on such approval. The Agreement is
terminable without penalty, on 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, on not less than 90 days' notice, by
FCIMCO. The Agreement will terminate automatically in the
event of its assignment (as defined in the 1940 Act).
FCIMCO is responsible for investment decisions for
the Fund 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 following persons are officers and/or directors
of FCIMCO: J. Stephen Baine, Chairman of the Board of
Directors, Chief Executive Officer and President; Alan F. Delp,
William G. Jurgensen, Joseph M. Thomas and David J. Vitale,
Directors; Terrall J. Janeway, Treasurer, Chief Financial and
Accounting Officer and Managing Director; Bradford M. Markham,
Secretary and Chief Legal Officer; and Richard A. Davies,
Deborah L. Edwards, Marco Hanig, David R. Kling and Stephen P.
Manus, Managing Directors.
ADMINISTRATION AND SUB-ADMINISTRATION AGREEMENTS.
Pursuant to an Administration Agreement dated January 17, 1995,
with the Fund, FCIMCO assists in all aspects of the Fund's
operations, other than providing investment advice, subject to
the overall authority of the Fund's Board in accordance with
Massachusetts law. FCIMCO has engaged Concord Holding
Corporation (the "Sub-Administrator") to assist it in providing
certain administrative services to the Fund. Pursuant to its
agreement with FCIMCO (the "Sub-Administration Agreement"), the
Sub-Administrator assists FCIMCO in furnishing the Fund
clerical help and accounting, data processing, bookkeeping,
internal auditing and legal services and certain other services
required by the Fund, preparing reports to the Fund's
shareholders, tax returns, reports to and filings with the
Securities and Exchange Commission and state Blue Sky
authorities, calculating the net asset value of the Fund's
shares and generally in providing for all aspects of the Fund's
operation, other than providing investment advice. The fees
payable to the Sub-Administrator for its services are paid by
FCIMCO.
The Fund has agreed that FCIMCO and the
Sub-Administrator 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 respective agreements
relate, except for a loss resulting from wilful misfeasance,
bad faith or gross negligence on the part of FCIMCO in the
performance of its obligations or from reckless disregard by it
of its obligations and duties under its Agreements or on the
part of the Sub-Administrator in the performance of its
obligations or from reckless disregard by it of its obligations
and duties under its agreement.
EXPENSES AND EXPENSE INFORMATION. As compensation for the
Manager's services to the Fund, the Fund has agreed to pay the
Manager an investment advisory and administrative fee, computed
daily and paid monthly, at an annual rate of .40 and .15,
respectively, of 1% of the value of the Fund's average daily
net assets. Prior to January 17, 1995, The First National Bank
of Chicago ("FNBC") provided management services to the Fund
pursuant to a Management Agreement (the "Prior Agreement") with
the Fund and engaged The Dreyfus Corporation to provide
administration services to the Fund. Pursuant to the Prior
Agreement, the Fund agreed to pay FNBC a 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, FNBC provided
investment advisory services to the Fund pursuant to an
Investment Advisory Agreement (the "Prior Advisory Agreement")
with the Fund and Dreyfus provided administration services to
the Fund pursuant to an Administration Agreement (the "Prior
Administration Agreement") with the Fund. Pursuant to the
Prior Advisory Agreement, the Fund agreed to pay FNBC 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.
The fees paid to FNBC pursuant to the Prior Advisory
Agreement for the fiscal year ended December 31, 1992 was
$914,834. For the period January 1, 1993 through April 29,
1993, the fee payable to FNBC pursuant to the Prior Advisory
Agreement was $266,582. For the period from April 30, 1993
(effective date of the Prior Agreement) to the fiscal year
ended December 31, 1993 and for the fiscal year ended December
31, 1994, the fees payable to FNBC were $699,072 and
$1,069,636, respectively. For the fiscal years ended December
31, 1992, 1993 and 1994, the fees payable to FNBC were reduced
pursuant to undertakings in effect resulting in net fees paid
of $895,911 in fiscal 1992, $647,661 in fiscal 1993 and
$485,987 in fiscal 1994.
The fee paid to Dreyfus pursuant to the Prior
Administration Agreement for the fiscal year ended December 31,
1992 was $457,417. For the period January 1, 1993 through
April 29, 1993, the fee payable to Dreyfus pursuant to the
Prior Administration Agreement was $133,291.
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, 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.
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 Prairie Family of Funds.
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.
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 2, 1994. 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, 1994, an
aggregate of $551,662 was charged to the Fund under the Plan,
of which $504,645 was paid to FNBC and its affiliates, $3,997
was paid for preparing, printing and distributing prospectuses
and operating the Plan, and $43,020 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.
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.
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 any gain realized from the sale or other
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, 1994, the
Fund's yield was 3.70% and its effective yield was 3.77%.
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.
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.
As of April 28, 1995, the following shareholder
beneficially owned, directly or indirectly, 5% or more of the
Fund's outstanding shares:
Percent of Total
NAME AND ADDRESS SHARES OUTSTANDING
The First National Bank of Chicago 47.97%
c/o ANB
1 North LaSalle Street
Chicago, Illinois 60602
A shareholder who beneficially owns, directly or
indirectly, more than 25% of the Fund's voting securities may
be deemed a "control person" (as defined in the Act) of the
Fund.
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.
COUNSEL AND INDEPENDENT AUDITORS
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 LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Fund.
<PAGE>
APPENDIX
Description of S&P, Moody's and Fitch ratings:
S&P
MUNICIPAL BOND RATINGS
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific
obligation.
The ratings are based on current information furnished by
the issuer or obtained by S&P from other sources it considers
reliable, and will include: (1) likelihood of default-capacity
and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the
terms of the obligation; (2) nature and provisions of the
obligation; and (3) protection afforded by, and relative
position of, the obligation in the event of bankruptcy,
reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA
Debt rated AA has a very strong capacity to pay interest
and repay principal and differs from the highest rated issues
only in a small degree.
The AA rating may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the
category.
MUNICIPAL NOTE RATINGS
SP-1
The issuers of these municipal notes exhibit very strong or
strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are
given a plus (+) designation.
SP-2
The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest.
COMMERCIAL PAPER RATINGS
The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Capacity for timely payment on issues with an A-2 designation
is strong. However, the relative degree of safety is not as
high as for issues designated A-1.
Moody's
MUNICIPAL BOND RATINGS
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments
are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of
such issues.
Aa
Bonds which are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise
what generally are known as high-grade bonds. They are rated
lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Moody's applies the numerical
modifiers 1, 2 and 3 to show relative standing within the
rating category. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a
ranking in the lower end of a rating category.
MUNICIPAL NOTE RATINGS
Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade (MIG).
Such ratings recognize the difference between short-term credit
risk and long-term risk. Factors affecting the liquidity of
the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in
bond risk, long term secular trends for example, may be less
important over the short run.
A short-term rating may also be assigned on an issue having
a demand feature. Such ratings will be designated VMIG, or, if
the demand feature is not rated, as NR. Short-term ratings on
issues with demand features are differentiated by the use of
the VMIG symbol to reflect such characteristics as payment upon
periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should
be alert to the fact that the source of payment may be limited
to the external liquidity with no or limited legal recourse to
the issuer in the event the demand is not met.
Moody's short-term ratings are designated Moody's
Investment Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4.
As the name implies, when Moody's assigns a MIG or VMIG rating,
all categories define an investment grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity
support or demonstrated broad-based access to the market for
refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding
group.
COMMERCIAL PAPER RATING
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations, and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and
high internal cash generation, and well established access to a
range of financial markets and assured sources of alternate
liquidity.
Issues (or related supporting institutions) rated Prime-2
(P-2) have a strong capacity for repayment of senior short-term
promissory obligations. This ordinarily will be evidenced by
many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Fitch
MUNICIPAL BOND RATINGS
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or
class of debt. The ratings take into consideration special
features of the issue, its relationship to other obligations of
the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the
political and economic environment that might affect the
issuer's financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and
of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay
interest and repay principal is very strong, although not quite
as strong as bonds rated AAA. Because bonds rated in the AAA
and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these
issuers is generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol
to indicate the relative position of a credit within the rating
category.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that
are payable on demand or have original maturities of up to
three years, including commercial paper, certificates of
deposit, medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating analysis, the short-term rating places greater emphasis
than bond ratings on the existence of liquidity necessary to
meet the issuer's obligations in a timely manner.
Fitch short-term ratings are as follows:
F-1+
EXCEPTIONALLY STRONG CREDIT QUALITY. Issues assigned this
rating are regarded as having the strongest degree of assurance
for timely payment.
F-1
VERY STRONG CREDIT QUALITY. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2
GOOD CREDIT QUALITY. Issues carrying this rating have a
satisfactory degree of assurance for timely payments, but the
margin of safety is not as great as the F-1+ and F-1
categories.
DEMAND BOND OR NOTES RATINGS
Certain demand securities empower the holder at his option
to require the issuer, usually through a remarketing agent, to
repurchase the security upon notice at par with accrued
interest. This is also referred to as a put option. The
ratings of the demand provision may be changed or withdrawn at
any time if, in Fitch's judgment, changing circumstances
warrant such action.
Fitch demand provision ratings carry the same symbols and
related definitions as its short-term ratings.
IBCA
CORPORATE RATINGS
An IBCA corporate rating represents IBCA's current
assessment of the business and financial risks of the company,
including the economic environment, industry characteristics,
nature of operations, market position, ownership, accounting
policies, earnings trends and sensitivities, cash flow, capital
and debt structure, liquidity position and contingent risks.
The corporate ratings consist of Long- and Short-Term
Ratings. The Short-Term Ratings relate to debt which has a
maturity of less than one year. The Long-Term Ratings relate
to debt instruments with maturity of one year or longer.
LONG-TERM RATINGS
AAA
Obligations for which there is the lowest expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial, such that adverse changes in
business, economic or financial conditions are unlikely to
increase investment risk significantly.
AA
Obligations for which there is a very low expectation of
investment risk. Capacity for timely repayment of principal
and interest is substantial. Adverse changes in business,
economic or financial conditions may increase investment risk,
albeit not very significantly.
NOTE: A plus (+) or minus (-) sign may be appended to a rating
to denote relative status within major rating categories.
SHORT-TERM RATINGS
A1+
Obligations supported by the highest capacity for timely
repayment.
A1
Obligations supported by a very strong capacity for timely
repayment.
A2
Obligations supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse
changes in business, economic or financial conditions.
INTERNATIONAL AND U.S. BANK RATINGS
An IBCA bank rating represents IBCA's current assessment of
the strength of the bank and whether such bank would receive
support should it experience difficulties. In assigning a bank
rating, IBCA considers the bank's results, asset quality and
contingencies, liquidity and funding, capital and management.
In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In
addition, IBCA assigns banks Long- and Short-Term Ratings as
used in the corporate ratings discussed above. Legal Ratings
address the question of whether the bank would receive support
provided by central banks or shareholders if it experienced
difficulties, and such ratings are considered by IBCA to be a
prime factor in its assessment of credit risk. Individual
Ratings represent IBCA's assessment of a bank's economic merits
and address the question of how the bank would be viewed if it
were entirely independent and could not rely on support from
state authorities or its owners.
LEGAL RATINGS
1
A bank for which there is a clear legal guarantee on the
part of its home state to provide any necessary support or a
bank of such importance both internationally and domestically
that support from the state would be forthcoming, if necessary.
The state in question must be a major developed country which
is clearly prepared to support its principal banks.
2
A bank for which there is no legal obligation on the part
of a sovereign entity to provide support but for which state
support would be forthcoming, for example, because of its
importance to the total economy or its historic relationship
with the government or Central Bank. The country in question
must clearly have sufficient resources to provide such support.
3
A bank which has owners who are of sufficient reputation
and possess such resources that shareholder support would be
forthcoming, if necessary.
4
A bank for which support from owners or outside authorities
is likely but not certain. In the case of owners, their
limited size may preclude assurance of support or, where there
is a large number of owners, it may be that they consider the
bank an investment rather than a long-term commitment.
5
A bank which cannot rely on outside assistance.
INDIVIDUAL RATINGS
A
A bank with a strong balance sheet, favorable credit
profile and a consistent record of above-average profitability.
B
A bank with a sound credit profile and without significant
problems. The bank's performance generally has been in line
with or better than that of its peers.
C
A bank which has an adequate credit profile but possesses
one or more troublesome aspects, giving rise to the modest
possibility of risk developing, or which has generally failed
to perform in line with its peers.
D
A bank which is currently underperforming in some notable
manner. The balance sheet is likely to be below average and
profitability poor. The bank has the capability of recovering
using its own resources, but this is likely to take some time.
<PAGE>
<TABLE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
<CAPTION>
PRINCIPAL
TAX EXEMPT INVESTMENTS--100.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
ALABAMA--3.9%
City of Phenix, IDB, EIR, CP (Mead Coated Board Project):
3.55%, 1/5/95 (LOC; ABN-Amro Bank) (a). . . . $4,000,000 $4,000,000
3.65%, 2/8/95 (LOC; ABN-Amro Bank) (a). . . . 2,500,000 2,500,000
ALASKA--3.1%
City of Valdez, Marine Terminal Revenue, Refunding, CP
(Arco Transportation Project)
3.60%, Series A, 2/1/95 (LOC; Atlantic Richfield Co.) (a) 5,200,000 5,200,000
COLORADO--3.6%
Colorado Student Obligation Bond Authority, Student Loan
Revenue, VRDN:
5.05%, Series A (LOC; Student Loan Marketing Association)
(a,b). . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
5.05%, Series B (LOC; Student Loan Marketing Association)
(a,b). . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
CONNECTICUT--1.2%
State of Connecticut Special Assessment Unemployment
Compensation Advanced Fund,
Revenue (Connecticut Unemployment) 3.80%, Series C,
7/1/95 (Insured; FGIC). . . . . . . . . . . . 2,000,000 2,000,962
DISTRICT OF COLUMBIA--1.2%
District of Columbia, Revenue (Supplemental Student
Loan-Consern)
4.05%, 7/1/95 (LOC; Mitsubishi Bank) (a). . . 2,000,000 2,000,000
FLORIDA--1.2%
Sarasota County Public Hospital District, HR, CP (Sarasota
Memorial
Hospital Project)
3.60%, Series B, 1/4/95 (LOC; Sumitomo Bank) (a,b) 2,000,000 2,000,000
GEORGIA--4.6%
Burke County Development Authority, PCR (Oglethorpe Power
Corp.-Vogtle):
CP 4%, 1/11/95 (LOC; Credit Suisse) (a) . . . 2,000,000 2,000,000
VRDN 4.95%, Series A (Insured; FGIC) (b). . . 5,600,000 5,600,000
ILLINOIS--6.1%
Illinois Development Finance Authority:
IDR, VRDN (Mattoon Precision Manufacturing Project)
5.85% (LOC; Industrial Bank of Japan) (a,b). . . . . 2,500,000 2,500,000
PCR, Refunding, CP (Illinois Power Co. Project)
3.75%, Series A, 1/9/95 (LOC; Canadian Imperial
Bank of Commerce) (a) . . . . . . . . . . 1,000,000 1,000,000
Illinois Health Facilities Authority, HR, VRDN (Sisters
Services) 5.50%, Series E (Insured; MBIA) . . . . . . . 2,000,000 2,000,000
Southwestern Development Authority, SWDR, VRDN (Shell Oil Co.
Project)
4.95% (LOC; Shell Oil Co.) (a,b). . . . . . . 4,600,000 4,600,000
INDIANA--9.7%
Indiana Development Finance Authority, SWDR, CP
(Pure Air On Lake Project):
3.60%, 1/4/95 (LOC; Fuji Bank) (a). . . . . . 3,000,000 3,000,000
INDIANA (continued)
Indiana Development Finance Authority, SWDR, CP
(Pure Air On Lake Project) (continued):
3.90%, Series A, 1/11/95 (LOC; Fuji Bank) (a). . . . . . . 3,000,000 3,000,000
City of Indianapolis, RRR, VRDN (Ogden Martin Systems)
4.95% (LOC; Swiss Bank Corp.) (a,b) . . . . . 3,000,000 3,000,000
Jasper County, PCR, CP (Northern Indiana Public Service Co):
4.20%, 1/11/95 (LOC; Barclays Bank) (a) . . . 3,000,000 3,000,000
3.70%, Series A, 1/12/95 (LOC; Barclays Bank) (a) 1,350,000 1,350,000
City of Seymour, EDR, VRDN (Kobello Metal Pouder)
5.85% (LOC; Industrial Bank of Japan) (a,b) . . . . . . 2,700,000 2,700,000
IOWA--1.8%
Iowa School Corp., Warrant Certificates, Revenue
(Iowa School Cash Anticipation Program) 4.25%, Series A,
7/17/95. . . . . . . . . . . . . . . . . . . . 3,000,000 3,010,138
KANSAS--3.4%
Butler County, Solid Waste Disposal Facilities Revenue, VRDN
(Texaco Refining and Marketing) 5%, Series A (LOC; Texaco
Inc.) (a,b). . . . . . . . . . . . . . . . . . 5,600,000 5,600,000
KENTUCKY--4.5%
City of Bowling Green, Industrial Building Revenue, VRDN:
(Bando Manufacturing America Project) 5.85% (LOC;
Industrial Bank of Japan) (a,b) . . . . . . . 1,000,000 1,000,000
(Town Fastener Inc. Project) 5.85% (LOC;
Industrial Bank of Japan) (a,b) . . . . . . . 2,400,000 2,400,000
Daviess County, Solid Waste Disposal Facilities Revenue, VRDN
(Scott Paper Co. Project)
4.95%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b) 3,000,000 3,000,000
City of Walton, IDR, VRDN (Namco Inc. Project)
5.85% (LOC; Industrial Bank of Japan) (a,b) . 1,000,000 1,000,000
LOUISIANA--2.4%
State of Louisiana, CP, Refunding
3.40%, Series A, 2/15/95 (LOC: Credit Locale de France and
Fuji Bank) (a). . . . . . . . . . . . . . . . 4,000,000 4,000,000
MAINE--1.5%
State of Maine, TAN 4.50%, 6/30/95 . . . . . . 2,500,000 2,509,507
MARYLAND--1.2%
Northeast Waste Disposal Authority, RRR, Refunding, VRDN
(Hartford County)
4.90% (BPA; Credit Locale and Insured; AMBAC) (b) 2,000,000 2,000,000
MICHIGAN--3.0%
Michigan Hospital Finance Authority, VRDN:
HR, Refunding (Mount Clemens Hospital) 5.65% (LOC;
Comerica Bank) (a,b). . . . . . . . . . . . . 2,000,000 2,000,000
Revenue (Hospital Equipment Loan Program)
5.60% (LOC; First of America Bank) (a,b). 2,900,000 2,900,000
MISSOURI--1.3%
Columbia, Special Obligation, VRDN 5%, Series A (LOC;
Toronto-Dominion Bank) (a,b) . . . . . . . . . $2,200,000 $2,200,000
NEVADA--6.7%
Clark County, PCR, CP (Southern California Edison Project)
3.65%, Series A, 1/3/95 (LOC; Southern California Edison)
(a). . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Washoe County, Water Facility Revenue, CP (Sierra Pacific Power
Co. Project):
3.60%, 1/4/95 (LOC; Union Bank of Switzerland) (a) 1,000,000 1,000,000
3.65%, 1/12/95 (LOC; Union Bank of Switzerland) (a) 5,100,000 5,100,000
NEW HAMPSHIRE--.7%
New Hampshire Industrial Development Authority, PCR, VRDN
(Connecticut Light and Power Co.) 5.80% (LOC; Union
Bank of Switzerland) (a,b). . . . . . . . . . 1,100,000 1,100,000
NORTH CAROLINA--1.6%Wake County Industrial Facilities and Pollution Control
Financing Authority, Revenue
CP (Carolina Power and Light Co. Project) 3.70%, 2/14/95
(LOC; Fuji Bank) (a). . . . . . . . . . . . . 2,700,000 2,700,000
OREGON--2.1%
State of Oregon, VRDN (Veteran Welfare Bond) 4.95%
(LOC; Mitsubishi Bank) (a,b). . . . . . . . . 3,400,000 3,400,000
PENNSYLVANIA--3.0%
Carbon County Industrial Development Authority, RRR, CP
(Panther Creek
Partners Project) 3.65%, Series A, 1/3/95
(LOC; National Westminster Bank) (a). . . . . $1,000,000 $1,000,000
Venango Industrial Development Authority, RRR, CP (Scrubgrass
Project)
3.80%, 2/1/95 (LOC; National Westminster Bank) (a) 4,000,000 4,000,000
RHODE ISLAND--1.8%
Providence Off State Public Packaging Corp., Exempt Facilities
Revenue, VRDN
(Washington Street Garage Corp. Project)
5.75% (LOC; Morgan Guaranty Trust Co.) (a,b). 3,000,000 3,000,000
TENNESSEE--4.5%
Memphis-Shelby County Airport Authority, Revenue, CP
4.35%, 4/6/95 (LOC; Canadian Imperial Bank of Commerce) (a) 2,405,000 2,405,000
Metro Government of Nashville and Davidson Counties, Facilities
Board Revenue, CP
(Vanderbilt University) 3.75%, 1/9/95 (BPA; Vanderbilt
University). . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
TEXAS--17.6%
Austin County Industrial Development Corp., IDR, CP
(Travis and Williamson Counties Combined Utilities):
3.60%, 1/4/95 (LOC; Swiss Bank Corp.) (a) 3,000,000 3,000,000
3.45%, 1/18/95 (LOC; Swiss Bank Corp.) (a) 2,800,000 2,800,000
Brazos Higher Education Authority Inc., Student Loan Revenue
3.80%, Series B-1, 6/1/95 (LOC; Student Loan Marketing
Association) (a). . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
TEXAS (continued)
Brazos River Authority, PCR, Refunding, CP (Texas Utilities Co.
Project)
3.70%, 2/9/95 (LOC; Canadian Imperial Bank of Commerce) (a) $3,000,000 $3,000,000
Calhoun County Industrial Development Authority, Port Revenue,
VRDN
(Formosa Plastics Corp.) 7% (LOC; Bank of America) (a,b) 2,000,000 2,000,000
Capital Health Facilities Development Corp., Health Facilities
Revenue, VRDN
(Island on Lake Travis) 5.10% (LOC; Credit Suisse) (a,b) 3,900,000 3,900,000
Dallas-Fort Worth Regional Airport Revenue, Joint Revenue,
Refunding, CP
3.60%, 2/1/95 (LOC; National Westminster Bank) (a) 1,000,000 1,000,000
Gulf Coast Industrial Development Authority, SWDR, VRDN
(Citgo Petroleum Corp. Project) 5% (LOC; Wachovia Bank of
Georgia) (a,b). . . . . . . . . . . . . . . . 7,000,000 7,000,000
Port of Port Arthur Naval District, PCR, VRDN (Star Enterprises
Project)
5.75% (LOC; Swiss Bank Corp.) (a,b) . . . . . 4,400,000 4,400,000
VIRGINIA--.8%
Peninsula Ports Authority, Coal Terminal Revenue, Refunding,
VRDN
(Dominion Terminal Project) 4.75%, Series D
(LOC; Barclays Bank) (a,b). . . . . . . . . . 1,240,000 1,240,000
WASHINGTON--1.7%
Port of Vancouver, Revenue, VRDN (United Grain Ore)
5.10% (LOC; Sumitomo Bank) (a,b). . . . . . . 2,800,000 2,800,000
WEST VIRGINIA--1.2%
West Virginia Hospital Finance Authority, HR, VRDN (Saint
Mary's Hospital Project)
5.55% (LOC; Mitsubishi Bank) (a,b). . . . . . $2,000,000 $2,000,000
WISCONSIN--1.3%
Wisconsin Health and Educational Facilities Authority, Revenue,
CP
(Alexian Village Milwaukee Inc.) 3.75%, 2/8/95
(LOC; Sumitomo Bank) (a). . . . . . . . . . . 2,100,000 2,100,000
WYOMING--3.3%
Lincoln County, PCR, CP (Exxon Project)
3.80%, Series A, 1/30/95 (Guaranteed by; Exxon Corp.) 5,500,000 5,500,000
TOTAL INVESTMENTS (cost $165,515,607). . . . . $165,515,607
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
__________________________________________________________________________________________________
SUMMARY OF ABBREVIATIONS
__________________________________________________________________________________________________
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation IDR Industrial Development Revenue
BPA Bond Purchase Agreement LOC Letter of Credit
CP Commercial Paper MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue PCR Pollution Control Revenue
EIR Environment Improvement Revenue RRR Resources Recovery Revenue
FGIC Financial Guaranty Insurance Company SWDR Solid Waste Disposal Revenue
HR Hospital Revenue TAN Tax Anticipation Notes
IDB Industrial Development Board VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
__________________________________________________________________________________________________
MOODY'S
VALUE OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------------- --------------------------------- --------------------------------------
<S> <C> <C>
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 100.0%
===
</TABLE>
NOTES TO STATEMENT OF INVESTMENT:
________________________________________________________________
_
_______________________________
(a) Secured by letters of credit. At December 31, 1994, 79.6%
of the Fund's net assets are backed by letters of credit
issued by domestic banks, foreign banks, Government
Agencies and Corporations.
(b) 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.
(c) P1 and A1 are the highest ratings assigned tax-exempt
commercial paper by Moody's and Standard & Poor's,
respectively.
See notes to financial statements.
<PAGE>
<TABLE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a) $165,515,607
Cash. . . . . . . . . . . . . . . . . . . . . 2,878,018
Receivable for investment securities sold . . 4,080,920
Interest receivable . . . . . . . . . . . . . 877,539
Prepaid expenses. . . . . . . . . . . . . . . 33,510
173,385,594
LIABILITIES:
Due to The First National Bank of Chicago . . $80,415
Due to The Dreyfus Corporation. . . . . . . . 97,284
Accrued expenses. . . . . . . . . . . . . . . 77,863 255,562
---------- --------------
NET ASSETS . . . . . . . . . . . . . . . . . . $173,130,032
=====
REPRESENTED BY:
Paid-in capital . . . . . . . . . . . . . . . $173,170,062
Accumulated net realized (loss) on investments (40,030)
----------------
NET ASSETS at value applicable to 173,183,640 shares
outstanding (unlimited
number of $.01 par value shares of Beneficial Interest
authorized). . . . . . . . . . . . . . . . . . $173,130,032
=====
NET ASSET VALUE, offering and redemption price per share
($173,130,032 / 173,183,640 shares) . . . . . $1.00
=====
See notes to financial statements.
<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
INVESTMENT INCOME:
INTEREST INCOME . . . . . . . . . . . . . . . $5,853,085
EXPENSES:
Management fee-Note 2(a) . . . . . . . . $1,069,636
Shareholder servicing costs-Note 2(b) . . . 551,662
Professional fees. . . . . . . . . . . . 60,273
Custodian fees . . . . . . . . . . . . . 33,583
Registration fees. . . . . . . . . . . . 28,368
Prospectus and shareholders' reports-Note 2(b) 26,815
Trustees' fees and expenses-Note 2(c). . 13,108
Miscellaneous. . . . . . . . . . . . . . 31,736
--------
1,815,181
Less-reduction in management fee
due to undertakings-Note 2(a). . . . 485,987
---------
TOTAL EXPENSES . . . . . . . . . . 1,329,194
----------
INVESTMENT INCOME--NET . . . . . . . . . . . . 4,523,891
NET REALIZED (LOSS) ON INVESTMENTS--Note 1(b). (36,537)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,487,354
====
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE 1
___________________________________________________________________________________________
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR ENDED DECEMBER 31,
1993 1994
------------ --------------
<S> <C> <C>
OPERATIONS:
Investment income-net . . . . . . . . $3,362,434 $ 4,523,891
Net realized (loss) on investments. . (2,293) (36,537)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . 3,360,141 4,487,354
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net . . . . . . . . (3,362,434) (4,523,891)
-------------- ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold . . . . 409,972,617 428,067,086
Dividends reinvested. . . . . . . . . 1,647,251 2,261,400
Cost of shares redeemed . . . . . . . (443,919,511) (434,859,851)
-------------- --------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS . . . . (32,299,643) (4,531,365)
-------------- --------------
TOTAL (DECREASE) IN NET ASSETS (32,301,936) (4,567,902)
-------------- --------------
NET ASSETS:
Beginning of year . . . . . . . . . . 209,999,870 177,697,934
-------------- -------------
End of year . . . . . . . . . . . . . $177,697,934 $173,130,032
===== =====
</TABLE>
See notes to financial statements.
<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE
1
________________________________________________________________
_
__________________________
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
the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $.9999 $.9999 $.9999 $.9999 $.9999
------ ------ ------ ------ ------
INVESTMENT OPERATIONS;
Investment income-net . . .0527 .0413 .0236 .0174 .0234
Net realized (loss) on investments --- --- -- --- (.0002)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS. . . . . . . . .0527 .0413 .0236 .0174 .0232
------ ------ ------ ------- ------
DISTRIBUTIONS;
Dividends from investment income-net (.0527) (.0413) (.0236) (.0174) (.0234)
------ ------ ------ ------ ------
Net asset value, end of year $.9999 $.9999 $.9999 $.9999 $.9997
=== === === === ===
TOTAL INVESTMENT RETURN. . 5.40% 4.21% 2.38% 1.75% 2.36%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.00% .98% .95% .79% .68%
Ratio of net investment income to
average net assets. . . . 5.27% 4.11% 2.38% 1.74% 2.33%
Decrease reflected in above expense
ratios due to undertakings by
the Manager . . . . . . --- --- .01% .16% .25%
Net Assets, end of year (000's Omitted) $176,009 $233,675 $210,000 $177,698 $173,130
</TABLE>
See notes to financial statements.
<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE
1
_______________________________________________________________
____________________________
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, until August
24, 1994, a wholly-owned subsidiary of Dreyfus, acted as the
distributor of the Fund's shares, which are sold without a
sales load. Effective August 24, 1994, the Manager became a
direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc.
(the "Distributor") was engaged as the Fund's distributor. The
Distributor, located at One Exchange Place, Boston,
Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of
which is Boston Institutional Group, Inc.
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. There is no assurance, however,
that the Fund will be able to maintain a stable net asset value
of $1.00.
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
original issue 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
applicable provisions of the Internal Revenue Code, and to make
distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income
and excise taxes.
The Fund has an unused capital loss carryover of
approximately $4,000 available for Federal income tax purposes
to be applied against future net securities profits, if any
realized subsequent to December 31, 1994. The carryover does
not include net realized securities losses from November 1,
1994 through December 31, 1994 which are treated, for Federal
income tax purposes, as arising in fiscal 1995. If not applied,
$1,000 of the carryover expires in 1999, $2,000 expires in 2001
and $1,000 expires in 2002. As a result of the expiration of a
prior year capital loss carryover $13,578 was reclassified from
accumulated net realized loss to additional paid in capital.
At December 31, 1994, 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, 1994
through April 25, 1994 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 April 26,
1994 to assume all expenses of the Fund in excess of an annual
rate of .70 of 1% of the Fund's average daily net assets. The
reduction in management fee, pursuant to the undertakings,
amounted to $485,987 for the year ended December 31, 1994.
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.
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.
(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, 1994,
the Fund was charged $504,645 pursuant to the Plan,
substantially all of which was retained by the Manager and
Dreyfus.
(C) Prior to August 24, 1994, certain officers and
trustees of the Fund were "affiliated persons," as defined in
the Act, of the Manager or Dreyfus Service Corporation. Each
trustee who is not an "affiliated person" receives an annual
fee of $2,500 and an attendance fee of $500 per meeting.
NOTE 3--SUBSEQUENT EVENTS:
As of January 1, 1995, the Fund's investment adviser is
First Chicago Investment Management Company ("FCIMCO"), a newly
formed registered investment adviser and a wholly-owned
subsidiary of The First National Bank of Chicago. Effective
January 17, 1995, the Fund entered into a new administration
agreement with FCIMCO. In addition, effective January 17, 1995,
FCIMCO entered into a master sub-administration agreement with
Concord Holding Corporation ("Concord") pursuant to which
FCIMCO will pay Concord a portion of its administration fee in
consideration of Concord's providing administrative services to
the Fund. The Fund has agreed to pay FCIMCO a monthly advisory
and administration fee at the annual rate of .40% and .15%,
respectively, of the value of the Fund's average daily net
assets.
The Fund entered into a new distribution agreement with
Concord Financial Group, Inc., a wholly-owned subsidiary of
Concord which is effective January 17, 1995.
<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
(FORMERLY FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND)--SEE NOTE
1
_______________________________________________________________
____________________________
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
We have audited the accompanying statement of assets and
liabilities of First Prairie Municipal Money Market Fund,
including the statement of investments, as of December 31,
1994, 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, 1994 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 Municipal
Money Market Fund, at December 31, 1994, 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 LLP Signature Logo)
New York, New York
February 3, 1995
<PAGE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS - LIST
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information.
Included in Part B of the Registration Statement:
Statement of Investments.
Statement of Assets and Liabilities.
Statement of Operations.
Statement of changes in Net Assets.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent
Auditors.
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS - LIST (CONTINUED)
(b) EXHIBITS:
(1)(a) Registrant's Agreement and Declaration of Trust are
incorporated by reference to Exhibit (1)(a) of Post-
Effective Amendment No. 12 to the Registration
Statement on Form N-1A, filed on March 3, 1994.
(1)(b) Amendment dated March 15, 1989 to 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) Registrant's By-Laws are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A, filed on March
3, 1994.
(5)(a) Investment Advisory Agreement.
(6)(a) Distribution Agreement.
(6)(b) Forms of Service Agreement 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) The Custody Agreement 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.
(9)(a) Administration Agreement.
(9)(b) Master Sub-Administration Agreement.
(10) 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) Service Plan 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 is incorporated by
reference to Exhibit (16) of Post-Effective Amendment
No. 12 to the Registration Statement on Form N-1A,
filed on March 3, 1994.
Other Exhibits
____________________
(a) Powers of Attorney are incorporated by
reference to Other Exhibits (a) of Post-
Effective Amendment No. 7 to the
Registration Statement on Form N-1A, filed
on April 26, 1990.
(b) Registrant's Certificate of 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)
Title of Class Number of Record
Holders as of April 28,
1995
Shares of Beneficial
Interest par value $.01 per
share 1,734
ITEM 27. INDEMNIFICATION
Reference is made to Article EIGHTH of the
Registrant's Agreement and Declaration of Trust
incorporated by reference to Exhibit (1) of Pre-
Effective Amendment No. 2 to the Registration
Statement filed under the Securities Act of 1933 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 filed under the Securities Act
of 1933 on December 30, 1985, and the following
undertaking set forth in the rule 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 also is made to the Distribution Agreement,
as revised.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Registrant is fulfilling the requirement of this
Item 28 to provide a list of the officers and directors of
First Chicago Investment Management Company (the "Investment
Adviser"), together with information as to any other business,
profession, vocation or employment of a substantial nature
engaged in by the Investment Adviser or those of its officers
and directors during the past two years, by incorporating by
reference the information contained in the Form ADV filed with
the SEC pursuant to the Investment Advisers Act of 1940 by the
Investment Adviser (SEC File No. 801-47947).
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Other investment companies for which
Registrant's principal underwriter (exclusive distributor) acts
as principal underwriter or exclusive distributor:
The Infinity Mutual Funds, Inc.
Pacific Horizon Funds, Inc.
Prairie Funds
Prairie Institutional Funds
Prairie Municipal Bond Fund, Inc.
First Prairie Money Market Fund
Prairie Intermediate Bond Fund
(b) The information required by this Item 29(b)
regarding each director or officer of Concord Financial Group,
Inc. is incorporated by reference to Schedule A of Form BD
filed by Concord Financial Group, Inc. pursuant to the
Securities Exchange Act of 1934 (SEC File No. 8-37601).
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
1. First Chicago Investment Management Company
Three First National Plaza
Chicago, Illinois 60670
2. Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019
ITEM 31. MANAGEMENT SERVICES
Not Applicable
ITEM 32. UNDERTAKINGS
Registrant hereby undertakes
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 outstand-
ing 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant
certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in this
City of New York, and State of New York, on the 28th day of
April, 1995.
FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND
BY:/S/ JOSEPH F. KISSEL*
Joseph F. Kissel, 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.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<C> <C> <C>
/S/JOSEPH F. KISSEL* President April 28, 1995
Joseph F. Kissel (Principal
Executive Officer)
/S/ RICHARD A. FABIETTI* Treasurer April 28, 1995
Richard A. Fabietti (Principal Financial
and Accounting
Officer)
/S/ JOHN P. GOULD* Trustee April 28, 1995
John P. Gould
/S/ MARILYN MCCOY* Trustee April 28, 1995
Marilyn McCoy
/S/ RAYMOND D. ODDI* Trustee April 28, 1995
Raymond D. Oddi
*By: /S/ ANN E. BERGIN April 28, 1995
Ann E. Bergin, As
Attorney-in-fact
</TABLE>
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
Post-Effective Amendment No. 13 to
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
EXHIBITS
<PAGE>
INDEX TO EXHIBITS
Page
(5)(a) Investment Advisory Agreement . . . . . . .
(6)(a) Distribution Agreement. . . . . . . . . . .
(9)(a) Administration Agreement. . . . . . . . . .
(9)(b) Master Sub-Administration Agreement . . . .
(11) Consent of Independent Auditors . . . . . .
<PAGE>
Exhibit 5(a)
INVESTMENT ADVISORY AGREEMENT
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
125 West 55th Street
New York, New York 10019
January 17, 1995
First Chicago Investment
Management Company
Three First National Plaza
Chicago, Illinois 60670
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series, if any, named on Schedule 1 hereto,
as such Schedule may be revised from time to time (each, a
"Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which
have been or will be submitted to you, and in such manner and
to such extent as from time to time may be approved by the
Fund's Board. The Fund desires to employ you to act as its
investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of each Series'
portfolio in accordance with such Series' investment objectives
and policies as stated in the Fund's Prospectus and Statement
of Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise each Series' investments and
conduct a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of such Series' assets. You
will furnish to the Fund such statistical information, with
respect to the investments which a Series may hold or
contemplate purchasing, as the Fund may reasonably request.
The Fund wishes to be informed of important developments
materially affecting any Series' portfolio and shall expect
you, on your own initiative, to furnish to the Fund from time
to time such information as you may believe appropriate for
this purpose.
You shall exercise your best judgment in rendering
the services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that you
shall not be liable hereunder for any error of judgment or
mistake of law or for any loss suffered by one or more Series,
provided that nothing herein shall be deemed to protect or
purport to protect you against any liability to the Fund or a
Series or to its security holders to which you would otherwise
be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and
duties hereunder.
In consideration of services rendered pursuant to
this Agreement, the Fund will pay you on the first business day
of each month a fee at the rate set forth opposite each Series'
name on Schedule 1 hereto. Net asset value shall be computed
on such days and at such time or times as described in the
Fund's then-current Prospectus and Statement of Additional
Information. The fee for the period from the date of the
commencement of the public sale of a Series' shares to the end
of the month during which such sale shall have been commenced
shall be pro-rated according to the proportion which such
period bears to the full monthly period, and upon any
termination of this Agreement before the end of any month, the
fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of
this Agreement.
For the purpose of determining fees payable to you,
the value of each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement. All other
expenses to be incurred in the operation of the Fund will be
borne by the Fund, except to the extent specifically assumed by
you. The expenses to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and distributions paid
on securities sold short, brokerage fees and commissions, if
any, fees of Board members, Securities and Exchange Commission
fees and 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 Series' existence,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of
additional information for regulatory purposes and for
distribution to existing stockholders, costs of stockholders'
reports and meetings, and any extraordinary expenses.
As to each Series, if in any fiscal year the
aggregate expenses of a Series (including fees pursuant to this
Agreement, but excluding interest, taxes, brokerage and, with
the prior written consent of the necessary state securities
commissions, extraordinary expenses) exceed the expense
limitation of any state having jurisdiction over such Series,
the Fund may deduct from the fees to be paid hereunder, or you
will bear, such excess expense to the extent required by state
law. Your obligation pursuant hereto will be limited to the
amount of your fees hereunder. 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 Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to
one or more other investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so
acting, provided that when the purchase or sale of securities
of the same issuer is suitable for the investment objectives of
two or more companies or accounts managed by you which have
available funds for investment, the available securities will
be allocated in a manner believed by you to be equitable to
each company or account. It is recognized that in some cases
this procedure may adversely affect the price paid or received
by one or more Series or the size of the position obtainable
for or disposed of by one or more Series.
In addition, it is understood that the persons
employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict
your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render
services of whatever kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad faith
or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your
obligations and duties hereunder. Any person, even though also
your officer, director, partner, employee or agent, who may be
or become an officer, Board member, employee or agent of the
Fund, shall be deemed, when rendering services to the Fund or
acting on any business of the Fund, to be rendering such
services to or acting solely for the Fund and not as your
officer, director, partner, employee or agent or one under your
control or direction even though paid by you.
As to each Series, this Agreement shall continue
until the date set forth opposite such Series' name on Schedule
1 hereto (the "Reapproval Date") and thereafter shall continue
automatically for successive annual periods ending on the day
of each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment
Company Act of 1940, as amended) of such Series' outstanding
voting securities, provided that in either event its
continuance also is approved by a majority of the Fund's Board
members who are not "interested persons" (as defined in said
Act) of any party to this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval.
As to each Series, this Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board or by vote of
holders of a majority of such Series' shares or, upon not less
than 90 days' notice, by you. This Agreement also will
terminate automatically, as to the relevant Series, in the
event of its assignment (as defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Prairie" as part of their name,
and that your corporation or its affiliates may enter into
investment advisory or other agreements with such other
entities. If you cease to act as the Fund's investment
adviser, the Fund agrees that, at your request, the Fund will
take all necessary action to change the name of the Fund to a
name not including "Prairie" in any form or combination of
words.
This Agreement has been executed on behalf of the
Fund by the undersigned officer of the Fund in his capacity as
an officer of the Fund. The obligations of this Agreement
shall only be binding upon the assets and property of the Fund
and shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
FIRST PRAIRIE MUNICIPAL
MONEY MARKET FUND
By:__________________________
Accepted:
FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY
By:______________________________
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Annual Fee
as a
Percentage
of Average
Daily Net Reapproval Reapproval
Name of Fund or Series Assets Date Day
<S> <C> <C> <C>
First Prairie Municipal Money .40% January 17, January 17
Market Fund 1997
</TABLE>
<PAGE>
Exhibit 6(a)
DISTRIBUTION AGREEMENT
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
125 West 55th Street
New York, New York 10019
January 17, 1995
Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019
Dear Sirs:
This is to confirm that, in consideration of the
agreements hereinafter contained, the above-named investment
company (the "Fund") has agreed that you shall be, for the
period of this agreement, the distributor of (a) shares of each
series of the Fund set forth on Exhibit A hereto, as such
Exhibit may be revised from time to time (each, a "Series") or
(b) if no Series are set forth on such Exhibit, shares of the
Fund. For purposes of this agreement the term "Shares" shall
mean the authorized shares of the relevant Series, if any, and
otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities
Act of 1933, as amended, and will transmit promptly any orders
received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which
the Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit
orders for the sale of Shares. It is contemplated that you
will enter into sales or servicing agreements with securities
dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will act only on
your own behalf as principal.
1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made
or adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be
furnished by the Fund hereunder, and all expenses in connection
with the preparation and printing of the Fund's prospectuses
and statements of additional information for regulatory
purposes and for distribution to shareholders; provided,
however, that nothing contained herein shall be deemed to
require the Fund to pay any of the costs of advertising the
sale of Shares.
1.6 The Fund agrees to execute any and all documents
and to furnish any and all information and otherwise to take
all actions which may be reasonably necessary in the discretion
of the Fund's officers in connection with the qualification of
Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such
qualification. You shall pay all expenses connected with your
own qualification as a dealer under state or Federal laws and,
except as otherwise specifically provided in this agreement,
all other expenses incurred by you in connection with the sale
of Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for
use in connection with the sale of Shares, such information
with respect to the Fund or any relevant Series and the Shares
as you may reasonably request, all of which shall be signed by
one or more of the Fund's duly authorized officers; and the
Fund warrants that the statements contained in any such
information, when so signed by the Fund's officers, shall be
true and correct. The Fund also shall furnish you upon request
with: (a) semi-annual reports and annual audited reports of
the Fund's books and accounts made by independent public
accountants regularly retained by the Fund, (b) quarterly
earnings statements prepared by the Fund, (c) a monthly
itemized list of the securities in the Fund's or, if
applicable, each Series' portfolio, (d) monthly balance sheets
as soon as practicable after the end of each month, and
(e) from time to time such additional information regarding the
Fund's financial condition as you may reasonably request.
1.8 The Fund represents to you that all registration
statements and prospectuses filed by the Fund with the Securi-
ties and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as
amended, with respect to the Shares have been carefully
prepared in conformity with the requirements of said Acts and
rules and regulations of the Securities and Exchange Commission
thereunder. As used in this agreement the terms "registration
statement" and "prospectus" shall mean any registration state-
ment and prospectus, including the statement of additional
information incorporated by reference therein, filed with the
Securities and Exchange Commission and any amendments and
supplements thereto which at any time shall have been filed
with said Commission. The Fund represents and warrants to you
that any registration statement and prospectus, when such reg-
istration statement becomes effective, will contain all state-
ments required to be stated therein in conformity with said
Acts and the rules and regulations of said Commission; that all
statements of fact contained in any such registration statement
and prospectus will be true and correct when such registration
statement becomes effective; and that neither any registration
statement nor any prospectus when such registration statement
becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Fund may but shall not be obligated to propose
from time to time such amendment or amendments to any registra-
tion statement and such supplement or supplements to any pro-
spectus as, in the light of future developments, may, in the
opinion of the Fund's counsel, be necessary or advisable. If
the Fund shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by
the Fund of a written request from you to do so, you may, at
your option, terminate this agreement or decline to make offers
of the Fund's securities until such amendments are made. The
Fund shall not file any amendment to any registration statement
or supplement to any prospectus without giving you reasonable
notice thereof in advance; provided, however, that nothing
contained in this agreement shall in any way limit the Fund's
right to file at any time such amendments to any registration
statement and/or supplements to any prospectus, of whatever
character, as the Fund may deem advisable, such right being in
all respects absolute and unconditional.
1.9 The Fund authorizes you to use any prospectus in
the form furnished to you from time to time, in connection with
the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person
who controls you within the meaning of Section 15 of the Secu-
rities Act of 1933, as amended, free and harmless from and
against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connec-
tion therewith) which you, your officers and directors, or any
such controlling person, may incur under the Securities Act of
1933, as amended, or under common law or otherwise, arising out
of or based upon any untrue statement, or alleged untrue state-
ment, of a material fact contained in any registration state-
ment or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact
required to be stated in either any registration statement or
any prospectus or necessary to make the statements in either
thereof not misleading; provided, however, that the Fund's
agreement to indemnify you, your officers or directors, and any
such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any
untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement or
prospectus in reliance upon and in conformity with written
information furnished to the Fund by you specifically for use
in the preparation thereof. The Fund's agreement to indemnify
you, your officers and directors, and any such controlling
person, as aforesaid, is expressly conditioned upon the Fund's
being notified of any action brought against you, your officers
or directors, or any such controlling person, such notification
to be given by letter or by telegram addressed to the Fund at
its address set forth above within ten days after the summons
or other first legal process shall have been served. The
failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or
defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but in case the
Fund does not elect to assume the defense of any such suit, or
in case you do not approve of counsel chosen by the Fund, the
Fund will reimburse you, your officers and directors, or the
controlling person or persons named as defendant or defendants
in such suit, for the fees and expenses of any counsel retained
by you or them. The Fund's indemnification agreement contained
in this paragraph 1.9 and the Fund's representations and
warranties in this agreement shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of you, your officers and directors, or any controlling
person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to your benefit,
to the benefit of your several officers and directors, and
their respective estates, and to the benefit of any controlling
persons and their successors. The Fund agrees promptly to
notify you of the commencement of any litigation or proceedings
against the Fund or any of its officers or Board members in
connection with the issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the
Fund, its several officers and Board members, and any person
who controls the Fund within the meaning of Section 15 of the
Securities Act of 1933, as amended, free and harmless from and
against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in con-
nection therewith) which the Fund, its officers or Board
members, or any such controlling person, may incur under the
Securities Act of 1933, as amended, or under common law or
otherwise, but only to the extent that such liability or
expense incurred by the Fund, its officers or Board members, or
such controlling person resulting from such claims or demands,
shall arise out of or be based upon any untrue, or alleged
untrue, statement of a material fact contained in information
furnished in writing by you to the Fund specifically for use in
the Fund's registration statement and used in the answers to
any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise
out of or be based upon any omission, or alleged omission, to
state a material fact in connection with such information
furnished in writing by you to the Fund and required to be
stated in such answers or necessary to make such information
not misleading. Your agreement to indemnify the Fund, its
officers and Board members, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified of
any action brought against the Fund, its officers or Board
members, or any such controlling person, such notification to
be given by letter or telegram addressed to you at your address
set forth above within ten days after the summons or other
first legal process shall have been served. You shall have the
right to control the defense of such action, with counsel of
your own choosing, satisfactory to the Fund, if such action is
based solely upon such alleged misstatement or omission on your
part, and in any other event the Fund, its officers or Board
members, or such controlling person shall each have the right
to participate in the defense or preparation of the defense of
any such action. The failure so to notify you of any such
action shall not relieve you from any liability which you may
have to the Fund, its officers or Board members, or to such
controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement contained in this
paragraph 1.10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's
officers and Board members, and their respective estates, and
to the benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of
any litigation or proceedings against you or any of your
officers or directors in connection with the issue and sale of
Shares.
1.11 No Shares shall be offered by either you or the
Fund under any of the provisions of this agreement and no
orders for the purchase or sale of such Shares hereunder shall
be accepted by the Fund if and so long as the effectiveness of
the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the
provisions of the Securities Act of 1933, as amended, or if and
so long as a current prospectus as required by Section 10 of
said Act, as amended, is not on file with the Securities and
Exchange Commission; provided, however, that nothing contained
in this paragraph 1.11 shall in any way restrict or have an
application to or bearing upon the Fund's obligation to
repurchase any Shares from any shareholder in accordance with
the provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and
Exchange Commission for amendments to the registration
statement or prospectus then in effect or for
additional information;
(b) in the event of the issuance by the Securi-
ties and Exchange Commission of any stop order sus-
pending the effectiveness of the registration state-
ment or prospectus then in effect or the initiation of
any proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the
registration statement or prospectus then in effect or
which requires the making of a change in such regis-
tration statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments to
any registration statement or prospectus which may
from time to time be filed with the Securities and Ex-
change Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by
you shall be offered for sale at a price per share (the
"offering price") approximately equal to (a) their net asset
value (determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall
be the percentage of the offering price of such Shares as set
forth in the Fund's then-current prospectus. The offering
price, if not an exact multiple of one cent, shall be adjusted
to the nearest cent. In addition, Shares of any class of the
Fund offered for sale by you may be subject to a contingent
deferred sales charge as set forth in the Fund's then-current
prospectus. You shall be entitled to receive any sales charge
or contingent deferred sales charge in respect of the Shares.
Any payments to dealers shall be governed by a separate
agreement between you and such dealer and the Fund's then-
current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate Reapproval Date shall be specified
on Exhibit A for each Series), and thereafter shall continue
automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A
hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as
to the Fund or relevant Series, as the case may be, in the
event of its assignment (as defined in said Act).
4. Exclusivity
The Fund acknowledges that the persons employed by you
to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates' right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance
with your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND
By:
Accepted:
CONCORD FINANCIAL GROUP, INC.
By:________________________
<PAGE>
EXHIBIT A
Name of Fund or Series Reapproval Date ReapprovaL
Day
First Prairie Municipal
Money Market Fund January 17, 1997 January 17
<PAGE>
Exhibit 9(a)
ADMINISTRATION AGREEMENT
FIRST PRAIRIE MUNICIPAL MONEY MARKET FUND
125 West 55th Street
New York, New York 10019
January 17, 1995
First Chicago Investment
Management Company
Three First National Plaza
Chicago, Illinois 60670
Dear Sirs:
The above-named investment company (the "Fund")
consisting of the series, if any, named on Schedule 1 hereto,
as such Schedule may be revised from time to time (each, a
"Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which
have been or will be submitted to you, and in such manner and
to such extent as from time to time may be approved by the
Fund's Board. The Fund desires to employ you to act as its
administrator.
In this connection it is understood that from time to
time you will employ or associate with itself such person or
persons as you may believe to be particularly fitted to assist
it in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect. We have discussed and
concur in your employing on this basis Concord Holding
Corporation (the "Sub-
Administrator").
Pursuant to this agreement and subject to the
supervision and control of the Fund's Board, you will assist in
supervising all aspects of the Fund's operations, except
investment management of the Series' portfolios. It is
understood that, pursuant to this Agreement, you shall not act
and shall not be required to act as an investment adviser or
have any authority to supervise the investment or reinvestment
of the cash, securities or other property comprising the
Series' assets or to determine what securities or other
property may be purchased or sold by the Fund.
You will supply office facilities (which may be in
your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and
legal services, internal executive and administrative services,
and stationery and office supplies; prepare reports to each
Series' stockholders, tax returns, reports to and filings with
the Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of each Series'
shares; and generally assist in all aspects of the Fund's
operations.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that
neither you nor the Sub-Administrator shall be liable hereunder
for any error of judgment or mistake of law or for any loss
suffered by one or more Series, provided that nothing herein
shall be deemed to protect or purport to protect you or the
Sub-Administrator against any liability to the Fund or a Series
or to its security holders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and
duties hereunder, or to which the Sub-Administrator would
otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties
under the agreement by which you engage it (the "Master Sub-
Administration Agreement"), or by reason of its reckless
disregard of its obligations and duties under such agreement.
In consideration of the services rendered pursuant to
this Agreement, the Fund will pay you on the first business day
of each month a fee at the rate set forth opposite each Series'
name on Schedule 1 hereto. Net asset value shall be computed
on such days and at such time or times as described in the
Fund's then-current Prospectus and Statement of Additional
Information. The fee for the period from the date of the
commencement of the public sale of a Series' shares to the end
of the month during which such sale shall have been commenced
shall be pro-rated according to the proportion which such
period bears to the full monthly period, and upon any
termination of this Agreement before the end of any month, the
fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of
this Agreement.
For the purpose of determining fees payable to you,
the value of each Series' net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of each Series' net assets.
You will bear all expenses in connection with the
performance of your services under this Agreement and will pay
all fees of the Sub-Administrator in connection with its duties
in respect of the Series. All other expenses to be incurred in
the operation of the Fund will be borne by the Fund, except to
the extent specifically assumed by you. The expenses to be
borne by the Fund include, without limitation, the following:
organizational costs, taxes, interest, loan commitment fees,
interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members,
Securities and Exchange Commission fees and 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 Series' existence, costs attributable
to investor services (including, without limitation, telephone
and personnel expenses), costs of preparing and printing
prospectuses and statements of additional information for
regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and corporate
meetings, and any extraordinary expenses.
The Fund understands that, from time to time
hereafter, you may act as administrator to one or more other
investment companies and fiduciary or other managed accounts,
and the Fund has no objection to your so acting. In addition,
it is understood that the persons employed by you to assist in
the performance of your duties hereunder will not devote their
full time to such service and nothing contained herein shall be
deemed to limit or restrict your right or the right of any of
your affiliates to engage in and devote time and attention to
other businesses or to render services of whatever kind or
nature.
Neither you nor the Sub-Administrator shall 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
this Agreement or the Master Sub-Administration Agreement
relates, except, in the case of you, for a loss resulting from
willful misfeasance, bad faith or gross negligence on your part
in the performance of your duties or from reckless disregard by
you of your obligations and duties under this Agreement and, in
the case of the Sub-Administrator, for a loss resulting from
willful misfeasance, bad faith or gross negligence on its part
in the performance of its duties or from reckless disregard by
it of its obligations and duties under the Master Sub-
Administration Agreement. Any person, even though also your
officer, Board member, partner, employee or agent, who may be
or become an officer, Board member, partner, employee or agent
of the Fund, shall be deemed, when rendering services to the
Fund or acting on any business of the Fund, to be rendering
such services to or acting solely for the Fund and not as your
officer, Board member, partner, employee, or agent or one under
your control or direction even though paid by you.
As to each Series, this Agreement shall continue until
the date set forth opposite such Series' name on Schedule 1
hereto (the "Reapproved Date"), and thereafter shall continue
automatically for successive annual periods ending on the day
of each year set forth opposite the Series' name on Schedule 1
hereto (the "Reapproval Day"), provided such continuance is
specifically approved at least annually by (i) the Fund's Board
or (ii) vote of a majority (as defined in the Investment
Company Act of 1940, as amended) of such Series' outstanding
voting securities, provided that in either event its
continuance also is approved by a majority of the Fund's Board
members who are not "interested persons" (as defined in said
Act) of any party to this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval.
As to each Series, after the Reapproval Date, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of holders of a majority of such Series'
shares or, upon not less than 90 days' notice, by you. This
Agreement also will terminate automatically, as to the relevant
Series, in the event of its assignment (as defined in said
Act).
The Fund is agreeing to the provisions of this
Agreement that limit the Sub-Administrator's liability and
other provisions relating to the Sub-Administrator so as to
induce the Sub-Administrator to enter into the Master Sub-
Administration Agreement with you and to perform its
obligations thereunder. The Sub-Administrator is expressly
made a third party beneficiary of this Agreement with rights as
respects the Fund to the same extent as if it had been a party
hereto.
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Prairie" as part of their name,
and that your corporation or its affiliates may enter into
administration or other agreements with such other entities.
If you cease to act as the Fund's administrator, the Fund
agrees that, at your request, the Fund will take all necessary
action to change the name of the Fund to a name not including
"Prairie" in any form or combination of words.
This Agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this Agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
FIRST PRAIRIE MUNICIPAL MONEY
MARKET FUND
By:
Accepted:
FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY
By:
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Annual Fee
as a
Percentage
of Average
Daily Net Reapproval Reapproval
Name of Fund or Series Assets Date Day
<S> <C> <C> <C>
First Prairie Municipal Money .15% January 17, January 17
Market Fund 1997
</TABLE>
<PAGE>
Exhibit 9(b)
MASTER SUB-ADMINISTRATION AGREEMENT
This Master Sub-Administration Agreement is made as of
this 31st day of January 1995 between FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY, a Delaware corporation, with a principal
place of business at Three First National Plaza, Chicago,
Illinois 60670 (herein called the "FCIMCO"), and CONCORD
HOLDING CORPORATION, a Delaware corporation with a principal
place of business at 125 West 55th Street New York, NY 10019
(herein called "Concord").
WHEREAS, FCIMCO serves as investment adviser and
administrator to the Prairie Funds, Prairie Institutional
Funds, Prairie Intermediate Bond Fund, Prairie Municipal Bond
Fund, First Prairie Money Market Fund, First Prairie Municipal
Money Market Fund and First Prairie Diversified Asset Fund
(individually each a "Fund" and collectively, the "Funds"),
each an open-end, management investment company registered
under the Investment Company Act of 1940, as amended, and
consisting of the investment portfolios set forth on Schedule I
hereto, as such Schedule may be revised from time to time
(individually, each a "Portfolio" and collectively, the
"Portfolios"); and
WHEREAS, pursuant to the terms of an administration
agreement between FCIMCO and each Fund (collectively the
"Administration Agreement"), FCIMCO may employ Concord to
assist it in performing its obligations under the
Administration Agreement; and
WHEREAS, each Fund offers for sale shares of beneficial
interest of its Portfolio(s), with or without par value as may
be determined from time to time by each Fund's Board of
Trustees (herein collectively called "Shares"); and
WHEREAS, pursuant to a Distribution Agreement
(collectively the "Distribution Agreement") between each Fund
and Concord Financial Group, Inc. ("CFG"), each Fund has
retained CFG as its distributor to provide for the sale and
distribution of the Shares; and
WHEREAS, FCIMCO desires to employ Concord to assist it in
performing its obligations pursuant to the Administration
Agreement as more fully described herein, and Concord is
willing to render such services under the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the sufficiency and
receipt whereof are hereby acknowledged, the parties hereto
agree as follows:
I. DELIVERY OF DOCUMENTS
FCIMCO has delivered to Concord copies of each of the
following documents and will deliver to it all future
amendments and supplements thereto, if any:
(a) The Funds' Declarations of Trust and all amendments
thereto (each such Declaration of Trust, as presently in effect
and as it shall from time to time be amended (herein called
collectively the "Declaration of Trust");
(b) The by-laws of each Fund, if any (such by-laws as
presently in effect and as they shall from time to time be
amended, herein called the "By-Laws");
(c) Resolutions of the Board of Trustees of each Fund
authorizing the execution and delivery of this Agreement;
(d) Each Fund's most recent Registration Statement under
the Securities Act of 1933, as amended (the "1933 Act"), and/or
the Investment Company Act of 1940, as amended (the "1940
Act"), on Form N-1A, Form N-14 or other applicable form, as
filed with the Securities and Exchange Commission (the
"Commission") relating to the Shares and any amendment thereto;
(e) Notification of registration of each Fund under the
1940 Act on Form N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional information
of each Fund with respect to each of the Portfolios (such
prospectuses and statements of additional information, as
presently in effect and as they shall from time to time be
amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
(g) The Administration Agreement.
II. SUB-ADMINISTRATION SERVICES
1. ENGAGEMENT AS SUB-ADMINISTRATOR. FCIMCO hereby
engages Concord to serve as Sub-Administrator for each of the
Portfolios, and Concord hereby accepts such appointment, under
the terms and conditions set forth herein. FCIMCO understands
and agrees that Concord currently acts and will in the future
continue to act as administrator or sub-administrator of
various investment companies which may be unaffiliated with the
Funds and as fiduciary of other managed accounts. In addition,
it is understood that the persons employed by Concord to assist
in the performance of its duties hereunder will not devote
their full time to such services and may in fact devote a
substantial portion of their time in the performance of duties
relating to Concord's provision of services to other investment
companies or fiduciary accounts and nothing herein shall be
deemed to limit or restrict the right of Concord, its
affiliates, and their respective employees to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature to Concord's other clients.
2. SERVICES AND DUTIES.
(a) As Sub-Administrator, and subject to the supervision
and control of FCIMCO, Concord will provide those facilities,
equipment, statistical and research data, clerical services,
internal compliance services relating to legal matters (and
personnel to carry out such administrative services) as are
specifically described in paragraph (b) of this paragraph 2
below. FCIMCO represents and warrants to Concord that the
Administration Agreement sets forth all of its duties and
obligations to the Funds as administrator and that it has
entered into no other agreements or understandings with the
Funds with respect to the matters set forth therein. Concord
represents that the services to be performed by it pursuant to
this Agreement are all the administrative services necessary to
permit FCIMCO to discharge fully its obligations to each Fund
under the Administration Agreement (collectively the "Necessary
Services"). Concord agrees to amend this Agreement to add any
additional services legally necessary in order for FCIMCO to
perform its obligations under the Administration Agreement, and
such additional services shall be included as Necessary
Services and shall be provided at no additional cost. FCIMCO
understands and agrees that from time to time Concord may
develop and/or provide to third parties services which may be
different from, or in addition to, the Necessary Services.
Concord is not obligated to provide FCIMCO or the Funds with
any services which are not Necessary Services without further
agreement as to services and additional cost. Concord
represents that it has sufficient personnel and experience to
perform the services to be performed by it hereunder, and
agrees to perform such services in accordance with industry
standards for mutual fund administrators.
(b) Concord shall provide the following services teach
Fund and its Portfolios.
(I) ADVERTISING AND SALES LITERATURE SUPPORT
1. Review and approve for all applicable Securities and
Exchange Commission, NASD (defined below) and all
state compliance requirements all advertising and
sales material prepared by the Fund or its
distributor. It is understood and agreed that
Concord shall not be responsible for the truth or
accuracy of any statements contained in material
which was not prepared by Concord.
2. File all advertising and sales material with the
National Association of Securities Dealers, Inc.
(NASD).
3. Maintain and update the Fund's advertising and sales
literature files.
4. Update advertising logs for all Portfolios.
5. Retain final copies of advertising and sales
materials for the Fund's files.
6. Respond to all NASD or other regulator comments and
provide any necessary contact person for interface
with NASD/other regulator.
(II) FUND OFFICERS
1. Provide officers to the Fund
(III) FUND COMPLIANCE
1. Maintain files of all Board and shareholder meeting
materials.
2. Prepare quarterly Board meeting responsibility chart.
3. Maintain annual filing calendar and follow up with
responsible parties.
4. Review, as requested, investment adviser's reports to
be submitted to the Board pursuant to applicable Fund
procedures.
5. Monitor compliance by the Fund with various
conditions imposed by exemptive orders relating to
multiple classes of shares.
6. Quarterly review of securities transactions by
persons designated as access persons by the
investment adviser for purposes of determining
compliance with Fund's Code of Ethics.
7. Review monthly Prospectus compliance reports prepared
by the investment adviser.
8. Negotiate D&O/E&O insurance matters and annual
renewals on behalf of the Fund.
9. Monitor fidelity bond coverage for the Fund.
10. Maintain insurance files for the Fund.
11. Review Prospectuses, as prepared by counsel to the
Fund.
12. Review periodic supplements to Prospectuses, as
prepared by counsel to the Fund.
13. Prepare operating manual for the Fund.
14. Prepare Board agendas and Board books.
15. Review material and reports prepared by Fund
auditors, and material prepared by counsel to the
Fund which is submitted to Concord.
(IV) BLUE SKY
1. Register the Shares with appropriate state blue sky
authorities.
2. Work with counsel to the Fund to address comments
during the registration process.
3. Obtain all sales permits required by relevant state
authorities in order to permit the sale of Shares in
the state.
4. Amend and renew sales permits obtained pursuant to
paragraph 2(b)(iv)(3) as may be required from time to
time.
5. Monitor the sale of Shares in individual states on a
daily basis.
6. File all registration statements, Prospectuses, proxy
statements, Rule 24f-2 Notices and other Fund reports
and documents as required by states' law.
7. Maintain Fund blue sky calendars.
8. Respond to all blue sky audit and examination issues.
(V) CORPORATE COUNSEL
1. Provide support for administrative functions
described in paragraph (b)(i) above.
2. Review Fund distribution agreements.
3. Review Fund administration agreements.
4. Review Prospectuses, amendments, and proxy statements
prepared by counsel to the Fund.
5. Provide, as needed, support to blue sky compliance,
I.E., assist in responding to comment letters, on
Fund compliance and as requested by project managers.
6. Maintain files of Prospectuses, Fund contracts, Fund
proxies and other similar Fund documents.
7. Attend Board and Shareholder Meetings, as requested
by the Fund or FCIMCO.
8. Prepare resolutions for Board Meetings.
9. Prepare and run shareholder meetings.
10. Prepare and maintain corporate records of the Fund
(minute book, etc.)
11. Assist in preparing for and complying with any
regulatory examinations of or involving the Fund.
(VI) FUND ACCOUNTING
A. TREASURER
1. Perform the functions of Fund Treasurer.
B. ACCOUNTS PAYABLE FUNCTIONS
2. Review invoices directed to the Fund and authorize
payments as appropriate.
3. Prepare and file form 1099-MISC for Fund expense
payments, including Trustees' fees.
C. OVERSIGHT FUNCTIONS: Oversight of required books and
records for the Fund, as maintained by Bank of New
York (BONY), or its successor, and oversight and
maintenance of any required books and records for the
Fund as required by Rule 31(a)-1 of the 1940 Act
which are not maintained by BONY.
4. Daily review of net asset value and dividend
calculations.
5. Review of daily ledgers and trial balances.
6. Review of monthly closing packages and related
reports.
7. Daily net asset value calculation for all Portfolios.
8. Compliance with Fund and investment adviser policies
on valuing (pricing) all Fund assets.
D. REPORTING FUNCTIONS:
9. Calculate dividends, as required (daily for money
market funds, etc.).
10. Calculate fee-based expenses, such as advisory fees,
administration fees and 12b-1 fees.
11. Monitor expense accruals for adequacy, and make
adjustments as needed.
l2. Prepare the following financial reports, as required:
* Annual report to shareholders
* Semi-annual report to shareholders
* Quarterly reports to Board of Trustees
* Monthly portfolios of investments
13. Prepare or assist in preparation of the following
regulatory filings:
* Form N-SAR (prepare)
* Form N-1A (assist)
* Proxy materials (assist)
14. Prepare IRS Qualification Tests.
* Income diversification
* Asset diversification
15. Prepare or oversee the preparation of the following
performance calculations:
* Total return
* SEC yield
* Distribution yield
* Total return at varying sales charges
16. Respond to surveys from industry publications
including, but not limited to Lipper, Donoghues,
Moringstar, Dalbar, Investment Company Institute,
Standard & Poor's
17. Prepare (or assist Fund auditors in preparing) and
file tax returns, including, but not limited to:
Form 1120-RIC, state and local filings, excise tax
returns.
18. Identify and track book-tax differences, including,
but not limited to: taxability of dividends, income
by state, income by source (US Treasury, Govt Agency,
etc.), dividends received, deduction information,
Alternative Minimum Tax information.
(VII) OPERATIONS
A. ADMINISTRATION
1. Assist with management/implementation of DDA Sweep.
2. Coordinate use of outside vendors by Fund.
3. Provide a designated project manager for routine
ongoing projects.
4. Coordinate the printing and distribution of
Prospectuses, annual and semi-annual reports.
B. SYSTEMS
5. If specifically agreed between Concord and FCIMCO
from time to time, research and analysis on specific
technical and systems needs of FCIMCO and the Fund.
Such research and analysis may include, feasibility
studies, the creation of systems specifications and
implementation plans, design and testing, and support
in implementation. In addition to the compensation
paid to Concord under paragraph 5 hereof, such
support shall be billed at a rate of $1,500 per day
plus expenses for systems support personnel.
(VIII) RELATIONSHIP MANAGER
1. Provide a designated individual to serve as a primary
contact for FCIMCO and the Fund on matters relating
to this Agreement.
(IX) CONSULTATIVE SERVICE
1. Provide limited internal asset gathering consulting
through the relationship manager, as supported by the
project manager.
2. Provide internal sale and educational support
relating to DDA sweep.
(c) In performing its duties herein, Concord warrants
that it will act in conformity with the Declaration of Trust,
By-Laws, and Prospectuses and in accordance with the
instructions and directions of FCIMCO and the Board of Trustees
of each Fund and agrees and warrants that it will conform to
and comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations.
(d) Where Concord is required to review or approve any
document, it shall maintain a record of its approval.
3. SUBCONTRACTORS. It is understood that Concord may
from time to time employ or associate with itself such person
or persons ("Subcontractors") as Concord may believe to be
particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such
Subcontractors shall be paid by Concord and that Concord shall
be as fully responsible to the Funds and FCIMCO for the acts
and omissions of any Subcontractor as it is for its own acts
and omissions.
4. EXPENSES ASSUMED AS SUB-ADMINISTRATOR. Except as
otherwise set forth in this paragraph 4, Concord shall pay all
expenses incurred by it in performing its services and duties
as described herein, including the cost of providing office
facilities, equipment and personnel related to such services
and duties. Other expenses incurred in the operation of each
Fund and the Portfolios (other than those borne by the Funds'
investment adviser or administrator) including taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who
are not officers, directors, partner, employees or holders of 5
percent or more of the outstanding voting securities of the
Funds' investment adviser or Concord or any of their
affiliates, Securities and Exchange Commission fees and state
blue sky registration or qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents'
fees, fund accounting agents' fees, fidelity bond and Directors
and officers' errors and omissions insurance premiums, outside
auditing and legal expenses, costs of maintaining corporate
existence, costs attributable to shareholder services,
including without limitation telephone and personnel expenses,
costs of preparing and printing prospectuses for regulatory
purposes and for distribution to existing shareholders, costs
of shareholders' reports and each Fund's meetings and any
extraordinary expenses will be borne by the respective Fund.
The parties hereto further acknowledge and agree that nothing
in this paragraph 4 shall be deemed to impose any obligation on
Concord to pay any expenses not incurred by it or to pay any
expenses incurred by it on behalf of any Fund not directly
associated with Concord's provision of sub-administration
services as described herein.
6. During normal business hours, Concord shall allow
FCIMCO, its auditors, the Funds and the Funds' auditors, and
the Commission, the Comptroller of the Currency and other
appropriate regulators reasonable access to all data, records,
information and personnel relating to Concord's services under
this Agreement.
III. CONFIDENTIALITY
Concord will treat as confidential and as proprietary
information all records and other information of each Fund and
the Portfolios and their prior or present shareholders or those
persons or entities who respond to CFG's inquiries concerning
investment in each Fund, and except as provided below, will not
use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, or
the performance of its responsibilities and duties with regard
to any other Portfolio which may be added to any Fund in the
future. Any other use by Concord of the information and
records referred to above of a Fund may be made only after
prior notification to and approval in writing by that Fund.
The Parties hereto acknowledge and agree that, notwithstanding
anything in the foregoing to the contrary, Concord may release
the information described above, upon prior notice to FCIMCO
and the Fund, if (i) on the written advice of its counsel its
failure to release such information would expose it to civil or
criminal contempt proceedings for failure to release such
information, or (ii) such release is required by law.
IV. LIMITATION OF LIABILITY, SURVIVAL; INDEMNIFICATION
1. Concord shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the FCIMCO or the
Funds in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its
duties or from its reckless disregard of its obligations and
duties under this Agreement. Any person, even though also an
officer, director, partner, employee or agent of Concord, who
may be or become an officer, director, employee or agent of any
Fund, shall be deemed, when rendering services to the Fund or
acting on any business of the Fund (other than services or
business in connection with Concord's duties hereunder) to be
rendering such services to or acting solely for the Fund and
not as an officer, director, partner, employee or agent or one
under the control or direction of Concord even though paid by
Concord.
2. Concord hereby indemnifies FCIMCO against, and agrees
to hold it harmless from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses
of investigation and reasonable attorneys' fees and expenses)
in connection with any action, suit or proceeding brought
against FCIMCO or any of its affiliates, incurred or suffered
by FCIMCO or any of its affiliates arising out of or resulting
from Concord's willful misfeasance, bad faith or gross
negligence in the performance of its duties under this
Agreement or from its reckless disregard of its obligations and
duties under this Agreement.
3. FCIMCO hereby indemnifies Concord against and agrees
to hold it harmless from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses
of investigation and reasonable attorneys' fees and expenses)
(collectively "Damages") in connection with any action, suit or
proceeding brought against Concord and/or any of its
affiliates, incurred or suffered by Concord or any of its
affiliates arising out of or resulting from FCIMCO's willful
misfeasance, bad faith or gross negligence in the performance
of its duties as Investment Adviser and Administrator of any
Fund or from its reckless disregard of its obligations and
duties to any Fund except that FCIMCO shall not indemnify
Concord or its affiliates for Damages arising out of or
resulting from services, obligations and duties undertaken by
Concord as provided in this Agreement.
4. The party seeking indemnification under this Article
IV (the "Indemnified Party") agrees to give prompt notice to
the party from whom indemnity is sought (the "Indemnifying
Party") of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which Indemnifying
Party may be liable under this Article IV. The Indemnifying
Party may, and at the request of the Indemnified Party shall,
participate in and control the defense of any such suit, action
or proceeding at its own expense. The Indemnifying Party shall
not be liable under this Article IV for any settlement effected
without its consent of any claim, litigation or proceeding in
respect of which indemnity may be sought hereunder.
5. The liability and obligations of either party hereto
arising pursuant to the provisions of this ARTICLE IV shall
survive the termination of this Agreement.
V. DURATION AND TERMINATION
1. This Agreement shall become effective as of the date
first above written and shall continue until February 1, 1998.
Thereafter, if not terminated, this Agreement shall continue
automatically as to a particular Portfolio for successive terms
of one year. Other than an "assignment" of this Agreement by
Concord to The BISYS Group, Inc. or an affiliate thereof
("BISYS") this Agreement will automatically and immediately
terminate in the event of its "assignment." As used in this
Agreement, the term "assignment" shall have the same meaning as
such term has in the 1940 Act. If this Agreement is assigned
to BISYS then the term "Concord" shall refer to BISYS which
shall assume all duties, obligations and
responsibilities of Concord hereunder. FCIMCO may terminate
this contract in the event Concord is declared insolvent,
bankrupt, or an assignment is made for the benefit of its
creditors.
2. Anything in this Agreement to the contrary
notwithstanding:
(a) On or after February 1, 1997 FCIMCO may terminate
this Agreement by three months prior written notice to Concord
provided that:
(i) as of the termination date provided in such notice
("Early Termination Date") all or substantially all of
Concord's duties and responsibilities under this Agreement
will be performed by FCIMCO or another direct or indirect
subsidiary of First Chicago Corporation and
(ii) as of the Early Termination Date FCIMCO shall pay
Concord a termination fee equal to four times the fee
payable to Concord pursuant to Article II, paragraph 5 of
this Agreement for the month which immediately proceeds
the month in which the Early Termination Date occurs.
(b) On or after February 1, 1998, in addition to the
method of termination by FCIMCO provided in paragraph 2(a)
immediately above, including the requirements of paragraphs
2(a)(i) and 2(a)(ii), either party hereto may terminate this
Agreement by six months prior written to the other party
hereto.
(c) FCIMCO shall have the right to terminate this
Agreement upon 45 days written notice if Concord materially
breaches this Agreement. A material breach means the failure
to perform the terms of this Agreement, whether in one act or
omission or a series of acts or omissions, whether or not
related, which (i) results or reasonably could be expected to
result in loss or damage, including expenses, to FCIMCO and/or
the Funds exceeding $50,000 in the aggregate, (ii) results in
the institution of civil or criminal proceedings by the
Commission or other regulator, other than a regular audit or
examination, (iii) constitutes negligence, bad faith or willful
misconduct, (iv) constitutes a violation of any law, rule or
regulation applicable to the Funds, FCIMCO or Concord or any of
its affiliates as to which Concord was required to comply under
the terms of the Agreement where the consequences of such
violation could reasonably be expected to result in the
institution of civil or criminal proceedings by the Commission
or other governmental authorities against the Funds or FCIMCO
or any of its affiliates, or (v) evidences a quantifiable and
material decline in the overall quality of services, provided
that Concord shall have the right to cure the breach set forth
in this clause (v) within 30 days after a written notice
setting forth in detail the nature of the breach, has been
delivered to Concord; provided Concord shall have the right to
cure a breach set forth in this clause (v) if and only if no
more than two other quantifiable and material breaches under
this clause (v) have occurred within the 12 months prior to the
delivery of such notice of the breach of this clause (v). In
addition, FCIMCO shall have the right to terminate this
Agreement upon 45 days written notice if Concord or its
affiliates provide or propose to provide mutual fund
administration or distribution services similar to the
Necessary Services to one or more investment companies whose
investment adviser is (i) Stien, Roe and Farnham or one of its
affiliates or (ii) a bank or affiliate thereof, other than
FCIMCO or Bank of America Illinois, having its principal place
of business in the Chicago metropolitan area; provided,
however, that the foregoing termination right shall not apply
in the following two circumstances: (i) Concord or its
affiliates may provide fund administration or distribution
services similar to the Necessary Services to one or more
investment companies whose investment adviser is a bank, or
affiliate thereof, having a principal place of business in the
Chicago metropolitan area (a "Chicago Bank Advised Fund")
provided that such bank or affiliate has, since the date of
this Agreement, merged with, been acquired by, or is otherwise
affiliated with, another bank which acts as investment adviser
to an investment company for which Concord or its affiliates
currently acts as administrator, sub-administrator or
distributor, and (ii) Concord or its affiliates may provide one
or more of the Necessary Services, and may provide fund
accounting and transfer agency services, to Chicago Bank-
Advised Funds and other unaffiliated third parties, provided
that Concord or an affiliate of Concord is not named as
administrator or sub-administrator or any other title which may
reflect or imply that Concord is providing the totality of
Necessary Services to such Chicago Bank-Advised Funds.
3. In the event of the termination of this Agreement,
Concord shall use its best efforts to assist in the transfer of
its responsibilities hereunder to FCIMCO or any successor
administrator or sub-administrator and Concord without
compensation shall remain responsible, which responsibility
shall survive termination of this Agreement, for all regulatory
filings, tax returns and other reports which relate to periods
which concluded prior to the termination.
VI. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated, except by an instrument in writing
signed by both parties hereto.
VII. NOTICES
Notices of any kind to be given to FCIMCO hereunder by
Concord shall be in writing and shall be duly given if mailed,
faxed or delivered to FCIMCO, Three First National Plaza, Suite
0334, Chicago, Illinois 60670, Attention: Marco Hanig or such
other address or to such individual as shall be so specified in
writing by FCIMCO to Concord. Notices of any kind to be given
to Concord hereunder by FCIMCO shall be in writing and shall be
duly given if mailed, faxed or delivered to Concord at 125 West
55th Street, New York New York 10019, Attention: Richard E.
Stierwalt, Chief Executive Officer, or at such other address or
to such individual as Concord shall specify in writing to
FCIMCO.
VIII. MISCELLANEOUS
1. CONSTRUCTION. The captions in this Agreement are
included for convenience of reference only and in no way define
or limit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement
shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement shall not be
affected thereby. Subject to the provisions of Article V
hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective
successors and shall be governed by Illinois law; provided,
however, that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation of the
Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as
of the day and year first above written.
FIRST CHICAGO INVESTMENT
MANAGEMENT COMPANY
By:________________________
President
CONCORD HOLDING CORPORATION
By:_________________________
<PAGE>
SCHEDULE I
PRAIRIE FUNDS:
Bond Fund
Equity Income Fund
Growth Fund
Intermediate Municipal Bond Fund
International Bond Fund
International Equity Fund
Managed Assets Fund
Managed Assets Income Fund
Money Market Fund
Municipal Money Market Fund
Special Opportunities Fund
U.S. Government Money Market Fund
Municipal Bond Fund
Intermediate Bond Fund
PRAIRIE INSTITUTIONAL FUNDS:
Cash Management Fund
Municipal Cash Management Fund
Treasury Prime Cash Management Fund
U.S. Government Securities Cash Management Fund
FIRST PRAIRIE:
First Prairie Diversified Assets Fund
First Prairie Money Market Funds
Money Market Series
Government Series
First Prairie Municipal Money
Market Fund
<PAGE>
EXHIBIT (11)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Condensed Financial Information" in the Prospectus and in the
Supplement to the Prospectus and "Counsel and Independent
Auditors" in the Statement of Additional Information and to the
use of our report dated February 3, 1995, in this Registration
Statement (Form N-1A No. 2-95548) of First Prairie Municipal
Money Market Fund.
ERNST & YOUNG LLP
New York, New York
April 28, 1995
