File No. 2-95547
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 12 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 12 [X]
(Check appropriate box or boxes.)
First Prairie Diversified Asset Fund
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
----
X on April 22, 1994 pursuant to paragraph (b) of Rule 485
----
60 days after filing pursuant to paragraph (a) of Rule 485
----
on (date) pursuant to paragraph (a) of Rule 485
----
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2
Notice for the fiscal year ended December 31, 1993 was filed on February 28,
1994.
First Prairie Diversified Asset 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 10,46
5 Management of the Fund 18
5 (a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 46
7 Purchase of Securities Being Offered 21
8 Redemption or Repurchase 34
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
_________
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-25
13 Investment Objectives and Policies B-2
14 Management of the Fund B-7
15 Control Persons and Principal B-10
Holders of Securities
16 Investment Advisory and Other B-10
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
First Prairie Diversified Asset Fund
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-22
18 Capital Stock and Other Securities B-25
19 Purchase, Redemption and Pricing B-12, B-15
and B-20
of Securities Being Offered
20 Tax Status *
21 Underwriters B-12
22 Calculations of Performance Data B-21
23 Financial Statements B-29
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-5
Investment Adviser
29 Principal Underwriters C-33
30 Location of Accounts and Records C-42
31 Management Services C-42
32 Undertakings C-42
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
April 22, 1994
FIRST PRAIRIE DIVERSIFIED ASSET FUND
Supplement to Prospectus
Dated April 22, 1994
The following information supplements and should be read in
conjunction with the section of the Fund's Prospectus entitled "Management
of the Fund."
The Dreyfus Corporation ("Dreyfus") has entered into an Agreement and
Plan of Merger providing for the merger of Dreyfus with a subsidiary of
Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in mid-1994, but could occur significantly later.
FIRST PRAIRIE
DIVERSIFIED ASSET FUND (First Prairie Logo)FIRST PRAIRIE FUNDS
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PROSPECTUS-APRIL 22, 1994
First Prairie Diversified Asset Fund (the "Fund") is an open-end,
diversified, management investment company, known as a mutual fund. Its
primary goal is the maximization of current income; a secondary but
nonetheless important goal is capital appreciation.
By this Prospectus, Class A and Class B shares of the Fund are being
offered. Class A shares are subject to a sales charge imposed at the time
of purchase and Class B shares are subject to a contingent deferred sales
charge imposed on redemptions made within six years of purchase. Other
differences between the two Classes include the services offered to and
the expenses borne by each Class and certain voting rights, as described
herein. The Fund offers these alternatives to permit an investor to choose
the method of purchasing shares that is most beneficial given the amount
of the purchase, the length of time the investor expects to hold the shares
and other circumstances.
The First National Bank of Chicago (the "Adviser") serves as the
Fund's investment adviser.
The Dreyfus Corporation (the "Administrator") serves as the Fund's
administrator. Dreyfus Service Corporation (the "Distributor"), a wholly-
owned subsidiary of the Administrator, serves as the Fund's distributor.
The Fund's shares are sold with a sales load. The Fund also 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.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY, THE ADVISER OR ANY OF ITS AFFILIATES OR ANY BANK,
AND ARE NOT FEDERALLY 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 SHARE PRICE
AND INVESTMENT RETURN FLUCTUATE AND ARE 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 22, 1994, which may be revised from time to time, provides a
further discussion of certain areas in this Prospectus and other matters
which may be of interest to some investors. It has been filed with the
Securities and Exchange Commission and is incorporated herein by
reference. For a free copy, write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call 1-800-346-3621.
When telephoning, ask for Operator 666.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PAGE 1
TABLE OF CONTENTS
Fee Table.............................................. 3
Condensed Financial Information........................ 4
Highlights............................................. 6
Alternative Purchase Methods........................... 9
Description of the Fund................................ 10
Management of the Fund................................. 18
How to Buy Fund Shares................................. 21
Shareholder Services................................... 28
How to Redeem Fund Shares.............................. 34
Distribution Plan and Shareholder Services Plan........ 41
Dividends, Distributions and Taxes..................... 42
Performance Information................................ 44
General Information.................................... 46
PAGE 2
FEE TABLE
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SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) 4.50% none
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge) none 4.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees .65% .65%
12b-1 Fees none .75%
Other Expenses 1.00% 1.00%
Total Fund Operating Expenses 1.65% 2.40%
EXAMPLE
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) except
where noted, redemption at the end of each time period:
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CLASS A CLASS B CLASS B*
1 YEAR $61 $ 64 $ 24
3 YEARS $95 $105 $ 75
5 YEARS $131 $148 $128
10 YEARS** $232 $238 $238
* Assuming no redemption of Class B shares.
**Ten-year figures assume conversion of Class B shares to Class A shares
at end of sixth year following the date of purchase.
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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%.
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The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses that investors will bear,
directly or indirectly, the payment of which will reduce investors' return
on an annual basis. Prior to February 8, 1994, Class A shares were subject
to 12b-1 fees but no service fees. For Class B shares, Other Expenses and
Total Fund Operating Expenses are estimated based on expenses incurred
by Class A shares. Long-term investors in Class B shares 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 Adviser, affiliates of the Adviser 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
"Distribution Plan and Shareholder Services Plan."
PAGE 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst & Young,
the Fund's independent auditors, whose report thereon appears in the
Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available
upon request. Class B shares had not been offered as of the date of the
financial statements and, accordingly, no financial data are available for
Class B.
FINANCIAL HIGHLIGHTS Contained below is per share operating
performance data for a Class 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>
Year Ended December 31,
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1986(1) 1987 1988 1989
------ ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $10.00 $10.75 $9.73 $10.66
------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net .63 .70 .78 .88
Net realized and unrealized gain (loss) on investments .70 (.85) .92 1.10
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.33 (.15) 1.70 1.98
------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net (.58) (.77) (.74) (.89)
Dividends from net realized gain on investments -- (.10) (.03) (.21)
------ ------ ------ ------
Total Distributions (.58) (.87) (.77) (1.10)
------ ------ ------ ------
Net asset value, end of year $10.75 $ 9.73 $10.66 $11.54
------ ------ ------ ------
TOTAL INVESTMENT RETURN(2) $13.59%(3) (1.73%) 17.78% 19.08%
------ ------ ------ ------
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- -- -- --
Ratio of net investment income to average net assets 5.90%(3) 6.61% 7.38% 7.74%
Decrease reflected in above expense ratios
due to undertakings by the Adviser and
Administrator (limited to the expense
limitation provision of the Investment
Advisory and Administration Agreements) 1.41%(3) 2.69% 2.62% 2.96%
Portfolio Turnover Rate 15.19%(3) 23.99% 15.71% 49.46%
Net Assets, end of year (000's Omitted) $2,212 $4,989 $5,890 $7,407
- ---------------------
(1)From January 23, 1986 (commencement of operations) to December 31, 1986.
(2)Exclusive of sales charge.
(3)Not annualized.
</TABLE>
PAGE 4
<TABLE>
Year Ended December 31,
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1990 1991 1992 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $11.54 $10.79 $12.56 $12.68
------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net .86 .83 .79 .72
Net realized and unrealized gain (loss) on investments (.54) 1.77 .26 .61
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .32 2.60 1.05 1.33
------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net (.88) (.83) (.77) (.72)
Dividends from net realized gain on investments (.19) -- (.16) (.18)
------ ------ ------ ------
Total Distributions (1.07) (.83) (.93) (.90)
------ ------ ------ ------
Net asset value, end of year $10.79 $12.56 $12.68 $13.11
------ ------ ------- ------
TOTAL INVESTMENT RETURN(2) 2.94% 24.87% 8.68% 10.70%
------ ------ -------- -------
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- -_ .02% .39%
Ratio of net investment income to average
net assets 7.71% 7.04% 6.24% 5.54%
Decrease reflected in above expense ratios
due to undertakings by the Adviser and
Administrator (limited to the expense
limitation provision of the Investment
Advisory and Administration Agreements) 2.58% 2.16% 1.86% 1.26%
Portfolio Turnover Rate 29.97% 26.02% 22.14% 16.40%
Net Assets, end of year (000's Omitted) $8,950 $14,038 $34,262 $51,586
- -----------------------
(2)Exclusive of sales charge.
</TABLE>
Further information about the Fund's performance is contained in the
Fund's annual report , which may be obtained without charge by writing to
the address or calling the number set forth on the cover page of this
Prospectus.
PAGE 5
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 mutual fund.
INVESTMENT OBJECTIVES The Fund's primary goal is the
maximization of current income. A secondary but important goal is capital
appreciation.
MANAGEMENT POLICIES The Fund attempts to achieve its goals by
investing primarily in marketable securities of established companies
which provide reasonable income and which, where consistent with this
objective, may have capital appreciation potential.
This includes investment grade bonds, preferred stocks, dividend
paying common stocks, securities convertible into common stock and
securities with warrants attached. In addition, the Fund may invest in U.S.
Government securities, high-grade commercial paper, bank obligations of
domestic and foreign banks, and short-term money market instruments.
The proportion of assets invested in each type of security will
vary from time to time depending on market and economic conditions. The
Fund may emphasize fixed-income investments for protracted periods of
time if the Fund deems it advisable.
The Fund also may lend its portfolio securities, write covered call
options and purchase put and call options in respect of specific securities.
INVESTMENT ADVISER The First National Bank of Chicago is the Fund's
investment adviser. The Fund has agreed to pay the Adviser a monthly fee
at the annual rate of .65 of 1% of the value of the Fund's average daily net
assets.
ADMINISTRATOR The Dreyfus Corporation assists in all aspects of the
Fund's operations other than providing investment advice. The Fund has
agreed to pay the Administrator a monthly fee at the annual rate of .30 of
1% of the value of the Fund's average daily net assets.
PAGE 6
ALTERNATIVE PURCHASE METHODS The Fund offers investors two
methods of purchasing Fund shares; an investor may choose the Class of
shares that best suits the investor's needs, given the amount of purchase,
the length of time the investor expects to hold the shares and any other
relevant circumstances. Each Class A and Class B share represents an
identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 4.50% of the public offering price
imposed at the time of purchase. The initial sales charge may be reduced
or waived for certain purchases. See "How to Buy Fund Shares_Class A
Shares." Class A shares are subject to an annual service fee at the rate of
.25 of 1% of the value of the average daily net assets of Class A.
Class B shares are sold at net asset value per share with no initial
sales charge at the time of purchase; as a result, the entire purchase price
is immediately invested in the Fund. Class B shares are subject to a
maximum 4% contingent deferred sales charge ("CDSC"), which is
assessed only if the Class B shares are redeemed within six years of
purchase. See "How to Redeem Fund Shares_Contingent Deferred Sales
Charge_Class B Shares." Class B shares also are subject to an annual
service fee at the rate of up to .25 of 1% of the value of the average daily
net assets of Class B. In addition, Class B shares are subject to an annual
distribution fee at the rate of up to .75 of 1% of the value of the average
daily net assets of Class B. The distribution fee paid by Class B will cause
such Class to have a higher expense ratio and to pay lower dividends than
Class A. Approximately six years after the date of purchase, Class B
shares automatically will convert to Class A shares, based on the relative
net asset values for shares of each Class, and will no longer be subject to
the distribution fee. See "Alternative Purchase Methods."
HOW TO BUY FUND SHARES Orders for purchases of Fund shares may be
placed through a number of institutions including the Adviser, affiliates
of the Adviser, including First Chicago Investment Services, Inc., ("FCIS")
a registered broker-dealer, the Distributor and certain other banks,
securities dealers and other industry professionals, such as investment
advisers, accountants and estate planning firms (collectively, "Service
Agents").
Page 7
The minimum initial investment is $1,000 ($250 for IRAs and
other personal retirement plans). 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,
Automatic Withdrawal Plan, Dividend Options privileges and TeleTransfer
Privilege. (Certain services and privileges may not be available through all
Service Agents.)
HOW TO REDEEM FUND SHARES Generally, investors should contact their
representatives at the Adviser or appropriate Service Agent for
redemption instructions. Investors who are not clients of the Adviser or a
Service Agent may redeem Fund shares by written request or through the
Wire Redemption Privilege, the Telephone Redemption Privilege or the
TeleTransfer Privilege. See "How to Redeem Fund Shares."
MONTHLY DIVIDENDS The Fund declares and pays dividends from net
investment income monthly. Distributions from net realized securities
gains, if any, generally are declared and paid once a year. Investors may
choose whether to receive dividends in cash or to reinvest in additional
Fund shares of the same Class at net asset value.
RISKS AND SPECIAL CONSIDERATIONS The value of the Fund's shares is
not fixed and can be expected to fluctuate.
Certain securities purchased by the Fund, including those rated Baa
by Moody's Investors Service, Inc. ("Moody's") and BBB by Standard &
Poor's Corporation ("S&P"), are subject to greater market fluctuation than
certain lower yielding, higher rated fixed-income securities and also may
be affected by changes in the credit rating or financial condition of the
issuing entities. Debt securities rated Baa by Moody's and BBB by S&P,
while considered investment grade obligations, lack outstanding
investment characteristics and may have speculative characteristics as
well.
Since the Fund's portfolio may contain securities issued by foreign
banks, the Fund may be subject to additional investment risks that are
different from those incurred by a fund which invests only in U.S.
domestic securities. See "Description of the Fund - Risk Factors."
PAGE 8
ALTERNATIVE PURCHASE
METHODS
THE FUND OFFERS INVESTORS TWO METHODS OF PURCHASING FUND SHARES;
AN INVESTOR MAY CHOOSE THE CLASS OF SHARES THAT BEST SUITS THE
INVESTOR'S NEEDS, GIVEN THE AMOUNT OF PURCHASE, THE LENGTH OF TIME
THE INVESTOR EXPECTS TO HOLD THE SHARES AND ANY OTHER RELEVANT
CIRCUMSTANCES.
The Fund offers investors two methods of purchasing Fund shares;
an investor may choose the Class of shares that best suits the investor's
needs, given the amount of purchase, the length of time the investor
expects to hold the shares and any other relevant circumstances. Each
Class A and Class B share represents an identical pro rata interest in the
Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 4.50% of the public offering price
imposed at the time of purchase. The initial sales charge may be reduced
or waived for certain purchases. See "How to Buy Fund Shares-Class A Shares."
These shares are subject to an annual service fee at the rate of up to .25 of
1% of the value of the average daily net assets of Class A. See "Distribution
Plan and Shareholder Services Plan-Shareholder Services Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% CDSC, which is assessed only if Class B
shares are redeemed within six years of purchase. See "How to Buy Fund
Shares-Class B Shares" and "How to Redeem Fund Shares-Contingent
Deferred Sales Charge-Class B Shares." These shares also are subject to
an annual service fee at the rate of up to .25 of 1% of the value of the
average daily net assets of Class B. In addition, Class B shares are subject
to an annual distribution fee at the rate of up to .75 of 1% of the value of
the average daily net assets of Class B. See "Distribution Plan and
Shareholder Services Plan." The distribution fee paid by Class B will
cause such Class to have a higher expense ratio and to pay lower dividends
than Class A. Approximately six years after the date of purchase, Class B
shares automatically will convert to Class A shares, based on the relative
net asset values for shares of each Class, and will no longer be subject to
the distribution fee. Class B shares that have been acquired through the
reinvestment of dividends and distributions will be converted on a pro
rata basis together with other Class B shares, in the proportion that a
shareholder's Class B shares converting to Class A shares bears to the
total Class B shares not acquired through the reinvestment of dividends
and distributions.
Page 9
An investor should consider whether, during the anticipated life of
the investor's investment in the Fund, the accumulated distribution fee
and CDSC on Class B shares prior to conversion would be less than the
initial sales charge on Class A shares purchased at the same time, and to
what extent, if any, such differential would be offset by the return of
Class A. In this regard, investors qualifying for reduced initial sales
charges who expect to maintain their investment for an extended period of
time might consider purchasing Class A shares because the accumulated
continuing distribution fees on Class B shares may exceed the initial sales
charge on Class A shares during the life of the investment. Generally,
Class A shares may be more appropriate for investors who invest
$100,000 or more in Fund shares.
DESCRIPTION OF THE FUND
THE FUND'S PRIMARY GOAL IS THE MAXIMIZATION OF CURRENT INCOME. ITS
SECONDARY GOAL IS CAPITAL APPRECIATION.
INVESTMENT OBJECTIVES The Fund's primary goal is the
maximization of current income; the Fund's secondary goal is capital
appreciation. The Fund's investment objectives 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 objectives will be achieved.
THE FUND INVESTS PRIMARILY IN MARKETABLE SECURITIES OF ESTABLISHED
COMPANIES WHICH PROVIDE REASONABLE INCOME AND MAY HAVE CAPITAL
APPRECIATION POTENTIAL.
MANAGEMENT POLICIES The Fund attempts to achieve its goals by
investing primarily in marketable securities of established companies
which provide reasonable income and which, where consistent with this
objective, may have capital appreciation potential. This includes
investment grade bonds rated at least Baa by Moody's or at least BBB by
S&P, preferred stocks, dividend paying common stocks, securities
convertible into common stock and securities with warrants attached.
Bonds rated Baa by Moody's are considered medium grade obligations
which lack outstanding investment characteristics and in fact have
speculative characteristics as well, while those rated BBB by S&P are
considered as having an adequate capacity to pay principal and
Page 10
interest. See "Risk Factors" below, and "Appendix" in the Statement of
Additional Information. The proportion of the Fund's assets invested in
each type of security will vary from time to time depending on market and
economic conditions, and the Fund may emphasize fixed-income
investments for protracted periods of time if the Fund deems it advisable
in that capital appreciation is not compatible with the production of income
at that time.
THE PROPORTION OF ASSETS INVESTED IN EACH TYPE OF SECURITY WILL VARY FROM
TIME TO TIME DEPENDING ON MARKET AND ECONOMIC CONDITIONS.
The Fund may invest up to 15% 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 objectives.
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 the Fund deems representative of their
value, the value of the Fund's net assets could be adversely affected. When
purchasing securities that have not been registered under the Securities
Act of 1933, as amended, and are not readily marketable, the Fund will
endeavor to obtain the right to registration at the expense of the issuer.
Generally, there will be a lapse of time between the Fund's decision to
sell any such security and the registration of the security permitting sale.
During any such period, the price of the securities will be subject to
market fluctuations. However, if a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain unregistered 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 Adviser 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 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 investments during such period.
Page 11
The Fund may invest up to 5% of its net assets in warrants, except
that this limitation does not apply to warrants acquired in units or
attached to securities. A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of time.
The Fund may invest in U.S. Government securities; investment
grade corporate bonds; high-grade commercial paper; certificates of
deposit, time deposits and bankers' acceptances issued by domestic banks,
foreign subsidiaries of domestic banks, foreign branches of domestic
banks and domestic and foreign branches of foreign banks; and other
short-term instruments, including fixed, floating and variable rate
corporate notes and bonds, participation interests in such obligations and
repurchase agreements. The Fund will not invest more than 25% of its
total assets in securities issued by foreign banks.
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 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. Principal and 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.
Page 12
Commercial paper consists of short-term, unsecured promissory
notes issued to finance short-term credit needs.
The commercial paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are
(a) rated not lower than Prime-2 by Moody's or A-2 by S&P (b) issued by
companies having an outstanding unsecured debt issue currently rated
at least Aa3 by Moody's or at least AA by S&P, or (c) if unrated,
determined by the Adviser to be of comparable quality to those rated
obligations which may be purchased by the Fund. The Fund may purchase
floating and variable rate notes and bonds issued by corporations. Floating
and variable rate notes and bonds include variable amount
master demand notes, which are obligations that permit the Fund to invest
fluctuating amounts at varying rates of interest pursuant to direct
arrangements between the Fund, as lender, and the borrower. These
obligations permit daily changes in the amounts borrowed. As mutually
agreed between the parties, the Fund may increase the amount under the
notes at any time up to the full amount provided by the note agreement, or
decrease the amount, and the borrower may repay up to the full amount of
the note without penalty. 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, plus accrued interest, at any time. Accordingly,
where these notes 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. In
connection with floating and variable demand obligations, the Adviser will
consider, on an ongoing basis, earning power, cash flow and other liquidity
ratios of the borrower, and the borrower's ability to pay principal and
interest on demand. Such obligations frequently are not rated by credit
rating agencies, and the Fund may invest in them only if at the time of an
investment the borrower meets the criteria set forth above for other
commercial paper issuers.
THE FUND ALSO INVESTS IN VARIOUS BANK DEPOSIT PRODUCTS SUCH AS
CDS, TIME DEPOSITS AND BANKERS' ACCEPTANCES.
Certificates of deposit are negotiable certificates evidencing 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 (in no event longer than seven
days) at a stated interest rate. The Fund will
Page 13
invest in time deposits of banks that have total assets in excess of one
billion dollars. 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 FDIC.
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. The other short-
term obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
A participation interest gives the Fund an undivided interest in the
security in the proportion that the Fund's participation interest bears to
the total principal amount of the security. These instruments will be
purchased from financial institutions and may have fixed, floating or
variable rates of interest with remaining maturities of one year 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 herein, or the payment obligation
otherwise will be collateralized by U.S. Government securities, or, in the
case of an unrated instrument, the Adviser must have determined that the
instrument is of comparable quality to instruments in which the Fund may
invest.
THE FUND MAY ONLY ENTER INTO REPURCHASE AGREEMENTS WHEN THE
FUND'S CUSTODIAN OR SUB-CUSTODIAN HAS CUSTODY OF THE UNDERLYING
COLLATERAL.
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 one billion dollars 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
Page 14
decrease below resale price. The Adviser and/or
the Administrator 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 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.
THE FUND MAY USE VARIOUS INVESTMENT TECHNIQUES WHICH MAY ENHANCE
ITS PERFORMANCE; THEIR USE INVOLVES CERTAIN RISKS.
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,
dividends or other distributions payable on the loaned security, and receives
interest on the amount of theloan. 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.
To earn additional income on its portfolio, the Fund may write
covered call option contracts on securities it owns to the extent of 20% of
the value of its net assets at the time such option contracts are written.
In addition, the Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of put and call options in respect of
specific securities (or groups or "baskets" of specific securities). A call
option gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security or securities at the exercise price
at any time during the option period. Conversely, a put option gives the
purchaser of the option the right to sell, and obligates the writer to buy,
the underlying security or securities at the exercise price at any time
during the option period. A covered call option sold by the Fund, which is a
call option with respect to which the Fund
Page 15
owns the underlying security or securities, exposes the Fund during the
term of the option to possible loss of opportunity to realize appreciation
in the market price of the underlying security or securities or to possible
continued holding of a security or securities which might otherwise have
been sold to protect against depreciation in the market price therof.
As a fundamental policy, the Fund is permitted to borrow money to
the extent permitted under the Investment Company Act of 1940. However,
the Fund currently intends to borrow money 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.
THE FUND HAS ADOPTED CERTAIN FUNDAMENTAL POLICIES INTENDED TO
LIMIT THE RISK OF ITS INVESTMENT PORTFOLIO. THESE POLICIES CANNOT BE
CHANGED WITHOUT APPROVAL BY A MAJORITY OF SHAREHOLDERS.
CERTAIN FUNDAMENTAL POLICIES The Fund may (i) borrow money to the
extent permitted under the Investment Company Act of 1940; (ii) invest up
to 5% of the value of its total assets in the securities of any one issuer,
except that up to 25% of the value of the Fund's total assets may be
invested, and obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities may be purchased, without regard to any
such limitation; and (iii) invest up to 25% of its total assets in any single
industry, provided that, when the Fund has adopted a temporary defensive
posture, there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.
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 Objectives and Management Policies-Investment
Restrictions" in the Statement of Additional Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES The Fund may (i)
purchase securities of any company having less than three years'
continuous operation (including operations of any predecessors) if such
purchase does not cause the value of its investments in all such
companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise
Page 16
encumber its assets, but only to secure
permitted borrowings; and (iii) invest up to 15% of its net assets in
repurchase agreements providing for settlement in more than seven days
after notice and in other illiquid securities. See "Investment Objectives
and Management Policies_Investment Restrictions" in the Statement of
Additional Information.
THE FUND MAY BE SUBJECT TO RISKS THAT ARE DIFFERENT FROM THOSE
INCURRED BY A FUND WHICH INVESTS ONLY IN U.S. DEBT SECURITIES.
RISK FACTORS Since the Fund's portfolio may contain securities
issued by foreign branches of domestic banks, foreign subsidiaries of
domestic banks, and domestic and foreign branches of foreign banks, the
Fund may be subject to additional investment risks with respect to these
securities that are different in some
respects from those incurred by a fund which invests only in debt
obligations of U.S. domestic issuers. Such risks include possible future
political and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities, the
possible establishment of exchange controls or the adoption of other
foreign governmental restrictions which might adversely affect the
payment of principal and interest on these securities and the possible
seizure or nationalization of foreign deposits.
CERTAIN SECURITIES PURCHASED BY THE FUND ARE SUBJECT TO GREATER
MARKET FLUCTUATION THAN HIGHER-RATED FIXED INCOME SECURITIES.
For the portion of the Fund's portfolio invested in debt securities,
investors should be aware that even through 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 values
of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. Once the rating of a
portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold
the security. Certain securities purchased by the Fund, such as those rated
Baa by Moody's and BBB by S&P, while considered investment grade
obligations, are subject to greater market fluctuation than certain lower
yielding, higher rated fixed-income securities. Bonds which are rated Baa
are neither highly protected nor poorly secured, and are considered by
Moody's to have speculative characteristics. Bonds rated BBB by S&P are
regarded as having adequate capacity to pay interest and repay principal,
and while such bonds normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and
Page 17
repay principal for bonds in this category than in higher rated categories.
See "Appendix" in the Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS The Fund's portfolio turnover
rate may vary from year to year, as well as within a year. The Adviser
believes that the annual portfolio turnover rate should not ordinarily
exceed 100%, but the amount of portfolio turnover will not be a limiting
factor when making portfolio decisions.
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 Adviser. However, if such other investment
companies or managed accounts are prepared to invest in, or desire to
dispose of, securities of the type in which the Fund invests 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
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.
INVESTMENT ADVISER The Adviser, located at Three First National
Plaza, Chicago, Illinois 60670, is the Fund's investment adviser. The
Adviser, 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 Adviser provided
personal investment management services to portfolios containing
approximately $15.5 billion in assets. The Adviser serves as investment
adviser for the Fund pursuant to an Investment Advisory Agreement dated
as of December 16, 1985 (as revised October 1, 1993). Under the
Investment Advisory Agreement, the Adviser, 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
Page 18
Fund's assets. The Adviser 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 Adviser provides these services through its
Investment Management Department. The investment advisory services of
the Adviser are not exclusive under the terms of the Investment Advisory
Agreement. The Adviser 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 Adviser has advised the Fund that in making its
investment decisions the Adviser does not obtain or use material
inside information in the possession of any other division or
department of the Adviser or in the possession of any affiliate
of the Adviser.
The Adviser 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 Adviser 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
"Distribution Plan and Shareholder Services Plan."
Under the terms of the Investment Advisory Agreement, the
Fund has agreed to pay the Adviser a monthly fee at the annual rate of .65
of 1% of the value of the Fund's average daily net assets. For the fiscal
year ended December 31, 1993, no investment advisory fee was paid by the
Fund pursuant to an undertaking by the Adviser.
The Fund's primary portfolio manager is Arthur P. Krill. He has held
that position since the Fund's inception, and has been employed by the
Adviser since June 1973. The Adviser also provides research services for
the Fund as well as for other funds it advises through a professional staff
of portfolio managers and security analysts.
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 Adviser are permitted
to purchase and sell securities upon the
Page 19
order and for the account of their customers. The Adviser has advised the
Fund of its belief that it may perform the services for the Fund contemplated
by the Investment Advisory Agreement and this Prospectus without violating the
Glass-Steagall Act or other applicable banking laws or regulations. The Adviser
has pointed out, however, that there are no cases deciding whether a bank
such as the Adviser may perform services comparable to those performed
by the Adviser 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 Adviser from continuing to perform such services for the Fund.
If the Adviser 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 Adviser and consider taking all actions necessary in the
circumstances.
THE DREYFUS CORPORATION, WHICH MANAGES OR ADMINISTERS
APPROXIMATELY $77 BILLION IN MUTUAL FUND ASSETS,
SERVES AS THE FUND`S ADMINISTRATOR.
ADMINISTRATOR The Administrator, located at 200 Park Avenue,
New York, New York 10166, serves as the Fund's administrator pursuant to
an Administration Agreement with the Fund. Under this Agreement, the
Administrator generally assists in all aspects of the Fund's operations,
other than providing investment advice, subject to the overall authority of
the Fund's Trustees in accordance with Massachusetts law. The
Administrator was formed in 1947 and as of February 28, 1994, managed
or administered approximately $77 billion in assets for more than 1.9
million investor accounts nationwide.
Under the terms of the Administration Agreement, the Fund has
agreed to pay the Administrator a monthly fee at the annual rate of .30 of
1% of the value of the Fund's average daily net assets. For the fiscal year
ended December 31, 1993, no administration fee was paid by the Fund
pursuant to an undertaking by the Administrator.
THE SHAREHOLDER SERVICES GROUP, INC. IS THE FUND'S TRANSFER AGENT.
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.
Page 20
EXPENSES All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by the Adviser
and/or the Administrator. 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 Adviser or the Administrator, Securities and Exchange Commission
fees, state Blue Sky qualification fees, advisory and administration 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
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and meetings and any
extraordinary expenses. Class A and Class B shares are subject to an annual
service fee for ongoing personal services relating to shareholder accounts and
services related to the maintenance of shareholder accounts. In addition, Class
B shares are subject to an annual distribution fee for advertising, marketing
and distributing Class B shares pursuant to a distribution plan adopted in
accordance with Rule 12b-1 under the Investment Company Act of 1940.
See "Distribution Plan and Shareholder Services Plan."
From time to time, the Adviser and/or the Administrator or any of
their affiliates may waive receipt of their fees and/or voluntarily assume
certain expenses of the Fund, which would have the effect of lowering the
overall expense ratio of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The Fund
will not pay the Adviser and/or the Administrator or their affiliates at a
later time for any amounts which may be waived, nor will the Fund
reimburse the Adviser and/or the Administrator or their affiliates for any
amounts which may be assumed.
HOW TO BUY FUND SHARES
THE FUND OFFERS A NUMBER OF CONVENIENT WAYS TO PURCHASE SHARES.
INFORMATION APPLICABLE TO ALL PURCHASERS The Fund's distributor
is Dreyfus Service Corporation, a wholly-owned subsidiary of the
Administrator, 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 Adviser and therefore are not insured
by the FDIC.
Page 21
When purchasing Fund shares, an investor must specify whether
the purchase is for Class A or Class B shares. Fund shares may be
purchased by all clients of the Adviser and its affiliates, including
qualified custody, agency and trust accounts, through their accounts with
the Adviser and its affiliates, or by clients of certain other 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. The Fund reserves the right to reject any purchase order.
YOU CAN OPEN AN ACCOUNT WITH AS LITTLE AS $1,000 ($250 FOR IRAS OR
OTHER RETIREMENT PLANS). SUBSEQUENT INVESTMENTS CAN BE AS LITTLE
AS $100.
The minimum initial investment for each Class is $1,000.
However, for IRAs and other personal retirement plans, the minimum
initial purchase is $250. All subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application. The Adviser 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.
If an order is received by the Transfer Agent by the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m.,
New York time) on any business day (which, as used herein, shall include
each day the New York Stock Exchange is open for business, except Martin
Luther King, Jr. Day, Columbus Day and Veterans Day), Fund shares will be
purchased at the public offering price (i.e., net asset value plus the
applicable sales load set forth below) determined as of the close of
trading on the floor of the New York Stock Exchange on that day.
Otherwise, Fund shares will be purchased at the public offering price
determined as of the close of trading on the floor of the New York Stock
Exchange on the next business day, except where shares are purchased
through a dealer as provided below.
NET ASSET VALUE IS DETERMINED AT THE CLOSE OF TRADING ON THE FLOOR
OF THE NEW YORK STOCK EXCHANGE (CURRENTLY 4:00 P.M., NEW YORK TIME)
ON EACH BUSINESS DAY.
Fund shares are sold on a continuous basis. Net asset value per
share is determined as of the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m., New York time), on each business day.
Net asset value per share of each Class is computed by dividing the value
of the Fund's net assets represented by such Class (i.e., the value of its
assets less liabilities) by the total number of shares of such Class
outstanding. The Fund's investments are valued each business day using
available market quotations or at fair value which may be determined by
one or more independent pricing services approved by the Board of
Trustees. Each pricing service's procedures are
Page 22
reviewed under the general supervision of the Board of Trustees. For
further information regarding the methods employed in valuing Fund
investments, see "Determination of Net Asset Value" in the Fund's
Statement of Additional Information.
Federal regulations require that investors 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 require
ment. 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").
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on any
business day and transmitted to the Distributor by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the floor of the New York Stock Exchange on that day. Otherwise, the
orders will be based on the next determined public offering price. It is the
dealers' responsibility to transmit orders so that they will be received by
the Distributor before the close of its business day.
CLASS A SHARES ARE SOLD WITH A MAXIMUM SALES LOAD OF 4.50%. THERE
ARE SEVERAL WAYS TO REDUCE OR ELIMINATE
THE SALES LOAD.
CLASS A SHARES The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
TOTAL SALES LOAD
-------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 to less than $3,000,000 1.00 1.00 1.00
$3,000,000 to less than $5,000,000 .50 .50 .50
$5,000,000 and above .25 .25 .25
</TABLE>
Page 23
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage-related or clearing arrangement with
an NASD member firm or other financial institution with respect to sales
of Fund shares), their spouses and minor children, and accounts opened
by a bank, trust company or thrift institution, acting as a fiduciary, may
purchase Class A shares for themselves or itself, as the case may be, at
net asset value, provided that they have furnished the Distributor
appropriate notification of such status at the time of the investment and
such other information as it may request from time to time in order to verify
eligibility for this privilege. This privilege also applies to full-time
employees of financial institutions affiliated with NASD member firms
whose employees are eligible to purchase Class A shares at net asset
value. In addition, Class A shares may be purchased at net asset value for
Fund accounts registered under the Uniform Gifts to Minors Act or Uniform
Transfers to Minors Act which are opened through FCIS. Class A shares are
also offered at net asset value to directors, employees and retired
employees of First Chicago Corporation, or any of its affiliates and
subsidiaries, Board members of a fund advised by the Adviser, including
members of the Fund's Board, or the spouse or minor child of any of the
foregoing.
Class A shares will be offered at net asset value without a sales
load to employees participating in qualified or nonqualified employee
benefit plans or other programs where (i) the employers or affiliated
employers maintaining such plans or programs have a minimum of 250
employees eligible for participation in such plans or programs or (ii) such
plan's or program's aggregate investment in the Fund, certain other funds
advised by the Adviser and certain other funds advised by the
Administrator exceeds one million dollars ("Eligible Benefit Plans"). Plan
sponsors, administrators or trustees, as applicable, are responsible for
notifying the Distributor when the relevant requirement is satisfied.
In fiscal 1993, FCIS, an affiliate of the Adviser, retained $34,436
from sales loads on Class A shares. The dealer reallowance may be
changed from time to time but will remain the same for all dealers.
Page 24
CLASS B SHARES The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is imposed
at the time of purchase. A CDSC is imposed, however, on certain
redemptions of Class B shares as described under "How to Redeem Fund
Shares." FCIS may compensate certain Service Agents for selling Class B
shares at the time of purchase from its own assets. Proceeds of the
CDSC and distribution fees payable to FCIS, in part, are used to defray
these expenses.
CONTACT YOUR INVESTMENT REPRESENTATIVE OR SERVICE AGENT TO LEARN
HOW TO PURCHASE SHARES.
PURCHASING SHARES THROUGH ACCOUNTS WITH THE ADVISER OR A
SERVICE AGENT Investors who desire to purchase Fund shares through
their accounts at the Adviser 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 Adviser 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 Shareholder Services Plan or advisory fees
received by the Adviser under the Investment Advisory Agreement. Each Service
Agent has agreed to transmit to its clients a schedule of such fees. In
addition, Service Agents and the Adviser receive different levels of
compensation for selling different classes of shares and may impose minimum
account and other conditions, including conditions which might affect the
availability of certain shareholder privileges described in this Prospectus.
It is the responsibility of the Adviser and Service Agents to transmit client
orders on a timely basis.
Copies of the Fund's Prospectus and Statement of Additional
Information may be obtained from the Distributor, the Adviser, certain
affiliates of the Adviser 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
Page 25
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 indicating the class of shares being
purchased. 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 #8900052082/First Prairie Diversified Asset Fund_Class A
shares, or DDA # 8900115386/First Prairie Diversified Asset Fund_Class
B shares, as the case may be, 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 instructions must
specify the investor's Fund account registration and the investor's Fund
account number PRECEDED BY THE DIGITS "1111."
Page 26
REDUCED SALES LOADS FOR CLASS A SHARES APPLY TO COMBINED
PURCHASES OF $50,000 OR MORE OF THIS FUND AND OTHER ELIGIBLE FIRST
PRAIRIE FUNDS.
RIGHT OF ACCUMULATION - CLASS A SHARES Reduced sales loads apply to any
purchase of Class A shares where the dollar amount of shares being purchased
plus the value of Fund shares, shares of certain other funds advised by the
Adviser purchased with a sales load or acquired by a previous exchange of
shares purchased with a sales load, and shares of certain other funds advised
by the Administrator which are sold with a sales load (hereinafter referred
to as "Eligible Funds") held by an investor and any related "purchaser" as
defined in the Statement of Additional Information, where
the aggregate investment, including such purchase, is $50,000
or more. If, for example, an investor previously purchased and still
holds Class A shares of the Fund, or of any other Eligible Fund or
combination thereof, with an aggregate current market value of $40,000
and subsequently purchases Class A shares of the Fund or an Eligible
Fund having a current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4.00% of the offering price
(4.20% of the net asset value). All present holdings of Eligible Funds may
be combined to determine the current offering price of the aggregate
investment in ascertaining the sales load applicable to each subsequent
purchase.
To qualify for reduced sales loads, at the time of a purchase
an investor or his Service Agent must notify the Distributor if orders are
made by wire, or the Transfer Agent if orders are made by mail. The
reduced sales load is subject to confirmation of an investor's holdings
through a check of appropriate records.
YOU CAN PURCHASE ADDITIONAL SHARES BY TELEPHONE AFTER YOU SUPPLY
THE NECESSARY INFORMATION ON YOUR ACCOUNT APPLICATION.
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.
Investors who have selected the TELETRANSFER Privilege may
request a TELETRANSFER purchase of Fund shares by calling 1-800-227-
0072 or, if calling from overseas, 1-401-455-3309.
Page 27
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.
YOU CAN EXCHANGE YOUR SHARES FOR SHARES OF OTHER ELIGIBLE FIRST
PRAIRIE FUNDS.
EXCHANGE PRIVILEGE The Exchange Privilege enables an investor to
purchase, in exchange for Class A or Class B shares of the Fund, shares of
the same class of certain other funds advised by the Adviser or shares of
the same class of certain funds advised by the Administrator, 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 Adviser. 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.
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 Adviser, certain
affiliates of the Adviser 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
Page 28
applicable and where available, will be automatically carried over to
the fund into which the exchange is made: Exchange Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, TELETRANSFER Privilege and
the dividend/capital gain distribution option (except for the 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 of Class
A shares into funds sold with a sales load. No CDSC will be imposed on
Class B shares at the time of an exchange; however, Class B shares
acquired through an exchange will be subject on redemption to the higher
CDSC applicable to the exchanged or acquired shares. The CDSC applicable
on redemption of the acquired Class B shares will be calculated from the
date of the initial purchase of the Class B shares exchanged. If an investor
is exchanging Class A shares 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.
Page 29
YOU CAN AUTOMATICALLY EXCHANGE FUND SHARES FOR SHARES OF CERTAIN
OTHER FIRST PRAIRIE MUTUAL FUNDS AT
REGULAR INTERVALS
WHICH YOU SELECT.
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 Class A or Class B shares of the Fund, in
shares of the same Class of certain other funds in the First Prairie Family
of Funds or certain funds advised by the Administrator 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 schedule 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 of Class A shares into
funds sold with a sales load. No CDSC will be imposed on Class B shares at
the time of an exchange; however, Class B shares acquired through an
exchange will be subject on redemption to the higher CDSC applicable to
the exchanged or acquired shares. The CDSC applicable on redemption of
the exchanged or acquired Class B shares will be calculated from the date
of the initial purchase of the Class B shares exchanged. 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 FCIS, or 1-800-645-6561 if Fund
shares were purchased through the Distributor.
Page 30
YOU CAN PURCHASE 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 Adviser, certain affiliates of the Adviser 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
termi-nate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
MANY FEDERAL PAYMENTS ARE ELIGIBLE FOR FULL OR PARTIAL DIRECT
DEPOSIT INTO YOUR FUND ACCOUNT TO PURCHASE SHARES.
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 Adviser,
certain affiliates of the Adviser 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.
Page 31
YOU CAN WITHDRAW A SPECIFIED DOLLAR
AMOUNT FROM YOUR FUND ACCOUNT EVERY MONTH OR QUARTER.
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 Adviser, certain
affiliates of the Adviser or certain Service Agents. The Automatic
Withdrawal Plan may be ended at any time by the investor, the Fund or the
Transfer Agent.
Class B shares withdrawn pursuant to the Automatic Withdrawal
Plan will be subject to any applicable CDSC. Purchases of additional Class
A shares where a sales load is imposed concurrently with withdrawals of
Class A shares generally are undesirable.
YOU CAN "SWEEP" YOUR DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
INTO CERTAIN OTHER FIRST PRAIRIE MUTUAL FUNDS.
DIVIDEND OPTIONS The Dividend Sweep enables an investor to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of the same class of another fund in the First
Prairie Family of Funds or certain funds advised or administered by the
Administrator 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 CDSC, the shares purchased will be
subject to the CDSC, 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 gains, 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.
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 FCIS, 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
Page 32
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. Shares held under Keogh Plans, IRAs or other
retirement plans are not eligible for these privileges.
BY SIGNING A LETTER OF INTENT TO PURCHASE ADDITIONAL CLASS A
SHARES WITHIN 13 MONTHS, YOU BECOME ELIGIBLE FOR ANY REDUCED SALES
CHARGES APPLYING TO THE TOTAL PURCHASE.
LETTER OF INTENT_CLASS A SHARES By signing a Letter of Intent
form, available from the Distributor, the Adviser, certain affiliates of the
Adviser or certain Service Agents, an investor becomes eligible for the
reduced sales load applicable to the total number of Eligible Fund shares
purchased in a 13-month period pursuant to the terms and under the
conditions set forth in the Letter of Intent. A minimum initial purchase of
$5,000 is required. To compute the applicable sales load, the offering
price of shares the investor holds (on the date of submission of the Letter
of Intent) in any Eligible Fund that may be used toward "Right of
Accumulation" benefits described above may be used as a credit toward
completion of the Letter of Intent. However, the reduced sales load will be
applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount indicated
in the Letter of Intent for payment of a higher sales load if the investor
does not purchase the full amount indicated in the Letter of Intent. The
escrow will be released when the investor fulfills the terms of the Letter
of Intent by purchasing the specified amount. If the investor's purchases
qualify for a further sales load reduction, the sales load will be adjusted
to reflect the investor's total purchase at the end of 13 months. If total
purchases are less than the amount specified, the investor will be
requested to remit an amount equal to the difference between the sales load
actually paid and the sales load applicable to the aggregate purchases
actually made. If such remittance is not received within 20 days,
the Transfer Agent, as attorney-in-fact pursuant to the terms of the Letter
of Intent, will redeem an appropriate number of Class A shares held in
escrow to realize the difference. Signing a Letter of Intent does not bind
the investor to purchase, or the Fund to sell, the full amount indicated at
the sales load in effect at the time of signing, but the investor must
complete the
Page 33
intended purchase to obtain the reduced sales load. At the time
an investor purchases Class A shares, he must indicate his intention to do
so under a Letter of Intent.
HOW TO REDEEM FUND SHARES
YOU CAN REDEEM FUND SHARES AT ANY TIME.
GENERAL An investor may request redemption of his Class A or Class B
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 as described below. If an investor holds Fund shares of more than
one Class, any request for redemption must specify the Class of shares
being redeemed. If an investor fails to specify the Class of shares to be
redeemed or if an investor owns fewer shares of the Class than specified
to be redeemed, the redemption request may be delayed until the Transfer
Agent receives further instructions from the investor or his Service
Agent.
The Fund imposes no charges (other than any applicable CDSC with
respect to Class B shares) when shares are redeemed. Service Agents may
charge a nominal fee for effecting redemp_tions 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.
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 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 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
Page 34
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 45 days' written notice if the
account's net asset value is $500 or less and remains so during the notice
period.
CONTINGENT DEFERRED SALES CHARGE_CLASS B SHARES
A CDSC payable to FCIS and other Service Agents is imposed on any
redemption of Class B shares which reduces the current net asset value
of an investor's Class B shares to an amount which is lower than the dollar
amount of all payments by the investor for the purchase of Class B shares
of the Fund held by the investor at the time of redemption. No CDSC will
be imposed to the extent that the net asset value of the Class B shares
redeemed does not exceed (i) the current net asset value of Class B shares
acquired through reinvestment of dividends or capital gain distributions,
plus (ii) increases in the net asset value of an investor's Class B shares
above the dollar amount of all the investor's payments for the purchase of
Class B shares of the Fund held by the investor at the time of redemption.
If the aggregate value of Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC
may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time the investor
purchased the Class B shares until the time of redemption of such shares.
Solely for purposes of determining the number of years from the time of
any payment for the purchase of Class B shares,
all payments during a month will be aggregated and deemed to have
been made on the first day of the month. The following table sets forth the
rates of the CDSC:
Page 35
YEAR SINCE PURCHASE CDSC AS A % OF
PAYMENT WAS MADE AMOUNT INVESTED OR
REDEMPTION PROCEEDS
- -------------------- -------------------
First 4.00
Second 4.00
Third 3.00
Fourth 3.00
Fifth 2.00
Sixth 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible
rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends
and distributions; then of amounts representing the increase in net asset
value of Class B shares above the total amount of payments for the
purchase of Class B shares made during the preceding six years; then of
amounts representing the cost of shares purchased six years prior to the
redemption; and finally, of amounts representing the cost of shares held
for the longest period of time within the applicable six-year period.
For example, assume an investor purchased 100 shares at $10 a
share for a cost of $1,000. Subsequently, the shareholder acquired five
additional shares through dividend reinvestment. During the second year
after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
had appreciated to $12 per share, the value of the investor's shares would
be $1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4% (the
applicable rate in the second year after purchase) for a total CDSC of
$9.60.
WAIVER OF CDSC The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability, as defined
in Section 72(m)(7) of the Internal Revenue Code of 1986, as amended (the
"Code"), of the shareholder, (b) redemptions by Eligible Benefit Plans, (c)
redemptions as a result of a combination of any investment company with
the Fund by merger, acquisition of assets or otherwise, (d) a distribution
fol-
Page 36
lowing retirement under a tax-deferred retirement plan or
upon attaining age 70 1/2 in the case of an IRA or Keogh plan or custodial
account pursuant to Section 403(b) of the Code, and (e) redemptions by
such shareholders as the Securities and Exchange Commission or its staff
may permit. If the Fund's Trustees determine to discontinue the waiver of
the CDSC, the disclosure in the Fund's prospectus will be revised
appropriately. Any Fund shares subject to a CDSC which were purchased prior
to the termination of such waiver will have the CDSC waived as provided in the
Fund's prospectus at the time of the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of redemption the
investor must notify the Transfer Agent or the investor's Service Agent
must notify the Distributor or FCIS. Any such qualification is subject to
confirmation of your entitlement.
THE FUND OFFERS A NUMBER OF CONVENIENT WAYS TO ACCESS YOUR
INVESTMENT.
PROCEDURES An investor who has purchased shares through his
account at the Adviser 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 Agents for delivery of the required application(s) to the
Transfer Agent. It is the responsibility of the Adviser 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.
Investors are urged to consult their Service Agents for instructions
concerning redemption of Fund shares held in IRAs or other personal
retirement plans. Other investors may redeem shares by using the regular
redemption procedure through the Transfer Agent, the Wire Redemption
Privilege, the Telephone Redemption Privilege, or the TELETRANSFER
Privilege, as described below.
An investor's redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised by the Adviser
or advised or administered by the Administrator that are not available
through the Exchange Privilege. The applicable CDSC will be charged upon
the
Page 37
redemption of Class B shares. The investor's redemption
proceeds will be invested in shares of the other fund on
the next business day. Before making such a request, the investor must
obtain and should review a copy of the current prospectus of the fund
being purchased. Prospectuses may be obtained from the Adviser, the
Distributor or certain Service Agents. The prospectus will contain
information concerning minimum investment requirements and other
conditions that may apply to the investor's purchase.
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. During the delay, the Fund's
net asset value may fluctuate.
SHARES MAY BE REDEEMED BY WRITTEN REQUEST.
REGULAR REDEMPTION Under the regular redemption procedure, an
investor may redeem shares by written request, indicating the class of
shares being redeemed, mailed to The First Prairie Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. Redemption requests
must be signed by each 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
Page 38
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 Exchange Medallion Program. For more information with respect to
signature-guarantees, please call the telephone number shown on the front cover.
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.
YOU CAN REDEEM SHARES BY WIRE IF YOU CHECK THE APPROPRIATE BOX 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. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates have
been issued, are not eligible for this Privilege.
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
Page 39
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 1-800-221-
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.
Shares held under Keogh Plans, IRAs or other retirement plans, and shares
for which certificates have been issued, are not eligible for this Privilege.
CALL 1-800-227-0072 FOR TELETRANSFER TRANSACTIONS.
TELETRANSFER PRIVILEGE An investor may redeem Fund shares
(minimum $500 per day) by telephone if he has checked the appropriate
box and supplied the necessary information on 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 Clearing House member may be so designated. Redemption
proceeds will be on deposit in the investor's account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request or, at the investor's request, paid by check (maximum
$150,000 per day) and mailed to his address. Holders of jointly registered
Fund or bank accounts may redeem through the TELETRANSFER Privilege
for transfer to their bank account only up to $250,000 within any 30-day
period. The Fund reserves the right to refuse any request made by
telephone, including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests. The Fund
may modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
Investors who have selected the TELETRANSFER Privilege may
request TELETRANSFER redemptions of Fund shares by telephoning 1-800-
227-0072 or, if calling from overseas, 1-401-455-3309. Shares held
under Keogh Plans, IRAs or other retirement plans, and shares issued in
certificate form, are not eligible for this Privilege.
Page 40
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class A and Class B shares are subject to a Shareholder Services Plan
and Class B shares only are subject to a Distribution Plan.
DISTRIBUTION PLAN Under the Distribution Plan, adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, the Fund pays for
advertising, marketing and distributing Class B shares at an annual rate of
up to .75 of 1% of the value of the average daily net assets of Class B.
Under the DistributionPlan, the Fund may make payments to Service
Agents, including FCIS and the Distributor, in respect of these services.
The Fund determines the amounts to be paid to Service Agents. Service
Agents receive such fees in respect of the average daily value of Class B
shares owned by their clients. From time to time, Service Agents may
defer or waive receipt of fees under the Distribution Plan while retaining
the ability to be paid by the Fund under the Distribution Plan thereafter.
The fees payable to Service Agents under the Distribution Plan for
advertising, marketing and distributing Class B shares are payable
without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN Under the Shareholder Services Plan,
the Fund pays Service Agents, including FCIS and the Distributor, for the
provision of certain services to the holders of Class A and Class B shares
a fee at the annual rate of up to .25 of 1% of the value of the average daily
net assets of Class A and Class B. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts. The Fund determines the amounts to be paid to Service Agents.
Each Service Agent is required to disclose to its clients any compensation
payable to it by the Fund pursuant to the Shareholder Services Plan and
any other compensation payable by their clients in connection with the
investment of their assets in Class A or Class B shares.
Page 41
DIVIDENDS, DISTRIBUTIONS
AND TAXES
THE FUND DECLARES AND PAYS DIVIDENDS FROM
NET INVESTMENT INCOME MONTHLY. YOU MAY CHOOSE WHETHER TO RECEIVE
DIVIDENDS IN CASH OR REINVEST IN ADDITIONAL SHARES.
The Fund ordinarily declares and pays dividends from net investment
income monthly. Investors may choose whether to receive dividends in
cash or to reinvest in additional Fund shares at net asset value.
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 of
the same class at net asset value. If an investor redeems all shares in his
account at any time prior to the payment of dividends, all dividends to
which such investor is entitled will be paid to him along with the
proceeds of the redemption. All expenses are accrued daily and deducted
before declaration of dividends to investors. Dividends paid by each Class
will be calculated at the same time and in the same manner and will be of the
same amount, except that the expenses attributable solely to Class A or Class
B will be borne exclusively by such Class. Class B shares will receive lower per
share dividends than Class A shares because of the higher expenses borne
by Class B. See "Fee Table."
DIVIDENDS AND DISTRIBUTIONS WILL BE TAXABLE TO MOST U.S. INVESTORS.
Dividends derived from net investment income, together with
distributions of net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to U.S. shareholders generally are
taxable as ordinary income whether received in cash or reinvested in
additional Fund shares. Distributions from net realized long-term
securities gains of the Fund generally are taxable to U.S. shareholders as
long-term capital gains regardless of how long the shareholder has held
his Fund shares and whether such distributions are received in cash or
reinvested in additional Fund shares. 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%. Dividends and distributions may be
subject to certain state and local taxes.
Only a relatively small portion of the dividends paid by the Fund is
likely to qualify for the dividends received deduction allowable to certain
U.S. corporations.
The Code provides for the "carryover" of some or all of the sales
load imposed on Class A shares if an investor exchanges his Class A
shares for shares of certain other funds advised by the Adviser, or for
shares of certain funds advised by the Administrator, within 91 days of
purchase and the other fund reduces or eliminates its otherwise
applicable sales load charge for the purpose of the exchange. In this case
the amount of the investor's sales load for the Fund's Class A shares, up
to the amount of the reduction of the sales load charge on the exchange, is
not included in the basis of the investor's Fund Class A shares for
purposes of computing gain or loss on the exchange, and instead is added
to the basis of the fund shares received in the exchange.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition 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 as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain
or loss may be realized, 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.
IF YOU HAVE NOT FURNISHED THE FUND WITH A CORRECT TAXPAYER
IDENTIFICATION NUMBER, YOU MAY BE SUBJECT TO TAX WITHHOLDING OF
31% OF ALL TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION
PROCEEDS.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be
realized, 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.
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 consti-tute 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.
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.
Management of the Fund believes that the Fund 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.
Each investor should consult his tax adviser regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class is calculated
on several bases, including current yield, average annual total return
and/or total return. These total return figures reflect changes in the price
of the shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the measuring period were
reinvested in shares of the same Class. Class A total return figures
include the maximum initial sales charge and Class B total return figures
include any applicable CDSC. These figures also take into account any
applicable service and distribution fees. As a result, at any given time,
the performance of Class B should be expected to be lower than that of
Class A. Performance for each Class will be calculated separately.
Page 44
"CURRENT YIELD" IS THE FUND'S NET INVESTMENT INCOME OVER A 30-DAY
PERIOD, EXPRESSED AS
AN ANNUAL PERCENTAGE AND ASSUMING ALL INCOME IS REINVESTED.
Current yield refers to the Fund's annualized net investment
income per share over a 30-day period, expressed as a percentage of the
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B at the end of the period. For
purposes of calculating current yield, the amount of net investment
income per share during that 30-day period, computed in accordance with
regulatory requirements, is compounded by assuming that it is reinvested
at a constant rate over a six-month period. An identical result is then
assumed to have occurred during a second six-month period which, when
added to the result for the first six months, provides an "annualized"
yield for an entire one-year period. Calculations of the Fund's current
yield may reflect absorbed expenses pursuant to any undertaking that may
be in effect. See "Management of the Fund."
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to the
reinvestment of dividends and distributions during the period. The return
is expressed as a percentage rate which, if applied on a compounded
annual basis, would result in the redeemable value of the investment at
the end of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return of Class A and Class B for
one, five and ten year periods, or for shorter time periods depending upon
the length of time during which the Fund has operated. Computations of
average annual total return for periods of less than one year represent an
annualization of the Fund's actual return for the applicable period.
"TOTAL RETURN" COMBINES THE INCOME AND PRINCIPAL CHANGES FOR A
SPECIFIED PERIOD, ASSUMING ALL DIVIDENDS AND DISTRIBUTIONS ARE
REINVESTED.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B at the beginning of the period.
Advertisements may include the percentage rate of total return or may
include the value of a hypothetical investment at the end of the period
which assumes the application of the percentage rate of total return.
Total return may also be calculated by using the net asset value per share
at the beginning of the period instead of the max-
Page 45
imum offering price per share at the beginning of the period for Class A
shares or without giving effect to any applicable CDSC at the end of the
period for Class B shares. Calculations based on the net asset value per
share do not reflect the deduction of the sales load which, if reflected,
would reduce the performance quoted.
AS OF THE DATE OF THIS PROSPECTUS, THE FUND WAS RATED 4-STAR BY MORNINGSTAR,
INC. PERFORMANCE VARIES FROM TIME TO TIME AND PAST RESULTS ARE NOT
NECESSARILY REPRESENTATIVE OF FUTURE RESULTS.
As of the date of this Prospectus, the Fund was rated
4-Star by Morningstar, Inc. This rating represents Morningstar's measure
of the Fund's risk-adjusted performance. Morningstar's ratings are based
on its overall assessment of a fund's risk level and historical total return,
net of expenses and sales loads, as compared to other funds in its class.
Performance will vary from time to time and past results are not
necessarily representative of future results. Investors should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other
investment companies using a different method of calculating
performance.
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., Standard & Poor's 500 Composite Stock
Price Index, Standard & Poor's MidCap 400 Index, the Dow Jones Industrial
Average, Morningstar, Inc. and other industry publications.
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 January 23, 1986. The Fund is authorized to
issue an unlimited number of shares of beneficial interest, par value $.01
per share. The Fund's shares are classified into two classes_Class A and
Class B. Each share has one vote and shareholders will vote in the
aggregate and not by class except as otherwise required by law or when
class voting is permitted by the Board of Trustees.
Page 46
However, holders of Class A and Class B shares will be entitled to vote
on matterssubmitted to shareholders pertaining to the Shareholder Services
Plan and only holders of Class B shares will be entitled to vote on matters
submitted to shareholders pertaining to the Distribution Plan.
On January 31, 1994, shareholders approved a proposal to change
certain of the Fund's fundamental policies and investment restrictions,
among other things, to increase (i) the amount the Fund may borrow,
(ii) the amount of assets that the Fund may pledge to secure such
borrowings, (iii) the percentage of Fund assets which may be invested in
illiquid securities and make such policy non-fundamental and (iv) the
amount of portfolio securities which the Fund may lend.
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.
Page 47
Investor inquiries may be made to the investor's Service
Agent, including the Adviser, 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 48
FIRST PRAIRIE DIVERSIFIED ASSET FUND (FIRST PRAIRIE LOGO)FIRST PRAIRIE FUNDS
PROSPECTUS
The First National Bank of Chicago
Investment Adviser
Dreyfus Service Corporation
Distributor
(ArtworK)
Prospectus begins on page one. 372p11042294
__________________________________________________________________________
FIRST PRAIRIE DIVERSIFIED ASSET FUND
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 22, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of First Prairie Diversified Asset Fund (the "Fund"), dated April 22,
1994, as it may be revised from time to time. To obtain a copy of the
Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call toll free 1-800-346-
3621.
The First National Bank of Chicago (the "Adviser") serves as the
Fund's investment adviser.
The Dreyfus Corporation (the "Administrator") serves as the Fund's
administrator.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Administrator, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objectives and Management Policies. . . . . . . .B-2
Management of the Fund . . . . . . . . . . . . . . . . . . .B-7
Investment Advisory and Administration Agreements. . . . . .B-10
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . .B-12
Distribution Plan and Shareholder Services Plan. . . . . . .B-14
Redemption of Fund Shares. . . . . . . . . . . . . . . . . .B-15
Shareholder Services . . . . . . . . . . . . . . . . . . . .B-17
Determination of Net Asset Value . . . . . . . . . . . . . .B-20
Performance Information. . . . . . . . . . . . . . . . . . .B-21
Portfolio Transactions . . . . . . . . . . . . . . . . . . .B-22
Dividends, Distributions and Taxes . . . . . . . . . . . . .B-23
Information About the Fund . . . . . . . . . . . . . . . . .B-25
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . .B-25
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . .B-26
Financial Statements . . . . . . . . . . . . . . . . . . . .B-29
Report of Independent Auditors . . . . . . . . . . . . . . .B-40
INVESTMENT OBJECTIVES 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."
Portfolio Securities
Bank Obligations. Domestic commercial banks organized under Federal
law are supervised and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation (the
"FDIC"). Domestic banks organized under state law are supervised and
examined by state banking authorities but are members of the Federal
Reserve System only if they elect to join. In addition, state banks whose
certificates of deposit ("CDs") may be purchased by the Fund are insured
by the Bank Insurance Fund administered by the FDIC (although such
insurance may not be of material benefit to the Fund, depending upon the
principal amount of the Cds of each bank held by the Fund) and are subject
to Federal examination and to a substantial body of Federal law and
regulation. As a result of Federal or state laws and regulations,
domestic branches of domestic banks whose Cds may be purchased by the
Fund, among other things, generally are required to maintain specified
levels of reserves, are limited in the amounts they can loan to a single
borrower and are subject to other regulations designed to promote
financial soundness. However, not all of such laws and regulations apply
to foreign branches of domestic banks.
Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and foreign branches of foreign banks, such
as Cds and time deposits ("TDs"), may be general obligations of the parent
banks in addition to the issuing branches, or may be limited by the terms
of a specific obligation and governmental regulation. Such obligations
are subject to different risks than are those of domestic banks. These
risks include foreign economic and political developments, foreign
governmental restrictions that may adversely affect payment of principal
and interest on the obligations, foreign exchange controls and foreign
withholding and other taxes on interest income. Foreign branches and
subsidiaries are not necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory reserve
requirements, loan limitations, and accounting, auditing and financial
recordkeeping requirements. In addition, less information may be publicly
available about a foreign branch of a domestic bank or about a foreign
bank than about a domestic bank.
Obligations of United States branches of foreign banks may be general
obligations of the parent banks in addition to the issuing branches, or
may be limited by the terms of a specific obligation and by Federal or
state regulation as well as governmental action in the country in which
the foreign bank has its head office. A domestic branch of a foreign bank
with assets in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which the branch
is located if the branch is licensed in that state.
In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state.
The deposits of Federal and State Branches generally must be insured by
the FDIC if such branches take deposits of less than $100,000.
In view of the foregoing factors associated with the purchase of Cds
and Tds issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, the Adviser carefully evaluates such
investments on a case-by-case basis.
The Fund may purchase Cds issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, the deposits of which are insured by the FDIC, provided the Fund
purchases any such CD in a principal amount of not more than $100,000,
which amount would be fully insured by the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the FDIC. Interest
payments on such a CD are not insured by the FDIC. The Fund will not own
more than one such CD per such issuer.
Management Policies
The Fund engages in the following practices in furtherance of its
objectives.
Options Transactions. The Fund may engage in options transactions,
such as writing covered call options. The principal reason for writing
covered call options is to realize, through the receipt of premiums, a
greater return than would be realized on the Fund's portfolio securities
alone. In return for a premium, the writer of a covered call option
forfeits the right to any appreciation in the value of the underlying
security above the strike price for the life of the option (or until a
closing purchase transaction can be effected). Nevertheless, the call
writer retains the risk of a decline in the price of the underlying
security. The size of the premiums that the Fund may receive may be
adversely affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing
activities.
Options written ordinarily will have expiration dates between one and
nine months from the date written. The exercise price of the options may
be below, equal to or above the market values of the underlying securities
at the time the options are written. In the case of call options, these
exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively. The Fund may write (a) in-the-money
call options when the Adviser expects that the price of the underlying
security will remain stable or decline moderately during the option
period, (b) at-the-money call options when the Adviser expects that the
price of the underlying security will remain stable or advance moderately
during the option period and (c) out-of-the-money call options when the
Adviser expects that the premiums received from writing the call option
plus the appreciation in market price of the underlying security up to the
exercise price will be greater than the appreciation in the price of the
underlying security alone. In these circumstances, if the market price of
the underlying security declines and the security is sold at this lower
price, the amount of any realized loss will be offset wholly or in part by
the premium received. Out-of-the-money, at-the-money and in-the-money put
options (the reverse of call options as to the relation of exercise price
to market price) may be utilized in the same market environments that such
call options are used in equivalent transactions.
So long as the Fund's obligation as the writer of an option
continues, the Fund may be assigned an exercise notice by the broker-
dealer through which the option was sold, requiring the Fund to deliver,
in the case of a call, or take delivery of, in the case of a put, the
underlying security against payment of the exercise price. This
obligation terminates when the option expires or the Fund effects a
closing purchase transaction. The Fund can no longer effect a closing
purchase transaction with respect to an option once it has been assigned
an exercise notice.
While it may choose to do otherwise, the Fund generally will write
only those options for which the Adviser believes there is an active
secondary market so as to facilitate closing transactions. There is no
assurance that sufficient trading interest to create a liquid secondary
market on a securities exchange will exist for any particular option or at
any particular time, and for some options no such secondary market may
exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated
trading activity or order flow, or other unforeseen events, at times have
rendered certain clearing facilities inadequate and resulted in the
institution of special procedures, such as trading rotations, restrictions
on certain types of orders or trading halts or suspensions in one or more
options. There can be no assurance that similar events, or events that
may otherwise interfere with the timely execution of customers' orders,
will not recur. In such event, it might not be possible to effect closing
transactions in particular options. If as a covered call option writer
the Fund is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise or it
otherwise covers its position.
The Fund may purchase put and call options for the purpose of
increasing its current return or avoiding adverse tax consequences that
could reduce its current return. The Fund also may purchase call options
to acquire the underlying security. The Fund may enter into closing sale
transactions with respect to such options and may permit them to expire.
The Fund will not purchase options for leveraging purposes.
The Fund will purchase put and call options only to the extent
permitted by the policies of state securities authorities in states where
shares of the Fund are qualified for offer and sale. These authorities
may impose further limitations on the Fund's ability to purchase options.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other institutional
investors, 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 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 dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; (5) the Fund may pay only reasonable custodian fees in
connection with the loan; and (6) while voting rights on the loaned
securities may pass to the borrower, the Fund's Board of Trustees must
terminate the loan and regain the right to vote the securities if a
material event adversely affecting the investment occurs. These
conditions may be subject to future modification.
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 10 as fundamental policies. These
restrictions cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended
(the "Act")) of the Fund's outstanding voting shares. Investment
restrictions numbered 11 through 18 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 the value 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, without regard to any such limitation.
2. Hold more than 10% of the voting securities of any single
issuer. This Investment Restriction applies only with respect to 75%
of the Fund's total assets.
3. Invest more than 25% of its assets in investments in any
particular industry or industries, provided that, when the Fund has
adopted a temporary defensive posture, there shall be no limitation
on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
4. Invest in commodities, except that the Fund may purchase and
sell options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes.
5. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration development programs, but the Fund may
purchase and sell securities that are secured by real estate or
issued by companies that invest or deal in real estate.
6. Borrow money, except to the extent permitted under the Act.
For purposes of this Investment Restriction, the entry into options
forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes shall not
constitute borrowing.
7. Make loans to others, except through the purchase of debt
obligations or 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.
8. Act as an underwriter of securities of other issuers, 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.
9. Issue any senior security (as such term is defined in
Section 18(f) of the Act), except to the extent the activities
permitted in Investment Restriction Nos. 5, 6, 10 and 13 may be
deemed to give rise to a senior security.
10. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in options, forward
contracts, futures contracts, including those relating to indexes,
and options on future contracts or indexes.
11. Purchase securities of any company having less than three
years' continuous operations (including operations of any
predecessor) if such purchase would cause the value of the Fund's
investments in all such companies to exceed 5% of the value of its
total assets.
12. Invest in the securities of a company for the purpose of
exercising management or control, but the Fund will vote the
securities it owns in its portfolio as a shareholder in accordance
with its views.
13. Pledge, mortgage or hypothecate 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 writing
covered put and call options and the purchase of securities on a
when-issued or forward commitment basis and collateral and initial or
variation margin arrangements with respect to options, forward
contracts, futures contracts, including those relating to indexes,
and options on futures contracts or indexes.
14. Purchase, sell or write puts, calls, or combinations
thereof, except as described in the Fund's Prospectus and Statement
of Additional Information.
15. Enter into repurchase agreements providing for settlement
in more than seven days after notice or purchase securities which are
illiquid, if, in the aggregate, more than 15% of the value of the
Fund's net assets would be so invested.
16. Invest in securities of other investment companies except
to the extent permitted under the Act.
17. Purchase or retain the securities of any issuer if the
officers or Trustees of the Fund or the officers or directors of the
Adviser who individually own beneficially more than 1/2 of 1% of the
securities of such issuer together own beneficially more than 5% of
the securities of such issuer.
18. Purchase warrants in excess of 5% of its net assets;
however, no more than 2% of the value of the Fund's net assets may be
invested in warrants which are not listed on the New York or American
Stock Exchange. For purposes of this restriction, such warrants
shall be valued at the lower of cost or market, except that warrants
acquired by the Fund in units or attached to securities shall not be
included within this 5% restriction.
While not a fundamental policy, the Fund will not invest in real
estate limited partnerships.
If a percentage restriction is adhered to at the time of investment,
a later increase in percentage resulting from a change in values or assets
will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. The Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees and Officers of the Fund
*JOSEPH S. DiMARTINO, President and Trustee. President, Chief Operating
Officer and a Director of the Administrator, Executive Vice President
and a Director of the Distributor and an officer, director or trustee
of other investment companies advised or administered by the
Administrator. He is also a Director of Noel Group, Inc., Director
and Corporate Member of The Muscular Dystrophy Association and a
Trustee of Bucknell University. His address is 200 Park Avenue, New
York, New York 10166.
JOHN P. GOULD, Trustee. Distinguished Service Professor of Economics of
the University of Chicago Graduate School of Business. From 1983 to
1993, Dean of the University of Chicago Graduate School of Business.
Since 1986, he has served as a Director of DFA Investment Dimensions
Group, a series mutual fund. Dean Gould also serves as a Director of
Harpor Capital Advisors. 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 also a member of the Chicago Economic Club. 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. His address is
1181 Loch Lane, Lake Forest, Illinois 60045.
Each of the "non-interested" Trustees also is a trustee of First
Prairie Cash Management, First Prairie Money Market Fund, First Prairie
Municipal Money Market Fund, First Prairie U.S. Government Income Fund and
First Prairie U.S. Treasury Securities Cash Management, and a director of
First Prairie Municipal Bond Fund.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Adviser or the Administrator, or any affiliate of either of them,
which totaled $4,999 for the fiscal year ended December 31, 1993 for such
Trustees, as a group.
Trustees (except Mrs. McCoy) were elected at the meeting of
shareholders held on September 28, 1987. No further shareholder meetings
will be held for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees holding office have been
elected by shareholders, at which time the Trustees then in office will
call a shareholders' meeting for the election of Trustees. Under the Act,
shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Trustee through a declaration in writing
or by vote cast in person or by proxy at a meeting called for that
purpose. Under the Fund's Agreement and Declaration of Trust, the
Trustees are required to call a meeting of shareholders for the purpose of
voting upon the question of removal of any such Trustee when requested in
writing to do so by the shareholders of record of not less than 10% of the
Fund's outstanding shares.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
Officers of the Fund Not Listed Above
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Administrator, Secretary of the Distributor and an officer of
other investment companies advised or administered by the
Administrator.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President-Mutual Fund
Accounting of the Administrator and an officer of other investment
companies advised or administered by the Administrator.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Administrator
and an officer of other investment companies advised or administered
by the Administrator.
PAUL R. CASTI, JR., Controller. Senior Accounting Manager of the Fund
Accounting Department of the Administrator and an officer of other
investment companies advised or administered by the Administrator.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Administrator and an officer of other investment companies advised or
administered by the Administrator.
ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General Counsel
to the Administrator and an officer of other investment companies
advised or administered by the Administrator.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Administrator, the Distributor and other investment companies
advised or administered by the Administrator.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on March 23, 1994.
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
Investment Advisory Agreement. The Adviser provides management
services to the Fund pursuant to the Investment Advisory Agreement (the
"Advisory Agreement") dated December 16, 1985 (as revised October 1, 1993)
with the Fund. The Advisory Agreement is subject to annual approval by
(i) the Fund's Board of Trustees or (ii) vote of a majority (as defined in
the Act) of the outstanding voting securities of the Fund, provided that
in either event the continuance also is approved by a majority of the
Trustees who are not "interested persons" (as defined in the Act) of the
Fund or the Adviser, by vote cast in person at a meeting called for the
purpose of voting on such approval. Shareholders last approved the
Advisory Agreement on September 28, 1987 and the Board of Trustees,
including a majority of the Trustees who are not "interested persons" of
any party to the Advisory Agreement, last voted to renew the Advisory
Agreement at a meeting held on December 10, 1993. The Advisory Agreement
is terminable without penalty, on not more than 60 days' notice, by the
Fund's Board of Trustees or by vote of the holders of a majority of the
Fund's shares or, upon not less than 90 days' notice, by the Adviser. The
Advisory Agreement will terminate automatically in the event of its
assignment (as defined in the Act).
As compensation for the Adviser's services to the Fund, the Fund has
agreed to pay the Adviser a fee, computed daily and paid monthly, at an
annual rate of .65 of 1% of the value of the Fund's average daily net
assets. For the fiscal years ended December 31, 1991, 1992 and 1993, no
fees were paid due to an undertaking by the Adviser.
The Fund has agreed that neither the Adviser nor the Administrator
will be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which the Adviser's
or the Administrator's respective agreement with the Fund relates, except
for a loss resulting from wilful misfeasance, bad faith or gross
negligence on the part of the Adviser or the Administrator, as the case
may be, in the performance of its obligations or from reckless disregard
by it of its obligations and duties under its respective agreement with
the Fund.
Administration Agreement. Pursuant to the Administration Agreement
(the "Administration Agreement") dated December 16, 1985 (as revised
October 1, 1993) with the Fund, the Administrator furnishes the Fund
clerical help and accounting, data processing, bookkeeping, internal
auditing and legal services and certain other services required by the
Fund, prepares reports to the Fund's shareholders, tax returns, reports to
and filings with the Securities and Exchange Commission and state Blue Sky
authorities, calculates the net asset value of the Fund's shares and
generally assists in all aspects of the Fund's operation, other than
providing investment advice. The Administrator bears all expenses in
connection with the performance of its services and pays the salaries of
all officers and employees who are employed by both it and the Fund.
The Administration Agreement is subject to annual approval by (i) the
Fund's Board of Trustees or (ii) vote of a majority (as defined in the
Act) of the Fund's outstanding voting securities, provided that in either
event the continuance also is approved by a majority of the Trustees who
are not "interested persons" (as defined in the Act) of the Fund or the
Administrator, by vote cast in person at a meeting called for the purpose
of voting on such approval. Shareholders last approved the Administration
Agreement on September 28, 1987 and the Board of Trustees, including a
majority of the Trustees who are not "interested persons" of any party to
the Administration Agreement, last voted to renew the Administration
Agreement at a meeting held on December 10, 1993. The Administration
Agreement is terminable without penalty, on not more than 60 days' notice,
by the Fund's Board of Trustees or by vote of the holders of a majority of
the Fund's shares or, upon not less than 90 days' notice, by the
Administrator. The Administration Agreement will terminate automatically
in the event of its assignment (as defined in the Act).
As compensation for the Administrator's services to the Fund, the
Fund has agreed to pay the Administrator a fee, computed daily and paid
monthly, at an annual rate of .30 of 1% of the value of the Fund's average
daily net assets. For the fiscal years ended December 31, 1991, 1992 and
1993, no fees were paid due to an undertaking by the Administrator.
In addition to the persons named as such in the section entitled
"Management of the Fund," the following persons are officers and/or
directors of the Administrator: Howard Stein, Chairman of the Board and
Chief Executive Officer; Julian M. Smerling, Vice Chairman of the Board of
Directors; Alan M. Eisner, Vice President and Chief Financial Officer;
David W. Burke, Vice President and Chief Administrative Officer; Robert F.
Dubuss, Vice President; Elie M. Genadry, Vice President--Institutional
Sales; Peter A. Santoriello, Vice President; Robert H. Schmidt, Vice
President; Kirk V. Stumpp, Vice President--New Product Development; Philip
L. Toia, Vice President; Katherine C. Wickham, Assistant Vice President;
Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman,
Lawrence M. Greene, Abigail Q. McCarthy and David B. Truman, directors.
Expenses and Expense Information. All expenses incurred in the
operation of the Fund are borne by the Fund, except to the extent
specifically assumed by the Adviser and/or the Administrator. The
expenses borne by the Fund include the following: taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Adviser or the Administrator, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory and
administration 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. Class A and Class B shares are subject to an
annual service fee for ongoing personal services relating to shareholder
accounts and services related to the maintenance of shareholder accounts.
In addition, Class B shares are subject to an annual distribution fee for
advertising, marketing and distributing Class B shares pursuant to a
distribution plan adopted in accordance with Rule 12b-1 under the Act.
See "Distribution Plan and Shareholder Services Plan."
The Adviser and the Administrator have agreed that if in any fiscal
year the aggregate expenses of the Fund (including fees pursuant to the
Advisory Agreement and the Administration Agreement, 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 each of the Adviser and the
Administrator, or the Adviser and the Administrator will bear,
approximately 70% and 30%, respectively, of 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 aggregate of the fees payable to the Adviser and the
Administrator is not subject to reduction as the value of the Fund's net
assets increases.
Glass-Steagall Act. For an additional discussion of the
Glass-Steagall Act in connection with the Fund's operations, see the
Fund's Prospectus.
From time to time, legislation has been introduced and may be
reintroduced in Congress, which would permit a bank, a bank holding
company or a subsidiary thereof to organize, sponsor, control and
distribute shares of an investment company such as the Fund,
notwithstanding present restrictions under the Glass-Steagall Act and the
Federal Bank Holding Company Act of 1956. As described herein, the Fund
is currently distributed by the Distributor, and the Administrator, its
parent, sponsors the Fund and provides it with administrative services.
If current restrictions preventing a bank from legally sponsoring,
organizing, controlling or distributing shares of an investment company
were relaxed, the Fund expects that the Adviser would consider the
possibility of offering to perform some or all of the services now
provided by the Administrator or the Distributor. It is not possible, of
course, to predict whether or in what form such legislation might be
enacted or the terms upon which the Adviser might offer to provide
services.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the First Prairie Family
of Funds, the funds in the Dreyfus Family of Funds and certain other
investment companies.
Sales Loads--Class A. The scale of sales loads applies to purchases
of Class A shares made by any "purchaser," which term includes an
individual and/or spouse purchasing securities for his, her or their own
account or for the account of any minor children, or a trustee or other
fiduciary purchasing securities for a single trust estate or a single
fiduciary account (including a pension, profit-sharing, or other employee
benefit trust created pursuant to a plan qualified under Section 401 of
the Internal Revenue Code of 1986, as amended (the "Code")) although more
than one beneficiary is involved; or a group of accounts established by or
on behalf of the employees of an employer or affiliated employers pursuant
to an employee benefit plan or other program (including accounts
established pursuant to Sections 403(b), 408(k), and 457 of the Code); or
an organized group which has been in existence for more than six months,
provided that it is not organized for the purpose of buying redeemable
securities of a registered investment company and provided that the
purchases are made through a central administration or a single dealer, or
by other means which result in economy of sales effort or expense.
Offering Price. The method of computing the offering price of Class
A shares for individual sales aggregating less than $50,000, based upon
the price in effect at the close of business on December 31, 1993, is as
follows:
NET ASSET VALUE and redemption price per share $13.11
Sales load, 4.5 percent of offering price
(approximately 4.7 percent of net asset
value per share). . . . . . . . . . . . .62
Offering price to public . . . . . . . . . . $13.73
TeleTransfer Privilege. TeleTransfer purchase orders may be made
between the hours of 8:00 a.m. and 4:00 p.m., New York time, on any
business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the
New York Stock Exchange are open, except Martin Luther King, Jr. Day,
Columbus Day and Veterans Day. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. To qualify to
use the TeleTransfer Privilege, the initial payment for purchase of Fund
shares must be drawn on, and redemption proceeds paid to, the same bank
and account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to
be wired to an account at any other bank, the request must be in writing
and signature-guaranteed. See "Redemption of Fund Shares--TeleTransfer
Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Distribution Plan and Shareholder Services Plan."
Class A and Class B shares are subject to a Shareholder Services Plan
and Class B shares only are subject to a Distribution Plan.
Distribution Plan. Rule l2b-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. The Fund's Board
of Trustees has adopted such a plan (the "Distribution Plan") with respect
to Class B shares pursuant to which the Fund pays for advertising,
marketing and distributing Class B shares. Under the Distribution Plan,
the Fund may make payments to the Adviser, its affiliates, including First
Chicago Investment Services, Inc., the Distributor or certain securities
dealers, financial institutions and other financial industry professionals
(collectively, "Service Agents") in respect of these services. The Fund's
Board of Trustees believes that there is a reasonable likelihood that the
Distribution Plan will benefit the Fund and holders of its Class B shares.
In some states, certain 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 Distribution
Plan, and the purposes for which such expenditures were incurred, must be
made to the Trustees for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B shares may bear for distribution pursuant to the
Distribution Plan without the approval of the holders of Class B shares
and that other material amendments of the Distribution 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 Distribution
Plan or in any agreements entered into in connection with the Distribution
Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Distribution Plan is subject to annual
approval by such vote of the Trustees cast in person at a meeting called
for the purpose of voting on the Distribution Plan. The Distribution Plan
was approved by the Fund's Board of Trustees, including a majority of the
Trustees who are not "interested persons," at a meeting held on October 1,
1993. The Distribution Plan is terminable 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 Distribution
Plan or in any agreements entered into in connection with the Distribution
Plan, or by vote of the holders of a majority of Class B shares.
Shareholder Services Plan. The Fund has adopted a Shareholder
Services Plan, pursuant to which the Fund pays Service Agents for the
provision of certain services to the holders of Class A and Class B
shares.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Trustees for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of 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 Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan, by vote cast in person at a meeting called for
the purpose of considering such amendments. The Shareholder Services Plan
is subject to annual approval by such vote of the Trustees cast in person
at a meeting called for the purpose of voting on the Shareholder Services
Plan. The Shareholder Services Plan was so approved on October 1, 1993.
The Shareholder Services Plan is terminable at any time by vote of a
majority of the Trustees who are not "interested persons" and who have no
direct or indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan.
Prior Rule 12b-1 Plan. As of February 8, 1994, the Fund terminated
its then existing Rule 12b-1 plan, which provided for payments to be made
to Service Agents for advertising, marketing and/or distributing Class A
shares and servicing holders of Class A shares. During the fiscal year
ended December 31, 1993, $145,608 was payable by the Fund under such Rule
12b-1 plan, of which prior $10,190 was payable for preparing, printing and
distributing prospectuses and operating the prior Rule 12b-1 plan, $4,356
of which was paid by the Fund pursuant to undertakings in effect, and
$135,418 was payable for advertising, marketing and servicing, none of
which was paid pursuant to undertakings in effect. No payments were made
by the Fund to the Adviser or any of its affiliates pursuant to such Rule
12b-1 plan.
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."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the next business day after receipt by the Transfer Agent of a
redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder
Services Form. Redemption proceeds, if wired, must be in the amount of
$1,000 or more and will be wired to the investor's account at the bank of
record designated in the investor's file at the Transfer Agent if the
investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the investor.
Immediate notification by the correspondent bank to the investor's bank is
necessary to avoid a delay in crediting the funds to the investor's bank
account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
________________ ________________
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator toll free at
1-800-654-7171. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Signatures."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption
will be effected as a TeleTransfer transaction through the Automated
Clearing House ("ACH") system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in the investor's
account at an ACH member bank ordinarily two business days after receipt
of the redemption request. See "Purchase of Fund Shares--TeleTransfer
Privilege."
Signatures. Written redemption requests must be signed by the
individual shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agent Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. Guarantees must be signed by an authorized signatory
of the guarantor and "Signature-Guaranteed" must appear with the
signature. The Transfer Agent may request additional documentation from
corporations, executors, administrators, trustees or guardians and may
accept other suitable verification arrangements from foreign investors,
such as consular verification. For more information with respect to
signature-guarantees, please call the telephone number listed on the
cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period up to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of such period. Such commitment
is irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In such event,
the securities would be valued in the same manner as the Fund's portfolio
is valued. If the recipient sold such securities, brokerage charges would
be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Exchange Privilege. The Exchange Privilege permits investors to
purchase, in exchange for all or part of their shares of Class A or Class
B of the Fund, shares of the same Class of certain other funds advised by
the Adviser, or shares of the same Class of certain funds advised by the
Administrator, on the basis of relative net asset value per share at the
time of the exchange, as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged for Class A shares of other funds sold with a sales
load, and the applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load
may be exchanged without a sales load for Class A shares of
other funds sold without a sales load.
C. Class A shares of funds purchased with a sales load, Class A
shares of funds acquired by a previous exchange from Class A
shares purchased with a sales load, and additional Class A
shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein
as "Purchased Shares") may be exchanged for Class A shares of
other funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at
the time the Purchased Shares were acquired), without giving
effect to any reduced loads, the difference will be deducted.
D. Class B shares of any fund may be exchanged for Class B shares
of other funds without a sales load. Class B shares of any fund
exchanged for Class B shares of another fund will be subject to
the higher applicable contingent deferred sales charge ("CDSC")
of the two funds and, for purposes of calculating CDSC rates and
conversion periods, will be deemed to have been held since the
date the Class B shares being exchanged were initially
purchased.
To accomplish an exchange under item C above, an investor must notify
the Transfer Agent of his prior ownership of fund shares and his account
number.
To use this Privilege, an investor or the investor's Service Agent
acting on the investor's behalf must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. Telephone exchanges
may be made only if the appropriate "YES" box has been checked on the
Account Application, or a separate signed and signature-guaranteed
Shareholder Services Form is on file with the Transfer Agent. By using
this Privilege, the investor authorizes the Transfer Agent to act on
telephonic, telegraphic or written exchange instructions from any person
representing himself or herself to be the investor or a representative of
the investor's Service Agent, and reasonably believed by the Transfer
Agent to be genuine. Telephone exchanges may be subject to limitations as
to the amount involved or the number of telephone exchanges permitted.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A or Class B shares of the
Fund, shares of the same Class of certain other funds in the First Prairie
Family of Funds or certain funds advised by the Administrator. This
Privilege is available only for existing accounts. Shares will be
exchanged on the basis of relative net asset value as described above
under "Exchange Privilege." Enrollment in or modification or cancellation
of this Privilege is effective three business days following notification
by the investor. An investor will be notified if his account falls below
the amount designated to be exchanged under this Privilege. In this case,
an investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares held under IRA and other retirement plans are
eligible for this Privilege. Exchanges of IRA shares may be made between
IRA accounts and from regular accounts to IRA accounts, but not from IRA
accounts to regular accounts. With respect to all other retirement
accounts, exchanges may be made only among those accounts.
The Exchange Privilege and Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available from the
Distributor, the Adviser, certain affiliates of the Adviser or certain
Service Agents. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Class B shares withdrawn
pursuant to the Automatic Withdrawal Plan will be subject to any
applicable CDSC.
Dividend Sweep. The Dividend Sweep enables investors to invest
automatically dividends or dividends and capital gain distributions, if
any, paid by the Fund in shares of the same Class of another fund in the
First Prairie Family of Funds or certain funds advised or administered by
the Administrator of which the investor is a shareholder. Shares of the
same Class of other funds purchased pursuant to this Privilege will be
purchased on the basis of relative net asset value per share as follows:
A. Dividends and distributions paid with respect to Class A shares
by a fund may be invested without imposition of a sales load in
Class A shares of other funds that are offered without a sales
load.
B. Dividends and distributions paid with respect to Class A shares
by a fund which does not charge a sales load may be invested in
Class A shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Dividends and distributions paid with respect to Class A shares
by a fund which charges a sales load may be invested in Class A
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are
being swept, without giving effect to any reduced loads, the
difference will be deducted.
D. Dividends and distributions paid with respect to Class B by a
fund may be invested without imposition of any applicable CDSC
in Class B shares of other funds and the Class B shares of such
other funds will be subject on redemption to any applicable
CDSC.
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."
Valuation of Portfolio Securities. Substantially all of the Fund's
investments (excluding short-term investments) are valued each business
day by an independent pricing service (the "Service") approved by the
Board of Trustees. Securities valued by the Service for which quoted bid
prices in the judgment of the Service are readily available and are
representative of the bid side of the market are valued at the mean
between the quoted bid prices (as obtained by the Service from dealers in
such securities) and asked prices (as calculated by the Service based upon
its evaluation of the market for such securities). Other investments
valued by the Service are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or
prices of securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
Short-term investments are not valued by the Service and are carried at
amortized cost, which approximates value. Other investments that are not
valued by the Service are valued at the average of the most recent bid and
asked prices in the market in which such investments are primarily traded,
or at the last sales price for securities traded primarily on an exchange
or the national securities market. In the absence of reported sales of
investments traded primarily on an exchange or the national securities
market, the average of the most recent bid and asked prices is used. Bid
price is used when no asked price is available. Expenses and fees,
including the investment advisory and administration fees (reduced by the
expense limitation, if any), and expenses under the Shareholder Services
Plan with respect to the Class A and Class B shares, and fees pursuant to
the Distribution Plan with respect to the Class B shares only, are accrued
daily and are taken into account for the purpose of determining the net
asset value of Fund shares. Because of the difference in operating
expenses incurred by each Class, the per share net asset value of each
Class will differ.
Restricted securities, as well as securities or other assets for
which market quotations are not readily available, or are not valued by
the Service, are valued at fair value as determined in good faith by the
Board of Trustees. The Board of Trustees will review the method of
valuation on a current basis. In making their good faith valuation of
restricted securities, the Trustees generally will take the following
factors into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a
public market exists usually will be valued at market value less the same
percentage discount at which purchased. This discount will be revised
periodically by the Board of Trustees if they believe that it no longer
reflects the value of the restricted securities. Restricted securities
not of the same class as securities for which a public market exists
usually will be valued initially at cost. Any subsequent adjustment from
cost will be based upon considerations deemed relevant by the Board of
Trustees.
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.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
Class B shares had not been offered as of the date of the financials
and, accordingly, no performance data are available for Class B.
The Fund's current yield for Class A for the 30-day period ended
December 31, 1993 was 4.47%, which reflects the absorption of expenses
pursuant to expense limitations in effect. See "Management of the Fund"
in the Prospectus. Had expenses not been absorbed, the Fund's current
yield for the same period would have been 3.39%. Current yield is
computed pursuant to a formula which operates as follows: The amount of
the Fund's expenses accrued for the 30-day period (net of reimbursements)
is subtracted from the amount of the dividends and interest earned
(computed in accordance with regulatory requirements) by the Fund during
the period. That result is then divided by the product of: (a) the
average daily number of shares outstanding during the period that were
entitled to receive dividends, and (b) the maximum offering price per
share in the case of Class A or the net asset value per share in the case
of Class B on the last day of the period less any undistributed earned
income per share reasonably expected to be declared as a dividend shortly
thereafter. The quotient is then added to 1, and that sum is raised to
the 6th power, after which 1 is subtracted. The current yield is then
arrived at by multiplying the result by 2.
The Fund's average annual total return for Class A for the 1, 5 and
7.94 year periods ended December 31, 1993 was 5.70%, 1.96% and 11.14%,
respectively. Average annual total return is calculated by determining
the ending redeemable value of an investment purchased with a hypothetical
$1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of
the initial investment, taking the "n"th root of the quotient (where "n"
is the number of years in the period) and subtracting 1 from the result.
A Class's average annual total return figures calculated in accordance
with such formula assume that in the case of Class A the maximum sales
load had been deducted from the hypothetical initial investment at the
time of purchase or in the case of Class B the maximum applicable CDSC has
been paid upon redemption at the end of the period.
Total return is calculated by subtracting the amount of the Fund's
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B at the beginning of a stated period
from the net asset value per share at the end of the period (after giving
effect to the reinvestment of dividends and distributions during the
period), and dividing the result by the maximum offering price per share
in the case of Class A or the net asset value per share in the case of
Class B at the beginning of the period. Total return also may be
calculated based on the net asset value per share at the beginning of the
period instead of the maximum offering price per share at the beginning of
the period for Class A shares or without giving effect to any applicable
CDSC at the end of the period for Class B shares. In such cases, the
calculation would not reflect the deduction of the sales load which, if
reflected, would reduce the performance quoted. The Fund's total return
for Class A for the period January 23, 1986 to December 31, 1993, based on
maximum offering price per share, was 131.27%. Based on net asset value
per share, the Fund's total return for Class A was 142.13% for this
period.
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 comparisons of the Fund's
performance with historical rates of inflation or may describe how an
investment in the Fund may be used to fund retirement costs or other
economic goals. From time to time advertising materials for the Fund also
may refer to Morningstar ratings and related analyses supporting such
ratings.
PORTFOLIO TRANSACTIONS
The Adviser supervises the placement of orders on behalf of the Fund
for the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made in the best judgment of
the Adviser and in a manner deemed fair and reasonable to shareholders.
The primary consideration is prompt execution of orders at the most
favorable net price. Subject to this consideration, the brokers selected
include those that supplement the Adviser's research facilities with
statistical data, investment information, economic facts and opinions.
Information so received is in addition to and not in lieu of services
required to be performed by the Adviser and the Adviser's fee is not
reduced as a consequence of the receipt of such supplemental information.
Such information may be useful to the Adviser in serving both the Fund and
other clients which it manages and, conversely, supplemental information
obtained by the placement of business of other clients may be useful to
the Adviser in carrying out its obligation to the Fund. Brokers also are
selected because of their ability to handle special executions such as are
involved in large block trades or broad distributions, provided the
primary consideration is met. Large block trades may, in certain cases,
result from two or more clients the Adviser might advise being engaged
simultaneously in the purchase or sale of the same security. Portfolio
turnover may vary from year to year, as well as within a year. The
overall reasonableness of brokerage commissions paid is evaluated by the
Adviser based upon its knowledge of available information as to the
general level of commissions paid by other institutional investors for
comparable services.
When transactions are executed in the over-the-counter market, the
Fund will deal with the primary market makers unless a more favorable
price or execution otherwise is obtainable.
For its portfolio securities transactions during the fiscal years
ended December 31, 1991, 1992 and 1993, the Fund paid total brokerage
commissions of $6,656, $29,818 and $29,826, respectively, none of which
was paid to the Distributor. There were no spreads or concessions on
principal transactions in fiscal 1991, 1992 and 1993.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund qualified as a "regulated
investment company" under the Code in fiscal 1993 and the Fund intends to
continue to so qualify if such qualification is in the best interests of
its shareholders. To qualify as a regulated investment company, the Fund
must distribute at least 90% of its net income (consisting of net
investment income and net short-term capital gain) to its shareholders,
must derive less than 30% of its annual gross income from gain on the sale
of securities held for less than three months, and must meet certain asset
diversification and other requirements. Accordingly, the Fund may be
restricted in the selling of securities held for less than three months,
and in the utilization of certain of the investment techniques described
in the Prospectus. The Code, however, allows the Fund to net certain
offsetting positions making it easier for the Fund to satisfy the 30%
test. The term "regulated investment company" does not imply the
supervision of management or investment practice or policies by any
government agency.
Any dividend paid shortly after one purchase of Fund Shares may have
the effect of reducing the aggregate net asset value below their
acquisition cost. Such a dividend or distribution would be a return on
investment in an economic sense, although taxable as stated above. In
addition, the Code provides that if a shareholder holds shares of the Fund
for six months or less and has received a capital gain dividend with
respect to such shares, any loss incurred on the sale of such shares will
be treated as a long-term capital loss to the extent of the capital gain
dividend received.
Depending upon the composition of the Fund's income, a portion of the
dividends from net investment income may qualify for the dividends
received deduction allowable to qualifying U.S. corporate shareholders
("dividends received deduction"). In general, dividend income of the Fund
distributed to the Fund's qualifying corporate shareholders will be
eligible for the dividends received deduction only to the extent that the
Fund's income consists of dividends paid by U.S. corporations. However,
Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares not held for more than 46 days and
has received a dividend from net investment income with respect to such
shares, the portion designated by the Fund as qualifying for the dividends
received deduction will not be eligible for such shareholder's dividends
received deduction. In addition, the Code provides other limitations with
respect to the ability of a qualifying corporate shareholder to claim the
dividends received deduction in connection with holding Fund shares.
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gains and losses. However, a portion of the
gain or loss realized from the disposition of certain non-U.S. dollar
denominated securities may be treated as ordinary income or loss under
Section 988 of the Code. In addition, all or a portion of any gains
realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276. Finally, all
or a portion of the gain realized from engaging in "conversion
transactions" may be treated as ordinary income under Section 1258.
"Conversion transactions" are defined to include certain option and
straddle transactions, transactions marketed or sold to produce capital
gains, or transactions described in Treasury regulations to be issued in
the future.
Under Section 1256 of the Code, any gain or loss the Fund realizes
from certain options transactions will be treated as 60% long-term capital
gain or loss and 40% short-term capital gain or loss. Gain or loss will
arise upon exercise or lapse of such options as well as from closing
transactions. In addition, any such options remaining unexercised at the
end of the Fund's taxable year will be treated as sold for their then fair
market value, resulting in additional gain or loss to the Fund
characterized in the manner described above.
Offsetting positions held by the Fund involving options may
constitute "straddles." Straddles are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
straddles is governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Sections
1256 and 988. As such, all or a portion of any short- or long-term
capital gain from certain "straddle" and/or conversion transactions may be
recharacterized as ordinary income.
If the Fund is treated as entering into "straddles" by reason of its
engaging in certain financial forward, futures or option transactions,
such straddles will be characterized as "mixed straddles" if the futures,
forward or option contracts comprising a part of such straddles were
governed by Section 1256 of the Code. The Fund may make one or more
elections with respect to "mixed straddles." If no election is made, to
the extent the straddle and the conversion rules apply to positions
established by the Fund, losses realized by the Fund will be deferred to
the extent of unrealized gain in any offsetting positions. Moreover, as a
result of the straddle rules, short-term capital loss on straddle
positions may be recharacterized as long-term capital loss and long-term
capital gain may be recharacterized as short-term capital gain or ordinary
income.
Investment by the Fund in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders. For example, the
Fund could be required to recognize annually a portion of the discount (or
deemed discount) at which such securities were issued and to distribute
such portion in order to maintain its qualification as a regulated
investment company. In such case, the Fund may be required to dispose of
securities which it might otherwise have continued to hold in order to
generate cash to satisfy these distribution requirements.
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. Shares have no preemptive or subscription rights and are
freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders and sends statements of shareholder accounts quarterly.
On March 15, 1989, the Fund's name was changed from First Lakeshore
Diversified Asset Fund to First Prairie Diversified Asset Fund.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
portfolio securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of Standard & Poor's Corporation ("S&P") and Moody's
Investors Service, Inc. ("Moody's") ratings:
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher rated categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds in
higher rated categories.
S&P's letter ratings may be modified by the addition of a plus (+) or
minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no
more than 365 days. Issues assigned an A rating are regarded as having
the greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety.
A-1
This designation 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.
A-2
Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for
issues designated A-1.
Moody's
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.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa 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.
Commercial Paper Ratings
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.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of 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.
<TABLE>
<CAPTION>
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1993
PRINCIPAL
BONDS AND NOTES-33.0% AMOUNT VALUE
----------- ------------
<S> <C> <C>
AUTOMOTIVE-1.0% Hertz
6 5/8%, 2000........................ $ 500,000 $ 500,013
------------
BANKING-5.3% Barclays American Corp., Deb.,
9 1/8%, 1997........................ 750,000 840,016
Chemical Banking Corp., Sub. Notes,
7 5/8%, 2003........................ 500,000 537,549
Citicorp:
9 3/4%, 1999........................ 250,000 293,279
8 5/8%, 2002........................ 350,000 398,934
NationsBank Corp., Sub. Notes,
8 1/8%, 2002........................ 350,000 389,325
Westpac Banking Corp., Sub. Deb.,
9 1/8%, 2001........................ 250,000 289,660
------------
2,748,763
------------
BASIC INDUSTRIES-1.0% USX-Marathon Group,
6 3/8%, 1998........................ 500,000 490,508
------------
ENERGY-3.3% Burlington Resources,
8 1/2%, 2001........................ 250,000 285,038
Coastal Corp.,Sr. Deb.,
10 1/4%, 2004....................... 500,000 597,500
Occidental Petroleum, Sr. Notes,
11 1/8%, 2010....................... 400,000 550,941
Shell Canada Corp., Deb.,
7 3/8%, 1999........................ 250,000 270,000
------------
1,703,479
------------
ENTERTAINMENT-1.0% Time Warner, Notes,
7.95%, 2000......................... 500,000 535,000
------------
FINANCE-6.8% Associates Corp. of North America,
Med.-Term Sr. Notes,
8 3/4%, 1996........................ 200,000 216,902
Discover Credit Card Corp., Notes,
8.37%, 1999......................... 250,000 274,925
General Motors Acceptance Corp., Deb.:
8.65%, 1996......................... 400,000 430,724
7 3/4%, 1997........................ 250,000 265,913
7%, 2000............................ 500,000 515,311
International Lease Finance Corp., Notes,
8.35%, 1998......................... 500,000 551,887
KFW International Finance,
Mortgage Guaranteed Notes,
8.85%, 1999......................... 250,000 287,378
Salomon, Sr. Notes,
7 1/2%, 2003........................ 500,000 522,693
Wells Fargo & Co., Sub. Notes,
8 3/8%, 2002........................ 400,000 446,081
------------
3,511,814
------------
FOOD AND BEVERAGES-5.0% Grand Metro Investment Corp., Deb.,
9%, 2011............................ 250,000 297,886
Philip Morris Corp., Deb.:
8 5/8%, 1999........................ 500,000 563,929
7 1/8%, 2004........................ 250,000 260,983
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
----------- ------------
FOOD AND BEVERAGES (CONTINUED) RJR Nabisco Guaranteed Sr. Notes:
8.30%, 1999......................... $ 750,000 $ 750,937
8 5/8%, 2002........................ 700,000 689,009
------------
2,562,744
------------
RETAIL-.6% May Department Stores, Notes,
9.45%, 1999......................... 250,000 285,270
------------
TECHNOLOGY-1.1% Digital Equipment, Deb.,
8 5/8%, 2012........................ 500,000 559,204
------------
UTILITIES-2.1% Commonwealth Edison,
First Mortgage, Ser. 81,
8 5/8%, 2022....................... 250,000 267,313
Long Island Lighting, Notes,
9%, 2022............................ 300,000 313,164
Pacific Bell, Notes,
7%, 2004............................ 500,000 526,156
------------
1,106,633
------------
U.S. GOVERNMENT AND AGENCIES-5.8% Federal Home Loan Banks, Notes,
8 1/4%, 1996........................ 100,000 108,360
Federal National Mortgage Assn., Deb.:
7.60%, 1997......................... 400,000 432,095
8.35%, 1999......................... 500,000 569,451
Student Loan Marketing Assn.,
ECU/YEN Reverse Principal Exchange
Rate Linked Securities,
10 3/8%, 1995....................... 200,000 112,500
FHLMC Series 98,
8 1/4%, 2020....................... 500,000 520,625
U.S. Treasury Notes:
8 1/2%, 1997........................ 100,000 111,594
8 1/8%, 1998........................ 500,000 557,578
8%, 2001............................ 500,000 571,953
------------
2,984,156
------------
TOTAL BONDS AND NOTES
(cost $16,172,418).................. $ 16,987,584
============
EQUITY-RELATED SECURITIES-50.9%
(COMMON STOCKS AND CONVERTIBLE SECURITIES)
COMMON STOCKS-31.8% SHARES
-----------
BANKING-4.3% BankAmerica............................ 18,000 $ 834,750
First Union............................ 19,000 783,750
NationsBank............................ 11,912 583,688
------------
2,202,188
------------
BASIC INDUSTRIES-.9% Union Camp............................. 10,000 476,250
------------
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
EQUITY-RELATED SECURITIES (CONTINUED)
COMMON STOCKS (CONTINUED) SHARES VALUE
----------- ------------
DRUGS AND HEALTH CARE-7.5% Bristol-Myers Squibb................... 20,000 $ 1,162,500
Glaxo Holdings PLC A.D.R............... 24,000 501,000
Johnson and Johnson.................... 11,000 492,250
Pfizer................................. 17,000 1,173,000
Schering-Plough........................ 8,000 548,000
------------
3,876,750
------------
ENERGY-3.7% Atlantic Richfield..................... 5,000 526,250
British Petroleum PLC A.D.S............ 9,000 576,000
Occidental Petroleum................... 20,000 342,500
Texaco................................. 7,500 484,687
------------
1,929,437
------------
FINANCE-1.5% American Express....................... 20,000 795,000
------------
FOOD AND BEVERAGES-2.2% Philip Morris Cos...................... 20,000 1,115,000
------------
HOSPITAL RELATED-3.0% National Health Investors.............. 55,000 1,526,250
------------
MANUFACTURING-1.0% Jostens Inc............................ 25,000 493,750
------------
TECHNOLOGY-1.0% International Business Machines........ 9,000 508,500
------------
UTILITIES-6.7% British Telecommunications............. 10,000 321,250
GTE.................................... 14,000 490,000
Long Island Lighting................... 20,000 487,500
Philadelphia Electric.................. 16,000 484,000
Sprint................................. 20,000 695,000
Texas Utilities........................ 12,000 519,000
U.S. West.............................. 10,000 458,750
------------
3,455,500
------------
TOTAL COMMON STOCKS 16,378,625
------------
CONVERTIBLE PREFERRED STOCKS-14.4%
AUTOMOTIVE-4.3% Ford Motor, Ser.A, Cum., $4.20......... 8,000 868,000
General Motors, Ser.A, Cum., $3.31..... 15,000 765,000
General Motors, Ser.C, Cum., $3.25..... 11,000 602,250
------------
2,235,250
------------
BANKING-3.8% BankAmerica, Ser.G, Cum., $3.25........ 7,000 414,750
Citicorp, Cum., $1.22.................. 25,000 496,875
Citicorp, Cum., $5.375................. 6,000 (a) 651,750
National City, Cum., $4.00............. 6,000 411,000
------------
1,974,375
------------
ENERGY-1.0% Snyder Oil, Cum., $6.00................ 20,000 540,000
------------
FOOD AND BEVERAGES-1.8% Conagra, Ser. E, Cum., $1.69........... 11,000 343,750
RJR Nabisco Holdings, Cum., $2.00...... 80,000 560,000
------------
903,750
------------
INSURANCE-2.6% Aon, Ser.B, Cum., $3.04................ 12,000 564,000
Conseco, Ser. D, Cum., $3.25........... 14,000 770,000
------------
1,334,000
------------
RETAIL-.9% Kmart, Ser.A, Cum., $3.41.............. 10,000 443,750
------------
TOTAL CONVERTIBLE PREFERRED STOCKS..... 7,431,125
------------
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
EQUITY-RELATED SECURITIES (CONTINUED)
PRINCIPAL
CONVERTIBLE SUBORDINATE DEBENTURES-4.7% AMOUNT VALUE
----------- ------------
BANKING-.8% Bank of New York,
7 1/2%, 2001........................ $ 275,000 $ 435,188
------------
ENERGY-.6% Swift Energy,
6 1/2%, 2003........................ 300,000 309,000
------------
ENTERTAINMENT-.5% Time Warner,
8 3/4%, 2015........................ 248,000 261,330
------------
HOSPITAL MANAGEMENT-.9% Genesis Health
6%, 2003............................ 400,000 480,000
------------
MINING AND METALS-.6% Trimas Corp.,
5%, 2003............................ 250,000 308,750
------------
RETAIL-1.3% Hechinger,
5 1/2%, 2012........................ 350,000 279,125
Price,
6 3/4%, 2001........................ 350,000 365,750
------------
644,875
------------
TOTAL CONVERTIBLE
SUBORDINATED DEBENTURES............. 2,439,143
------------
TOTAL EQUITY-RELATED SECURITIES
(cost $24,078,883).................. $ 26,248,893
============
SHORT-TERM INVESTMENTS-15.5%
COMMERCIAL PAPER: Ford Motor Credit Corp.,
3.35%, 1/3/94....................... $ 3,700,000 $ 3,700,000
General Electric Cap. Corp.:
3.4032%, 1/7/94..................... 3,950,000 3,950,000
3.20%, 1/10/94...................... 370,000 370,000
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $8,020,000)................... $ 8,020,000
============
TOTAL INVESTMENTS (cost $48,271,301)........................................... 99.4% $ 51,256,477
====== ============
CASH AND RECEIVABLES (NET)..................................................... .6% $ 329,266
====== ============
NET ASSETS..................................................................... 100.0% $ 51,585,743
====== ============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At December 31, 1993, this
security amounted to $651,750 or 1.3% of net assets.
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $48,271,301)-see statement....................................... $51,256,477
Dividends and interest receivable.......................................... 495,261
Receivable for shares of Beneficial Interest subscribed.................... 204,466
Prepaid expenses........................................................... 19,146
Due from administrator..................................................... 5,834
-----------
51,981,184
LIABILITIES:
Due to custodian........................................................... $217,571
Payable for shares of Beneficial Interest redeemed......................... 120,261
Accrued expenses........................................................... 57,609 395,441
-------- -----------
NET ASSETS..................................................................... $51,585,743
===========
REPRESENTED BY:
Paid-in capital............................................................ $48,421,161
Accumulated undistributed investment income-net............................ 110,357
Accumulated undistributed net realized gain on investments................. 69,049
Accumulated net unrealized appreciation on investments-Note 3.............. 2,985,176
-----------
NET ASSETS at value applicable to 3,934,557 shares outstanding
(unlimited number of $.01 par value shares of Beneficial
Interest authorized)....................................................... $51,585,743
===========
NET ASSET VALUE, offering and redemption price per share
($51,585,743 / 3,934,557 shares)........................................... $13.11
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
INVESTMENT INCOME:
INCOME:
<S> <C> <C>
Interest............................................................... $1,734,098
Cash dividends (net of $9,316 foreign taxes withheld at source)........ 941,289
----------
TOTAL INCOME................................................... $2,675,387
EXPENSES:
Investment advisory fee-Note 2(a)...................................... 293,405
Administration fee-Note 2(a)........................................... 135,418
Shareholder servicing costs-Note 2(b).................................. 187,815
Prospectus and shareholders' reports-Note 2(b)......................... 29,430
Legal fees............................................................. 28,415
Auditing fees.......................................................... 21,613
Registration fees...................................................... 19,140
Custodian fees......................................................... 16,335
Trustees' fees and expenses-Note 2(c).................................. 4,999
Miscellaneous.......................................................... 7,920
----------
744,490
Less-expense reimbursement from Adviser and Administrator due
to undertakings-Note 2(a).......................................... 570,074
----------
TOTAL EXPENSES................................................. 174,416
----------
INVESTMENT INCOME-NET.......................................... 2,500,971
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 3.................................... $ 625,561
Net unrealized appreciation on investments................................. 1,377,749
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................ 2,003,310
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $4,504,281
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE DIVERSIFIED ASSET FUND
STATEMENT OF CHANGES IN NET ASSETS
OPERATIONS:
YEAR ENDED DECEMBER 31,
-------------------------------
1992 1993
----------- -----------
<S> <C> <C>
Investment income-net...................................................... $ 1,391,154 $ 2,500,971
Net realized gain on investments........................................... 179,839 625,561
Net unrealized appreciation on investments for the year.................... 343,006 1,377,749
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 1,913,999 4,504,281
----------- -----------
NET EQUALIZATION CREDITS-Note 1(e)............................................. 51,331 59,053
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net...................................................... (1,385,188) (2,506,116)
Net realized gain on investments........................................... (279,770) (674,754)
----------- -----------
TOTAL DIVIDENDS........................................................ (1,664,958) (3,180,870)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold.............................................. 20,593,226 17,738,182
Dividends reinvested....................................................... 1,264,046 2,955,407
Cost of shares redeemed.................................................... (1,933,539) (4,752,158)
----------- -----------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS........... 19,923,733 15,941,431
----------- -----------
TOTAL INCREASE IN NET ASSETS....................................... 20,224,105 17,323,895
NET ASSETS:
Beginning of year.......................................................... 14,037,743 34,261,848
----------- -----------
End of year (including undistributed investment income-net:
$56,449 at December 31, 1992 and $110,357 at December 31, 1993)........ $34,261,848 $51,585,743
=========== ===========
SHARES SHARES
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................................ 1,637,986 1,371,296
Shares issued for dividends reinvested..................................... 100,550 226,486
Shares redeemed............................................................ (153,827) (365,489)
----------- -----------
NET INCREASE IN SHARES OUTSTANDING..................................... 1,584,709 1,232,293
=========== ===========
See notes to financial statements.
</TABLE>
FIRST PRAIRIE DIVERSIFIED ASSET FUND
CONDENSED FINANCIAL INFORMATION
Reference is made to pages 4 and 5 of the Prospectus dated April 22, 1994.
See notes to financial statements.
FIRST PRAIRIE DIVERSIFIED ASSET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified open-end management investment company. The
First National Bank of Chicago ("Adviser") serves as the Fund's
investment adviser. The Dreyfus Corporation ("Administrator") serves as
the Fund's administrator. Dreyfus Service Corporation ("Distributor"), a
wholly-owned subsidiary of the Administrator, acts as the distributor of
the Fund's shares.
(A) PORTFOLIO VALUATION: Most debt securities (excluding short-term
investments) are valued each business day by an independent pricing
service ("Service") approved by the Board of Trustees. Debt securities for
which quoted bid prices in the judgement of the Service are readily
available and are representative of the bid side of the market are valued
at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the
Service based upon its evaluation of the market for such securities). Other
debt securities are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
securities of comparable quality, coupon, maturity and type; indications
as to values from dealers; and general market conditions. Short-term
investments are carried at amortized cost, which approximates value.
Other securities are valued at the average of the most recent bid and
asked prices in the market in which such securities are primarily traded,
or at the last sales price for securities traded primarily on an exchange or
the national securities market. In the absence of reported sales of
securities traded primarily on an exchange or the national securities
market, the average of the most recent bid and asked prices is used. Bid
price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Dividend income is recognized on the ex-dividend date and interest
income, including, where applicable, amortization of discounts on
investments, is recognized on the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-
dividend date. Dividends from investment income-net are declared and
paid monthly. Dividends from net realized capital gain 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. This may result in distributions that are in excess
of investment income-net and net realized gain on a fiscal year basis. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
On January 31, 1994, the Board of Trustees declared a cash dividend
of $.047 per share from undistributed investment income-net, payable on
February 1, 1994 (ex-dividend date) to shareholders of record as of the
close of business on January 31, 1994.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
(E) EQUALIZATION: The Fund follows the accounting practice known as
"equalization" by which a portion of the amounts received on issuances
and paid on redemptions of Fund shares is allocated to undistributed
investment income-net so that undistributed investment income-net per
share is unaffected by Fund shares issued or redeemed.
FIRST PRAIRIE DIVERSIFIED ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2-INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an
Investment Advisory Agreement with the Adviser and an Administration
Agreement with the Administrator are payable monthly based on annual
rates of .65 of 1% and .30 of 1%, respectively, of the average daily value
of the Fund's net assets. The agreements further provide that if in any full
year the aggregate expenses of the Fund, excluding 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 Adviser and the
Administrator, or the Adviser and the Administrator will each bear, such
excess expense in proportion to their respective fees. 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 Adviser and the Administrator had undertaken, from
January 1, 1993 through October 24, 1993, to reduce the Advisory fee and
the Administration fee paid by, or reimburse such excess expenses of 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 Adviser and Administrator have
currently undertaken from October 25, 1993 to waive receipt of the
Advisory fee and the Administration fee paid by the Fund in excess of an
annual rate of .50 of 1% of the Fund's average daily net assets. Pursuant to
such undertakings, the Adviser and the Administrator reimbursed the Fund
$293,405 and $276,669, respectively.
First Chicago Investment Services, Inc., an affiliate of the Adviser,
retained $34,436 during the year ended December 31, 1993 from
commissions earned on sales of Fund shares.
(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 Adviser, the Administrator 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 .30 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. During the year ended December 31, 1993,
$145,590 was charged to the Fund pursuant to the Plan, of which $141,251
was waived pursuant to an undertaking by the Administrator.
(C) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Adviser or the Administrator. Each trustee
who is not an "affiliated person" receives an annual fee of $1,500 and an
attendance fee of $250 per meeting.
FIRST PRAIRIE DIVERSIFIED ASSET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) On December 5, 1993, Dreyfus entered into an Agreement and Plan of
Merger providing for the merger of Dreyfus with a subsidiary of Mellon
Bank Corporation ("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including the receipt of certain regulatory
approvals and the approvals of the stockholders of Dreyfus and of Mellon.
The merger is expected to occur in mid-1994, but could occur later.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
other than short-term securities, during the year ended December 31,
1993 amounted to $20,117,316 and $6,059,306, respectively.
At December 31, 1993, accumulated net unrealized appreciation on
investments was $2,985,176, consisting of $3,879,019 gross unrealized
appreciation and $893,843 gross unrealized depreciation.
At December 31, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
FIRST PRAIRIE DIVERSIFIED ASSET FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE DIVERSIFIED ASSET FUND
We have audited the accompanying statement of assets and liabilities
of First Prairie Diversified Asset Fund, including the statement of
investments, as of December 31, 1993, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of First Prairie Diversified Asset Fund, at December 31, 1993,
the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
Ernst & Young Signature
New York, New York
February 9, 1994
First Prairie Diversified Asset 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 for the period from January
23, 1986 (commencement of operations) to December 31, 1986
and for each of the seven years in the period ended December
31, 1993.
Included in Part B of the Registration Statement:
Statement of Investments-- December 31, 1993.
Statement of Assets and Liabilities-- December 31, 1993.
Statement of Operations--year ended December 31, 1993.
Statement of Changes in Net Assets--for each of the
years ended December 31, 1992 and 1993.
Notes to Financial Statements
Report of Ernst & Young, Independent Auditors, dated
February 9, 1994.
Schedules No. I through VII and other financial statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust are incorporated by reference to Exhibit (1) of Pre-Effective
Amendment No. 2 to the Registration Statement on Form
N-1A, filed on December 30, 1985, and Exhibit (1)(b) of Post-
Effective Amendment No. 11 to the Registration Statement on Form
N-1A, filed on February 4, 1994.
(2) Registrant's By-Laws, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A, filed on December 30, 1985.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Post-Effective
Amendment No. 3 to the Registration Statement on Form N-1A, filed
on April 21, 1987.
(5)(a) The Investment Advisory Agreement, as revised, is incorporated by
reference to Exhibit (5) of Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A, filed on April 26, 1990.
(5)(b) The Investment Advisory Agreement, as revised, is incorporated by
reference to Exhibit 5(b) of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A, filed on February 4, 1994.
(5)(c) The Administration Agreement, as revised, is incorporated by
reference to Exhibit (5)(c) of Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A, filed on April 26, 1990.
(5)(d) The Administration Agreement, as revised, is incorporated by
reference to Exhibit (5)(d) of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A, filed on February 4, 1994.
(6)(a) Distribution Agreement, as revised, is incorporated by reference
to Exhibit (6)(a) of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A, filed on February 4, 1994.
(6)(b) Forms of Service Agreement, as amended are incorporated by
reference to Exhibit 6(b) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on March 22, 1989.
(8)(a) Amended and Restated Custody Agreement is incorporated by
reference to Exhibit 8(a) of Post-Effective Amendment No. 6 to
the Registration Statement on Form N-1A, filed on April 26, 1990.
(9) The Registrant's Shareholder Services Plan is incorporated by
reference to Exhibit 9 of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A, filed on February 4, 1994.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(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) The Registrant's Distribution Plan.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A, filed on February 4, 1994.
Other Exhibits
______________
(a) Powers of Attorney.
(b) 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)
Number of Record
Title of Class Holders as of March 23, 1994
______________ _____________________________
Class A - Shares of beneficial
interest, par value $.01 per share 2,928
Class B - Shares of beneficial
interest, par value $.01 per share 36
Item 27. Indemnification
_______ _______________
Reference is made to Article VIII 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 on Form N-1A, filed
on December 30, 1985. The application of these provisions is limited by
Article 10 of the Registrant's By-Laws incorporated by reference to Exhibit
(2) of Pre-Effective Amendment No. 2 to the Registration Statement on Form
N-1A, filed on December
Item 27. Indemnification - continued
_______ ____________________________
30, 1985 and the following undertaking set forth in the rules
promulgated by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a trustee,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in such Act and will be governed by the final
adjudication of such issue.
Reference is also made to the Distribution Agreement, as revised,
which is incorporated by reference to Exhibit (6)(a) of Post-Effective
Amendment No. 11 to the Registration Statement on Form N-1A, filed
on February 4, 1994.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
(a) Officers and Directors of the Adviser:
The Adviser is a commercial bank providing a wide range of banking
and investment services.
To the knowledge of the Registrant, none of the directors or
executive officers of the Adviser, except those described below, are or have
been, at any time during the past two years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that
certain directors and executive officers of the Adviser also hold or have
held various positions with bank and non-bank affiliates of the Adviser,
including its parent, First Chicago Corporation.
Position with Principal Occupation or Other
Name the Adviser Employment of a Substantial Nature
Richard L. Chairman of the Board Serves as Chairman of the Board and
Thomas and Chief Executive Chief Executive Officer of First
Officer Chicago Corporation
John H. Director Chairman of the Board and Chief
Bryan Executive Officer, Sara Lee
Corporation*
Dean L. Director Chairman of the Board and Chief
Buntrock Executive Officer, Waste Management,
Inc.*
Frank W. Director Honorary Chairman of the Board and
Considine Chairman of the Executive Committee,
American National Can Company*
James S. Director General Partner, Henry Crown and
Crown Company (Not Incorporated)*
Donald P. Director Dean of the J.L. Kellogg Graduate
Jacobs School of Management, Northwestern
University*
Charles S. Director Chairman of the Board and Chief
Locke Executive Officer, Morton
International, Inc.*
Richard M. Director Retired Chairman and Chief Executive
Morrow Amoco Corporation*
Item 28. Business and Other Connections of Investment Adviser (continued)
_______ ________________________________________________________________
Position with Principal Occupation or Other
Name the Adviser Employment of a Substantial Nature
Leo F. Mullin Director, President and President and Chief Operating
Chief Operating Officer Officer of First Chicago Corporation
and Chairman, American National
Corporation
Earl L. Director Principal, Earl L. Neal &
Neal Associates, a Law Firm
James J. Director Chairman and Chief Executive
O'Connor Officer, Commonwealth Edison
Company
Jerry K. Director Chairman, President and Chief
Pearlman Executive Officer, Zenith
Electronics Corporation*
Jack F. Director Chairman of the Board, President and
Reichert Chief Executive Officer, Brunswick
Corporation*
Patrick G. Director President and Chief Executive
Ryan Officer, Aon Corporation*
George A. Director Chairman of the Board, Retired, and
Shaefer Director, Caterpillar Inc.*
Adele Simmons Director President, John D. and Catherine T.
MacArthur Foundation
Roger W. Director Chairman of the Board, President and
Stone Chief Executive Officer, Stone
Container Corporation*
David J. Director and Vice Vice Chairman of First Chicago
Vitale Chairman Corporation*
Item 28. Business and Other Connections of Investment Adviser (continued)
_______ ________________________________________________________________
Name Position with the Adviser
Marvin J. Alef, Jr. Executive Vice President
John W. Ballantine Executive Vice President
Jerry C. Bradshaw Executive Vice President
Sherman I. Goldbert Executive Vice President, General Counsel and
Secretary
Donald R. Hollis Executive Vice President
W.G. Jurgensen Executive Vice President and Chief Financial
Officer
Scott P. Marks, Jr. Executive Vice President
Robert A. Rosholt Executive Vice President and Chief Financial
Officer
J. Mikesell Thomas Executive Vice President
Item 28. Business and Other Connections of Investment Adviser and
Administrator (continued)
_______ __________________________________________________________
(b) Officers and Directors of the Administrator
The Dreyfus Corporation (the "Administrator") and subsidiary
companies comprise a financial service organization whose business consists
primarily of providing investment management services as the investment
adviser, manager and distributor for sponsored investment companies
registered under the Investment Company Act of 1940 and as an investment
adviser to institutional and individual accounts. The Administrator also
serves as sub-investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary of the
Administrator, serves primarily as distributor of shares of investment
companies sponsored by Administrator and of other investment companies for
which the Administrator acts as investment adviser, sub-investment
adviser or administrator. Dreyfus Management, Inc., another
wholly-owned subsidiary, provides investment management services
to various pension plans, institutions and individuals.
Item 28. Business and Other Connections of Administrator (continued)
________ ____________________________________________________________
Officers and Directors
______________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and
Investment
Chairman of the Board and Officer:
Chief Executive Officer Dreyfus Capital Growth Fund (A Premier
Fund)++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus New Leaders Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc. ++;
The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
HOWARD STEIN Dreyfus Land Development Corporation*;
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Strategic Growth, L.P. ++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Dreyfus Growth Allocation Fund, Inc.++
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
President:
Dreyfus Consumer Life Insurance Company*;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money
Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
FN Network Tax Free Money Market Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
HOWARD STEIN World Balanced Fund++++;
(cont'd) Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money
Market Fund++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Institutional Money Market
Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Consumer Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus International Equity Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money
Market Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Edison Electric Index Fund,
Inc.++;
JOSEPH S. DiMARTINO Dreyfus Life and Annuity Index Fund,
(cont'd) Inc.++;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market
Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment
Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Trustee and Investment Officer:
Premier GNMA Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director and Corporate Member:
Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
JOSEPH S. DiMARTINO Director:
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money
Market Fund++;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Money Market
Fund, Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
LAWRENCE M. GREENE Dreyfus New Leaders Fund, Inc.++;
(cont'd) Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
Dreyfus Growth Opportunity Fund, Inc.++;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
Director:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market
Fund, Inc.++;
Dreyfus California Municipal
Income, Inc.++;
Dreyfus California Tax Exempt Bond
Fund, Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Growth Allocation Fund, Inc.++;
Dreyfus Insured Municipal Bond
Fund, Inc.++;
Dreyfus Intermediate Municipal Bond
Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Municipal Income,
Inc.++;
Dreyfus New York Tax Exempt Bond
Fund, Inc.++;
Dreyfus Ohio Municipal Money Market
Fund, Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Strategic Municipal Bond
Fund, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
Trustee:
Dreyfus BASIC U.S. Government Money
Market Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Cash Management++;
DAVID W. BURKE Dreyfus Connecticut Intermediate
Municipal (cont'd) Bond Fund++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt
Bond Fund++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++
ELIE M. GENADRY President:
Vice President - Institutional Services Division of
Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of
Dreyfus Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
ELIE M. GENADRY Peoples S&P MidCap Index Fund, Inc.++;
(cont'd) Vice President:
The Dreyfus Trust Company++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
Dreyfus Consumer Life Insurance Company*;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Money Market
Fund, Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
DANIEL C. MACLEAN Dreyfus Massachusetts Municipal Money
(cont'd) Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money
Market Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
DANIEL C. MACLEAN General New York Municipal Bond Fund,
(cont'd) Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money
Market Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund, Inc.++;
Dreyfus Institutional Money Market
Fund++;
Dreyfus International Equity Fund,
Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
DANIEL C. MACLEAN Dreyfus Pennsylvania Intermediate
(cont'd) Municipal Bond Fund++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market
Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
JEFFREY N. NACHMAN Dreyfus Massachusetts Tax Exempt Bond
(cont'd) Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income,
Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
JEFFREY N. NACHMAN First Prairie Municipal Money Market
(cont'd) Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money
Market Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market
Fund, Inc.++;
Dreyfus BASIC U.S. Government Money
Market Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus International Equity Fund,
Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
JEFFREY N. NACHMAN Dreyfus Pennsylvania Intermediate
(cont'd) Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.*;
Vice President:
Dreyfus Personal Management, Inc.*
ROBERT H. SCHMIDT President and Director:
Vice President Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
Formerly, Chairman and Chief Executive
Officer:
Levine, Huntley, Schmidt & Beaver
250 Park Avenue
New York, New York 10017
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- Director:
Income Research The Dreyfus Security Savings Bank
F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Vice President:
Assistant Vice President - Dreyfus Consumer Life Insurance
Human Resources Company++;
Formerly, Assistant Commissioner:
Department of Parks and Recreation of the
City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Treasurer and Assistant Secretary:
Assistant Vice President The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market
Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
JOHN J. PYBURN Dreyfus New Jersey Municipal Money Market
(cont'd) Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income,
Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money
Market Fund, Inc.++;
General Money Market Fund, Inc.++;
JOHN J. PYBURN General Municipal Bond Fund, Inc.++;
(cont'd) General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Consumer Life Insurance Company*;
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money
Market Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market
Fund++;
MARK N. JACOBS Dreyfus International Equity Fund,
Inc.++;
(cont'd) Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Money Market
Fund, Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Consumer Life Insurance Company*;
MARK N. JACOBS Dreyfus Florida Intermediate Municipal
(cont'd) Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
MARK N. JACOBS First Prairie U.S. Treasury Securities
(cont'd) Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money
Market Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Money Market
Fund, Inc.++;
Dreyfus BASIC U.S. Government Money
Market Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund, (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money
Market Fund, Inc.++;
CHRISTINE PAVALOS Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market
Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus International Equity Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income,
Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus New York Tax Exempt Intermediate
(cont'd) Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
FN Network Tax Free Money Market Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
CHRISTINE PAVALOS General California Municipal Money Market
(cont'd) Fund++;
General Government Securities Money
Market Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80
Route 4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Money Market Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Growth, L.P. (A Strategic Fund)
24) Dreyfus Global Investing, Inc.
25) Dreyfus GNMA Fund, Inc.
26) Dreyfus Government Cash Management
27) Dreyfus Growth and Income Fund, Inc.
28) Dreyfus Growth Opportunity Fund, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Short Term Treasury Fund
31) Dreyfus Insured Municipal Bond Fund, Inc.
32) Dreyfus Intermediate Municipal Bond Fund, Inc.
33) Dreyfus International Equity Fund, Inc.
34) Dreyfus Investors GNMA Fund
35) The Dreyfus Leverage Fund, Inc.
36) Dreyfus Life and Annuity Index Fund, Inc.
37) Dreyfus Liquid Assets, Inc.
38) Dreyfus Massachusetts Intermediate Municipal Bond Fund
39) Dreyfus Massachusetts Municipal Money Market Fund
40) Dreyfus Massachusetts Tax Exempt Bond Fund
41) Dreyfus Michigan Municipal Money Market Fund, Inc.
42) Dreyfus Money Market Instruments, Inc.
43) Dreyfus Municipal Bond Fund, Inc.
44) Dreyfus Municipal Cash Management Plus
45) Dreyfus Municipal Money Market Fund, Inc.
46) Dreyfus New Jersey Intermediate Municipal Bond Fund
47) Dreyfus New Jersey Municipal Bond Fund, Inc.
48) Dreyfus New Jersey Municipal Money Market Fund, Inc.
49) Dreyfus New Leaders Fund, Inc.
50) Dreyfus New York Insured Tax Exempt Bond Fund
51) Dreyfus New York Municipal Cash Management
52) Dreyfus New York Tax Exempt Bond Fund, Inc.
53) Dreyfus New York Tax Exempt Intermediate Bond Fund
54) Dreyfus New York Tax Exempt Money Market Fund
55) Dreyfus Ohio Municipal Money Market Fund, Inc.
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Short-Intermediate Government Fund
63) Dreyfus Short-Intermediate Municipal Bond Fund
64) Dreyfus Short-Term Income Fund, Inc.
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Strategic Growth, L.P.
67) Dreyfus Strategic Income
68) Dreyfus Strategic Investing
69) Dreyfus Tax Exempt Cash Management
70) The Dreyfus Third Century Fund, Inc.
71) Dreyfus Treasury Cash Management
72) Dreyfus Treasury Prime Cash Management
73) Dreyfus Variable Investment Fund
74) Dreyfus-Wilshire Target Funds, Inc.
75) Dreyfus Worldwide Dollar Money Market Fund, Inc.
76) First Prairie Cash Management
77) First Prairie Money Market Fund
78) First Prairie Municipal Money Market Fund
79) First Prairie Municipal Bond Fund
80) First Prairie U.S. Government Income Fund
81) First Prairie U.S. Treasury Securities Cash Management
82) FN Network Tax Free Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
91) Pacific American Fund
92) Peoples Index Fund, Inc.
93) Peoples S&P MidCap Index Fund, Inc.
94) Premier Insured Municipal Bond Fund
95) Premier California Municipal Bond Fund
96) Premier GNMA Fund
97) Premier Growth Fund, Inc.
98) Premier Municipal Bond Fund
99) Premier New York Municipal Bond Fund
100) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board None
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director President
and Trustee
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President None
Henry D. Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President None
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President and None
Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Vice
President
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President None
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
James Barr
Newton, MA Regional Vice President None
Mary B. Brundage
Pasadena, CA Regional Vice President None
Edward Donley
Latham, NY Regional Vice President None
Thomas Ellis
Ranchero Murietta, CA Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Richard P. Kundracik
Waterford, MI Regional Vice President None
Michael Lane
Beaver Falls, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Robert J. Richardson
Houston, TX Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Donald A. Nanfeldt* Executive Vice President None
Charles Cardona** Senior Vice President- None
Institutional Services
Stacy Alexander* Vice President-Bank Wholesale None
Eric Almquist* Vice President-Eastern Regional None
Sales Manager
James E. Baskin+++++++ Vice President-Institutional Sales None
Kenneth Bernstein
Boca Raton, FL Vice President-Bank Wholesale None
Stephen Burke* Vice President-Bank Wholesaler None
Sales Manager
Laurel A. Diedrick
Burrows*** Vice President-Bank Wholesale None
Gary F. Callahan
Somerville, NJ Vice President-Bank Wholesale None
Daniel L. Clawson++++ Vice President-Institutional Sales None
Anthony T. Corallo
San Francisco, CA Vice President-Institutional Sales None
Bonnie M. Cymbryla
Brewerton, NY Vice President-Bank Wholesale None
William Davis
Bellevue, WA Vice President None
Steven Faticone***** Vice-President-Bank Wholesale None
William E. Findley**** Vice President None
Mary Genet***** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Bank Wholesale None
Nancy Knee++++ Vice President-Bank Wholesale None
Bradford Lange* Vice President-Bank Wholesale None
Kathleen McIntyre
Lewis++ Vice President-Western Regional None
Sales Manager
Eva Machek***** Vice President-Institutional Sales None
Bradley R. Maybury
Seattle, WA Vice President-Bank Wholesale None
Mary McCabe*** Vice President-Bank Wholesale None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President-Bank Wholesale- None
National Accounts Manager
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President-Bank Wholesale None
Lorianne Pinto* Vice President-Bank Wholesale None
Douglas Rentschler
Grosse Point Park, MI Vice President-Bank Wholesale None
Leah Ryan**** Vice President-Institutional Sales None
Emil Samman* Vice President-Institutional
Marketing None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President-Institutional None
Administration
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Brant Snavely
Charlotte, NC Vice President-Bank Wholesale None
Thomas Stallings
Richmond, VA Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Thomas Winnick
Malverne, PA Vice President-Bank Wholesale None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Mary Rogers** Assistant Vice President-
Institutional Servicing None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Carolyn Warren Stein++ Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President None
Robert W. Stone* Executive Vice President None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
William Gallagher* Vice President-Sales None
Brent Glading* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the Registrant's
outstanding shares of beneficial interest and in connection with such
meeting to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of its latest annual report to shareholders, upon request and without
charge.
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 Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the twenty-second day of April, 1994.
First Prairie Diversified Asset Fund
BY: /s/Joseph S. DiMartino*
Joseph S. DiMartino, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated.
Signatures Title Date
/s/Joseph S. DiMartino* President (Principal Executive 04/22/94
- -----------------------
Joseph S. DiMartino Officer) and Trustee
/s/John J. Pyburn* Treasurer (Principal Financial 04/22/94
- ------------------
John J. Pyburn and Accounting Officer)
/s/Paul R. Casti, Jr.* Controller (Principal Accounting 04/22/94
- ---------------------
Paul R. Casti, Jr. Officer)
/s/John P. Gould* Trustee 04/22/94
- -----------------
John P. Gould
/s/Marilyn McCoy* Trustee 04/22/94
- -----------------
Marilyn McCoy
/s/Raymond D. Oddi* Trustee 04/22/94
- ------------------
Raymond D. Oddi
*BY: /s/Robert I. Frenkel
--------------------
Robert I. Frenkel
Attorney-in-Fact
Other Exhibit
(a)
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Mark N. Jacobs and
Robert I. Frenkel, and each of them, with full power to act without the
other, her true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for her and in her name,
place and stead, in any and all capacities (until revoked in writing) to sign
any and all amendments to the Registration Statement (including post-
effective amendments and amendments thereto), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or her substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
First Prairie Diversified Asset Fund
_______________________________________
April 4, 1994
_________________________________
Marilyn McCoy, Trustee
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated February 9, 1994 in this Registration Statement (Form N-1A No.
2-95547) of First Prairie Diversified Asset Fund.
ERNST & YOUNG
New York, New York
April 20, 1994
FIRST PRAIRIE DIVERSIFIED ASSET FUND
DISTRIBUTION PLAN
Exhibit 15 (b)
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Distribution
Plan (the "Plan") relating to its Class B shares in accordance
with Rule 12b-1 promulgated under the Investment Company Act of
1940, as amended (the "Act"). Under the Plan, the Fund would
pay certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") for
advertising, marketing and distributing the Fund's Class B
shares. If the proposal is to be implemented, the Act and
Rule 12b-1 require that a written plan describing all material
aspects of the proposed financing be adopted by the Fund.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated
such information as it deemed necessary to an informed
determination as to whether a written plan should be implemented
and has considered such pertinent factors as it deemed necessary
to form the basis for a decision to use assets attributable to
the Fund's Class B shares for such purposes.
In voting to approve the implementation of such a
plan, the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and holders of its Class B shares.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to one or more Service Agents
a fee at an annual rate of up to .75 of 1% of the value of the
Fund's average daily net assets attributable to Class B for
advertising, marketing and distributing the Fund's Class B
shares. The Fund's Trustees shall determine the amounts to be
paid to Service Agents and the basis on which such payments will
be made, but in no event shall such payments exceed .75 of 1%
per annum of the value of the Fund's average daily net assets
attributable to Class B. Payments to a Service Agent are
subject to compliance by the Service Agent with the terms of any
related Plan agreement between the Service Agent and the Fund.
2. For the purposes of determining the fees payable
under this Plan, the value of the net assets attributable to
Class B shall be computed in the manner specified in the Fund's
Declaration of Trust for the computation of the value of the
Fund's net assets attributable to such a class.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by (a) holders of a majority of the Fund's outstanding
Class B shares, and (b) a majority of the Board members,
including a majority of the Board members 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 this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4(b)
hereof.
6. This Plan may be amended at any time by the
Board, provided that (a) any amendment to increase materially
the costs which the Fund may bear pursuant to this Plan shall be
effective only upon approval by a vote of holders of a majority
of the Fund's outstanding Class B shares, and (b) any material
amendments of the terms of this Plan shall become effective only
upon approval as provided in paragraph 4(b) hereof.
7. This Plan is terminable without penalty at any
time by (a) vote of a majority of the Board members 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 this Plan or in any agreements entered into in connection
with this Plan, or (b) vote of holders of a majority of the
Fund's outstanding Class B shares.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and
property of the Fund and shall not be binding upon any Trustee,
officer or shareholder of the Fund individually.
Dated: October 1, 1993
Effective Date: February 8, 1994
