PRAIRIE INSTITUTIONAL FUNDS
THREE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60670
May 21, 1996
Dear Prairie Institutional Funds Shareholder:
The Board of Trustees of the Prairie Institutional Funds has called a
Special Meeting of Shareholders on June 25, 1996 concerning matters that are
important to you.
As you may be aware, First Chicago Corporation recently completed a merger
with NBD Bancorp, Inc. ("NBD") on November 30, 1995. As a result, the new
organization has since taken steps to consolidate the mutual fund investment
advisory activities of both bank holding companies. First Chicago Investment
Management Company currently provides investment advisory services to the
Prairie Institutional Funds. NBD Bank currently provides investment advisory
services to The Woodward Funds.
As the next step in the consolidation process, you are asked to consider and
approve a proposed Agreement and Plan of Reorganization (the "Reorganization
Agreement"). The Reorganization Agreement provides that each of the three
investment portfolios of the Prairie Institutional Funds will transfer
substantially all its assets and liabilities to a corresponding new
institutional cash management portfolio of the Woodward registered investment
company. The transaction is expected to occur on or after July 12, 1996. The
combined investment company will be renamed Pegasus Funds sometime after the
completion of the transaction.
WHAT DO THESE CHANGES MEAN TO YOU?
. The value of the shares you hold at the time of the Reorganization will
not change as a result of the transaction, and will be the same
immediately after the Reorganization.
. The Reorganization will be tax-free and will not involve any sales
loads, commissions or transaction charges.
. The investment policies and objectives of the new institutional cash
management portfolios under the Woodward registered investment company
will be substantially similar to your Prairie Institutional Fund's
current objectives and policies following the Reorganization, except as
stated in the enclosures.
. Shareholders will benefit from improved shareholder servicing and the
elimination of redundant administration costs to the funds.
AS A RESULT, THE PRAIRIE INSTITUTIONAL FUNDS BOARD OF TRUSTEES HAS VOTED IN
FAVOR OF THE PROPOSED REORGANIZATION AGREEMENT AND STRONGLY ENCOURAGES THAT YOU
VOTE "FOR" THE PROPOSAL AS WELL.
The Reorganization Agreement and other related matters are discussed in
detail in the enclosed materials, which you should read carefully.
<PAGE>
VOTING INSTRUCTIONS
Enclosed is a proxy card for the meeting. We urge you to read the enclosed
proxy statement and to vote by completing, signing and returning the enclosed
proxy ballot form(s) in the prepaid envelope. If you are a stockholder of more
than one Fund, you will receive a proxy card for each of your Funds. Please vote
and return EACH proxy card you receive. EVERY VOTE COUNTS.
First Chicago NBD Corporation is pleased with the opportunities the
Reorganization will provide to better serve our mutual fund investors. If you
have any questions, your account manager will be happy to assist you. Thank you
for your cooperation.
Sincerely,
Mark A. Dillon
President
Prairie Institutional Funds
2
<PAGE>
PRAIRIE INSTITUTIONAL FUNDS
Three First National Plaza
Chicago, IL 60670
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
------------------------
To be held on June 25, 1996
To Prairie Institutional Funds Shareholders:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders
("Shareholders") of each Portfolio of Prairie Institutional Funds ("Prairie")
will be held at the offices of BISYS Fund Services, Inc., 3435 Stelzer Road,
Columbus, Ohio 43219, on June 25, 1996 at 9:00 a.m. (Eastern time) for the
following purposes:
ITEM 1. With respect to each investment portfolio (a "Prairie Portfolio") of
Prairie:
To consider and act upon a proposal to approve an Agreement and Plan of
Reorganization (the "Reorganization Agreement") and the transactions
contemplated thereby, including (a) the transfer of substantially all of
the assets and liabilities of the Cash Management Fund, Treasury Prime
Cash Management Fund and U.S. Government Securities Cash Management Fund
to corresponding investment portfolios (the "Woodward Funds") of The
Woodward Funds in exchange for Institutional Shares and Service Shares,
as applicable, of the Woodward Funds; (b) the distribution of such
Woodward Fund shares to the shareholders of the Prairie Portfolios
according to their respective interests; (c) the terminations under state
law and the Investment Company Act of 1940, as amended, of Prairie.
ITEM 2. With respect to each Prairie Portfolio:
To transact such other business as may properly come before the Special
Meeting or any adjournment(s) thereof.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ITEM 1.
The proposed reorganization and related matters are described in the
attached Combined Prospectus/Proxy Statement. Appendix A to the Combined
Prospectus/Proxy Statement is a copy of the Reorganization Agreement.
Shareholders of record as of the close of business on April 11, 1996 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE EACH ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY PRAIRIE'S
BOARD OF TRUSTEES. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
PRAIRIE A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY
ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON.
George O. Martinez
Secretary
May 21, 1996
i
<PAGE>
COMBINED PROSPECTUS/PROXY STATEMENT
Dated May 21, 1996
PRAIRIE INSTITUTIONAL FUNDS
Three First National Plaza
Chicago, Illinois 60670
(800) 370-9446
THE WOODWARD FUNDS
900 Tower Drive
P. O. Box 7058
Troy, Michigan 48007-7058
(800) 688-3350
This Combined Prospectus/Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Trustees of Prairie Institutional Funds
("Prairie") in connection with a Special Meeting (the "Meeting") of Shareholders
("Shareholders") to be held on June 25, 1996 at 9:00 a.m. (Eastern time) at the
offices of BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219,
at which Shareholders will be asked to consider and approve a proposed Agreement
and Plan of Reorganization dated May 21, 1996 (the "Reorganization Agreement"),
by and between Prairie and The Woodward Funds ("Woodward") and the matters
contemplated therein. A copy of the Reorganization Agreement is attached as
Appendix A.
Prairie and Woodward are each open-end, management investment companies.
First Chicago Investment Management Company ("FCIMCO") currently provides
investment advisory services to Prairie. NBD Bank ("NBD") currently provides
investment advisory services to Woodward. In reviewing the proposed
reorganization (the "Reorganization"), the Prairie Board considered, among other
things, the recently completed merger of First Chicago Corporation, the parent
company of FCIMCO, and NBD Bancorp, Inc., the parent company of NBD; the effect
of such merger on Prairie; the fact that FCIMCO and NBD would serve as
co-advisers to Woodward; the recommendations of FCIMCO and NBD with respect to
the proposed consolidation of Prairie and Woodward; the fact that the
Reorganization would constitute a tax-free reorganization; and the fact that the
interests of Shareholders would not be diluted as a result of the
Reorganization.
The Reorganization Agreement provides that each of the three investment
portfolios of Prairie listed below will transfer substantially all its assets
and liabilities to the newly organized Woodward investment portfolio identified
below opposite its name:
<TABLE>
<CAPTION>
PRAIRIE PORTFOLIOS WOODWARD FUNDS
- ---------------------------------------- ----------------------------------------
<S> <C>
Cash Management Fund Cash Management Fund
Treasury Prime Cash Management Fund Treasury Prime Cash Management Fund
U.S. Government Securities Cash U.S. Government Securities Cash
Management Fund Management Fund
</TABLE>
1
<PAGE>
In exchange for the transfers of these assets and liabilities, Woodward will
issue shares in the three Woodward investment portfolios listed above
(collectively, the "Woodward Funds") to the corresponding Prairie investment
portfolios listed above (collectively, the "Prairie Portfolios"). The
transaction is expected to occur on July 12, 1996, or as soon thereafter as is
practicable.
The Prairie Portfolios offer two classes of shares. The Woodward Funds will
have comparable classes of shares. Holders of each class of shares of a Prairie
Portfolio will receive the class of shares of the corresponding Woodward Fund as
set forth in the table on page 10 under "Information Relating to the Proposed
Reorganization--Description of the Reorganization Agreement."
The Prairie Portfolios will make liquidating distributions of the Woodward
Funds' shares to the Shareholders of the Prairie Portfolios, so that a holder of
a class of shares in a Prairie Portfolio will receive a class of Shares (as
described herein) of the corresponding Woodward Fund with the same aggregate net
asset value as the Shareholder had in the Prairie Portfolio immediately before
the transaction. Following the Reorganization, Shareholders of the Prairie
Portfolios will be Shareholders of their corresponding Woodward Funds, and
Prairie will be terminated under state law and the Investment Company Act of
1940, as amended.
The Woodward Funds have recently been organized for the purpose of
continuing the investment operations of the Prairie Portfolios and have no
substantial assets or prior history of investment operations.
This Combined Prospectus/Proxy Statement sets forth the information that a
Shareholder of Prairie should know before voting on the Reorganization Agreement
(and related transactions), and should be retained for future reference. The
Prospectus relating to the shares of the Woodward Funds, which describes the
operations of those Funds, accompanies this Combined Prospectus/Proxy Statement.
Additional information is set forth in the Statements of Additional Information
relating to those Funds and this Combined Prospectus/Proxy Statement, which are
dated April 26, 1996 and May 21, 1996, respectively, and in the Prospectus and
Statement of Additional Information, each dated March 18, 1996, relating to
Prairie. Each of these documents is on file with the Securities and Exchange
Commission (the "SEC"), and is available without charge upon oral or written
request by writing or calling either Prairie or Woodward at the respective
addresses or telephone numbers indicated above. The information contained in the
Prospectus and Statement of Additional Information, dated March 18, 1996
relating to Prairie is incorporated herein by reference.
This Combined Prospectus/Proxy Statement constitutes the Proxy Statement of
Prairie for the meeting of its Shareholders, and Woodward's Prospectus for the
shares of its Woodward Funds that have been registered with the SEC and are to
be issued in connection with the Reorganization.
This Combined Prospectus/Proxy Statement is expected to first be sent to
Shareholders on or
about May 21, 1996.
THE SECURITIES OF THE WOODWARD FUNDS 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 COMBINED PROSPECTUS/PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
2
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY PRAIRIE OR WOODWARD.
SHARES OF THE WOODWARD FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, THE FIRST NATIONAL BANK OF CHICAGO, NBD BANK OR ANY
OF THEIR AFFILIATES. SHARES OF THE WOODWARD FUNDS ARE NOT FEDERALLY INSURED BY,
GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE WOODWARD FUNDS INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. THERE IS NO
ASSURANCE THAT THE WOODWARD CASH MANAGEMENT FUND, TREASURY PRIME CASH MANAGEMENT
FUND OR U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary............................................................................... 1
Proposed Reorganization........................................................... 1
Reasons for the Reorganization.................................................... 1
Federal Income Tax Consequences................................................... 1
Overview of the Prairie Portfolios and Woodward Funds............................. 1
Purchase and Redemption Information, Dividends and Pricing........................ 9
Voting Information................................................................ 9
Risk Factors...................................................................... 9
Information Relating to the Proposed Reorganization................................... 10
Description of the Reorganization Agreement....................................... 10
Capitalization.................................................................... 12
Federal Income Tax Consequences................................................... 12
Comparison of Investment Policies and Risk Factors.................................... 12
Investment Limitations............................................................ 13
Other Information................................................................. 14
Information Relating to Voting Matters................................................ 15
General Information............................................................... 15
Shareholder and Board Approvals................................................... 16
Appraisal Rights.................................................................. 22
Quorum............................................................................ 22
Annual Meetings................................................................... 22
Additional Information about Woodward................................................. 22
Additional Information about Prairie.................................................. 23
Litigation............................................................................ 23
Financial Statements.................................................................. 23
Other Business........................................................................ 23
Shareholder Inquiries................................................................. 24
Appendix A--Agreement and Plan of Reorganization.................................. A-1
</TABLE>
<PAGE>
SUMMARY
The following is a summary of certain information relating to the
Reorganization, the parties thereto and the related transactions, and is
qualified by reference to the more complete information contained elsewhere in
this Combined Prospectus/Proxy Statement, the Prospectuses and Statements of
Additional Information of Prairie and Woodward, and the Reorganization Agreement
attached to this Combined Prospectus/Proxy Statement as Appendix A. Prairie's
Annual Report to Shareholders may be obtained free of charge by calling
1-800-224-4800 or writing Three First National Plaza, Chicago, Illinois 60670.
PROPOSED REORGANIZATION. Based upon their evaluation of the relevant
information presented to them, and in light of their fiduciary duties under
federal and state law, Prairie's and Woodward's Boards, including their members
who are not "interested persons" within the meaning of the Investment Company
Act of 1940 (the "1940 Act"), have unanimously determined that the proposed
Reorganization is in the best interests of their Funds' respective Shareholders
and that the interests of such Shareholders will not be diluted as a result of
such Reorganization.
The Cover Page, this Summary and pages 10-15 hereof summarize the proposed
Reorganization.
REASONS FOR THE REORGANIZATION. The primary reason for the Reorganization is
the recently completed merger between NBD Bancorp, Inc., the parent of NBD, and
First Chicago Corporation, the parent of FCIMCO. This Reorganization presents
the opportunity to combine the separate Prairie and Woodward mutual fund
families into a single, larger consolidated group. NBD and FCIMCO have
recommended that each of the Prairie Portfolios be reorganized as described in
this Combined Prospectus/Proxy Statement. In light of this recommendation, after
consideration of the reasons therefor and the proposed operations of the
combined funds after the Reorganization, and in consideration of the fact that
the Reorganization will be tax-free and will not dilute the interests of Prairie
Shareholders, the Board of Trustees of Prairie have authorized the Agreement and
Plan of Reorganization and recommended approval of the Reorganization by
Shareholders.
FEDERAL INCOME TAX CONSEQUENCES. Drinker Biddle & Reath, independent outside
counsel to Woodward and to its Board of Trustees, will issue an opinion (based
on certain assumptions) as of the effective time of the Reorganization that the
transaction will not give rise to the recognition of income, gain or loss for
federal income tax purposes to the Prairie Portfolios, the Woodward Funds or
their respective shareholders. See "Information Relating to the Proposed
Reorganization--Federal Income Tax Consequences."
OVERVIEW OF THE PRAIRIE PORTFOLIOS AND WOODWARD FUNDS. The investment
objectives and policies of the Prairie Portfolios are similar to those of the
corresponding Woodward Funds.
PRAIRIE CASH MANAGEMENT FUND AND WOODWARD CASH MANAGEMENT FUND.
The investment objective of both Funds is to provide investors with as high
a level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. Each pursues its investment objective by investing
in a diversified portfolio of high quality money market instruments.
1
<PAGE>
PRAIRIE TREASURY PRIME CASH MANAGEMENT FUND AND WOODWARD TREASURY PRIME CASH
MANAGEMENT FUND.
The investment objective of both Funds is to provide as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. The Funds invest only in securities issued and
guaranteed as to principal and interest by the U.S. Government.
PRAIRIE U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND AND WOODWARD U.S.
GOVERNMENT SECURITIES CASH MANAGEMENT FUND.
The investment objective of both Funds is to provide investors with as high
a level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. Each pursues its investment objective by investing
only in short-term securities issued or guaranteed as to principal or interest
by the U.S. Government, its agencies or instrumentalities and may enter into
repurchase agreements.
See "Comparison of Investment Policies and Risk Factors" below and the
Prairie and Woodward Prospectuses, which are incorporated by reference herein,
for a more detailed description of the similarities and differences between the
investment objectives and policies of the Prairie Portfolios and the
corresponding Woodward Funds.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS--THE PRAIRIE PORTFOLIOS. FCIMCO
serves as investment adviser for the Prairie Portfolios and is entitled to
receive advisory fees from them, computed daily and paid monthly, at the
following annual rates, expressed as a percentage of a Portfolio's average daily
net assets:
<TABLE>
<CAPTION>
ACTUAL ADVISORY FEE
RECEIVED FOR FISCAL
PERIOD ENDED DECEMBER 31,
PRAIRIE PORTFOLIOS ADVISORY FEE 1995 (AFTER WAIVERS)
- ---------------------------------------- ------------ -------------------------
<S> <C> <C>
Cash Management Fund.................... 0.20% 0.11%
Treasury Prime Cash Management Fund..... 0.20% 0.09%
U.S. Government Securities Cash
Management Fund......................... 0.20% 0.12%
</TABLE>
Pursuant to the Prairie investment advisory agreement, FCIMCO provides the
day-to-day management of each Prairie Portfolio's investments, subject to the
overall authority of the Board and in conformity with Massachusetts law and the
stated policies of the Portfolio. FCIMCO is responsible for making investment
decisions for each Prairie Portfolio, placing purchase and sale orders and
providing research, statistical analysis and continuous supervision of each
Portfolio's investments.
FCIMCO also serves as each Prairie Portfolio's administrator pursuant to a
separate administration agreement. For its services as administrator, FCIMCO is
entitled to receive a fee, calculated daily and paid monthly, at the annual rate
of 0.15% of the average daily net assets of each Prairie Portfolio. For the
fiscal period ended December 31, 1995, FCIMCO received administration fees
(after fee waivers) at the effective annual rates of 0.15%, 0.11% and 0.15% of
the average daily net assets of the Cash Management, Treasury Prime Cash
Management and U.S. Government Securities Cash Management Funds, respectively.
FCIMCO has engaged Concord Holding Corporation ("Concord"), a wholly-owned
subsidiary of The BISYS Group, Inc., to assist it in providing certain
administrative
2
<PAGE>
services for the Prairie Portfolios. FCIMCO, and not the Prairie Portfolios,
bears the fees for Concord's services as sub-administrator.
Primary Funds Service Corp. ("PFSC") serves as Prairie's transfer agent.
The Bank of New York currently provides custodial services to each Prairie
Portfolio. It is anticipated that on or about June 3, 1996, NBD will begin
providing custodial services to each Prairie Portfolio.
Concord Financial Group, Inc. ("CFG") is the principal underwriter and
distributor for Prairie. CFG is a wholly-owned subsidiary of Concord.
Prairie has adopted a Service Plan pursuant to Rule 12b-1 under the 1940 Act
(the "Prairie Service Plan"). Under the Prairie Service Plan, the Service Shares
of each of the Prairie Portfolios pay CFG for advertising, marketing and
distributing the Service Shares and for the provision of certain services to the
holders of Service Shares at an annual rate of 0.25% of the average daily net
asset value of such Portfolio's outstanding Service Shares. The fee payable for
such services is intended to be a "service fee" as defined in Article III,
Section 26 of the NASD Rules of Fair Practice. The services provided may include
personal services related to shareholder accounts, such as answering shareholder
inquiries regarding the applicable Portfolio and providing reports and other
information, and services related to the maintenance of shareholder accounts.
CFG may make payments to certain financial institutions, securities dealers and
other industry professionals (collectively, "Service Agents") in respect of
these services. FCIMCO and its affiliates may act as Service Agents and receive
fees under the Prairie Service Plan. The fees payable to CFG for advertising,
marketing and distributing Service Shares and for payments to Service Agents are
payable without regard to actual expenses incurred.
For the fiscal period ended December 31, 1995, Prairie paid fees to CFG
pursuant to the Prairie Service Plan of $77,634, $38,530 and $60,969,
respectively, for the Cash Management, Treasury Prime Cash Management and U.S.
Government Securities Cash Management Funds, which represented 0.25% of the
average net assets of each Portfolio's Service Shares during that period.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS--WOODWARD FUNDS. Both FCIMCO and
NBD serve as investment adviser to the Woodward Funds and are jointly entitled
to receive advisory fees from the Woodward Funds computed daily and paid
monthly, at the following annual rates, expressed as a percentage of each Fund's
average daily net assets:
<TABLE>
<CAPTION>
ACTUAL ADVISORY FEE
RECEIVED FOR YEAR ENDED
DECEMBER 31, 1995
WOODWARD FUNDS ADVISORY FEE (AFTER WAIVERS)
- ------------------------------------------ ------------ -----------------------
<S> <C> <C>
Cash Management Fund...................... 0.20% N/A*
Treasury Prime Cash Management Fund....... 0.20% N/A*
U.S. Government Securities Cash Management
Fund...................................... 0.20% N/A*
</TABLE>
- ------------
* These are new portfolios which have not commenced investment operations as of
the date hereof.
Pursuant to the Woodward investment advisory agreement, NBD and FCIMCO have
jointly agreed to provide day-to-day management of each Woodward Fund's
investments as co-adviser, subject
3
<PAGE>
to the overall authority of Woodward's Board and in conformity with
Massachusetts law and the stated policies of each Fund. FCIMCO and NBD are
responsible for making investment decisions for each Woodward Fund, placing
purchase and sale orders and providing research, statistical analysis and
continuous supervision of each Fund's investments. NBD and FCIMCO have advised
Woodward's Board that investment management for the Funds will be provided by
NBD's investment management staff.
NBD, FCIMCO and BISYS Fund Services, Inc. ("BISYS") serve as
co-administrators pursuant to a joint administration agreement. BISYS is a
wholly-owned subsidiary of The BISYS Group, Inc. and is affiliated with Concord,
the current sub-administrator of Prairie. For their services as
co-administrators, NBD, FCIMCO and BISYS will be jointly entitled to receive a
fee, computed daily and paid monthly, at the annual rate of 0.15% of the average
daily net assets of each Woodward Fund.
First Data Investor Services Group, Inc. serves as Woodward's transfer
agent.
NBD also serves as Woodward's custodian. As custodian for Woodward, NBD (i)
maintains separate accounts in the name of each Fund, (ii) collects and makes
disbursements of money on behalf of each Fund, and (iii) collects and receives
all income and other payments and distributions on account of the portfolio
securities of each Fund. For its services as custodian, NBD is entitled to
receive fees from each Fund at the following rates: $11.00 for each clearing and
settlement transaction and $12.00 for each accounting and safekeeping service
with respect to investments, in addition to activity charges for Master Control
and Master Settlement accounts.
BISYS is the principal underwriter and distributor for Woodward.
Woodward has adopted a Distribution and Services Plan pursuant to Rule 12b-1
under the 1940 Act. Under the Distribution and Services Plan, each Woodward Fund
pays BISYS for the advertising, marketing and distribution of its Service Shares
and/or the provision of shareholder and administrative services for the
beneficial owners of such Service Shares, a fee at an annual rate of up to 0.25%
of the average daily net asset value of such Fund's outstanding Service Shares.
The support services provided may include personal services related to
shareholders accounts, such as answering shareholder inquiries regarding the
applicable Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. Under the Distribution and
Services Plan, BISYS may make payments to Service Agents in respect of these
services. FCIMCO, NBD and their affiliates may act as Service Agents and receive
fees under the Distribution and Services Plan. BISYS determines the amounts to
be paid to Service Agents. The distribution services provided under the
Distribution and Services Plan are activities primarily intended to result in
the sale of such Fund's Service Shares.
COMPARATIVE FEE TABLES. The tables below show (i) information regarding the
fees and expenses paid by each class of shares of each Prairie Portfolio as of
the most recent fiscal period, restated to reflect the expenses the Prairie
Portfolio is expected to incur during the current fiscal year, and (ii)
estimated fees and expenses on a pro forma basis giving effect to the proposed
Reorganization. Although under no contractual obligation, FCIMCO, NBD and BISYS
have informed Woodward and Prairie that they expect to waive fees and reimburse
expenses for the current fiscal year ending December 31, 1996 to the extent the
total operating expenses applicable to each class of shares of each Fund exceed
the amount set forth in the tables below. The tables indicate that the total
operating expenses attributable to the corresponding classes of the Prairie
Portfolios and Woodward Funds are expected to be the same at the time of the
Reorganization.
4
<PAGE>
COMPARATIVE FEE TABLE FOR EACH PORTFOLIO
<TABLE>
<CAPTION>
PRAIRIE WOODWARD
CASH MANAGEMENT CASH MANAGEMENT PRO FORMA
FUND FUND* COMBINED
---------------------- ---------------------- ----------------------
SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL
SHARES SHARES SHARES SHARES SHARES SHARES
------- ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES (as a
percentage of average net assets)
Advisory Fees (after fee waivers)(1).......... .13%(2) .13%(2) .13% .13% .13% .13%
12b-1 Fees (distribution and servicing) .25% None .25% None .25% None
Other Expenses(3) (after fee waivers and/or
expense reimbursements)....................... .22%(4) .22%(4) .22%(5) .22%(5) .22%(5) .22%(5)
Total Operating Expenses (after fee waivers
and/or expense reimbursements)................ .60%(6) .35%(6) .60%(7) .35%(7) .60%(7) .35%(7)
</TABLE>
- ------------
* The Woodward Cash Management Fund has not yet commenced investment operations.
The Woodward Cash Management Fund will continue the operations of the Prairie
Cash Management Fund upon consummation of the Reorganization relating to that
Fund.
(1) The maximum advisory fees for the Service Shares and Institutional Shares of
each of the Prairie Cash Management Fund, Woodward Cash Management Fund and
Pro Forma Combined Fund are 0.20%.
(2) This number has been restated. Actual advisory fees received for the fiscal
period ended December 31, 1995 were 0.11%.
(3) Includes administration fees of 0.15%.
(4) Other Expenses, before fee waivers and/or expense reimbursements, would have
been 0.24% and 0.23%, respectively, for the Service Shares and Institutional
Shares of the Prairie Cash Management Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements would be
0.23% for both the Service Shares and Institutional Shares of both the
Woodward Cash Management Fund and the Pro Forma Combined Fund.
(6) Absent voluntary waivers and expense reimbursements, which can be terminated
upon 90 days notice, total operating expenses for the Service Shares and
Institutional Shares of the Prairie Cash Management Fund would have been
0.69% and 0.43%, respectively.
(7) Absent voluntary waivers and expense reimbursements, which can be terminated
at any time, total operating expenses for the Service Shares and
Institutional Shares would be 0.68% and 0.43%, respectively, for both the
Woodward Cash Management Fund and the Pro Forma Combined Fund.
5
<PAGE>
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return, and (2) redemption at the end of the
following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Prairie Cash Management Fund
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
Woodward Cash Management Fund
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
Pro Forma Combined
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
</TABLE>
<TABLE>
<CAPTION>
PRAIRIE WOODWARD
TREASURY PRIME TREASURY PRIME
CASH MANAGEMENT CASH MANAGEMENT PRO FORMA
FUND FUND* COMBINED
---------------------- ---------------------- ----------------------
SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL
SHARES SHARES SHARES SHARES SHARES SHARES
------- ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES (as a
percentage of average net assets)
Advisory Fees (after fee waivers)(1)......... .12%(2) .12%(2) .12% .12% .12% .12%
12b-1 Fees (distribution and servicing)...... .25% None .25% None .25% None
Other Expenses(3) (after fee waivers and/or
expense reimbursements)...................... .23%(4) .23%(4) .23%(5) .23%(5) .23%(5) .23%(5)
Total Operating Expenses (after fee waivers
and/or expense reimbursements)............... .60%(6) .35%(6) .60%(7) .35%(7) .60%(7) .35%(7)
</TABLE>
- ------------
* The Woodward Treasury Prime Cash Management Fund has not yet commenced
investment operations. The Woodward Treasury Prime Cash Management Fund will
continue the operations of the Prairie Treasury Prime Cash Management Fund
upon consummation of the Reorganization relating to that Fund.
(1) The maximum advisory fees for the Service Shares and Institutional Shares of
each of the Prairie Treasury Prime Cash Management Fund, Woodward Treasury
Prime Cash Management Fund and Pro Forma Combined Fund are 0.20%.
(2) This number has been restated. Actual advisory fees received for the fiscal
period ended December 31, 1995 were 0.09%.
(3) Includes administration fees of 0.15%.
(4) Other Expenses, before fee waivers and/or reimbursements, would have been
0.29% and 1.03%, respectively, for the Service Shares and Institutional
Shares of the Prairie Treasury Prime Cash Management Fund.
(5) Other Expenses, before fee waivers and/or expense reimbursements, would be
0.32% for the Service Shares and Institutional Shares of both the Woodward
Treasury Prime Cash Management Fund and the Pro Forma Combined Fund.
6
<PAGE>
(6) Absent voluntary waivers, which can be terminated upon 90 days notice, the
total operating expenses for Service Shares and Institutional Shares of the
Prairie Treasury Prime Cash Management Fund would have been 0.74% and 1.23%,
respectively.
(7) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for the Service Shares and Institutional Shares would be
.77% and .52%, respectively, for both the Woodward Treasury Prime Cash
Management Fund and the Pro Forma Combined Fund.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return, and (2) redemption at the end of the
following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Prairie Treasury Prime Cash Management Fund
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
Woodward Treasury Prime Cash Management Fund
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
Pro Forma Combined
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
</TABLE>
<TABLE>
<CAPTION>
PRAIRIE WOODWARD
U.S. GOVERNMENT U.S. GOVERNMENT
SECURITIES SECURITIES
CASH MANAGEMENT CASH MANAGEMENT PRO FORMA
FUND FUND* COMBINED
---------------------- ---------------------- ----------------------
SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL SERVICE INSTITUTIONAL
SHARES SHARES SHARES SHARES SHARES SHARES
------- ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES(as a
percentage of average net assets)
Advisory Fees (after fee waivers)(1)......... .14%(2) .14%(2) .14% .14% .14% .14%
12b-1 Fees (distribution and servicing)...... .25% None .25% None .25% None
Other Expenses(3)(after fee waivers and/or
expense reimbursements)...................... .21%(4) .21%(4) .21%(5) .21%(5) .21%(5) .21%(5)
Total Operating Expenses (after fee waivers
and/or expense reimbursements)............... .60%(6) .35%(6) .60%(7) .35%(7) .60%(7) .35%(7)
</TABLE>
- ------------
* The Woodward U.S. Government Securities Cash Management Fund has not yet
commenced investment operations. The Woodward U.S. Government Securities Cash
Management Fund will continue the operations of the Prairie U.S. Government
Securities Cash Management Fund upon consummation of the Reorganization
relating to that Fund.
(1) The maximum advisory fees for the Service Shares and Institutional Shares of
each of the Prairie U.S. Government Securities Cash Management Fund,
Woodward U.S. Government Securities Cash Management Fund and Pro Forma
Combined Fund, are 0.20%.
(2) This number has been restated. Actual advisory fees for the fiscal period
ended December 31, 1995 were 0.12%.
(3) Includes administration fees of 0.15%.
7
<PAGE>
(4) Other Expenses, before fee waivers and/or reimbursements, would have been
0.24% and 0.22%, respectively, for the Service Shares and Institutional
Shares of the Prairie U.S. Government Securities Cash Management Fund.
(5) Other Expenses, before fee waivers and/or reimbursements, would be 0.23% for
the Service Shares and Institutional Shares of both the Woodward U.S.
Government Securities Cash Management Fund and the Pro Forma Combined Fund.
(6) Absent voluntary waivers, which can be terminated upon 90 days notice, the
total operating expenses for Service Shares and Institutional Shares of the
Prairie U.S. Government Securities Cash Management Fund would have been
0.69% and 0.42%, respectively.
(7) Absent voluntary waivers, which can be terminated at any time, the total
operating expenses for Service Shares and Institutional Shares would be
0.68% and 0.43%, respectively, for both the Woodward U.S. Government
Securities Cash Management Fund and the Pro Forma Combined Fund.
EXAMPLE: An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return, and (2) redemption at the end of the
following periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Prairie U.S. Government Securities
Cash Management Fund
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
Woodward U.S. Government Securities
Cash Management Fund
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
Pro Forma Combined
Service Shares........................................ $6 $19 $33 $ 75
Institutional Shares.................................. $4 $11 $20 $ 44
</TABLE>
EXPENSE RATIOS -- PRAIRIE PORTFOLIOS. The following table sets forth (i) the
ratios of operating expenses to average net assets of the Prairie Portfolios for
the fiscal period ended December 31, 1995 (a) after fee waivers and expense
reimbursements, and (b) absent fee waivers and expense reimbursements:
<TABLE>
<CAPTION>
FISCAL PERIOD ENDED DECEMBER 31, 1995
------------------------------------------
RATIO OF OPERATING RATIO OF OPERATING
EXPENSES TO AVERAGE EXPENSES TO AVERAGE
NET ASSETS AFTER NET ASSETS ABSENT
FEE WAIVERS AND FEE WAIVERS AND
EXPENSE EXPENSE
REIMBURSEMENTS REIMBURSEMENTS
------------------- -------------------
<S> <C> <C>
PRAIRIE PORTFOLIOS
Cash Management Fund
Service Shares..................................... 0.60% 0.69%
Institutional Shares............................... 0.35% 0.43%
Treasury Prime Cash Management Fund
Service Shares..................................... 0.60% 0.74%
Institutional Shares............................... 0.35% 1.23%
U.S. Government Securities Cash Management Fund
Service Shares..................................... 0.60% 0.69%
Institutional Shares............................... 0.35% 0.42%
</TABLE>
8
<PAGE>
EXPENSE RATIOS -- WOODWARD FUNDS. The Woodward Cash Management, Treasury
Prime Cash Management and U.S. Government Securities Cash Management Funds will
commence investment operations upon consummation of the Reorganization.
PURCHASE AND REDEMPTION INFORMATION, DIVIDENDS AND PRICING. The purchase,
redemption, dividends and pricing policies of the Prairie Portfolios and the
Woodward Funds are identical.
VOTING INFORMATION. This Combined Prospectus/Proxy Statement is being
furnished in connection with the solicitation of proxies by Prairie's Board of
Trustees in connection with the Special Meeting of Shareholders to be held at
the offices of BISYS, 3435 Stelzer Road, Columbus, Ohio 43219, on June 25, 1996
at 9:00 a.m. Eastern time (such meeting and any adjournments thereof hereinafter
referred to as the "Meeting"). Only Shareholders of record at the close of
business on April 11, 1996 will be entitled to notice of and to vote at the
Meeting. Each share or fraction thereof is entitled to one vote or fraction
thereof and all shares will vote separately by Portfolio. Shares represented by
a properly executed proxy will be voted in accordance with the instructions
thereon, or if no specification is made, the persons named as proxies will vote
in favor of each proposal set forth in the Notice of Meeting. Proxies may be
revoked at any time before they are exercised by submitting to Prairie a written
notice of revocation or a subsequently executed proxy or by attending the
Meeting and voting in person. For additional information, including a
description of the Shareholder vote required for approval of the Reorganization
Agreement and related transactions contemplated thereby, see "Information
Relating to Voting Matters."
RISK FACTORS. The following discussion highlights the principal risk factors
associated with an investment in the Prairie Portfolios and the Woodward Funds
and is qualified in its entirety by the more extensive discussion of risk
factors in "Comparison of Investment Policies and Risk Factors" and related
Prospectuses and Statements of Additional Information which are incorporated
herein by reference.
Because of the similarities of the investment objectives and policies of the
Prairie Portfolios and their corresponding Woodward Funds, management believes
that an investment in a Woodward Fund involves risks that are substantially
similar to those of the corresponding Prairie Portfolio. These investment risks
include those typically associated with investing in a portfolio of high
quality, short-term money market instruments.
Although each Prairie Portfolio and Woodward Fund seek to maintain a stable
net asset value of $1.00 per share, there is no assurance they will be able to
do so. Generally, the market value of debt securities will vary inversely to
changes in prevailing interest rates. The Prairie Cash Management Fund and
Woodward Cash Management Fund may seek to achieve their investment objectives
through investments in securities of foreign issuers that involve risks not
typically associated with U.S. issuers. Each Fund may invest up to 10% of its
net assets in securities that are illiquid. Certain Funds may engage in
securities lending transactions. Some Portfolios may invest in stripped U.S.
Government Securities which may exhibit greater volatility than more
conventional debt securities. There is no assurance that any portfolio will
achieve its investment objective.
9
<PAGE>
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
Prairie has entered into an agreement whereby its investment portfolios are
to be acquired by portfolios of Woodward. Significant provisions of this
Reorganization Agreement are summarized below; however, this summary is
qualified in its entirety by reference to the Reorganization Agreement, a copy
of which is attached as Appendix A to this Combined Prospectus/Proxy Statement.
DESCRIPTION OF THE REORGANIZATION AGREEMENT. There are three separate
Prairie investment portfolios. Their assets will be acquired and liabilities
assumed by three new Woodward Funds which have been organized to continue the
operations of these Prairie Portfolios.
The Reorganization Agreement provides that substantially all of the assets
and liabilities of the Prairie Portfolios will be transferred to the Woodward
Funds identified in the table below. The holders of each class of shares of a
Prairie Portfolio will receive the class of shares of the corresponding Woodward
Fund identified in the table. In the table, (a) opposite the name of each
Prairie Portfolio is the name of the Woodward Fund which will issue shares to
such Prairie Portfolio, and (b) opposite the name of each class of shares of the
Prairie Portfolio is the name of the class of shares of the Woodward Fund to be
distributed to the holders of such Prairie class. The number of each class of
shares to be issued by the Woodward Funds will have an aggregate net asset value
equal to the aggregate net asset value of the corresponding class or classes of
shares of the particular Prairie Portfolio as of the regular close of the New
York Stock Exchange, currently 4:00 p.m. Eastern time, on the business day
immediately preceding each transaction.
<TABLE>
<CAPTION>
PRAIRIE PORTFOLIOS AND CLASSES WOODWARD FUNDS AND CLASSES
- ------------------------------------ ------------------------------------
<S> <C>
Cash Management Fund Cash Management Fund
Service Shares Service Shares
Institutional Shares Institutional Shares
Treasury Prime Cash Management Fund Treasury Prime Cash Management Fund
Service Shares Service Shares
Institutional Shares Institutional Shares
U.S. Government Securities Cash U.S. Government Securities Cash
Management Fund Management Fund
Service Shares Service Shares
Institutional Shares Institutional Shares
</TABLE>
Following the transfers of assets and liabilities from the Prairie
Portfolios to the Woodward Funds, and the issuances of shares by the Woodward
Funds to the Prairie Portfolios, each of the Prairie Portfolios will distribute
the class of shares of the Woodward Funds pro rata to the holders of classes of
shares of the Prairie Portfolios as described above in liquidation of the
Prairie Portfolios. Each holder of a class of shares of a Prairie Portfolio will
receive an amount of the corresponding class of shares of the corresponding
Woodward Fund of equal value. Following the Reorganization, the registration of
Prairie as an investment company under the 1940 Act will be terminated, and
Prairie will be terminated under state law. The stock transfer books of Prairie
will be permanently closed after the Reorganization.
10
<PAGE>
The Reorganization is subject to a number of conditions, including approval
of the Reorganization Agreement and the transactions contemplated thereby
described in this Combined Prospectus/Proxy Statement by the Shareholders of
Prairie; the receipt of certain legal opinions described in the Reorganization
Agreement; the receipt of certain certificates from the parties concerning the
continuing accuracy of the representations and warranties in the Reorganization
Agreement and other matters; and the parties' performance in all material
respects of their agreements and undertakings in the Reorganization Agreement.
Assuming satisfaction of the conditions in the Reorganization Agreement, the
Reorganization is expected to occur on July 12, 1996 or as soon thereafter as is
practicable.
The expenses of Woodward and of Prairie incurred in connection with the
Reorganization will be borne by First Chicago NBD Corporation, except that
Woodward will bear any related registration fees payable under the Securities
Act of 1933 and state blue sky laws.
The Reorganization may be abandoned prior to its consummation by the mutual
consent of the parties to the Reorganization Agreement. The Reorganization
Agreement provides further that at any time prior to, or (to the fullest extent
permitted by law) after, the approval of the Reorganization Agreement by
Shareholders of Prairie (a) the parties thereto may, by written agreement
approved by their respective Boards of Trustees, or authorized officers and with
or without the approval of their respective Shareholders, amend any of the
provisions of the Reorganization Agreement; and (b) either party may waive any
breach by the other party or the failure to satisfy any of the conditions to its
obligations with or without the approval of such party's Shareholders.
BOARD CONSIDERATION. In giving its approval to the Reorganization at
meetings held on December 6, 1995, January 9, 1996 and February 20, 1996, the
Board of Trustees of Prairie considered, primarily, the recent merger between
First Chicago Corporation, the parent company of FCIMCO, and NBD Bancorp, Inc.,
the parent company of NBD. This Reorganization presents the opportunity to
combine the separate Prairie and Woodward mutual fund families into a single,
larger consolidated group, offering shareholders a full spectrum of funds.
Accordingly, FCIMCO and NBD recommended that each of the Prairie Portfolios be
reorganized as described in this Combined Prospectus/Proxy Statement. The Board
of Trustees of Prairie considered the recommendation of FCIMCO and NBD with
respect to the proposed consolidation of Prairie and Woodward; the investment
capabilities of the co-advisers; the compatibility of the investment objectives
and policies of the Prairie Portfolios and their corresponding Woodward Funds;
the improvement of operational efficiencies and achievement of economies of
scale through the consolidation of investment portfolios that are substantially
similar; the management and other fees paid by the Woodward Funds; the projected
operating expense ratios of the Woodward Funds following the Reorganization; the
fact that the Reorganization would constitute a tax-free reorganization; the
fact that total operating expense ratios of each Woodward Fund after the
Reorganization were expected to be the same as the expense ratios of the
corresponding Prairie Portfolio prior to the transaction; and that the interests
of Shareholders would not be diluted as a result of the Reorganization.
After considering the foregoing factors, together with such other
information as they considered to be relevant, Prairie's Trustees unanimously
approved the Reorganization Agreement and directed that it be submitted to
Shareholders for approval.
PRAIRIE'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL
OF THE REORGANIZATION AGREEMENT.
The Board of Trustees of Prairie has not determined what action it will take
in the event the shareholders of any Prairie Portfolio fail to approve the
Reorganization Agreement or for any reason
11
<PAGE>
the Reorganization is not consummated. In either such event, the Trustees will
consider other appropriate courses of action, including continuing operations of
the Prairie Portfolios in their present form.
At meetings held on November 27, and 28, 1995, January 9, 1996 and February
20, 1996, the Woodward Board of Trustees considered the proposed Reorganization.
Based upon their evaluation of the relevant information provided to them, and in
light of their fiduciary duties under federal and state law, the Board of
Trustees unanimously determined that the proposed Reorganization was in the best
interests of Woodward and its shareholders, and that the interests of existing
shareholders of Woodward's other funds would not be diluted as a result of the
transaction.
CAPITALIZATION. Because the Prairie Portfolios will be combined in the
Reorganization with newly organized Woodward Funds having only nominal assets
and liabilities, information on the capitalization of the Prairie Portfolios and
Woodward Funds is not included.
FEDERAL INCOME TAX CONSEQUENCES. Consummation of the Reorganization is
subject to the condition that Prairie and Woodward receive an opinion from
Drinker Biddle & Reath to the effect that for federal income tax purposes: (i)
the transfer of all of the assets and liabilities of each of the Prairie
Portfolios to their corresponding Woodward Funds in exchange for shares of the
corresponding Woodward Funds and liquidating distributions to Shareholders of
the Prairie Portfolios of the shares of the Woodward Fund so received, as
described in the Reorganization Agreement, will constitute reorganizations
within the meaning of Section 368(a)(1)(C), Section 368(a)(1)(D) or Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended, and with respect
to the Reorganization, each Prairie Portfolio and Woodward Fund will be
considered "a party to a reorganization" within the meaning of Section 368(b) of
the Code; (ii) no gain or loss will be recognized by any Prairie Portfolio as a
result of such transactions; (iii) no gain or loss will be recognized by any
Woodward Fund as a result of such transactions; (iv) no gain or loss will be
recognized by the Shareholders of any Prairie Portfolio on the distribution to
them by Prairie of shares of any class of the corresponding Woodward Fund in
exchange for their shares of any class of the Prairie Portfolio; (v) the
aggregate basis of the Woodward Fund shares received by a shareholder of a
Prairie Portfolio will be the same as the aggregate basis of the Shareholder's
Prairie Portfolio shares immediately prior to the Reorganization; (vi) the basis
of each Woodward Fund in the assets of the corresponding Prairie Portfolio
received pursuant to the Reorganization will be the same as the basis of the
assets in the hands of the Prairie Portfolio immediately before the
Reorganization; (vii) a shareholder's holding period for Woodward Fund shares
will be determined by including the period for which the shareholder held the
Prairie Portfolio shares exchanged therefor, provided that the shareholder held
such Prairie Portfolio shares as a capital asset; and (viii) each Woodward
Fund's holding period with respect to the assets received in the Reorganization
will include the period for which such assets were held by the corresponding
Prairie Portfolio.
Woodward and Prairie have not sought a tax ruling from the Internal Revenue
Service ("IRS"), but are acting in reliance upon the opinion of counsel
discussed in the previous paragraph. That opinion is not binding on the IRS and
does not preclude the IRS from adopting a contrary position. Shareholders should
consult their own advisers concerning the potential tax consequences to them,
including state and local income taxes.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
The investment objectives and policies of each Prairie Portfolio are
substantially the same as those of the corresponding Woodward Fund. There are,
however, certain differences. The following discussion summarizes the more
significant differences in the investment policies, risk factors and limitations
of the
12
<PAGE>
Prairie Portfolios and their corresponding Woodward Funds, and is qualified in
its entirety by the Prospectuses and Statements of Additional Information of the
Prairie Portfolios and the Woodward Funds which are incorporated herein by
reference.
The Woodward Cash Management and U.S. Government Securities Cash Management
Funds may invest in securities issued by other investment companies which
principally invest in securities of the type in which such Funds invest. Under
the 1940 Act, a Fund's investments in such securities, subject to certain
exceptions, is currently limited to: (i) 3% of the total voting stock of any one
investment company; (ii) 5% of a Fund's total assets with respect to any one
investment company; and (iii) 10% of a Fund's total assets in the aggregate.
Investments in the securities of other investment companies may involve
duplication of advisory fees and certain other expenses. The Prairie Cash
Management and U.S. Government Securities Cash Management Funds, as a matter of
fundamental policy, are not permitted to invest in the securities of other
investment companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
The Woodward Treasury Prime Cash Management and U.S. Government Securities
Cash Management Funds may invest in stripped U.S. Treasury Securities and the
Woodward U.S. Government Securities Cash Management Fund may invest in stripped
U.S. Government Securities, where the principal and interest components are
traded independently under the Separate Trading and Registered Interest and
Principal Securities Program ("STRIPS"). Under STRIPS, the principal and
interest components are individually numbered and separately issued by the U.S.
Treasury at the request of depository financial institutions, which then trade
the component parts independently. These obligations are usually issued at a
discount to their face value, and because of the manner in which principal and
interest are returned, may exhibit greater volatility than more conventional
debt securities. The Prairie Treasury Prime Cash Management and U.S. Government
Securities Cash Management Funds are not expressly permitted to invest in
STRIPS.
INVESTMENT LIMITATIONS. Neither the Prairie Portfolios nor the Woodward
Funds may change their fundamental investment policies and limitations without
the affirmative vote of the holders of a majority of the outstanding shares (as
defined in the 1940 Act) of the particular Prairie Portfolio or Woodward Fund.
As a matter of fundamental policy, each Prairie Portfolio may invest up to
25% of the value of its total assets in the securities of issuers in a single
industry, provided that: (a) there is no limitation on the purchase of
obligations issued and guaranteed by the U.S. Government, its agencies and
instrumentalities; and (b) the Prairie Cash Management Fund will invest, except
when it has adopted a temporary defensive position, at least 25% of its total
assets in securities issued by banks, including foreign banks and branches. Each
Woodward Fund has substantially the same fundamental investment limitation, but
also adds the following clarification that: (a) there is no limitation with
respect to (1) instruments issued or guaranteed by any state, territory or
possession of the United States, the District of Columbia or any of their
authorities, agencies, instrumentalities or political subdivisions, (2)
instruments issued by domestic branches of U.S. banks and (3) repurchase
agreements secured by instruments described in clauses (1) and (2); (b)
wholly-owned finance companies will be considered to be in the industries of
their parents if their activities are primarily related to financing the
activities of the parents; (c) utilities will be divided according to their
services, for example, gas, gas transmission, electric and gas, electric and
telephone will each be considered a separate industry; (d) personal credit and
business credit businesses will be considered separate industries; and (e) the
Woodward Cash Management Fund will invest at least 25% of its total assets in
obligations of issuers in the banking industry or instruments secured by such
obligations except during temporary defensive periods.
13
<PAGE>
The Prairie Treasury Prime Cash Management Fund, as a matter of fundamental
policy, may borrow money to the extent permitted under the 1940 Act, which
currently limits borrowing to no more than 33 1/3% of the value of the Fund's
total assets; each of the Prairie Cash Management and U.S. Government Securities
Cash Management Funds may borrow money from banks, but only for temporary or
emergency (not leveraging) purposes, in an amount up to 15% of the value of a
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 value of a Fund's total
assets, that Fund will not make any additional investments. Each of the Woodward
Funds is permitted to borrow money to the extent permitted under the 1940 Act.
As a matter of fundamental policy, each Prairie Portfolio may mortgage,
pledge, hypothecate or otherwise encumber its assets only to secure permitted
borrowings (this policy is not fundamental with respect to the Prairie Treasury
Prime Cash Management Fund). The Woodward Funds may mortgage, pledge or
hypothecate their assets to the extent permitted by the 1940 Act.
The Prairie Portfolios have adopted a fundamental policy such that they may
not purchase or sell real estate, except that the Prairie Treasury Cash
Management Fund may purchase securities of issuers which deal in real estate and
may purchase securities which are secured by interests in real estate. The
Woodward Funds may not purchase or sell real estate or commodities, except to
the extent permitted by the 1940 Act.
As a matter of fundamental policy, the Prairie Portfolios, with the
exception of the Prairie Treasury Cash Management Fund, may not acquire any
other investment company or investment company security except in connection
with a merger, consolidation, reorganization or acquisition of assets. The
Prairie Treasury Cash Management Fund and the Woodward Funds have adopted non-
fundamental policies that allow them to invest in other investment companies to
the extent permitted by the 1940 Act.
As a matter of fundamental policy, the Prairie Cash Management and U.S.
Government Securities Cash Management Funds, and the Woodward Funds may not make
loans to others (other than through investment in debt obligations or other
instruments referred to in each Fund's Prospectus), except that each Fund may
lend its portfolio securities in an amount not to exceed 33 1/3% of the value of
its total assets. The Prairie Treasury Prime Cash Management Fund may not make
loans except through the purchase of debt obligations and the entry into
repurchase agreements.
The Prairie Cash Management Fund, and the Woodward Funds have adopted
fundamental policies which do not permit them to purchase securities (except
U.S. Government Securities and related repurchase agreements) if more than 5% of
such a Fund's assets are invested in the obligations of any one issuer, except
that up to 25% of the value of the Fund's total assets may be invested without
regard to this 5% limitation. The Prairie Treasury Prime Cash Management and
U.S. Government Securities Cash Management Funds are not subject to this
limitation.
See "Investment Objectives and Management Policies" in Prairie's Statement
of Additional Information and "Investment Objectives and Management
Policies--Investment Restrictions" in Woodward's Statement of Additional
Information, which are incorporated by reference herein, for additional
investment limitations of the Prairie Portfolios and Woodward Funds.
OTHER INFORMATION. Prairie and Woodward are registered as open-end
management investment companies under the 1940 Act. Currently, Prairie offers
three investment portfolios and Woodward consists of seventeen investment
portfolios in addition to the three Woodward Funds.
14
<PAGE>
Woodward and Prairie are both organized as Massachusetts business trusts and
are subject to the provisions of their respective Declarations of Trust and
By-laws. Shares of both Prairie and Woodward: (i) are entitled to one vote for
each full share held and a proportionate fractional vote for each fractional
share held; (ii) will vote in the aggregate and not by class except as otherwise
expressly required by law or when class voting is permitted by the respective
Boards of Trustees; and (iii) are entitled to participate equally in the
dividends and distributions that are declared with respect to a particular
investment portfolio and in the net distributable assets of such portfolio on
liquidation. Shares of the Prairie Portfolios have a par value of $.001. Shares
of the Woodward Funds have a par value of $.10. In addition, shares of the
Prairie Portfolios and Woodward Funds have no preemptive rights and only such
conversion and exchange rights as the respective Boards of Trustees may grant in
their discretion. When issued for payment as described in their prospectuses,
Prairie Portfolio shares and Woodward Fund shares are fully paid and
non-assessable by such entities except as required under Massachusetts law.
Woodward is not required under Massachusetts Law to hold annual shareholder
meetings and intends to do so only if required by the 1940 Act. Shareholders
have the right to remove Trustees. To the extent required by law, Woodward will
assist in shareholder communications in such matters.
The foregoing is only a summary. Shareholders may obtain copies of the
Declarations of Trust and By-laws of Woodward and Prairie upon written request
at the addresses shown on the cover page of this Combined Prospectus/Proxy
Statement.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION. This Combined Prospectus/Proxy Statement is being
furnished in connection with the solicitation of proxies by Prairie's Board of
Trustees in connection with the Meeting. It is expected that the solicitation of
proxies will be primarily by mail. Officers and service contractors of Prairie
may also solicit proxies by telephone, telegraph, facsimile or personal
interview. Shareholder Communications Corporation ("SCC") has been retained to
assist in the solicitation of proxies primarily by contacting shareholders by
telephone and telegram. Authorizations to execute proxies may be obtained by
telephonic or electronically transmitted instructions in accordance with
procedures designed to authenticate the shareholder's identity. In all cases
where a telephonic proxy is solicited, the shareholder will be asked to provide
his or her address, social security number (in the case of an individual) or
taxpayer identification number (in the case of an entity) and the number of
shares owned and to confirm that the shareholder has received the Combined
Prospectus/Proxy Statement and proxy card in the mail. Within 72 hours of
receiving a shareholder's telephonic or electronically transmitted voting
instructions, a confirmation will be sent to the shareholder to ensure that the
vote has been taken in accordance with the shareholder's instructions and to
provide a telephone number to call immediately if the shareholder's instructions
are not correctly reflected in the confirmation. Prairie has been advised by its
counsel that the use of telephonic or electronically transmitted voting
instructions complies with applicable state law. Shareholders requiring further
information with respect to telephonic or electronically transmitted voting
instructions or the proxy generally should contact SCC toll-free at 1-800-733-
8481, extension 458. Any shareholder giving a proxy may revoke it at any time
before it is exercised by submitting to Prairie a written notice of revocation
or a subsequently executed proxy or by attending the Meeting and voting in
person.
Only shareholders of record at the close of business on April 11, 1996 will
be entitled to vote at the Meeting. On that date there were outstanding and
entitled to be voted 476,973,351 shares of Prairie Cash Management Fund,
159,379,818 shares of Prairie Treasury Prime Cash Management Fund and
15
<PAGE>
521,562,187 shares of Prairie U.S. Government Securities Cash Management Fund.
Each share or fraction thereof is entitled to one vote or fraction thereof, and
all shares will vote separately by Fund.
Prairie and Woodward have been advised by FCIMCO that the shares of each
Prairie Portfolio over which First Chicago NBD Corporation or its affiliates
have voting power will, wherever possible, be voted in accordance with
instructions received from beneficial owners or fiduciaries of such accounts who
are not related to First Chicago NBD Corporation or its affiliates. As to
employee benefit plans, First Chicago NBD Corporation may vote such shares in
accordance with the recommendation of an independent fiduciary. Where First
Chicago NBD Corporation is required to vote Prairie shares, it will vote them in
the same proportions as the shares of all other voting shareholders of each
respective Prairie Portfolio were actually voted.
If the accompanying proxy is executed and returned in time for the Meeting,
the shares covered thereby will be voted in accordance with the proxy on all
matters that may properly come before the Meeting or any adjournment thereof.
For information on adjournment of the meeting, see "Quorum" below.
SHAREHOLDER AND BOARD APPROVALS. The Reorganization Agreement (and the
transactions contemplated thereby) is being submitted for approval at the
Meeting by the holders of a majority of the outstanding shares of the Prairie
Cash Management Fund, Treasury Prime Cash Management Fund and U.S. Government
Securities Cash Management Fund in accordance with the provisions of Prairie's
Declaration of Trust, and the requirements of the 1940 Act. The term "majority
of the outstanding shares" of a Prairie Portfolio as used herein means more than
50% of the outstanding shares of such Prairie Portfolio.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees that cannot be voted on a proposal
because instructions have not been received from the beneficial owners) will be
counted for purposes of determining whether or not a quorum is present for
purposes of convening the meeting. On the Reorganization proposal abstentions
and broker non-votes will be considered to be a vote against the Reorganization
proposal.
The approval of the Reorganization by shareholders of Woodward is not being
solicited because their approval or consent is not legally required.
At April 11, 1996, the name, address and percentage of ownership of each
person who owned of record 5% or more of any class of shares of the Prairie
Portfolios are listed below. Prior to the Reorganization, the Woodward Funds
will have only nominal assets. Accordingly, the persons who own of record 5% or
more of any class of shares of the Prairie Portfolios will not materially change
upon consummation of the Reorganization.
<TABLE>
<CAPTION>
PERCENTAGE
OF PRAIRIE PERCENTAGE
PERCENTAGE PORTFOLIO OF CLASS
CLASS OF OF CLASS SHARES OF WOODWARD
SHARES OWNED ON OWNED ON FUND OWNED
PRAIRIE PORTFOLIO NAME AND ADDRESS OWNED RECORD DATE RECORD DATE ON CONSUMMATION
- --------------------- ------------------ ---------- ----------- ----------- ---------------
<C> <S> <C> <C> <C> <C>
Treasury Prime Cash First Chicago 26,871,022 20.06% 16.86% 20.06%
Management Fund Holding
(Institutional 1 First National
Shares) Plaza Chicago,
IL 60670
</TABLE>
On April 11, 1996, the trustees and officers of Prairie, as a group, owned
none of the outstanding shares of the Prairie Portfolios.
16
<PAGE>
At April 11, 1996, no shares of the corresponding Woodward Funds were
outstanding.
On April 11, 1996, Trussal & Co., 9000 Haggerty Road, Belleville, Michigan
48111, held of record the outstanding Class I Shares, as listed below, of each
Fund of The Woodward Funds as nominee of NBD Bank's Trust Division and
affiliated banks which acted as agent or custodian on behalf of their customers.
NBD Bank possessed or shared voting or investment power and may be deemed for
certain purposes to be the beneficial owner with respect to those Class I Shares
listed below at April 11, 1996.
<TABLE>
<CAPTION>
WOODWARD FUNDS TRUSSAL & CO. NBD BANK
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Money Market Fund............ 1,119,337,926.000 (or 66.31% 565,859,843 (or 33.52% of
of such class and 59.15% of such class and 29.90% of such
such Fund) Fund)
Government Fund.............. 220,130,889.000 (or 63.52% of 75,558,448 (or 21.80% of such
such class and 55.71% of such class and 19.12% of such
Fund) Fund)
Treasury Money Market Fund... 652,126,413.000 (or 73.25% of 86,455,763 (or 9.71% of such
such class and 71.40% of such class and 9.47% of such Fund)
Fund)
Tax-Exempt Money Market 525,590,084.000 (or 84.48% of 289,351,959 (or 46.51% of
Fund......................... such class and 80.73% of such su;ch class and 44.44% of
Fund) such Fund)
Michigan Tax-Exempt Money 41,814,954.000 (or 68.09% of 20,301,858 (or 33.06% of such
Market Fund.................. such class and 31.18% of such class and 15.14% of such
Fund) Fund)
Bond Fund.................... 47,618,354.685 (or 99.95% of 44,508,677 (or 93.42% of such
such class and 94.08% of such class and 87.94% of such
Fund) Fund)
Intermediate Bond Fund....... 36,903,910.695 (or 100% of 33,119,176 (or 89.74% of such
such class and 97.01% of such class and 87.06% of such
Fund) Fund)
Short Bond Fund.............. 16,509,198.961 (or 100% of 15,640,213 (or 94.74% of such
such class and 99.54% of such class and 94.30% of such
Fund) Fund)
Municipal Bond Fund.......... 7,043,673.027 (or 100% of 5,020,124 (or 71.27% of such
such class and 85.55% of such class and 60.97% of such
Fund) Fund)
Michigan Municipal Bond 3,124,974.746 (or 100% of 1,975,178 (or 63.21% of such
Fund......................... such class and 61.60% of such class and 38.93% of such
Fund) Fund)
Growth/Value Fund............ 50,464,520.428 (or 99.94% of 45,936,420 (or 90.97% of such
such class and 92.81% of such class and 84.48% of such
Fund) Fund)
Opportunity Fund............. 37,334,158.331 (or 99.32% of 33,910,365 (or 90.21% of such
such class and 88.86% of such class and 80.71% of such
Fund) Fund)
Intrinsic Value Fund......... 19,810,622.098 (or 99.77% of 17,076,428 (or 86.00% of such
such class and 92.70% of such class and 79.91% of such
Fund) Fund)
Capital Growth Fund.......... 15,315,972.114 (or 99.99% of 14,084,067 (or 91.95% of such
such class and 97.38% of such class and 89.54% of such
Fund) Fund)
Balanced Fund................ 8,487,031.272 (or 99.84% of 8,322,312 (or 97.90% of such
such class and 90.37% of such class and 88.62% of such
Fund) Fund)
Equity Index Fund............ 42,169,892.577 (or 99.83% of 38,996,471 (or 92.32% of such
such class and 98.92% of such class and 91.48% of such
Fund) Fund)
International Equity Fund.... 12,205,925.791 (or 99.71% of 11,060,436 (or 90.35% of such
such class and 98.84% of such class and 89.57% of such
Fund) Fund)
</TABLE>
17
<PAGE>
At April 11, 1996, the Automated Cash Management System ("ACMS"), 9000
Haggerty Road, Belleville, Michigan 48111, held of record the following Class I
Shares on behalf of its participants (no participant owned beneficially 5% or
more of such Shares):
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
CLASS OWNED FUND SHARES
NUMBER OF ON OWNED ON
SHARES HELD RECORD DATE RECORD DATE
--------------- ----------- -----------
<S> <C> <C> <C>
Money Market Fund................. 315,383,261.080 18.68% 16.66%
Government Fund................... 37,001,111.750 10.68% 9.36%
Treasury Money Market Fund........ 202,888,627.970 22.79% 22.22%
Tax-Exempt Money Market Fund...... 64,407,122.370 10.35% 9.89%
Michigan Tax-Exempt Money Market
Fund.............................. 10,087,603.910 16.43% 7.52%
</TABLE>
At April 11, 1996, First of Michigan Corporation, Woodward's current
co-distributor, 100 Renaissance Center, 26th Floor, Detroit, MI 48243, held of
record, but not beneficially, 49,760,829.190 Class A Shares of the Michigan
Tax-Exempt Money Market Fund, representing 68.43% of such class and 36.27% of
such Fund.
At April 11, 1996, the name, address and share ownership of the persons who
may have beneficially owned 5% or more of the outstanding shares of the
respective share classes of each investment portfolio of The Woodward Funds were
as follows:
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF FUND
CLASS AND OF CLASS SHARES
AMOUNT OF OWNED ON OWNED ON
WOODWARD FUND NAME AND ADDRESS SHARES OWNED RECORD DATE RECORD DATE
- ---------------------------- ---------------------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Money Market Fund BHC Securities Class A 18.30% 1.98%
One Commerce Square 37,408,131.480
2005 Market Street
Philadelphia, PA 19103
Government Fund SEC Lending Collateral-- Class I 5.66% 4.96%
Lehman Trust Administration 19,603,000.000
611 Woodward Avenue
Detroit, MI 48232
BHC Securities Class A 19.04% 2.34%
One Commerce Square 9,250,911.230
2005 Market Street
Philadelphia, PA 19103
Tax-Exempt Money Market Fund BHC Securities Class A 18.09% 0.80%
One Commerce Square 5,229,907.990
2005 Market Street
Philadelphia, PA 19103
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF FUND
CLASS AND OF CLASS SHARES
AMOUNT OF OWNED ON OWNED ON
WOODWARD FUND NAME AND ADDRESS SHARES OWNED RECORD DATE RECORD DATE
- ---------------------------- ---------------------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Michigan Tax-Exempt Money Michigan School Asbestos Class I 13.90% 6.37%
Market Fund Trust 8,537,688.000
Humphrey, Farrington,
McClain, P.C.
c/o Scott Manuel
221 W. Lexington
Suite 400
P.O. Box 900
Independence, MO 64051
Treasury Money Market Fund BHC Securities Class A 55.28% 1.39%
One Commerce Square 12,731,953.930
2005 Market Street
Philadelphia, PA 19103
Walter International Congo, Class A 12.83% 0.32%
Inc. 2,955,354.150
One Jackson Square
Jackson, MI 49201
Bond Fund NBD Bancorp, Inc. Class I 5.21% 4.91%
Employees Savings and 2,482,665.331
Investment Plan
Trust Administration
611 Woodward Avenue
Detroit, MI 48232
Henry Ford Investment Class I 19.00% 17.89%
Management Account 9,054,319.689
600 Fisher Building
Detroit, MI 48202
Intermediate Bond Fund BHC Securities Class A 12.11% 0.36%
One Commerce Square 137,965.479
2005 Market Street
Philadelphia, PA 19103
Short Bond Fund The Wellness Plan Class I 24.82% 24.71%
6500 John C. Lodge 4,098,062.186
Detroit, MI 48202
Kresge Foundation Class I 24.50% 24.38%
3215 W. Big Beaver 4,044,108.681
P.O. Box 3151
Troy, MI 48007-3151
BHC Securities Class A 31.03% 0.14%
One Commerce Square 23,873.240
2005 Market Street
Philadelphia, PA 19103
Benjamin J. Soleau Class A 6.44% 0.03%
543 Adams 4,950.679
Plymouth, MI 48170
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF FUND
CLASS AND OF CLASS SHARES
AMOUNT OF OWNED ON OWNED ON
WOODWARD FUND NAME AND ADDRESS SHARES OWNED RECORD DATE RECORD DATE
- ---------------------------- ---------------------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Richard A. Poel Class A 7.38% 0.03%
10 Lakeview Drive 5,679.723
Beale AFB, CA 95903
Richard L. Foersterling Class A 25.95% 0.12%
1256 Penniman 19,965.303
Plymouth, MI 48170
Michael G. Hall Family Trust Class A 5.10% 0.02%
1006 Cumber Road 3,922.694
Ubly, MI 48475
Municipal Bond Fund Charles J. LeFler Revocable Class I 8.81% 7.53%
Trust 620,328.325
39740 Walker Court
Northville, MI 48167
Consumer Power Class I 22.57% 19.30%
212 W. Michigan Avenue 1,589,431.300
Jackson, MI 49201
BHC Securities Class A 6.32% 0.91%
One Commerce Square 75,215.365
2005 Market Street
Philadelphia, PA 19103
Michigan Municipal Bond Fund Carol LeFler Revocable Trust Class I 6.72% 4.14%
39740 Walker Court 209,878.635
Northville, MI 48167
Growth/Value Fund BHC Securities Class A 11.66% 0.83%
One Commerce Square 452,039.547
2005 Market Street
Philadelphia, PA 19103
Opportunity Fund BHC Securities Class A 9.85% 1.04%
One Commerce Square 435,386.057
2005 Market Street
Philadelphia, PA 19103
Intrinsic Value Fund BHC Securities Class A 11.90% 0.84%
One Commerce Square 180,106.171
2005 Market Street
Philadelphia, PA 19103
Capital Growth Fund BHC Securities Class A 13.64% 0.36%
One Commerce Square 56,155.051
2005 Market Street
Philadelphia, PA 19103
Balanced Fund NBD Bancorp, Inc. Class I 22.81% 20.65%
Employees Savings and 1,939,412.930
Investment Plan
Trust Administration
611 Woodward Avenue
Detroit, MI 48232
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
PERCENTAGE OF FUND
CLASS AND OF CLASS SHARES
AMOUNT OF OWNED ON OWNED ON
WOODWARD FUND NAME AND ADDRESS SHARES OWNED RECORD DATE RECORD DATE
- ---------------------------- ---------------------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Dickinson/Wright Target Class I 12.39% 11.22%
Benefit 1,053,549.999
500 Woodward Avenue
Suite 4000
Detroit, MI 48226
Albert Kahn and Associates Class I 5.52% 5.00%
7430 Second Avenue 468,889.357
Detroit, MI 48202
BHC Securities Class A 5.26% 0.50%
One Commerce Square 46,818.554
2005 Market Street
Philadelphia, PA 19103
Equity Index Fund Whirlpool Class I 28.06% 27.80%
2000 M-63 North 11,851,242.721
Benton Harbor, MI 49022
Oakland County Class I 7.75% 7.68%
Retirement System 3,271,916.412
1200 N. Telegraph
Pontiac, MI 48053
Consumer Power Union Class I 7.84% 7.76%
Welfare Benefit 3,310,073.383
212 W. Michigan Avenue
Jackson, MI 49201
McGregor Fund Class I 7.78% 7.70%
333 West Fort Street 3,284,511.667
Detroit, MI 48226
BHC Securities Class A 38.63% 0.35%
One Commerce Square 149,705.069
2005 Market Street
Philadelphia, PA 19103
International Equity Fund Employees Retirement Plan Class I 34.88% 34.57%
of NBD Bank 4,269,534.670
Trust Administration
611 Woodward Avenue
Detroit, MI 48232
BHC Securities Class A 21.56% 0.19%
One Commerce Square 23,040.372
2005 Market Street
Philadelphia, PA 19103
</TABLE>
At April 11, 1996, the trustees and officers of The Woodward Funds, as a
group, owned less than 1% of the outstanding shares of the respective share
classes of each of Woodward's investment portfolios.
21
<PAGE>
APPRAISAL RIGHTS. Shareholders are not entitled to any rights of share
appraisal under Prairie's Declaration of Trust, or under the laws of the
Commonwealth of Massachusetts, in connection with the Reorganization.
Shareholders have, however, the right to redeem from Prairie their Prairie
Portfolio shares at net asset value until the effective time of the
Reorganization, and thereafter shareholders may redeem from Woodward the
Woodward shares acquired by them in the Reorganization at net asset value.
QUORUM. In the event that a quorum is not present at the Meeting, or in the
event that a quorum is present at the Meeting but sufficient votes to approve
the Reorganization Agreement and the transactions contemplated thereby are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares affected by the
adjournment that are represented at the Meeting in person or by proxy. If a
quorum is present, the persons named as proxies will vote those proxies which
they are entitled to vote FOR the Reorganization Agreement, in favor of such
adjournments, and will vote those proxies required to be voted AGAINST such
proposals against any adjournment. A shareholder vote may be taken with respect
to one or more Prairie Portfolios prior to any such adjournment if sufficient
votes have been received for approval with respect to any such Prairie
Portfolio. A quorum is constituted with respect to a Prairie Portfolio by the
presence in person or by proxy of the holders of more than 30% of the
outstanding shares of the Portfolios entitled to vote at the Meeting. Prairie
proxies properly executed and marked with a negative vote or an abstention will
be considered to be present at the Meeting for the purposes of determining the
existence of a quorum for the transaction of business.
ANNUAL MEETINGS. Woodward does not presently intend to hold annual meetings
of shareholders for the election of trustees and other business unless and until
such time as less than a majority of the trustees holding office have been
elected by the shareholders, at which time the trustees then in office will call
a shareholders' meeting for the election of trustees. Shareholders have the
right to call a meeting of shareholders to consider the removal of one or more
trustees or for other matters and such meetings will be called when requested in
writing by the holders of record of 10% or more of Woodward's outstanding shares
of beneficial interest. To the extent required by law, Woodward will assist in
shareholder communications on such matters.
ADDITIONAL INFORMATION ABOUT WOODWARD
Information about the Woodward Funds is included in the Prospectus
accompanying this Combined Prospectus/Proxy Statement, which is incorporated by
reference herein. Additional information about these Funds is included in their
Statement of Additional Information dated April 26, 1996 which has been filed
with the SEC. Copies of the Statement of Additional Information may be obtained
without charge by writing to Woodward c/o NBD, P.O. Box 7058, Troy, Michigan
48007, or by calling Woodward at 1-800-688-3350. Woodward is subject to the
informational requirements of the Securities Exchange Act of 1934 and the 1940
Act, as applicable, and, in accordance with such requirements, files proxy
materials, reports and other information with the SEC. These materials can be
inspected and copied at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained from the Public Reference Branch, Office of
Consumer Affairs and
22
<PAGE>
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates.
ADDITIONAL INFORMATION ABOUT PRAIRIE
Information about Prairie is incorporated herein by reference from its
Prospectus dated March 18, 1996 and Statement of Additional Information, dated
March 18, 1996, copies of which may be obtained without charge by writing or
calling Prairie at the address and telephone number shown on the cover page of
this Combined Prospectus/Proxy Statement. Reports and other information filed by
Prairie can be inspected and copied at the Public Reference Facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of such material can be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, Washington, D.C. 20549, at prescribed rates.
LITIGATION
Neither Prairie nor Woodward is involved in any litigation or proceeding
that is believed likely to have any material adverse financial effect upon the
ability of the co-advisers to provide investment advisory services or any
material adverse effect upon either the Prairie Portfolios or the Woodward
Funds.
FINANCIAL STATEMENTS
The financial highlights and financial statements for the Prairie Portfolios
for the fiscal period ended December 31, 1995, are contained in Prairie's Annual
Report to Shareholders and in Prairie's Prospectus and Statement of Additional
Information dated March 18, 1996, each of which is incorporated by reference
into this Combined Prospectus/Proxy Statement.
The audited financial statements of the Prairie Portfolios for the fiscal
period ended December 31, 1995, contained in Prairie's Annual Report and
incorporated by reference in this Combined Proxy/Prospectus, have been
incorporated herein in reliance on the report of Ernst & Young LLP, independent
auditors, given upon the authority of such firm as experts in accounting and
auditing.
Pro forma financial statements for the Woodward Funds giving effect to the
Reorganization have not been prepared because the Woodward Funds do not expect
to commence investment operations until the Reorganization. It is intended that
each Woodward Fund will adopt the financial statements and performance history
of its corresponding Prairie Portfolio.
OTHER BUSINESS
Prairie's Board knows of no other business to be brought before the Meeting.
However, if any other matters come before the Meeting, it is the intention that
proxies which do not contain specific restrictions to the contrary will be voted
on such matters in accordance with the judgment of the persons named in the
enclosed form of proxy.
23
<PAGE>
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to Prairie in writing at the address
on the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-370-9446.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
DATE AND SIGN EACH ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
24
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
THE WOODWARD FUNDS
AND PRAIRIE INSTITUTIONAL FUNDS
DATED MAY 21, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
I. Transfer of Assets of Prairie Portfolios..................................... A-1
II. Liquidating Distributions and Termination of Prairie......................... A-3
III. Valuation Times.............................................................. A-3
IV. Certain Representations, Warranties and Agreements of Prairie................ A-3
V. Certain Representations, Warranties and Agreements of Woodward............... A-5
VI. Shareholder Action on Behalf of the Acquired Funds........................... A-7
VII. N-14 Registration Statement and Proxy Solicitation Materials................. A-7
VIII. Effective Times of the Reorganization........................................ A-7
IX. Woodward Conditions.......................................................... A-8
X. Prairie Conditions........................................................... A-10
XI. Tax Documents................................................................ A-11
XII. Finder's Fees................................................................ A-11
XIII. Announcements................................................................ A-12
XIV. Further Assurances........................................................... A-12
XV. Termination of Representations and Warranties................................ A-12
XVI. Termination of Agreement..................................................... A-12
XVII. Amendment and Waiver......................................................... A-12
XVIII. Governing Law................................................................ A-13
XIX. Successors and Assigns....................................................... A-13
XX. Beneficiaries................................................................ A-13
XXI. Prairie Liability............................................................ A-13
XXII. Woodward Liability........................................................... A-13
XXIII. Notices...................................................................... A-14
XXIV. Expenses..................................................................... A-15
XXV. Entire Agreement............................................................. A-15
XXVI. Counterparts................................................................. A-15
</TABLE>
i
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION made as of May 21, 1996 by and between
The Woodward Funds, a Massachusetts business trust ("Woodward"), and Prairie
Institutional Funds, a Massachusetts business trust ("Prairie").
WHEREAS, the parties desire that substantially all of the assets and
liabilities of Prairie's portfolios be transferred to, and be acquired and
assumed by, certain Woodward portfolios in exchange for Service and
Institutional Shares of the Woodward portfolios which shall thereafter be
distributed by Prairie to the holders of Service and Institutional Shares of its
portfolios, all as described in this Agreement (the "Reorganization");
WHEREAS, the parties intend that the Woodward Cash Management, Treasury
Prime Cash Management and U.S. Government Securities Cash Management Funds will
each have nominal assets and liabilities before the Reorganization and will
continue the investment operations of the Prairie Cash Management, Treasury
Prime Cash Management and U.S. Government Securities Cash Management Funds,
respectively, after the Reorganization;
WHEREAS, the parties intend that the transfers of assets, assumptions of
liabilities, and distributions of Service and Institutional Shares in each
Prairie portfolio, be treated as a tax-free reorganization under Section
368(a)(1)(C), 368(a)(1)(D) or 368(a)(1)(F) of the Internal Revenue Code of 1986,
as amended (the "Code"); and
WHEREAS, the parties intend that in connection with the Reorganization each
of the Prairie portfolios shall be terminated and Prairie shall be terminated
under state law and deregistered as described in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and subject to the terms and conditions hereof, and
intending to be legally bound hereby, Woodward and Prairie agree as follows:
I. TRANSFER OF ASSETS OF PRAIRIE PORTFOLIOS.
1.01 (a) At the Effective Time of the Reorganization (as defined in Article
VIII) with respect to each of the Prairie portfolios (each, an "Acquired Fund"),
all property of every description, and all interests, rights, privileges and
powers of each Acquired Fund other than cash in an amount necessary to pay any
unpaid dividends and distributions as provided in Article IV(g) (such assets,
the "Acquired Fund Assets") shall be transferred and conveyed by such Acquired
Fund to Woodward on behalf of one of its portfolios as set forth in Section 1.02
(each, an "Acquiring Fund"), and shall be accepted by Woodward on behalf of such
Acquiring Fund, and Woodward, on behalf of such Acquiring Fund, shall assume all
known liabilities whether accrued, absolute, contingent or otherwise, of such
Acquired Fund reflected in the calculation of such Acquired Fund's net asset
value (the "Acquired Fund Liabilities"), so that at and after the Effective Time
of the Reorganization with respect to such Acquired Fund: (i) all assets of such
Acquired Fund shall become and be the assets of its Acquiring Fund; and (ii) all
known liabilities of such Acquired Fund reflected as such in the calculation of
the Acquired Fund's net asset value shall attach to its Acquiring Fund as
aforesaid and may thenceforth be enforced against such Acquiring Fund to the
extent as if the same had been incurred by it. Without limiting the generality
of
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<PAGE>
the foregoing, the Acquired Fund Assets shall include all property and assets of
any nature whatsoever, including, without limitation, all cash, cash
equivalents, securities, other investments, claims and receivables (including
dividend and interest receivables) owned by an Acquired Fund, and (subject to
Section 1.01(b)) any deferred or prepaid expenses shown as an asset on an
Acquired Fund's books, at the Effective Time of the Reorganization of such
Acquired Fund, and all good will, all other intangible property and all books
and records belonging to an Acquired Fund. Recourse by any person for the
Acquired Fund Liabilities assumed by an Acquiring Fund shall, at and after the
Effective Time of the Reorganization of such Acquired Fund, be limited to such
Acquiring Fund.
1.02 The assets of each Acquired Fund shall be acquired by the Acquiring
Fund identified below opposite its name, and the holders of each class of shares
of such Acquired Fund shall receive the class of shares of the Acquiring Fund
identified below opposite the name of such class:
<TABLE>
<CAPTION>
PRAIRIE PORTFOLIOS AND CLASSES WOODWARD PORTFOLIOS AND CLASSES
- ----------------------------------------- -----------------------------------------
<S> <C>
Cash Management Fund Cash Management Fund
Service Shares Service Shares
Institutional Shares Institutional Shares
Treasury Prime Cash Management Fund Treasury Prime Cash Management Fund
Service Shares Service Shares
Institutional Shares Institutional Shares
U.S. Government Securities Cash U.S. Government Securities Cash
Management Fund Management Fund
Service Shares Service Shares
Institutional Shares Institutional Shares
</TABLE>
In connection with the Reorganization, the Board of Trustees of Woodward has
adopted resolutions authorizing the establishment of Service Shares for each
Acquiring Fund. This change will be effective by the Effective Time of the
Reorganization with respect to each Acquiring Fund.
1.03 In exchange for the transfer of the Acquired Fund Assets and the
assumption of the Acquired Fund Liabilities, Woodward shall simultaneously issue
at the applicable Effective Time of the Reorganization to each Acquired Fund a
number of full and fractional shares to the third decimal place, of the
Acquiring Fund specified in Section 1.02 and of the class or classes identified
in Section 1.02, all determined and adjusted as provided in this Agreement. The
number of shares of each class of the Acquiring Funds so issued will have an
aggregate net asset value equal to the value of the Acquired Fund Assets that
are represented by shares of the corresponding class of the Acquired Fund, the
holders of which shall receive shares of such class of the Acquiring Fund, as
specified in Section 1.02, all determined and adjusted as provided in this
Agreement.
1.04 The net asset value of each class of shares of the Acquiring Funds and
the net asset value of each class of shares of the Acquired Funds shall be
determined as of the applicable Valuation Time with respect to each Acquired
Fund specified in Article III.
1.05 The net asset value of each class of shares of each Acquiring Fund
shall be computed in the manner set forth in such Acquiring Fund's then current
prospectus under the Securities Act of 1933, as amended (the "1933 Act"). The
net value of the Acquired Fund Assets to be transferred by the Prairie
portfolios shall be computed by Prairie and shall be subject to adjustment by
the amount, if any, agreed to by Woodward and Prairie. In determining the value
of the securities transferred by the Acquired Funds to the Acquiring Funds, each
security shall be priced in accordance with the policies and
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<PAGE>
procedures of Woodward described in its then current prospectuses and statements
of additional information and adopted by Woodward's Board of Trustees, which are
and shall be consistent with the policies now in effect for Prairie. For such
purposes, price quotations and the security characteristics relating to
establishing such quotations shall be determined by Woodward, provided that such
determination shall be subject to the approval of Prairie.
II. LIQUIDATING DISTRIBUTIONS AND TERMINATION OF PRAIRIE.
Immediately after the Effective Time of the Reorganization with respect to
each Acquired Fund, such Acquired Fund shall distribute in complete liquidation
pro rata to the record holders of each class of its shares at the applicable
Effective Time of the Reorganization the shares of the class of the Acquiring
Fund identified in Section 1.02 to be received by the record holders of such
class of such Acquired Fund. In addition, each shareholder of record of an
Acquired Fund shall have the right to receive any unpaid dividends or other
distributions which were declared before the applicable Effective Time of the
Reorganization with respect to the shares of an Acquired Fund that are held by
the shareholder at the applicable Effective Time of the Reorganization. In
accordance with instructions it receives from Prairie, Woodward shall record on
its books the ownership of each class of shares of each Acquiring Fund by the
record holders of the class of shares of the Acquired Fund identified in Section
1.02. All of the issued and outstanding shares of each class of each Acquired
Fund shall be redeemed and canceled on the books of Prairie at the Effective
Time of the Reorganization of such Acquired Fund and shall thereafter represent
only the right to receive the class of shares of the Acquiring Fund identified
in Section 1.02, and the Acquired Fund's transfer books shall be closed
permanently. As soon as practicable after the Effective Time of the
Reorganization, Prairie shall make all filings and take all other steps as shall
be necessary and proper to effect its complete dissolution, and shall file an
application pursuant to Section 8(f) of the 1940 Act for an order declaring that
it has ceased to be an investment company and any and all documents that may be
necessary to terminate its existence under state law. After the Effective Time
of the Reorganization, Prairie shall not conduct any business except in
connection with its liquidation, dissolution, and deregistration.
III. VALUATION TIMES.
Subject to Section 1.05 hereof, the Valuation Time for the Reorganization
with respect to each of the Acquired Funds shall be 4:00 P.M., Eastern Time, on
such date as may be agreed in writing by the duly authorized officers of both
parties hereto.
IV. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PRAIRIE.
Prairie, on behalf of itself and each of its Acquired Funds, represents and
warrants to, and agrees with, Woodward as follows:
(a) It is a Massachusetts business trust duly created pursuant to its
Agreement and Declaration of Trust for the purpose of acting as a management
investment company under the 1940 Act and is validly existing under the laws
of, and duly authorized to transact business in, the Commonwealth of
Massachusetts. Each Acquired Fund is registered with the Securities and
Exchange Commission (the "SEC") as an open-end management investment company
under the 1940 Act and such registration is in full force and effect.
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<PAGE>
(b) It has power to own all of its properties and assets and, subject to
the approvals of shareholders referred to herein, to carry out and
consummate the transactions contemplated hereby, and has all necessary
federal, state and local authorizations to carry on its business as now
being conducted and to consummate the transactions contemplated by this
Agreement.
(c) This Agreement has been duly authorized, executed and delivered by
Prairie, and represents Prairie's valid and binding contract, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium, and other similar laws
of general applicability relating to or affecting creditors' rights and to
general principles of equity. The execution and delivery of this Agreement
does not and will not, and the consummation of the transactions contemplated
by this Agreement will not, violate Prairie's Agreement and Declaration of
Trust, By-laws or any agreement or arrangement to which it is a party or by
which it is bound.
(d) Each Acquired Fund has elected to qualify and has qualified as a
"regulated investment company" under Subtitle A, Chapter 1, Subchapter M,
Part I of the Code, as of and since its first taxable year; has been such a
regulated investment company at all times since the end of its first taxable
year when it so qualified; and qualifies and shall continue to qualify as a
regulated investment company until the Effective Time of the Reorganization
with respect to such Acquired Fund.
(e) All federal, state, local and foreign income, profits, franchise,
sales, withholding, customs, transfer and other taxes, including interest,
additions to tax and penalties (collectively, "Taxes") relating to the
Acquired Fund Assets due or properly shown to be due on any return filed by
any Acquired Fund with respect to taxable periods ending on or prior to, and
the portion of any interim period up to, the date hereof have been fully and
timely paid or provided for; and there are no levies, liens, or other
encumbrances relating to Taxes existing, threatened or pending with respect
to the Acquired Fund Assets.
(f) The financial statements of each Acquired Fund for the fiscal period
ended December 31, 1995, examined by Ernst & Young LLP, copies of which have
been previously furnished to Woodward, present fairly the financial position
of each Acquired Fund as of December 31, 1995 and the results of its
operations for the year or period then ending, in conformity with generally
accepted accounting principles.
(g) At both the Valuation Time and the Effective Time of the
Reorganization with respect to each Acquired Fund, there shall be no known
liabilities of such Acquired Fund, whether accrued, absolute, contingent or
otherwise, not reflected in the net asset values per share of its
outstanding classes of shares.
(h) There are no legal, administrative or other proceedings pending or,
to Prairie's knowledge threatened, against Prairie or an Acquired Fund which
could result in liability on the part of Prairie or an Acquired Fund.
(i) Subject to the approvals of shareholders referred to herein, at both
the Valuation Time and the Effective Time of the Reorganization with respect
to each Acquired Fund, it shall have full right, power and authority to
sell, assign, transfer and deliver the Acquired Fund Assets of such Acquired
Fund and, upon delivery and payment for the Acquired Fund Assets as
contemplated
A-4
<PAGE>
herein, an Acquiring Fund shall acquire good and marketable title thereto,
free and clear of all liens and encumbrances, and subject to no restrictions
on the ownership or transfer thereof (except as imposed by federal or state
securities laws).
(j) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by Prairie of the
transactions contemplated by this Agreement, except such as may be required
under the 1933 Act, the Securities Exchange Act of 1934, as amended ("1934
Act"), the 1940 Act, the rules and regulations under those Acts, and state
securities laws.
(k) Insofar as the following relate to Prairie, the registration
statement filed by Woodward on Form N-14 relating to the shares of the
Acquiring Funds that will be registered with the SEC pursuant to this
Agreement, which, without limitation, shall include a proxy statement of
Prairie and the prospectus(es) of Woodward with respect to the transactions
contemplated by this Agreement, and any supplement or amendment thereto or
to the documents contained or incorporated therein by reference (the "N-14
Registration Statement"), on the effective date of the N-14 Registration
Statement, at the time of any shareholders' meeting referred to herein and
at each Effective Time of the Reorganization: (i) shall comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act, the rules and regulations thereunder, and state securities laws,
and (ii) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the
representations and warranties in this subsection shall apply only to
statements in or omissions from the N-14 Registration Statement made in
reliance upon and in conformity with information furnished by Prairie for
use in the N-14 Registration Statement.
(l) All of the issued and outstanding shares of each class of each
Acquired Fund have been duly and validly issued, are fully paid and
non-assessable, and were offered for sale and sold in conformity with all
applicable federal and state securities laws, and no shareholder of an
Acquired Fund has any preemptive right of subscription or purchase in
respect of such shares.
(m) Prairie shall not sell or otherwise dispose of any shares of an
Acquiring Fund to be received in the transactions contemplated herein,
except in distribution to its shareholders as contemplated herein.
V. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF WOODWARD.
Woodward, on behalf of itself and each Acquiring Fund, represents and
warrants to, and agrees with, Prairie as follows:
(a) It is a Massachusetts business trust duly created pursuant to its
Agreement and Declaration of Trust for the purpose of acting as a management
investment company under the 1940 Act and is validly existing under the laws
of, and duly authorized to transact business in, the Commonwealth of
Massachusetts. Each Acquiring Fund is registered with the SEC as an open-end
management investment company under the 1940 Act and such registration is in
full force and effect.
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<PAGE>
(b) It has power to own all of its properties and assets and to carry
out and consummate the transactions contemplated herein, and has all
necessary federal, state and local authorizations to carry on its business
as now being conducted and to consummate the transactions contemplated by
this Agreement.
(c) This Agreement has been duly authorized, executed and delivered by
Woodward, and represents Woodward's valid and binding contract, enforceable
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium, and other similar laws
of general applicability relating to or affecting creditors' rights and to
general principles of equity. The execution and delivery of this Agreement
did not, and the consummation of the transactions contemplated by this
Agreement will not, violate Woodward's Agreement and Declaration of Trust or
By-Laws or any agreement or arrangement to which it is a party or by which
it is bound.
(d) Each Acquiring Fund has elected or will elect to qualify as a
"regulated investment company" under Subtitle A, Chapter 1, Subchapter M,
Part I of the Code, as of and since its first taxable year.
(e) At both the Valuation Time and the Effective Time of the
Reorganization with respect to each Acquiring Fund, there shall be no known
liabilities of such Acquiring Fund, whether accrued, absolute, contingent or
otherwise, not reflected in the net asset values per share of its
outstanding classes to be issued pursuant to this Agreement.
(f) There are no legal, administrative or other proceedings pending or,
to its knowledge, threatened against Woodward or an Acquiring Fund which
could result in liability on the part of Woodward or an Acquiring Fund.
(g) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by Woodward of the
transactions contemplated by this Agreement, except such as may be required
under the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations
under those Acts, and state securities laws.
(h) Insofar as the following relate to Woodward, the N-14 Registration
Statement on its effective date, at the time of any shareholders' meetings
referred to herein and at each Effective Time of the Reorganization: (i)
shall comply in all material respects with the provisions of the 1933 Act,
the 1934 Act and the 1940 Act, the rules and regulations thereunder, and
state securities laws, and (ii) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided,
however, that the representations and warranties in this subsection shall
apply only to statements in or omissions from the N-14 Registration
Statement made in reliance upon and in conformity with information furnished
by Woodward for use in the N-14 Registration Statement.
(i) The shares of each class of each Acquiring Fund to be issued and
delivered to an Acquired Fund for the account of record holders of shares of
an Acquired Fund, pursuant to the terms hereof, shall have been duly
authorized as of the Effective Time of the Reorganization applying to such
Acquiring Fund and, when so issued and delivered, shall be registered under
the 1933 Act and under applicable state securities laws, duly and validly
issued, fully paid and non-assessable, and no
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<PAGE>
shareholder of Woodward shall have any preemptive right of subscription or
purchase in respect thereto.
VI. SHAREHOLDER ACTION ON BEHALF OF THE ACQUIRED FUNDS.
6.01 As soon as practicable after the effective date of the N-14
Registration Statement, but in any event prior to the Effective Time of the
Reorganization applicable to the Acquired Funds and as a condition to the
Reorganization, the Board of Trustees of Prairie shall call, and Prairie shall
hold, a meeting of the shareholders of the Acquired Funds for the purpose of
considering and voting upon:
(a) Approval of this Agreement and the transactions contemplated hereby,
including, without limitation:
(i) The transfer of the Acquired Fund Assets belonging to each
Acquired Fund to an Acquiring Fund, and the assumption by such Acquiring
Fund of the Acquired Fund Liabilities of such Acquired Fund, in exchange
for shares of a class or classes of shares of such Acquiring Fund, as set
forth in Section 1.02.
(ii) The liquidation of each Acquired Fund through the distribution
to its record holders of shares of the class or classes of shares of such
Acquiring Fund as described in this Agreement.
(b) Such other matters as may be determined by the Boards of Trustees or
authorized officers of the parties.
6.02 Approval of this Reorganization Agreement by the shareholders of the
Acquired Funds shall constitute the waiver of the application of any fundamental
policy of such Acquired Funds that might be deemed to prevent them from taking
the actions necessary to effectuate the Reorganization as described, and such
policies, if any, shall be deemed to have been amended accordingly.
VII. N-14 REGISTRATION STATEMENT AND PROXY SOLICITATION MATERIALS.
Woodward shall file the N-14 Registration Statement under the 1933 Act, and
Prairie shall file the combined prospectus/proxy statement contained therein
under the 1934 Act and 1940 Act proxy rules, with the SEC as promptly as
practicable. Each of Woodward and Prairie has cooperated and shall continue to
cooperate with the other, and has furnished and shall continue to furnish the
other with the information relating to itself that is required by the 1933 Act,
the 1934 Act, the 1940 Act, the rules and regulations under each of those Acts
and state securities laws, to be included in the N-14 Registration Statement.
VIII. EFFECTIVE TIMES OF THE REORGANIZATION.
Delivery of the Acquired Fund Assets of each Acquired Fund and the shares of
the classes of its Acquiring Fund to be issued pursuant to Article I and the
liquidation of each Acquired Fund pursuant to Article II shall occur at the
opening of business on the next business day following the Valuation Time
applicable to such Acquired Fund, or on such other date, and at such place and
time and date, as may be determined by the President or any Vice President of
each party hereto. The respective date and time at which such actions are taken
with respect to an Acquired Fund are referred to herein as the
A-7
<PAGE>
"Effective Time of the Reorganization." To the extent any Acquired Fund Assets
are, for any reason, not transferred at the applicable Effective Time of the
Reorganization, Prairie shall cause such Acquired Fund Assets to be transferred
in accordance with this Agreement at the earliest practicable date thereafter.
IX. WOODWARD CONDITIONS.
The obligations of Woodward hereunder with respect to each Acquiring Fund
shall be subject to the following conditions precedent:
(a) This Agreement and the transactions contemplated by this Agreement
shall have been approved by the shareholders of such Acquired Fund, in the
manner required by law.
(b) Prairie shall have duly executed and delivered to Woodward such
bills of sale, assignments, certificates and other instruments of transfer
("Transfer Documents") as may be necessary or desirable to transfer all
right, title and interest of Prairie and such Acquired Fund in and to the
Acquired Fund Assets of such Acquired Fund. The Acquired Fund Assets shall
be accompanied by all necessary state stock transfer stamps or cash for the
appropriate purchase price therefor.
(c) All representations and warranties of Prairie made in this Agreement
shall be true and correct in all material respects as if made at and as of
each Valuation Time and each Effective Time of the Reorganization. As of the
Valuation Time and the Effective Time of the Reorganization applicable to
each Acquired Fund, there shall have been no material adverse change in the
financial position of such Acquired Fund since December 31, 1995 other than
those changes incurred in the ordinary course of business as an investment
company. No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
(d) Woodward shall have received an opinion of Stroock & Stroock & Lavan
addressed to Woodward in form reasonably satisfactory to it and dated the
Effective Time of the Reorganization applicable to each Acquired Fund,
substantially to the effect that: (i) Prairie is a Massachusetts business
trust duly organized and validly existing under the laws of the Commonwealth
of Massachusetts; (ii) the shares of such Acquired Fund outstanding at such
time are duly authorized, validly issued, fully paid and non-assessable by
such Acquired Fund, and to such counsel's knowledge, no shareholder of such
Acquired Fund has any option, warrant or pre-emptive right to subscription
or purchase in respect thereof; (iii) this Agreement and the Transfer
Documents have been duly authorized, executed and delivered by Prairie and
represent legal, valid and binding contracts, enforceable in accordance with
their terms, subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and such counsel
shall not be required to express an opinion with respect to the application
of equitable principles in any proceeding, whether at law or in equity, or
with respect to the provisions of this Agreement intended to limit liability
for particular matters to an Acquired Fund and its assets; (iv) the
execution and delivery of this Agreement did not, and the consummation of
the transactions contemplated by this Agreement will not, violate the
Agreement and Declaration of Trust or By-laws of Prairie or any material
agreement known to such counsel to which Prairie is a party or by which
Prairie is bound; and
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<PAGE>
(v) to such counsel's knowledge, no consent, approval, authorization or
order of any court or governmental authority is required for the
consummation by Prairie of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act, the 1940
Act, the rules and regulations under those Acts and such as may be required
under the state securities laws. Such opinion may rely on the opinion of
other counsel to the extent set forth in such opinion, provided such other
counsel is reasonably acceptable to Woodward.
(e) Woodward shall have received an opinion of Drinker Biddle & Reath,
addressed to Woodward and Prairie in form reasonably satisfactory to them
and dated the Effective Time of the Reorganization applicable to each
Acquired Fund, substantially to the effect that for federal income tax
purposes (i) the transfers of all of the Acquired Fund Assets hereunder, and
the assumption by its Acquiring Fund of Acquired Fund Liabilities, in
exchange for shares of each class of such Acquiring Fund, and the
distribution of said shares to the shareholders of such Acquired Fund, as
provided in this Agreement, will each constitute a reorganization within the
meaning of Section 368(a)(1)(C), 368(a)(1)(D) or 368(a)(1)(F) of the Code
and with respect to each reorganization, the Acquired Fund and the Acquiring
Fund will each be considered "a party to a reorganization" within the
meaning of Section 368(b) of the Code; (ii) in accordance with Sections
361(a), 361(c)(1) and 357(a) of the Code, no gain or loss will be recognized
by such Acquired Fund as a result of such transactions; (iii) in accordance
with Section 1032(a) of the Code, no gain or loss will be recognized by an
Acquiring Fund as a result of such transactions; (iv) in accordance with
Section 354(a)(1) of the Code, no gain or loss will be recognized by the
shareholders of such Acquired Fund on the distribution to them by such
Acquired Fund of shares of any class of an Acquiring Fund in exchange for
their shares of the corresponding class of the Acquired Fund; (v) in
accordance with Section 358(a)(1) of the Code, the aggregate basis of
Acquiring Fund shares received by each shareholder of any class of an
Acquired Fund will be the same as the aggregate basis of the shareholder's
Acquired Fund shares immediately prior to the transactions; (vi) in
accordance with Section 362(b) of the Code, the basis of the Acquired Fund
Assets to any Acquiring Fund will be the same as the basis of such Acquired
Fund Assets in the hands of the corresponding Acquired Fund immediately
prior to the exchange; (vii) in accordance with Section 1223(1) of the Code,
a shareholder's holding period for Acquiring Fund shares will be determined
by including the period for which the shareholder held the shares of an
Acquired Fund exchanged therefor, provided that the shareholder held such
shares of an Acquired Fund as a capital asset; and (viii) in accordance with
Section 1223(2) of the Code, the holding period of an Acquiring Fund with
respect to the Acquired Fund Assets will include the period for which such
Acquired Fund Assets were held by an Acquired Fund.
(f) The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking to
enjoin consummation of the transactions contemplated by this Agreement under
Section 25(c) of the 1940 Act.
(g) The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of Woodward, contemplated by the SEC and the
parties shall have received all permits and other authorizations necessary
under state securities laws to consummate the transactions contemplated by
this Agreement.
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<PAGE>
(h) The President or a Vice President of Prairie shall have certified
that Prairie has performed and complied in all material respects with each
of its agreements and covenants required by this Agreement to be performed
or complied with by it prior to or at each Valuation Time and each Effective
Time of the Reorganization.
(i) Prairie shall have delivered or caused to be delivered to Woodward
each account, book, record or other document of Prairie applicable to such
Acquired Fund which is required to be maintained by Section 31(a) of the
1940 Act and Rules 31a-1 to 31a-3 thereunder (regardless of what person
possesses the same). Prairie has instructed its service contractors to
provide Woodward upon request with access to and copies of all documents
belonging to Prairie.
(j) Woodward shall have received from the SEC a written order of
exemption, satisfactory in form and substance to Prairie and Woodward,
exempting the Reorganization from Sections 17(a) and 17(d) of the 1940 Act
and Rule 17d-1 thereunder.
X. PRAIRIE CONDITIONS.
The obligations of Prairie hereunder with respect to each Acquired Fund
shall be subject to the following conditions precedent:
(a) This Agreement and the transactions contemplated by this Agreement
shall have been approved by the shareholders of such Acquired Fund, in the
manner required by law.
(b) All representations and warranties of Woodward made in this
Agreement shall be true and correct in all material respects as if made at
and as of each Valuation Time and each Effective Time of the Reorganization.
As of the Valuation Time and the Effective Time of the Reorganization
applicable to each Acquired Fund, there shall have been no material adverse
change in the financial condition of its Acquiring Fund since December 31,
1995 other than those changes incurred in the ordinary course of business as
an investment company. No action, suit or other proceeding shall be
threatened or pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated herein.
(c) Prairie shall have received an opinion of Drinker Biddle & Reath,
addressed to Prairie in form reasonably satisfactory to it and dated the
Effective Time of the Reorganization applicable to each Acquired Fund,
substantially to the effect that: (i) Woodward is a Massachusetts business
trust duly organized and validly existing under the laws of the Commonwealth
of Massachusetts and is qualified to do business and in good standing in
each state in which such qualification is required; (ii) the shares of each
class of each Acquiring Fund to be delivered at such time to an Acquired
Fund as provided for by this Agreement are duly authorized and upon delivery
will be validly issued, fully paid and non-assessable by such Acquiring Fund
and to such counsel's knowledge, no shareholder of an Acquiring Fund has any
option, warrant or pre-emptive right to subscription or purchase in respect
thereof; (iii) this Agreement has been duly authorized, executed and
delivered by Woodward and represents a legal, valid and binding contract,
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws
relating to or affecting creditors' rights generally and court decisions
with respect thereto, and such counsel shall not be required to express an
opinion with respect to the application of equitable principles in any
proceeding, whether at law or in equity, or with
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<PAGE>
respect to the provisions of this Agreement intended to limit liability for
particular matters to an Acquiring Fund and its assets; (iv) the execution
and delivery of this Agreement did not, and the consummation of the
transactions contemplated by this Agreement will not, violate the Agreement
and Declaration of Trust or By-laws of Woodward, or any material agreement
known to such counsel to which Woodward is a party or by which Woodward is
bound; and (v) to such counsel's knowledge no consent, approval,
authorization or order of any court or governmental authority is required
for the consummation by Woodward of the transactions contemplated by this
Agreement, except such as have been obtained under the 1933 Act, the 1934
Act, the 1940 Act, the rules and regulations under those Acts and such as
may be required under the state securities laws. Such opinion may rely on
the opinion of other counsel to the extent set forth in such opinion,
provided such other counsel is reasonably acceptable to Prairie.
(d) Prairie shall have received an opinion of Drinker Biddle & Reath,
addressed to Woodward and Prairie in the form reasonably satisfactory to
them and dated the Effective Time of the Reorganization applicable to each
Acquired Fund, with respect to the matters specified in Section IX(e).
(e) The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending such effectiveness shall have been
instituted, or to the knowledge of Woodward, contemplated by the SEC and the
parties shall have received all permits and other authorizations necessary
under state securities laws to consummate the transactions contemplated by
this Agreement.
(f) The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking to
enjoin consummation of the transactions contemplated by this Agreement under
Section 25(c) of the 1940 Act.
(g) The President or Vice President of Woodward shall have certified
that Woodward has performed and complied in all material respects with each
of its agreements and covenants required by this Agreement to be performed
or complied with by it prior to or at each Valuation Time and each Effective
Time of the Reorganization.
(h) Prairie shall have received from the SEC a written order of
exemption, satisfactory in form and substance to Prairie and Woodward,
exempting the Reorganization from Sections 17(a) and 17(d) of the 1940 Act
and Rule 17d-1 thereunder.
XI. TAX DOCUMENTS.
Prairie shall deliver to Woodward at each Effective Time of the
Reorganization confirmations or other adequate evidence as to the adjusted tax
basis of the Acquired Fund Assets then delivered to an Acquiring Fund in
accordance with the terms of this Agreement.
XII. FINDER'S FEES.
Each party represents and warrants to each of the other parties hereto that
there is no person who is entitled to any finder's or other similar fee or
commission arising out of the transactions contemplated by this Agreement.
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<PAGE>
XIII. ANNOUNCEMENTS.
Any announcements or similar publicity with respect to this Agreement or the
transactions contemplated herein shall be at such time and in such manner as the
parties shall agree; provided, that nothing herein shall prevent any party upon
notice to the other parties from making such public announcements as such
party's counsel may consider advisable in order to satisfy the party's legal and
contractual obligations in such regard.
XIV. FURTHER ASSURANCES.
Subject to the terms and conditions herein provided, each of the parties
hereto shall use its best efforts to take, or cause to be taken, such action, to
execute and deliver, or cause to be executed and delivered, such additional
documents and instruments, and to do, or cause to be done, all things necessary,
proper or advisable under the provisions of this Agreement and under applicable
law to consummate and make effective the transactions contemplated by this
Agreement.
XV. TERMINATION OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the parties set forth in this
Agreement shall terminate at the Effective Time of the Reorganization.
XVI. TERMINATION OF AGREEMENT.
16.01 This Agreement may be terminated as to one or more investment
portfolios by a party at any time at or prior to the Effective Time of the
Reorganization by the Board of Trustees of Woodward or the Board of Trustees of
Prairie, as provided below:
(a) By Woodward if the conditions set forth in Article IX are not
satisfied as specified in said Section;
(b) By Prairie if the conditions set forth in Article X are not
satisfied as specified in said Section;
(c) By the mutual consent of the parties.
16.02 If a party terminates this Agreement as to any investment portfolio
because one or more of its conditions precedent have not been fulfilled, or if
this Agreement is terminated by mutual consent, this Agreement will become null
and void without any liability of either party or any of their investment
portfolios to the other; provided, however, that if such termination is by
Woodward pursuant to Section 16.01(a) as a result of a breach by Prairie of any
of its representations, warranties or covenants in this Agreement, or such
termination is by Prairie pursuant to Section 16.01(b) as a result of a breach
by Woodward of any of its representations, warranties or covenants in this
Agreement, nothing herein shall affect the non-breaching party's right to
damages on account of such other party's breach.
XVII. AMENDMENT AND WAIVER.
At any time prior to or (to the fullest extent permitted by law) after
approval of this Agreement by the shareholders of Prairie, (a) the parties
hereto may, by written agreement authorized by their
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<PAGE>
respective Boards of Trustees or their respective Presidents or any Vice
Presidents, and with or without the approval of their shareholders, amend any of
the provisions of this Agreement, and (b) either party may waive any breach by
the other party or the failure to satisfy any of the conditions to its
obligations (such waiver to be in writing and authorized by the President or
Vice President of the waiving party with or without the approval of such party's
shareholders).
XVIII. GOVERNING LAW.
This Agreement and the transactions contemplated hereby shall be governed,
construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to the conflicts of law principles
otherwise applicable therein.
XIX. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the respective successors and permitted
assigns of the parties hereto. This Agreement and the rights, obligations and
liabilities hereunder may not be assigned by either party without the consent of
the other party.
XX. BENEFICIARIES.
Nothing contained in this Agreement shall be deemed to create rights in
persons not parties hereto, other than the successors and permitted assigns of
the parties.
XXI. PRAIRIE LIABILITY.
21.01 The name "Prairie Institutional Funds," refers to the trust created
and the trustees, as trustees but not individually or personally, acting from
time to time under the Declaration of Trust dated October 20, 1994 which is
hereby referred to and a copy of which is on file at the office of the State
Secretary of the Commonwealth of Massachusetts and at the principal office of
Prairie. The obligations of Prairie entered into in the name or on behalf
thereof by any of the trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
trustees, shareholders or representatives of Prairie personally, but bind only
the trust property, and all persons dealing with any portfolio of Prairie must
look solely to the trust property belonging to such portfolio for the
enforcement of any claims against Prairie.
21.02 Both parties specifically acknowledge and agree that any liability of
Prairie under this Agreement with respect to an Acquired Fund, or in connection
with the transactions contemplated herein with respect to an Acquired Fund,
shall be discharged only out of the assets of that Acquired Fund and that no
other portfolio of Prairie shall be liable with respect thereto.
XXII. WOODWARD LIABILITY.
22.01 The names "The Woodward Funds" and "Trustees of Woodward" refer,
respectively, to the trust created and the trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated April 21, 1987, as amended May 1, 1992, which is hereby referred to
and a copy of which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of Woodward. The
obligations of Woodward entered into in the
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<PAGE>
name or on behalf thereof by any of the trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the trustees, shareholders or representatives of Woodward personally, but bind
only the trust property, and all persons dealing with any portfolio of Woodward
must look solely to the trust property belonging to such portfolio for the
enforcement of any claims against Woodward.
22.02 Both parties specifically acknowledge and agree that any liability of
Woodward under this Agreement with respect to an Acquiring Fund, or in
connection with the transactions contemplated herein with respect to an
Acquiring Fund, shall be discharged only out of the assets of that Acquiring
Fund and that no other portfolio of Woodward shall be liable with respect
thereto.
XXIII. NOTICES.
All notices required or permitted herein shall be in writing and shall be
deemed to be properly given when delivered personally or by telecopier to the
party entitled to receive the notice or when sent by certified or registered
mail, postage prepaid, or delivered to a nationally recognized overnight courier
service, in each case properly addressed to the party entitled to receive such
notice at the address or telecopier number stated below or to such other address
or telecopier number as may hereafter be furnished in writing by notice
similarly given by one party to the other party hereto:
If to Woodward:
The Woodward Funds
Earl I. Heenan, Jr., President
c/o NBD Bank
611 Woodward Avenue
Detroit, Michigan 48226
With a copy to:
W. Bruce McConnel, III, Esq.
Drinker Biddle & Reath
1345 Chestnut Street
Philadelphia, PA 19107
Telecopier Number: (215) 988-2757
If to Prairie:
Prairie Institutional Funds
c/o Mark A. Dillon, President
Three First National Plaza
Chicago, Illinois 60670
Telecopier Number: (312) 732-1576
With a copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Telecopier Number: (212) 806-6006
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<PAGE>
XXIV. EXPENSES.
Each party represents to the other that its expenses incurred in connection
with the Reorganization will be borne by First Chicago NBD Corporation or one or
more of its affiliates, provided, however, that Woodward shall bear any filing
fees under the 1933 Act and state securities laws in connection with its Service
and Institutional Shares to be distributed to shareholders of the Acquired
Funds.
XXV. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements, arrangements and
understandings relating to matters provided for herein.
XXVI. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which,
when executed and delivered shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the date first
written above.
THE WOODWARD FUNDS
BY: /S/EARL I. HEENAN, JR.
----------------------
PRAIRIE INSTITUTIONAL FUNDS
BY: /S/D'RAY BREWER
------------------------
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<PAGE>
<TABLE>
<S> <C> <C>
PRAIRIE INSTITUTIONAL FUNDS
CASH MANAGEMENT FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
PRAIRIE FUNDS PRAIRIE INSTITUTIONAL FUNDS (THE "COMPANY") FOR
PROXY SERVICES USE AT A MEETING OF SHAREHOLDERS TO BE HELD AT THE
POST OFFICE BOX 9156 OFFICES OF BISYS FUND SERVICES, INC., 3435 STELZER
FARMINGDALE, NY 11735-9858 ROAD, COLUMBUS, OHIO ON JUNE 25, 1996 AT 9:00 A.M.
(EASTERN TIME).
THE UNDERSIGNED HEREBY APPOINTS GEORGE O. MARTINEZ
AND D'RAY BREWER, AND EACH OF THEM, WITH FULL POWER
OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE
AT THE ABOVE-STATED MEETING, AND AT ALL ADJOURNMENTS
OR POSTPONEMENTS THEREOF, ALL SHARES OF BENEFICIAL
INTEREST, EVIDENCING INTERESTS IN THE CASH MANAGEMENT
FUND (THE "FUND"), HELD OF RECORD BY THE UNDERSIGNED
ON APRIL 11, 1996, THE RECORD DATE FOR THE MEETING,
UPON THE FOLLOWING MATTERS AND UPON ANY OTHER MATTER
WHICH MAY COME BEFORE THE MEETING, IN THEIR
DISCRETION:
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE
MANNER SPECIFIED HEREON AND, IN THE ABSENCE OF
SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY
TO VOTE FOR PROPOSALS 1 AND 2.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/ CM KEEP THIS PORTION FOR YOUR RECORDS
- ----------------------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT FUND DETACH AND RETURN THIS PORTION ONLY
VOTE ON PROPOSALS
FOR AGN ABS
| | | | | | 1. PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED
|__| |__| |__| THEREBY, INCLUDING THE TRANSFER OF SUBSTANTIALLY ALL OF THE ASSETS AND LIABILITIES OF THE
COMPANY'S CASH MANAGEMENT FUND (THE "REORGANIZING PORTFOLIO") TO WOODWARD'S CASH MANAGEMENT FUND
(THE "WOODWARD FUND") IN EXCHANGE FOR INSTITUTIONAL SHARES AND SERVICE SHARES OF THE WOODWARD
FUND, THE DISTRIBUTION OF THE WOODWARD FUND'S SHARES SO RECEIVED TO SHAREHOLDERS OF THE
REORGANIZING PORTFOLIO ACCORDING TO THEIR RESPECTIVE INTERESTS, AND THE TERMINATION OF THE
COMPANY'S EXISTENCE UNDER STATE LAW AND THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR
AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- ---------------------------- ------------------------------ ---------
SIGNATURE SIGNATURE(JOINT OWNERS) DATE
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
PRAIRIE INSTITUTIONAL FUNDS
TREASURY PRIME CASH MANAGEMENT FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
PRAIRIE FUNDS PRAIRIE INSTITUTIONAL FUNDS (THE "COMPANY") FOR
PROXY SERVICES USE AT A MEETING OF SHAREHOLDERS TO BE HELD AT THE
POST OFFICE BOX 9156 OFFICES OF BISYS FUND SERVICES, INC., 3435 STELZER
FARMINGDALE, NY 11735-9858 ROAD, COLUMBUS, OHIO ON JUNE 25, 1996 AT 9:00 A.M.
(EASTERN TIME).
THE UNDERSIGNED HEREBY APPOINTS GEORGE O. MARTINEZ
AND D'RAY BREWER, AND EACH OF THEM, WITH FULL POWER
OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE
AT THE ABOVE-STATED MEETING, AND AT ALL ADJOURNMENTS
OR POSTPONEMENTS THEREOF, ALL SHARES OF BENEFICIAL
INTEREST, EVIDENCING INTERESTS IN THE TREASURY PRIME
CASH MANAGEMENT FUND (THE "FUND"), HELD OF RECORD BY
THE UNDERSIGNED ON APRIL 11, 1996, THE RECORD DATE
FOR THE MEETING, UPON THE FOLLOWING MATTERS AND UPON
ANY OTHER MATTER WHICH MAY COME BEFORE THE MEETING,
IN THEIR DISCRETION:
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE
MANNER SPECIFIED HEREON AND, IN THE ABSENCE OF
SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY
TO VOTE FOR PROPOSALS 1 AND 2.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/ TPCM KEEP THIS PORTION FOR YOUR RECORDS
- ----------------------------------------------------------------------------------------------------------------------------------
TREASURY PRIME CASH MANAGEMENT FUND DETACH AND RETURN THIS PORTION ONLY
VOTE ON PROPOSALS
FOR AGN ABS
| | | | | | 1. PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED
|__| |__| |__| THEREBY, INCLUDING THE TRANSFER OF SUBSTANTIALLY ALL OF THE ASSETS AND LIABILITIES OF THE
COMPANY'S TREASURY PRIME CASH MANAGEMENT FUND (THE "REORGANIZING PORTFOLIO") TO WOODWARD'S
TREASURY PRIME CASH MANAGEMENT FUND (THE "WOODWARD FUND") IN EXCHANGE FOR INSTITUTIONAL SHARES
AND SERVICE SHARES OF THE WOODWARD FUND, THE DISTRIBUTION OF THE WOODWARD FUND'S SHARES SO
RECEIVED TO SHAREHOLDERS OF THE REORGANIZING PORTFOLIO ACCORDING TO THEIR RESPECTIVE INTERESTS,
AND THE TERMINATION OF THE COMPANY'S EXISTENCE UNDER STATE LAW AND THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR
AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- ---------------------------- ------------------------------ ---------
SIGNATURE SIGNATURE(JOINT OWNERS) DATE
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
PRAIRIE INSTITUTIONAL FUNDS
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
PRAIRIE FUNDS PRAIRIE INSTITUTIONAL FUNDS (THE "COMPANY") FOR
PROXY SERVICES USE AT A MEETING OF SHAREHOLDERS TO BE HELD AT THE
POST OFFICE BOX 9156 OFFICES OF BISYS FUND SERVICES, INC., 3435 STELZER
FARMINGDALE, NY 11735-9858 ROAD, COLUMBUS, OHIO ON JUNE 25, 1996 AT 9:00 A.M.
(EASTERN TIME).
THE UNDERSIGNED HEREBY APPOINTS GEORGE O. MARTINEZ
AND D'RAY BREWER, AND EACH OF THEM, WITH FULL POWER
OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE
AT THE ABOVE-STATED MEETING, AND AT ALL ADJOURNMENTS
OR POSTPONEMENTS THEREOF, ALL SHARES OF BENEFICIAL
INTEREST, EVIDENCING INTERESTS IN THE U.S. GOVERNMENT
SECURITIES CASH MANAGEMENT FUND (THE "FUND"), HELD OF
RECORD BY THE UNDERSIGNED ON APRIL 11, 1996, THE
RECORD DATE FOR THE MEETING, UPON THE FOLLOWING
MATTERS AND UPON ANY OTHER MATTER WHICH MAY COME
BEFORE THE MEETING, IN THEIR DISCRETION:
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE
MANNER SPECIFIED HEREON AND, IN THE ABSENCE OF
SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY
TO VOTE FOR PROPOSALS 1 AND 2.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/ USGSCM KEEP THIS PORTION FOR YOUR RECORDS
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND DETACH AND RETURN THIS PORTION ONLY
VOTE ON PROPOSALS
FOR AGN ABS
| | | | | | 1. PROPOSAL TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION AND THE TRANSACTIONS CONTEMPLATED
|__| |__| |__| THEREBY, INCLUDING THE TRANSFER OF SUBSTANTIALLY ALL OF THE ASSETS AND LIABILITIES OF THE
COMPANY'S U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND (THE "REORGANIZING PORTFOLIO") TO
WOODWARD'S U.S. SECURITIES CASH MANAGEMENT FUND (THE "WOODWARD FUND") IN EXCHANGE FOR
INSTITUTIONAL SHARES AND SERVICE SHARES OF THE WOODWARD FUND, THE DISTRIBUTION OF THE WOODWARD
FUND'S SHARES SO RECEIVED TO SHAREHOLDERS OF THE REORGANIZING PORTFOLIO ACCORDING TO THEIR
RESPECTIVE INTERESTS, AND THE TERMINATION OF THE COMPANY'S EXISTENCE UNDER STATE LAW AND THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR
AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE
NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- ---------------------------- ------------------------------ ---------
SIGNATURE SIGNATURE(JOINT OWNERS) DATE
</TABLE>
<PAGE>
PRAIRIE INSTITUTIONAL FUNDS
Three First National Plaza
Chicago, Illinois 60670
THE WOODWARD FUNDS
900 Tower Drive
P. O. Box 7058
Troy, Michigan 48007
STATEMENT OF ADDITIONAL INFORMATION
(1996 Special Meeting of Shareholders of
Prairie Institutional Funds)
This Statement of Additional Information is not a prospectus but
should be read in conjunction with the Combined Proxy Statement/Prospectus
dated May 21, 1996 for the Special Meeting of Shareholders of Prairie
Institutional Funds ("Prairie") to be held on June 25, 1996. Copies of the
Combined Proxy Statement/Prospectus may be obtained at no charge by calling
Prairie at 1-800-370-9446.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the
Combined Proxy Statement/Prospectus.
Further information about the Service Shares and Institutional Shares
of the Woodward Funds is contained in and incorporated by reference to
Woodward's Statements of Additional Information dated April 26, 1996,
copies of which are included herewith.
Further information about the Service Shares and Institutional Shares
of the Prairie Portfolios is contained in and incorporated by reference to
Prairie's Statement of Additional Information dated March 18, 1996, a copy
of which is included herewith. The audited financial statements and
related independent accountant's report for Prairie contained in the Annual
Report dated December 31, 1995 are incorporated herein by reference. No
other parts of the Annual Report are incorporated by reference herein.
The date of this Statement of Additional Information is May 21, 1996.
<PAGE>
TABLE OF CONTENTS
Page
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General Information . . . . . . . . . . . B-3
<PAGE>
GENERAL INFORMATION
The Shareholders of Prairie are being asked to approve or disapprove
an Agreement and Plan of Reorganization (the "Reorganization Agreement")
dated as of May 21, 1996 between Prairie and Woodward, and the transactions
contemplated thereby. The Reorganization Agreement contemplates the
transfer of substantially all of the assets and liabilities of Prairie Cash
Management Fund, Treasury Prime Cash Management Fund and U.S. Government
Securities Cash Management Fund to corresponding Woodward Funds in exchange
for full and fractional shares representing interests in such corresponding
Woodward Funds. The shares issued by Woodward will have an aggregate net
asset value equal to the aggregate net asset value of the shares of the
respective Prairie Portfolios that are outstanding immediately before the
effective time of the Reorganization.
Following the exchange, the Prairie Portfolios will make a liquidating
distribution of corresponding Woodward Funds shares to their shareholders.
Each shareholder owning shares of a particular Prairie Portfolio at the
effective time of the Reorganization will receive shares of the
corresponding Woodward Fund of equal value, plus the right to receive any
unpaid dividends and distributions that were declared before the effective
time of the Reorganization on Prairie Portfolio shares. Upon completion of
the Reorganization, Prairie will be terminated under state law and
deregistered under the Investment Company Act of 1940.
The Special Meeting of Shareholders of Prairie to consider the
Reorganization Agreement and the related transactions will be held at 9:00
a.m./p.m. Eastern time on June 25, 1996 at the offices of BISYS Fund
Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219. For further
information about the transaction, see the Combined Proxy
Statement/Prospectus.
Banking laws and regulations currently prohibit a bank holding company
registered under the Bank Holding Company Act of 1956, as amended, or any
bank or non-bank affiliate thereof from sponsoring, organizing,
controlling, or distributing the shares of a registered, open-end
investment company continuously engaged in the issuance of its shares, and
prohibit banks generally from issuing, underwriting, selling, or
distributing securities such as shares of the Woodward Funds, but do not
prohibit such a bank holding company or its affiliates or banks generally
from acting as investment adviser, transfer agent, or custodian to such an
investment company or from purchasing shares of such a company as agent for
and upon the order of customers. FCIMCO, NBD and financial intermediaries
which agree to provide shareholder support services that are banks or bank
affiliates are subject to such banking laws and regulations. Should
legislative, judicial,
<PAGE>
or administrative action prohibit or restrict the activities of such
companies in connection with their services to the Woodward Funds, Woodward
might be required to alter materially or discontinue its arrangement with
such companies and change its method of operation. It is anticipated,
however, that any resulting change in Woodward's method of operation would
not affect a Woodward Fund's net asset value per share or result in
financial loss to any shareholder.
