<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1996
REGISTRATION NO. 33-20658
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
Pre-Effective, Amendment No. / / Post-Effective Amendment No. / /
(Check appropriate box or boxes)
------------------------
EMERALD FUNDS
Exact Name of Registrant as Specified in Charter
(614) 470-8000
Area Code and Telephone Number
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
Address of Principal Executive Offices
JEFFREY A. DALKE
DRINKER BIDDLE & REATH
1100 PHILADELPHIA NATIONAL BANK BUILDING
1345 CHESTNUT STREET
PHILADELPHIA, PENNSYLVANIA 19107
Name and Address of Agent for Service
Approximate Date of Proposed Public Offering: As soon as practicable after
the Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective April 1, 1996 pursuant
to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing
fee is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 33-20658) pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The registrant is filing as an exhibit to
this Registration Statement a copy of its earlier declaration under Rule 24f-2.
Pursuant to Rule 429, this Registration Statement relates to the aforesaid
registration statement on Form N-1A.
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<PAGE>
EMERALD FUNDS
FORM N-14
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
<TABLE>
<CAPTION>
ITEM NO. PROSPECTUS HEADING
- ----------------------------------------------------------------- ------------------------------------------------------
<C> <S> <C>
1. Beginning of Registration Statement and Outside Front
Cover Page........................................... Cover Page
2. Beginning and Outside Back Cover Page................. Table of Contents
3. Fee Table, Synopsis Information and Risk Factors...... Comparative Fee Tables; Summary; Risk Factors
4. Information About the Transaction..................... Information Relating to the Proposed Reorganization;
Comparison of the Funds
5. Information About the Registrant...................... Summary; Comparison of the Funds; Additional
Information About the Funds
6. Information About the Company Being Acquired.......... Summary; Comparison of the Funds; Additional
Information About the Funds
7. Voting Information.................................... Summary; Information Relating to Voting Matters
8. Interest of Certain Persons and Experts............... Additional Information About the Funds
9. Additional Information Required for Reoffering by
Persons Deemed to be Underwriters.................... Inapplicable
</TABLE>
<PAGE>
EMERALD FUNDS
Prime Trust and Treasury Trust Funds
April 1, 1996
Dear Shareholder:
The Board of Trustees of Emerald Funds (the "Company") is pleased to call
a special shareholders meeting concerning matters that are important to you.
At the meeting shareholders will be asked to consider the combination of
the Emerald Prime Trust Fund and Treasury Trust Fund with the Emerald Prime
Fund and Treasury Fund. The formal Notice of Special Meeting of Shareholders
and a Combined Proxy Statement/Prospectus describing this matter in detail
are enclosed, as is a form of Proxy for your use. IT IS IMPORTANT THAT YOU
RETURN THE PROXY WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
The proposed combination provides that the assets and liabilities of the
Emerald Prime Trust and Treasury Trust Funds (the "Transferor Funds") will be
transferred to the Emerald Prime Fund and Treasury Fund, respectively (the
"Surviving Funds"), and that shareholders will exchange their shares of the
Transferor Funds for shares of the Surviving Funds having the same value.
In connection with its recommendation of the proposed combination to
shareholders, the Board of Trustees of the Company considered that the total
assets of the Surviving Funds are considerably greater than those of the
Transferor Funds. The Board believes that the investment and other operations
of the Transferor Funds can be conducted more efficiently through their
combination with the Surviving Funds, and that the proposed reorganization is
in the interests of the Funds and their shareholders. The Board has also
considered that the investment objectives, policies and restrictions of each
Surviving Fund are the same as those of its corresponding Transferor Fund;
that both the Surviving Funds and the Transferor Funds receive investment
advisory services from Barnett Banks Trust Company, N.A.; and that the
procedures for purchasing and redeeming shares of the respective Funds are
essentially the same.
Because the matters described in the attached materials are important to
you, I urge you to complete and return the enclosed proxy promptly to ensure
that your shares are represented at the meeting. I also urge you to vote
"FOR" the proposed transaction.
Sincerely,
Chesterfield H. Smith
Chairman
<PAGE>
EMERALD FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE PRIME TRUST AND TREASURY TRUST FUNDS
To be held on May 10, 1996
To the Shareholders of the
Prime Trust and Treasury Trust Funds,
Investment Portfolios Offered by
Emerald Funds
NOTICE IS HEREBY GIVEN THAT a Special Meeting of Shareholders of the PRIME
TRUST AND TREASURY TRUST FUNDS, two investment portfolios offered by Emerald
Funds (the "Company"), will be held at the Company's offices, 3435 Stelzer Road,
Columbus, Ohio 43219-3035 on May 10, 1996 at 10:00 a.m., local time, for the
following purposes:
ITEM 1. To approve or disapprove a Plan of Reorganization and the
transactions contemplated thereby, including the transfer of all of
the assets and liabilities of the Company's Prime Trust Fund and
Treasury Trust Fund (the "Transferor Funds") to the Company's Prime
Fund and Treasury Fund, respectively (the "Surviving Funds"), in
exchange for Emerald Shares of the Surviving Funds, and a
liquidating distribution of such shares to shareholders of the
Transferor Funds.
ITEM 2. To transact such other business as may properly come before the
Special Meeting or any adjournment thereof.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ITEM 1.
The proposed reorganization and related matters are described in the
attached Combined Proxy Statement/Prospectus. A copy of the Plan of
Reorganization is appended as Appendix A thereto.
Shareholders of record as of the close of business on March 15, 1996 are
entitled to notice of, and to vote at, the Special Meeting or any adjournment
thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF THE COMPANY. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
THE COMPANY A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR
BY ATTENDING THE MEETING AND ELECTING TO VOTE IN PERSON.
By the Order of the
Board of Trustees
JEFFREY A. DALKE
SECRETARY
April , 1996
<PAGE>
COMBINED PROXY STATEMENT/PROSPECTUS
DATED APRIL 1, 1996
EMERALD FUNDS
3435 STELZER ROAD, COLUMBUS, OHIO 43219-3035
PHONE (800) 367-5905
This Combined Proxy Statement/Prospectus is furnished in connection with the
solicitation of proxies by the Board of Trustees of Emerald Funds (the
"Company") for use at a Special Meeting of Shareholders of the Company's Prime
Trust Fund and Treasury Trust Fund (the "Transferor Funds") to be held at 10:00
a.m., local time, on May 10, 1996 at the Company's offices, 3435 Stelzer Road,
Columbus, Ohio 43219-3035, or any adjournment thereof (the "Meeting"). At the
Meeting shareholders of the Transferor Funds will be asked to consider and
approve a proposed Plan of Reorganization dated as of February , 1996 and the
transactions contemplated thereby.
The Transferor Funds and the Company's Prime Fund and Treasury Fund (the
"Surviving Funds") are separate money market portfolios of the Company, which is
registered as an open-end management company under the Investment Company Act of
1940 (the "1940 Act"). The investment objective, policies and fundamental
limitations of the Prime Trust Fund and the Prime Fund are the same, and those
of the Treasury Trust Fund and the Treasury Fund are the same. In addition, the
purchase and redemption policies of each of these Funds are substantially
similar and, except for the sub-adviser for the Transferor Funds, the service
providers for each of the Funds are the same. As discussed in this Combined
Proxy Statement/Prospectus, the original reasons for the separate organization
of the Transferor Funds no longer exist, and management of the Company believes
that because of their relatively smaller size, the investment and other
operations of the Transferor Funds would be conducted more efficiently through
their reorganization into the Surviving Funds.
The Plan of Reorganization provides that, if approved by shareholders of a
Transferor Fund at the Meeting, all assets and liabilities of the Transferor
Fund will be transferred to the corresponding Surviving Fund in exchange for
Emerald Shares of the Surviving Fund, and that the Transferor Fund will make a
liquidating distribution of such shares such that each shareholder of a
Transferor Fund will hold, immediately after the effective time of the
reorganization, a like number of full and fractional Emerald Shares in the
corresponding Surviving Fund.
This Combined Proxy Statement/Prospectus sets forth concisely the
information that a shareholder of the Transferor Funds should know before voting
on the Plan of Reorganization and should be retained for future reference. A
Prospectus relating to the Surviving Funds and their shares dated April 1, 1996,
which describes the operations of the Surviving Funds, accompanies this Combined
Proxy Statement/Prospectus. Additional information is set forth in the Statement
of Additional Information dated April 1, 1996 relating to this Combined Proxy
Statement/Prospectus. That Statement of Additional Information 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 the Company at the
address or telephone number indicated above. The information contained in the
aforesaid Prospectus and Statement of Additional Information is incorporated
herein by reference.
This Combined Proxy Statement/Prospectus constitutes the Transferor Funds'
proxy statement for the Meeting, and the Prospectus for the shares of the
Surviving Funds that have been registered with the SEC in connection with the
reorganization.
This Combined Proxy Statement/Prospectus is expected to be sent to
shareholders of the Transferor Funds on or about April 8, 1996.
SHARES OF THE TRANSFEROR AND SURVIVING FUNDS (COLLECTIVELY, THE "FUNDS") ARE
NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, BARNETT BANKS
TRUST COMPANY, N.A. OR ANY OF ITS AFFILIATES, AND ARE NOT FEDERALLY INSURED BY,
GUARANTEED BY OR OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT,
THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. WHILE THE
FUNDS WILL ATTEMPT TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE,
THERE CAN BE NO ASSURANCE THAT THEY WILL BE ABLE TO DO SO ON A CONTINUOUS BASIS.
INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL. IN ADDITION, THE DIVIDENDS PAID BY THE FUNDS WILL FLUCTUATE.
<PAGE>
BARNETT BANKS TRUST COMPANY, N.A. SERVES AS INVESTMENT ADVISER TO THE FUNDS, IS
PAID A FEE FOR ITS SERVICES TO THE SURVIVING FUNDS, AND IS NOT AFFILIATED WITH
EMERALD ASSET MANAGEMENT, INC., THE FUNDS' DISTRIBUTOR.
THE SECURITIES OF THE SURVIVING 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
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT/PROSPECTUS 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 THE COMPANY.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
SUMMARY.................................................................................................... 4
Proposed Reorganization.................................................................................. 4
Reasons for Reorganization............................................................................... 4
Federal Income Tax Consequences.......................................................................... 4
Comparison of the Funds.................................................................................. 4
Comparative Fee Tables................................................................................... 6
Voting Information....................................................................................... 8
Risk Factors............................................................................................. 8
INFORMATION RELATING TO THE PROPOSED REORGANIZATION........................................................ 9
Description of the Plan of Reorganization................................................................ 9
Board Consideration...................................................................................... 10
Capitalization........................................................................................... 10
Federal Income Tax Consequences.......................................................................... 11
COMPARISON OF THE FUNDS.................................................................................... 11
Investment Objectives and Policies....................................................................... 11
Other Information........................................................................................ 11
INFORMATION RELATING TO VOTING MATTERS..................................................................... 12
General Information...................................................................................... 12
Shareholder and Board Approval........................................................................... 12
Quorum................................................................................................... 13
Annual Meetings.......................................................................................... 13
ADDITIONAL INFORMATION ABOUT THE FUNDS..................................................................... 14
OTHER BUSINESS............................................................................................. 14
SHAREHOLDER INQUIRIES...................................................................................... 14
Appendix A -- Plan of Reorganization....................................................................... A-1
</TABLE>
3
<PAGE>
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION RELATING TO THE PROPOSED
REORGANIZATION, AND IS QUALIFIED BY REFERENCE TO THE MORE COMPLETE INFORMATION
CONTAINED ELSEWHERE IN THIS COMBINED PROXY STATEMENT/PROSPECTUS, INCLUDING THE
PLAN OF REORGANIZATION ATTACHED AS APPENDIX A HERETO, AND IN THE PROSPECTUSES
AND STATEMENT OF ADDITIONAL INFORMATION OF THE FUNDS.
PROPOSED REORGANIZATION: The Board of Trustees of the Company has approved
the Plan of Reorganization, which is being recommended to the shareholders of
the Transferor Funds for approval at the Meeting. Subject to such approval, the
Plan of Reorganization provides for the acquisition by the Prime Fund of all of
the assets and liabilities of the Prime Trust Fund, and the acquisition by the
Treasury Fund of all of the assets and liabilities of the Treasury Trust Fund
(such assets subject to such liabilities are called the "Assets") in exchange
for Emerald Shares of the respective Surviving Funds, and a liquidating
distribution of such shares.
As a result of the proposed reorganization, each shareholder of a Transferor
Fund will become a shareholder of the corresponding Surviving Fund and will
hold, immediately after the time the reorganization becomes effective (the
"Effective Time of the Reorganization"), the same number of Emerald Shares of
the corresponding Surviving Fund, with the same value, as the number of shares
the shareholder held in the particular Transferor Fund immediately before the
Effective Time of the Reorganization.
For further information, see "Information Relating to the Proposed
Reorganization -- Description of the Plan of Reorganization."
REASONS FOR REORGANIZATION: When the Transferor Funds were organized in
1988, legal questions existed under federal and state law regarding the ability
of Barnett Banks Trust Company, N.A. ("Barnett"), the Company's investment
adviser, to invest the assets of certain of its fiduciary accounts over which it
exercised investment discretion in investment portfolios from which it received
investment advisory fees. Since that time these questions have been clarified
through the Federal Office of the Comptroller of the Currency in published
letters and legislative action in Florida and other states, and the original
reasons for the organization of the Transferor Funds have been removed. In
connection with its approval of the Plan of Reorganization, the Company's Board
of Trustees noted that the investment objective, policies and fundamental
investment limitations of each Transferor Fund were the same as the
corresponding Surviving Fund; that the total assets of the Surviving Funds were
considerably greater than those of the Transferor Funds; that the annualized
ordinary operating expense ratios (that is, the ratio of ordinary operating
expenses to average daily net assets) of the Surviving Funds before fee waivers,
have historically been lower than those for the corresponding Transferor Funds
and that on a net basis, after fee waivers, these ratios have been comparable;
and that the service providers for each of the Funds were the same, except for
the Transferor Funds' sub-adviser. Management of the Company believes that
because of their relatively smaller size, the investment and other operations of
the Transferor Funds would be conducted more efficiently through their
reorganization with the Surviving Funds, and that the proposed reorganization is
in the interests of the Transferor Funds and their shareholders. See
"Information Relating to the Proposed Reorganization -- Board Consideration."
FEDERAL INCOME TAX CONSEQUENCES: Consummation of the reorganization will
not give rise to tax liability for federal income tax purposes to any of the
Funds or their respective shareholders. See "Information Relating to the
Proposed Reorganization -- Federal Income Tax Consequences."
COMPARISON OF THE FUNDS: The Surviving Funds and their Emerald Shares are
described in the Prospectus dated April 1, 1996 that accompanies this Combined
Proxy Statement/Prospectus. The investment objective and policies of each
Transferor Fund and its corresponding Surviving Fund are the same. Investment
advisory, administration and distribution services are provided to each of the
4
<PAGE>
Funds by Barnett, BISYS Fund Services Limited Partnership ("BISYS") and Emerald
Asset Management, Inc. ("EAM"), respectively. In addition, both Funds receive
transfer agency services from DST Systems, Inc. and custodial services from The
Bank of New York.
The procedures for purchasing and redeeming shares of the Transferor Funds
are essentially the same as those for Emerald Shares of the Surviving Funds,
except that currently purchase and redemption orders for shares of the
Transferor Funds must be received by 12:00 noon (Eastern time) in order to be
processed the same day; orders for Emerald Shares of the Surviving Funds must be
received by 2:00 p.m. (Eastern time) for same day processing. Additionally,
dividends on net investment income for both the Transferor and Surviving Funds
are declared daily and paid monthly within five business days after the end of
the month. Net capital gains distributions for the Funds, if any, are made at
least annually after any reductions for capital loss carryforwards.
The annualized ratio of expenses to average net assets (net of fee waivers)
of shares of both the Prime Trust and Treasury Trust Funds was 0.40% for the
fiscal year ended November 30, 1995. Without fee waivers the ratios would have
been .46% and .45%, respectively. The annualized ratios of operating expenses to
average net assets (net of fee waivers) of Emerald Shares of the Prime and
Treasury Funds for the same period were .37% and .40% respectively. Without
voluntary fee waivers, these ratios would have been .39% and .42%, respectively.
Barnett is not entitled to any compensation from the Transferor Funds for
its advisory services. For the services provided and expenses assumed pursuant
to its Sub-Advisory Agreement, Rodney Square Management Corporation, as
sub-adviser for the Transferor Funds (the "Sub-Adviser"), is entitled to receive
a fee from each Fund, calculated daily and payable monthly, at the annual rate
of .15% of each Fund's average daily net assets. The Sub-Adviser and BISYS, as
the Company's administrator, have each voluntarily agreed to waive their
sub-advisory and administration fees with respect to the Transferor Funds to the
extent that the Funds' annualized ratios of ordinary operating expenses to
average net assets, calculated daily, exceeds .40%. As investment adviser to the
Surviving Funds, Barnett is entitled to advisory fees that are calculated daily
and payable monthly at the annual rate of .25% of each Fund's average daily net
assets. Under the terms of the advisory agreement for the Surviving Funds, the
fees payable to Barnett are not subject to reduction as the value of each Fund's
net assets increases. Barnett has, however, informed the Company of its
intention to reduce the annual rate of its advisory fees with respect to these
two Funds to the following rates: .25% of the first $600 million of each Fund's
net assets; .23% of each Fund's net assets over $600 million but not exceeding
$1 billion; .21% of the next $1 billion of each Fund's net assets; and .19% of
each Fund's net assets over $2 billion. Barnett and Bisys have also voluntarily
agreed to waive their advisory and administrative fees with respect to the Prime
and Treasury Funds' Emerald Shares to the extent that the Funds' annualized
ratios of ordinary operating expenses to average net assets, calculated daily,
exceeds .40%. The foregoing waivers may be terminated in the future by Barnett,
the Sub-Adviser or Bisys without the Company's consent. Neither shares of the
Transferor Funds nor Emerald Shares of the Surviving Funds are subject to a
distribution plan, and do not pay fees to EAM for its distribution services.
COMPARATIVE FEE TABLES: The following tables (a) compare the fees and
expenses of each Transferor Fund and its corresponding Surviving Fund for their
fiscal year ended November 30, 1995 and (b) show the estimated fees and expenses
on a pro forma basis giving effect to the reorganization. The purpose of these
tables is to assist shareholders in understanding the various costs and expenses
that investors in the Funds bear as shareholders. The tables do not reflect any
charges that may be imposed by Barnett or its affiliates or other institutions
directly on their customer accounts in connection with investments in the Funds.
5
<PAGE>
TABLE 1
<TABLE>
<CAPTION>
PRIME TRUST PRIME
FUND FUND PRO FORMA
----------- --------- -----------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).... None None None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering
price)........................................................................ None None None
Deferred Sales Load (as a percentage of redemption proceeds.................... None None None
Redemption Fees................................................................ None None None
Exchange Fee................................................................... None None None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees (after waivers)*............................................... 0.15% 0.23% 0.23%
Other Expenses (after waivers and reimbursements)**............................ 0.25% 0.14% 0.13%
----------- --------- -----------
TOTAL FUND OPERATING EXPENSES:
(after waivers and reimbursements)***......................................... 0.40% 0.37% 0.36%
----------- --------- -----------
----------- --------- -----------
</TABLE>
- ------------------------
* Management Fees (before waivers) would be .15%, .25% and .25%, respectively.
Fee waivers and expense reimbursements reflected in the table are voluntary
and may be terminated at any time, with respect to either Fund without the
consent of the Funds.
** Other Expenses (before waivers and reimbursements) would be 0.31%, 0.14% and
0.13%, respectively.
*** Total Fund Operating Expenses (before waivers and reimbursements) would be
0.46%, 0.39% and 0.38%, respectively.
EXAMPLE:*
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
PRIME TRUST PRIME
FUND FUND PRO FORMA
--------------- ----------- -------------
<S> <C> <C> <C>
1 year.......................................................................... $ 4 $ 4 $ 4
3 years......................................................................... $ 13 $ 12 $ 12
5 years......................................................................... $ 22 $ 21 $ 20
10 years........................................................................ $ 51 $ 47 $ 46
</TABLE>
- ------------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
6
<PAGE>
TABLE 2
<TABLE>
<CAPTION>
TREASURY TRUST TREASURY
FUND FUND PRO FORMA
--------------- ----------- -----------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)..................................................................... None None None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)........................................ None None None
Deferred Sales Load
(as a percentage of redemption proceeds.................................... None None None
Redemption Fees............................................................. None None None
Exchange Fee................................................................ None None None
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees (after waivers)*............................................ 0.15% 0.24% 0.24%
Other Expenses (after waivers and reimbursements)**......................... 0.25% 0.16% 0.15%
------ ----------- -----------
TOTAL FUND OPERATING EXPENSES:
(after waivers and reimbursements)***...................................... 0.40% 0.40% 0.39%
------ ----------- -----------
------ ----------- -----------
</TABLE>
- ------------------------
* Management Fees (before waivers) would be 0.15%, 0.25% and 0.25%,
respectively. Fee waivers and expense reimbursements reflected in the table
are voluntary and may be terminated any time with respect to either Fund
without the consent of the Funds.
** Other Expenses (before waivers) would be 0.30%, 0.17% and 0.15%,
respectively.
*** Total Fund Operating Expenses (before waivers) would be 0.45%, 0.42% and
0.40%, respectively.
EXAMPLE:*
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
TREASURY TRUST TREASURY
FUND FUND PRO FORMA
--------------- ----------- -------------
<S> <C> <C> <C>
1 year........................................................................ $ 4 $ 4 $ 4
3 years....................................................................... $ 13 $ 13 $ 13
5 years....................................................................... $ 22 $ 22 $ 22
10 years...................................................................... $ 51 $ 51 $ 49
</TABLE>
- ------------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
7
<PAGE>
VOTING INFORMATION: This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by the Company's Board
of Trustees for use at the Meeting. Only shareholders of record of the
Transferor Funds at the close of business on March 15, 1996 will be entitled to
vote. Each share or fraction thereof is entitled to one whole or fractional
vote. 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 the proposal set forth in the
Notice of Special Meeting of Shareholders. Proxies may be revoked at any time
before they are exercised by the subsequent execution and submission of a
revised proxy, by written notice of revocation to the Company, or by voting in
person at the Meeting. For additional information, including a description of
the shareholder vote required for approval of the Plan of Reorganization and the
transactions contemplated therein, see "Information Relating to Voting Matters."
RISK FACTORS: Because of the similarities of the investment objectives and
policies of the Funds, management believes that an investment in a Surviving
Fund involves investment risks that are substantially the same as those of the
corresponding Transferor Fund. These investment risks, in general, are those
typically associated with investing in a portfolio of money market instruments.
The Prime Fund and Prime Trust Fund may each invest in foreign securities
that are considered attractive by Barnett, but may be subject to potential
adverse political and governmental developments and changes in foreign currency
exchange rates. Barnett evaluates the rewards and risks presented by all
securities purchased by the Funds, and determines, in connection with the
management of the Funds, how these securities will be used in furtherance of the
Funds' investment objectives. It is possible, however, that these evaluations
will prove to be inaccurate or incomplete and, even when accurate and complete,
it is possible that a Fund will incur loss. Although each Fund seeks to maintain
a stable net asset value of $1.00 per share, there is no assurance that it will
be able to do so.
8
<PAGE>
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
The terms and conditions under which the reorganization may be consummated
are set forth in the Plan of Reorganization. Significant provisions of the Plan
of Reorganization are summarized below; however, this summary is qualified in
its entirety by reference to the Plan of Reorganization, a copy of which is
attached as Appendix A to this Combined Proxy Statement/Prospectus.
DESCRIPTION OF THE PLAN OF REORGANIZATION: The Plan of Reorganization
provides that at the Effective Time of the Reorganization, all of the Assets of
each Transferor Fund will be transferred to its corresponding Surviving Fund,
such that at and after the Effective Time of the Reorganization the Assets
(including liabilities) of the Transferor Fund will become and be the Assets
(including liabilities) of the Surviving Fund. In exchange for the transfer of
Assets, the Company will issue to each Transferor Fund full and fractional
Emerald Shares of the corresponding Surviving Fund, and the Transferor Fund will
make a liquidating distribution of such Emerald Shares to its shareholders. The
number of Emerald Shares of each Surviving Fund so issued will be equal in
number to the number of full and fractional shares representing interests in the
corresponding Transferor Fund that are outstanding immediately prior to the
Effective Time of the Reorganization. At and after the Effective Time of the
Reorganization, all debts, liabilities and obligations of each Transferor Fund
will attach to its corresponding Surviving Fund and may thereafter be enforced
against the Surviving Fund to the same extent as if they had been incurred by
it.
To facilitate the foregoing, the Company will establish open accounts in the
name of each shareholder of a Transferor Fund representing the number of Emerald
Shares of the corresponding Surviving Fund owned by the shareholder as a result
of the reorganization. The stock transfer books of the Company for the
Transferor Funds will be permanently closed as of the close of business on the
day immediately preceding the Effective Time of the Reorganization. Redemption
requests received thereafter by the Company with respect to the Transferor Funds
will be deemed to be redemption requests for Emerald Shares of the Surviving
Funds issued in the reorganization. If any Transferor Fund shares held by a
Transferor Fund shareholder are represented by a share certificate, the
certificate must be surrendered to the Company's transfer agent for cancellation
before the Surviving Fund shares issued to the shareholder in the reorganization
will be redeemed.
The reorganization is subject to a number of conditions, including approval
of the Plan of Reorganization and the transactions contemplated therein by the
shareholders of the Transferor Funds, and the receipt of the legal opinion of
Drinker Biddle & Reath that shares of the Surviving Funds issued to shareholders
of the Transferor Funds in accordance with the terms of the Plan of
Reorganization will be validly issued, fully paid and nonassessable.
Each shareholder of the Transferor Funds will have the right to receive any
unpaid dividends or other distributions that were declared before the Effective
Time of the Reorganization with respect to the shares representing interests in
the Transferor Funds held by the shareholder immediately prior to the Effective
Time of the Reorganization. Assuming satisfaction of the conditions in the Plan
of Reorganization, the Effective Time of the Reorganization will be on May ,
1996, or such other date as is scheduled by the Company.
The Plan of Reorganization and the reorganization described therein may be
abandoned at any time for any reason prior to the Effective Time of the
Reorganization upon the vote of a majority of the Board of Trustees of the
Company. The Plan of Reorganization provides further that at any time prior to
or (to the fullest extent permitted by law) after approval of the Plan of
Reorganization by the shareholders of the Transferor Funds the Company may, upon
authorization by the Board of Trustees of the Company, and with or without the
approval of the shareholders, amend any of the provisions of the Plan of
Reorganization. The Plan of Reorganization provides that in the event the Plan
is approved with respect to one but not both of the Transferor Funds, the Board
of Trustees may, in the exercise of its reasonable business judgment, either
abandon the reorganization with respect to both of the Transferor Funds or
direct that the reorganization be consummated to the extent it deems advisable.
9
<PAGE>
BOARD CONSIDERATION: The Board of Trustees of the Company considered the
proposed reorganization at a meeting held on January 31, 1996. At the meeting,
the trustees were advised that the original reasons for the organization of the
Transferor Funds no longer existed as discussed under "Summary -- Reasons for
Reorganization." In addition, the Surviving Funds had substantially greater
assets ($2.62 billion as of November 30, 1995) than the Transferor Funds ($254
million as of the same date). The Board was advised that because of their
greater size, the investment and other operations of the Surviving Funds were
believed to be more efficient than those of the Transferor Funds, and that
management believed that the proposed reorganization would benefit the
Transferor Funds, the Surviving Funds and their shareholders. These benefits
included greater potential portfolio trading efficiencies, such as quantity
discounts, better securities execution and reduced portfolio volatility
resulting from shareholder purchase and redemption activity, and potentially
broader portfolio diversification.
The Board of Trustees reviewed the terms of the proposed reorganization, and
considered the similarity of the investment objectives, policies and
restrictions of the Funds. The Trustees also considered the federal tax
consequences of the reorganization. The Board of Trustees reviewed the expected
costs of the reorganization, estimated to be approximately $65,000.
Based upon their evaluation of the relevant information presented to them,
and in light of their fiduciary duties under federal and state law, the
Company's Board of Trustees unanimously determined that the proposed
reorganization was in the best interests of the Funds, that the interests of
shareholders of the Company would not be diluted as a result of the transaction,
and that the Board should recommend approval of the Plan of Reorganization by
shareholders of the Transferor Funds at the Meeting. The Plan of Reorganization
in the form attached hereto as Appendix A was approved by the Board of Trustees
on February , 1996.
CAPITALIZATION: Because the Transferor Funds will be combined with the
Surviving Funds in the reorganization, the total capitalization of each
Surviving Fund after the reorganization is expected to be greater than the
current capitalization of the corresponding Transferor Fund. The following table
sets forth as of November 30, 1995 (i) the capitalization of each Transferor
Fund; (ii) the capitalization of each Surviving Fund; and (iii) the pro forma
capitalization of each Surviving Fund as adjusted to give effect to the proposed
reorganization of the Transferor Funds. There is, of course, no assurance that
the reorganization will be consummated. Moreover, if consummated, the
capitalization of each Fund is likely to be different at the Effective Time of
the Reorganization as a result of daily share purchase and redemption activity
in the Funds.
10
<PAGE>
PRO FORMA CAPITALIZATION TABLE (AS OF NOVEMBER 30, 1995)
<TABLE>
<CAPTION>
NET ASSET
SHARES VALUE PER
TOTAL NET ASSETS OUTSTANDING SHARE
------------------ ---------------- -----------
<S> <C> <C> <C>
A. Prime Trust/Prime
Prime Trust Fund.............................................. $ 131,088,868 131,098,672 $ 1.00
Prime Fund.................................................... $ 1,809,659,689 1,809,309,750 $ 1.00
Pro Forma Combined............................................ $ 1,940,748,557 1,940,408,422 $ 1.00
B. Treasury Trust/Treasury
Treasury Trust Fund........................................... $ 132,850,214 132,855,897 $ 1.00
Treasury Fund................................................. $ 811,047,825 811,355,627 $ 1.00
Pro Forma Combined............................................ $ 943,898,039 944,211,524 $ 1.00
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES: Consummation of the transaction is subject
to the condition that the respective parties receive an opinion from Drinker
Biddle & Reath, subject to appropriate factual assumptions, to the effect, among
other things, that for federal income tax purposes (1) the transaction will
constitute a tax-free transaction under Section 368(a)(1)(C) or Section
368(a)(1)(D) of the Internal Revenue Code of 1986, as amended, (2) no gain or
loss will be recognized by the Transferor or Surviving Funds or the shareholders
of the Transferor Funds, and (3) the basis, and holding period, of Emerald
Shares received by the Shareholders of the Transferor Funds will be the same as
the basis, and holding period, of the shares of the Transferor Funds exchanged
therefor.
The Company has not sought a tax ruling from the Internal Revenue Service
("IRS"). The discussion of the federal tax consequences in the preceding
paragraph is not binding on the IRS and does not preclude the IRS from adopting
a contrary position. Shareholders should consult their own advisors concerning
the potential tax consequences to them, including state and local income tax
consequences.
COMPARISON OF THE FUNDS
INVESTMENT OBJECTIVES AND POLICIES: Each of the Funds is classified as a
"diversified" portfolio under the 1940 Act. The investment objective, policies
and fundamental limitations of each Transferor Fund and of corresponding
Surviving Fund are the same.
OTHER INFORMATION: The Company was organized as a Massachusetts business
trust on March 15, 1988 and is registered with the Securities and Exchange
Commission as in open-end management investment company. The Company's Agreement
and Declaration of Trust authorizes the Board of Trustees to classify and
reclassify any unissued shares into one or more classes of shares. Pursuant to
such authority, the Board of Trustees has authorized the issuance of an
unlimited number of shares in a single class of shares in each of the Transferor
Funds and three classes of shares (Emerald Shares, Emerald Service Shares and
Retail Shares) in each of the Surviving Funds. Each of the Funds is classified
as a diversified company under the 1940 Act. The Board of Trustees has also
authorized the issuance of additional classes of shares representing interests
in other investment portfolios of the Company. Information regarding the Funds'
Emerald Service Shares and Retail Shares, as well as the other portfolios
offered by the Company, may be obtained by contacting EAM at the address listed
below.
Shares of each Surviving Fund's three share classes bear a pro rata portion
of all operating expenses paid by a Fund except as follows. Holders of a Fund's
Emerald Service Shares bear the fees set forth in the prospectus describing such
shares that are paid under the Fund's Shareholder Services Plan. Similarly,
holders of a Fund's Retail Shares bear the payments set forth in the prospectus
describing such shares that are paid under the Funds' Retail Plan. In addition,
shares of each Fund's three share classes bear other miscellaneous "class
expenses" (I.E., certain printing, registration and per account transfer agency
expenses). Because of these Plans and other "class expenses", the
11
<PAGE>
performance of the Emerald Shares of a particular Surviving Fund is expected to
be higher than the performance of the Fund's Emerald Service Shares, and the
performance of both the Emerald Shares and Emerald Service Shares of a Fund is
expected to be higher than the performance of the Fund's Retail Shares. The
Funds offer various services and privileges in connection with Retail Shares
that are not generally offered in connection with Emerald Shares and Emerald
Service Shares, including an automatic investment plan, automatic withdrawal
plan and checkwriting. For further information regarding the Funds' Retail
Shares, contact EAM at 3435 Stelzer Road, Columbus, Ohio 43219-3025.
Shareholders are entitled to one vote for each full share held and
proportionate fractional votes for fractional shares held. Shares of all
portfolios of the Company vote together and not by class, unless otherwise
required by law or permitted by the Board of Trustees. All shareholders of a
Surviving Fund will vote together as a single class on matters pertaining to the
Fund's investment advisory agreement and fundamental investment limitations.
Only holders of Emerald Service Shares will vote on matters pertaining to the
Funds' Shareholder Services Plan for those shares, and only holders of Retail
Shares will vote on matters pertaining to the Plan for those shares.
For information concerning the procedures for purchasing and redeeming
shares of the respective Funds, and for the advisory and other fees payable by
the Funds, see "Summary -- Comparison of the Funds."
The foregoing is only a summary of certain material attributes of the Funds
and their shares. Shareholders may obtain copies of the Company's Agreement and
Declaration of Trust and Code of Regulations from the Company upon written
request at its principal office.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION: This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by the Board of
Trustees of the Company for use at the Meeting. It is expected that the
solicitation of proxies will be primarily by mail. The Company's officers may
also solicit proxies by telephone, telegraph or personal interview. In addition,
the Company may retain the services of one or more outside organizations to aid
in the solicitation of proxies. Such organizations normally charge a fee plus
out-of-pocket charges.
Only shareholders of record at the close of business on March 15, 1996 will
be entitled to vote at the Meeting. On that date, there were outstanding and
entitled to be voted shares of the Prime Trust Fund and
shares of the Treasury Trust Fund. Each share or fraction thereof is entitled to
one vote or fraction thereof.
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. Any shareholder giving a
proxy may revoke it at any time before it is exercised by submitting to the
Company a written notice of revocation or a subsequently executed proxy or by
attending the Meeting and electing to vote in person.
SHAREHOLDER AND BOARD APPROVAL: The Plan of Reorganization and the
transactions contemplated therein are being submitted for approval at the
Meeting by the holders of a majority of the outstanding shares of each
Transferor Fund in accordance with the terms of the Plan. Under those terms
"majority of the outstanding shares" means (a) 67% or more of the outstanding
shares of a Transferor Fund present at the meeting, if the holders of more than
50% of the outstanding shares of the Transferor Fund are present or represented
by proxy, or (b) more than 50% of the outstanding shares of the Transferor Fund,
whichever is less.
The vote of the shareholders of the Surviving Funds is not being solicited,
because their approval or consent is not required for the reorganization.
The approval of the Plan of Reorganization by the Board of Trustees of the
Company is discussed above under "Information Relating to the Proposed
Reorganization -- Board Consideration."
12
<PAGE>
At the record date for the Meeting, Barnett and its affiliates or their
nominees held of record substantially all of the outstanding shares of the
Transferor Funds, and substantially all of the outstanding Emerald Shares of the
Surviving Funds. In addition, at that date Barnett and its affiliates held
investment and/or voting power with respect to a majority of the outstanding
shares of each of those Funds on behalf of their customers. The name, address
and share ownership of each other person who may have possessed sole or shared
voting or investment power with respect to more than 5% of the outstanding
shares of the Funds' respective share classes at that date are listed in the
following table. The table also shows the percentage of the Funds' respective
share classes that would be owned by these persons upon the consummation of the
reorganization based on their holdings at that date.
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE
CLASS AND PERCENTAGE OF PORTFOLIO OF CLASS
NAME AND AMOUNT OF CLASS OWNED ON SHARES OWNED ON OWNED ON
PORTFOLIO ADDRESS SHARES OWNED RECORD DATE RECORD DATE CONSUMMATION
- ------------------------------------------- ------------- ------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Prime Trust Fund...........................
Treasury Trust Fund........................
Prime Fund.................................
Treasury Fund..............................
</TABLE>
For purposes of the 1940 Act, any person who owns directly or though one or
more controlled companies more than 25 percent of the voting securities of a
company is presumed to "control" such company. Under this definition, Barnett
and its affiliates may be deemed to be controlling persons of the Company.
The Company has been advised by Barnett that it intends to vote the shares
of the Transferor Funds over which it has voting power FOR and AGAINST the
reorganization proposal presented at the Meeting in the same proportions as the
total votes that are cast FOR and AGAINST the proposal by other shareholders of
the respective Funds.
At March , 1996, the trustees and officers of the Company as a group owned
beneficially less than 1% of the outstanding shares of the Transferor Funds and
the Surviving Funds.
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 Plan of Reorganization are not received, the persons named as proxies, or
their substitutes, 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 represented at the Meeting in
person or by proxy. If a quorum is not present, the persons named as proxies
will vote those proxies FOR adjournment. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to vote FOR the
Plan of Reorganization in favor of such adjournments, and will vote those
proxies required to be voted AGAINST such proposal against any adjournment. A
shareholder vote may be taken with respect to one Transferor Fund (but not the
other Transferor Fund) before any such adjournment if sufficient votes have been
received for approval. A quorum is constituted with respect to a Fund by the
presence in person or by proxy of the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at the Meeting. For purposes of
determining the presence of a quorum for transacting business at the Meeting,
abstentions, but not broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owners or other persons entitled to vote shares with respect to which
the brokers or nominees do not have discretionary power), will be treated as
shares that are present at the Meeting but which have not been voted.
Abstentions and broker "non-votes" will have the effect of a "no" vote for
purposes of obtaining the requisite approval of the reorganization.
ANNUAL MEETINGS: The Company 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
13
<PAGE>
trustees then in office will call a shareholders' meeting for the election of
trustees. The Trustees will call a shareholder meeting upon the written request
of shareholders owning at least 10% of the shares entitled to vote.
ADDITIONAL INFORMATION ABOUT THE FUNDS
Information about the Surviving Funds and their Emerald Shares is included
in the Prospectus dated April 1, 1996 accompanying this Combined Proxy
Statement/Prospectus, which is incorporated by reference herein, and information
about the Transferor Funds is included in their Prospectus dated April 1, 1996,
which is also incorporated herein by reference. Additional information about the
Funds is included in the Funds' Statements of Additional Information dated April
1, 1996, which have been filed with the SEC. Copies of the Transferor Funds'
Prospectus and the Statements of Additional Information may be obtained without
charge by writing to the Distributor at 3435 Stelzer Road, Columbus, Ohio
43219-3025. The Company 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 offices of BISYS listed above. In addition,
these materials can be inspected and copied at the SEC's Regional Offices at 77
Park Place, New York, New York 10007, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60621-2511. Copies of such
material can also 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.
OTHER BUSINESS
The Company's Board of Trustees knows of no other business to be brought
before the Meeting. However, if any other matters come before the Meeting, it is
the intention of the Board that proxies that 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.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Company in writing at the
address on the cover page of this Combined Proxy Statement/Prospectus or by
telephoning (800) 367-5905.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
14
<PAGE>
APPENDIX A
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION made this th day of February, 1996, by Emerald
Funds (the "Trust"), a Massachusetts business trust established under an
Agreement and Declaration of Trust dated March 15, 1988, as amended, on behalf
of its Prime Trust Fund and Treasury Trust Fund (the "Transferor Funds") and its
Prime Fund and Treasury Fund (the "Surviving Funds").
WHEREAS, the Trust is an open-end registered investment company of the
management type;
WHEREAS, the Trust is authorized to issue its shares of beneficial interest
in separate series, each of which maintains a separate and distinct portfolio of
assets;
WHEREAS, the Transferor Funds and the Surviving Funds are separate series of
the Trust with similar investment objectives, policies and limitations;
WHEREAS, the Transferor Funds own securities which are assets of the
character in which the Surviving Funds are permitted to invest;
WHEREAS, the Board of Trustees of the Trust has determined that the transfer
of all of the assets and liabilities of the Transferor Funds to the Surviving
Funds is in the best interests of both the Transferor Funds and Surviving Funds
and would provide more efficient management and administration of those assets,
and has further determined that the interests of the shareholders of the said
Funds would not be diluted as a result of this transaction; and
WHEREAS, the Trust intends to provide for the reorganization of the
Transferor Funds through the acquisition by the Surviving Funds of all of the
assets, subject to all of the liabilities, of the Transferor Funds in exchange
for shares of beneficial interest of the Surviving Funds of the share class
known as "Emerald Shares," the termination of the Transferor Funds and the
distribution to their shareholders of such Emerald Shares, all pursuant to the
provisions of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended (the "Code");
NOW THEREFORE, the Trust has adopted this Plan of Reorganization as follows:
1. PLAN OF REORGANIZATION AND LIQUIDATION
(a) The Trust, on behalf of the Prime Trust Fund, shall assign, sell,
convey, transfer and deliver to the Prime Fund at the closing provided for
in Section 2 (hereinafter called the "Closing") all of the then existing
assets of the Prime Trust Fund of every kind and nature. In consideration
therefor, the Prime Fund shall at the Closing (i) assume all of the Prime
Trust Fund's obligations and liabilities then existing, whether absolute,
accrued, contingent or otherwise including without limitation all fees and
expenses in connection with the transactions contemplated hereby and (ii)
deliver to the Prime Trust Fund a number of full and fractional Emerald
Shares of the Prime Fund equal to the number of full and fractional shares
of the Prime Trust Fund then outstanding. The number of shares of the Prime
Trust Fund issued and outstanding and the number of Emerald Shares of the
Prime Fund to be issued to the Prime Trust Fund shall in each case be
determined by the Trust's Administrator as of 4:30 p.m., Eastern time, on
the Closing Date (as defined in Section 2). The determination of said
Administrator shall be conclusive and binding on the Prime Trust Fund and
Prime Fund and their respective shareholders.
(b) The Trust, on behalf of the Treasury Trust Fund, shall assign, sell,
convey, transfer and deliver to the Treasury Fund at the Closing all of the
then existing assets of the Treasury Trust Fund of every kind and nature. In
consideration therefor, the Treasury Fund shall at the Closing (i) assume
all of the Treasury Trust Fund's obligations and liabilities then existing,
whether absolute, accrued, contingent or otherwise including without
limitation all fees and expenses in
A-1
<PAGE>
connection with the transactions contemplated hereby and (ii) deliver to the
Treasury Trust Fund a number of full and fractional Emerald Shares of the
Treasury Fund equal to the number of full and fractional shares of the
Treasury Trust Fund then outstanding. The number of shares of the Treasury
Trust Fund issued and outstanding and the number of Emerald Shares of the
Treasury Fund to be issued to the Treasury Trust Fund shall in each case be
determined by the Trust's Administrator as of 4:30 p.m., Eastern time, on
the Closing Date. The determination of said Administrator shall be
conclusive and binding on the Treasury Trust Fund and Treasury Fund and
their respective shareholders.
(c) Upon consummation of the transactions described in paragraphs (a)
and (b) of this Section 1, each Transferor Fund shall distribute in complete
liquidation pro rata to its shareholders of record as of the Closing Date
the Emerald Shares received by the Transferor Fund. Such distribution shall
be accomplished by the establishment of an open account on the share records
of each Surviving Fund in the name of each shareholder of the corresponding
Transferor Fund representing a number of Emerald Shares equal to the number
of shares of the Transferor Fund owned of record by the shareholder at the
Closing Date. Certificates for shares of the Transferor Funds issued prior
to the reorganization, if any, shall represent outstanding shares of the
corresponding Surviving Funds following the reorganization. In the interest
of economy and convenience, certificates representing Emerald Shares of the
Surviving Funds will not be physically issued. After the Closing Date, the
Transferor Funds shall not conduct any business except in connection with
its liquidation.
2. CLOSING AND CLOSING DATE. The Closing shall occur at the offices of the
Trust's Administrator at 4:30 p.m., Eastern time, on May , 1996 or at such
other time and date, or at such other location, as the Trust may determine (the
"Closing Date"). All acts taking place at the Closing shall be deemed to take
place simultaneously on the Closing Date unless otherwise provided.
3. CONDITIONS PRECEDENT. The obligations of the Transferor Funds and
Surviving Funds to effect the transactions contemplated hereunder shall be
subject to the satisfaction of each of the following conditions:
(a) All filings shall have been made with, and all authority and orders
shall have been received from the Securities and Exchange Commission (the
"SEC") and state securities commissions as may be necessary in the opinion
of Drinker Biddle & Reath to permit the parties to carry out the
transactions contemplated by this Plan.
(b) The Trust shall have received an opinion of Drinker Biddle & Reath
substantially to the effect that for federal income tax purposes: (i) the
acquisition of the assets and assumption of the liabilities of the
Transferor Funds by the Surviving Funds in return for Emerald Shares of the
Transferor Funds followed by the distribution of such shares to the
shareholders of the Transferor Funds will constitute a "reorganization"
within the meaning of Section 368(a)(1)(C) or Section 368(a)(1)(D) of the
Code and the Surviving Funds and the Transferor Funds will each be "a party
to the reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Transferor Funds upon the
transfer of their assets and liabilities to the Surviving Funds; (iii) the
tax basis of the assets of the Transferor Funds in the hands of the
Surviving Funds will be the same as the tax basis of such assets in the
hands of the Transferor Funds immediately prior to the transfer; (iv) the
holding period of the Surviving Funds for the assets of the Transferor Funds
transferred to them will include the period during which such assets were
held by the Transferor Funds; (v) no gain or loss will be recognized by the
Surviving Fund upon the receipt of the assets of the Transferor Funds in
exchange for Emerald Shares of the Surviving Funds and the assumption by the
Surviving Funds of the liabilities of the Transferor Funds; (vi) no gain or
loss will be recognized by the shareholders of the Transferor Funds upon the
receipt of said Emerald Shares in exchange for their shares in the
Transferor Funds; (vii) the basis of said Emerald Shares received by the
shareholders of the Transferor Funds will be the same as the basis of the
shares of the Transferor Fund exchanged therefor; and (viii) the
A-2
<PAGE>
holding period of said Emerald Shares received by the shareholders of the
Transferor Funds will include the holding period of the shares of the
Transferor Funds exchanged therefor, provided that at the time of the
exchange the shares of the Funds were held as capital assets; and as to such
other matters as the Trust may reasonably request;
(c) The Trust shall have received an opinion of Drinker Biddle & Reath
to the effect that the Emerald Shares of the Surviving Funds issued pursuant
to this Plan will, when issued in accordance with the provisions hereof, be
legally issued, fully paid and non-assessable.
(d) This Plan and the reorganization contemplated hereby shall have been
approved by the Board of Trustees of the Trust and shall have been
recommended for approval to the shareholders of the Transferor Funds by the
Trust's Board of Trustees;
(e) This Plan and the reorganization contemplated hereby shall have been
approved by the affirmative vote of the holders of a majority of the
outstanding shares of beneficial interest of the Transferor Funds (as
defined in the Trust's Agreement and Declaration of Trust) entitled to vote
thereon, voting separately on a Fund-by-Fund basis;
(f) The Trust shall file with the SEC a Registration Statement on Form
N-14 which shall include a combined proxy statement/prospectus complying in
all material respects with the requirement of the federal securities laws
relating to a meeting of shareholders of the Transferor Funds to be called
to consider and act upon the transactions contemplated herein.
4. AMENDMENT. This Plan may be amended at any time by action of the
Trustees of the Trust notwithstanding approval thereof by the shareholders of
the Transferor Funds, provided that no amendment shall have a material adverse
effect on the interests of the shareholders of the Transferor Funds and
Surviving Funds.
5. TERMINATION. The Trustees of the Trust may terminate this Plan and
abandon the reorganization contemplated hereby, notwithstanding approval thereof
by the shareholders of the Transferor Funds, at any time prior to the Closing,
if circumstances should develop that, in their judgment, make proceeding with
the Plan inadvisable.
6. NO SURVIVAL OF REPRESENTATIONS, ETC. The representations, warranties,
covenants and agreements contained herein shall not survive the Closing Date.
7. WAIVER. The Trust, after consultation with its counsel and by consent
of its Board of Trustees, Executive Committee or an officer authorized by such
Board of Trustees, may waive any condition to the obligations of any Fund
hereunder if, in its or such officer's judgment, such waiver will not have a
material adverse effect on the interests of the shareholders of the Transferor
Funds and Surviving Funds. In the event shareholder approval of reorganization
is obtained with respect to one Transferor Fund but not with respect to the
other Transferor Fund, with the result that the transactions contemplated by
this Plan may be consummated with respect to one but not both of the Transferor
Funds, the Board of Trustees of the Trust may, in the exercise of its reasonable
business judgment, either abandon this Plan with respect to both of the
Transferor Funds or direct that the reorganization be consummated to the degree
the Board deems advisable.
8. MISCELLANEOUS PROVISIONS. This Plan shall bind and inure to the benefit
of the Transferor Funds and Surviving Funds and their respective successors and
assigns. It shall be governed by and carried out in accordance with the laws of
The Commonwealth of Massachusetts.
The names "Emerald Funds" and "Trustees of Emerald Funds" refer respectively
to the Trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under an Agreement and Declaration of Trust
dated March 15, 1988, 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
the principal office of the Trust. The obligations of "Emerald Funds" entered
into in the name or on behalf thereof by any of the Trustees, representatives or
agents are not made individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders or representatives of the Trust
A-3
<PAGE>
personally, but bind only the Trust Property, and all persons dealing with any
class or series of shares of the Trust must look solely to the Trust Property
belonging to such class or series for the enforcement of any claims against the
Trust.
IN WITNESS WHEREOF, the Trust has caused this Plan of Reorganization to be
executed by a duly authorized officer as of the day and year first written.
EMERALD FUNDS, on behalf of its
Prime Trust, Treasury Trust,
Prime and Treasury Funds
By: __________________________________
Title: _______________________________
A-4
<PAGE>
EMERALD FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219-3035
STATEMENT OF ADDITIONAL INFORMATION
(1996 SPECIAL MEETING OF SHAREHOLDERS OF THE PRIME TRUST FUND AND TREASURY TRUST
FUND)
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Proxy Statement/Prospectus dated April 1,
1996 ("Combined Proxy Statement/ Prospectus") for the Special Meeting of
Shareholders of the Prime Trust Fund and Treasury Trust Fund (the "Transferor
Funds"), two investment portfolios offered by Emerald Funds, to be held on May
10, 1996. Copies of the Combined Proxy Statement/Prospectus may be obtained at
no charge by calling Emerald Asset Management, Inc. at 1-800-367-5905.
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.
The audited financial statements contained in the Annual Reports dated
November 30, 1995, for the Transferor Funds and Surviving Funds, which accompany
this Statement of Additional Information, are incorporated herein by reference.
No other parts of the Annual Reports are incorporated by reference herein.
Further information about shares of the Transferor Funds and Emerald Shares
of the Prime Fund and Treasury Fund (the "Surviving Funds") is contained in and
incorporated by reference to said Funds' Statements of Additional Information
dated April 1, 1996, copies of which also accompany this document.
The date of this Statement of Additional Information is April 1, 1996.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
General Information........................................................................................ 3
Pro Forma Financial Statements............................................................................. F-1
</TABLE>
2
<PAGE>
GENERAL INFORMATION
The shareholders of the Transferor Funds are being asked to approve or
disapprove a Plan of Reorganization dated as of February , 1996 and the
transactions contemplated thereby. The Plan contemplates the transfer of all of
the assets and liabilities of the Company's Prime Trust Fund to the Company's
Prime Fund and the assets and liabilities of the Company's Treasury Trust Fund
to the Company's Treasury Fund. In exchange, each Transferor Fund will receive
Emerald Shares of the corresponding Surviving Fund which will be distributed to
the shareholders of the Transferor Fund in connection with the Transferor Fund's
liquidation, such that each holder of shares in a Transferor Fund at the
Effective Time of the Reorganization will receive a like number of full and
fractional Emerald Shares in the corresponding Surviving Fund.
A Special Meeting of Shareholders of the Transferor Funds to consider. the
Plan of Reorganization and the related transactions, will be held at the
Company's offices, 3435 Stelzer Road, Columbus, Ohio 43219-3025 at 10:00 a.m.
local time on May 10, 1996. For further information about the transaction, see
the Combined Proxy Statement/Prospectus.
3
<PAGE>
EMERALD FUNDS
PRIME FUND
PRIME TRUST FUND
TREASURY FUND
TREASURY TRUST FUND
INTRODUCTION TO PROPOSED FUND MERGERS
The accompanying unaudited Pro Forma Combining Statements of Assets and
Liabilities, Statements of Operations, and Schedules of Portfolio Investments
reflect the accounts of the Emerald Funds: Prime Fund, Prime Trust Fund,
Treasury Fund, and Treasury Trust Fund as of and for the year ended November 30,
1995. These statements have been derived from the funds' books and records
utilized in calculating daily net asset values at November 30, 1995.
F-1
<PAGE>
EMERALD FUNDS
PRIME FUND AND PRIME TRUST FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
PRIME PRIME TRUST ADJUSTMENTS PRO FORMA
FUND FUND (NOTE 1) COMBINED (NOTE 1)
----------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities (amortized cost
$1,633,793,549, $86,365,111, and
$1,720,158,660 respectively)............ $ 1,633,793,549 $ 86,365,111 $ $ 1,720,158,660
Repurchase agreements (amortized cost
$207,476,146, $45,279,800, and
$252,755,946 respectively).............. 207,476,146 45,279,800 252,755,946
Cash..................................... 194,531 194,531
Interest receivable...................... 9,785,378 102,338 9,887,716
Prepaid expenses and other............... 5,910 2,338 8,248
----------------- --------------- --------------- -----------------
Total assets......................... 1,851,255,514 131,749,587 1,983,005,101
----------------- --------------- --------------- -----------------
LIABILITIES:
Dividends payable........................ 5,545,108 574,289 6,119,397
Payable to brokers for investments
purchased............................... 35,090,411 35,090,411
Accrued expenses:
Investment Advisory fees............... 272,079 13,626 285,705
Administration fees.................... 131,661 13,626 145,287
Shareholder Service fees (Emerald
Service Shares)....................... 429,903 429,903
Custodian and transfer agent fees...... 71,679 13,371 85,050
Other.................................. 54,984 45,807 100,791
----------------- --------------- --------------- -----------------
Total liabilities.................... 41,595,825 660,719 42,256,544
----------------- --------------- --------------- -----------------
NET ASSETS................................. $ 1,809,659,689 $ 131,088,868 $ $ 1,940,748,557
----------------- --------------- --------------- -----------------
----------------- --------------- --------------- -----------------
CAPITAL:
Shares outstanding ($0.001 par value,
unlimited number of shares authorized):
Emerald Shares......................... 462,636,209 131,098,672 593,734,881
Emerald Service Shares................. 901,831,725 901,831,725
Investor Shares........................ 444,841,816 444,841,816
----------------- --------------- --------------- -----------------
Total Shares Outstanding............. 1,809,309,750 131,098,672 1,940,408,422
----------------- --------------- --------------- -----------------
----------------- --------------- --------------- -----------------
Net Asset Value, Offering price and
Redemption Price per share
Emerald Shares......................... $ 1.00 $ 1.00 $ 1.00
Emerald Service Shares................. $ 1.00 $ 1.00
Investor Shares........................ $ 1.00 $ 1.00
----------------- --------------- -----------------
----------------- --------------- -----------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.... 1,809,310 131,099 1,940,409
Additional paid-in capital............... 1,807,500,440 130,967,573 1,938,468,013
Accumulated net realized gains/ losses on
investment transactions................. 349,939 (9,804) 340,135
----------------- --------------- -----------------
Net Assets, November 30, 1995.............. $ 1,809,659,689 $ 131,088,868 $ 1,940,748,557
----------------- --------------- -----------------
----------------- --------------- -----------------
</TABLE>
See Notes to Pro Forma Financial Statements.
F-2
<PAGE>
EMERALD FUNDS
TREASURY FUND AND TREASURY TRUST FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
TREASURY TREASURY TRUST ADJUSTMENTS COMBINED (NOTE
FUND FUND (NOTE 1) 1)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities (amortized cost
$333,750,484 $20,072,641, and $353,823,125
respectively)............................... $ 333,750,484 $ 20,072,641 $ $ 353,823,125
Repurchase agreements (amortized cost
$478,369,915 $63,568,500, and $541,938,415
respectively)............................... 478,369,915 63,568,500 541,938,415
Interest receivable.......................... 2,449,984 273,631 2,723,615
Receivable from brokers for investments
sold........................................ 49,613,792 49,613,792
Prepaid expenses and other................... 20,572 13,847 34,419
--------------- --------------- --------------- ---------------
Total assets............................. 814,590,955 133,542,411 948,133,366
--------------- --------------- --------------- ---------------
LIABILITIES:
Dividends payable............................ 3,090,411 604,590 3,695,001
Accrued expenses:
Investment Advisory fees................... 136,024 14,127 150,151
Administration fees........................ 40,287 14,126 54,413
Shareholder Service fees (Emerald Service
Shares)................................... 152,403 152,403
Distribution expenses (Investor Shares).... 17,401 17,401
Custodian and transfer agent fees.......... 46,207 15,363 61,570
Other...................................... 60,397 43,991 104,388
--------------- --------------- --------------- ---------------
Total liabilities........................ 3,543,130 692,197 4,235,327
--------------- --------------- --------------- ---------------
NET ASSETS..................................... $ 811,047,825 $ 132,850,214 $ $ 943,898,039
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
CAPITAL:
Shares outstanding ($0.001 par value,
unlimited number of shares authorized):
Emerald Shares............................. 236,482,130 132,855,897 369,338,027
Emerald Service Shares..................... 525,808,234 525,808,234
Investor Shares............................ 49,065,263 49,065,263
--------------- --------------- --------------- ---------------
Total Shares Outstanding................. 811,355,627 132,855,897 944,211,524
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Net Asset Value, Offering price and
Redemption Price per share
Emerald Shares............................. $ 1.00 $ 1.00 $ 1.00
Emerald Service Shares..................... $ 1.00 $ 1.00
Investor Shares............................ $ 1.00 $ 1.00
--------------- --------------- ---------------
--------------- --------------- ---------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par........ 811,356 132,856 944,212
Additional paid-in capital................... 810,544,271 132,723,041 943,267,312
Accumulated net realized losses on investment
transactions................................ (307,802) (5,683) (313,485)
--------------- --------------- ---------------
Net Assets, November 30, 1995.................. $ 811,047,825 $ 132,850,214 $ 943,898,039
--------------- --------------- ---------------
--------------- --------------- ---------------
</TABLE>
See Notes to Pro Forma Financial Statements.
F-3
<PAGE>
EMERALD FUNDS
PRIME FUND AND PRIME TRUST FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PRIME PRIME TRUST ADJUSTMENTS COMBINED (NOTE
FUND FUND (NOTE 1) 1)
-------------- ------------- ----------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest.......................................... $ 97,394,992 $ 6,936,648 $ $ 104,331,640
-------------- ------------- ----------- ----------------
Total Income.................................. 97,394,992 6,936,648 104,331,640
-------------- ------------- ----------- ----------------
EXPENSES:
Investment Advisory fees.......................... 4,036,274 173,413 115,609 4,325,296
Administration fees............................... 1,451,221 173,413 (80,926) 1,543,708
Shareholder Service fees (Emerald Service
Shares).......................................... 2,814,354 2,814,354
Distribution Expenses (Investor Shares)........... 1,523,904 1,523,904
Transfer agent fees and expenses.................. 107,225 9,019 116,244
Custodian fees and expenses....................... 501,967 82,506 584,473
Insurance expense................................. 47,414 4,306 51,720
Legal fees........................................ 18,603 17,190 (17,190) 18,603
Audit fees........................................ 39,423 38,727 (38,727) 39,423
Reports to shareholders (Emerald Shares).......... 17,371 8,580 25,951
Reports to shareholders (Emerald Service
Shares).......................................... 12,162 12,162
Reports to shareholders (Investor Shares)......... 122,497 122,497
Trustees' fees.................................... 12,767 12,253 25,020
Registration fees................................. 50,203 50,203
Organization costs................................ 571 571
Other expenses.................................... 47,358 7,176 44,000 98,534
-------------- ------------- ----------- ----------------
Total expenses before waivers and
reimbursements................................. 10,803,314 526,583 22,766 11,352,663
Less: Fee waivers and expense reimbursements.... (392,096) (64,148) (23,330) (479,574)
-------------- ------------- ----------- ----------------
Total Expenses................................ 10,411,218 462,435 (564) 10,873,089
-------------- ------------- ----------- ----------------
Net Investment Income............................... 86,983,774 6,474,213 564 93,458,551
-------------- ------------- ----------- ----------------
REALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions..... 410,900 410,900
-------------- ------------- ----------- ----------------
Change in net assets resulting from operations.... $ 87,394,674 $ 6,474,213 $ 564 $ 93,869,451
-------------- ------------- ----------- ----------------
-------------- ------------- ----------- ----------------
</TABLE>
See Notes to Pro Forma Financial Statements.
F-4
<PAGE>
EMERALD FUNDS
TREASURY FUND AND TREASURY TRUST FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
TREASURY PRO FORMA PRO FORMA
TREASURY TRUST ADJUSTMENTS COMBINED (NOTE
FUND FUND (NOTE 1) 1)
-------------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest............................................ $ 48,196,732 $ 8,336,155 $ $ 56,532,887
-------------- ------------- ----------- --------------
Total Income.................................... 48,196,732 8,336,155 56,532,887
-------------- ------------- ----------- --------------
EXPENSES:
Investment Advisory fees............................ 2,049,210 212,078 140,248 2,401,536
Administration fees................................. 797,128 212,078 (83,561) 925,645
Shareholder Service fees (Emerald Service Shares)... 1,898,193 1,898,193
Distribution Expenses (Investor Shares)............. 200,869 200,869
Transfer agent fees and expenses.................... 81,992 20,175 102,167
Custodian fees and expenses......................... 339,437 84,877 424,314
Insurance expense................................... 50,294 4,191 54,485
Legal fees.......................................... 17,344 19,793 (19,793) 17,344
Audit fees.......................................... 29,474 37,376 (37,376) 29,474
Reports to shareholders (Emerald Shares)............ 2,808 14,937 17,745
Reports to shareholders (Emerald Service Shares).... 10,095 10,095
Reports to shareholders (Investor Shares)........... 39,058 39,058
Trustees' fees...................................... 12,448 12,267 24,715
Other expenses...................................... 53,738 11,739 21,000 86,477
-------------- ------------- ----------- --------------
Total expenses before waivers and
reimbursements................................... 5,582,088 629,511 20,518 6,232,117
Less: Fee waivers and expense reimbursements...... (225,991) (64,111) (7,517) (297,619)
-------------- ------------- ----------- --------------
Total Expenses.................................. 5,356,097 565,400 13,001 5,934,498
-------------- ------------- ----------- --------------
Net Investment Income................................. 42,840,635 7,770,755 (13,001) 50,598,389
-------------- ------------- ----------- --------------
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions...... (195,517) (76,579) (272,096)
-------------- ------------- ----------- --------------
Change in net assets resulting from operations...... $ 42,645,118 $ 7,694,176 $ (13,001) $ 50,326,293
-------------- ------------- ----------- --------------
-------------- ------------- ----------- --------------
</TABLE>
See Notes to Pro Forma Financial Statements.
F-5
<PAGE>
EMERALD FUNDS
PRIME FUND AND PRIME TRUST FUND
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRIME FUND
----------------------------------------------------------
PRINCIPAL AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST
RATING RATE DATE (000) (NOTE 2)
------------ ----- -------- --------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BANK NOTES -- 8.1%
Bank of America, Seattle First National Medium
Term Note*..................................... A1/P1 5.74% 12/29/95 $35,000 $ 35,000,000
Bank of New York (Delaware), Medium Term
Note*.......................................... A1/P1 5.88 10/25/96 38,000 38,000,000
Huntington National Bank -- Floating Rate Bank
Note*.......................................... A1/P1 5.82 12/1/95 35,000 35,000,000
Nations Bank Corp -- Floating Rate Medium Term
Note*.......................................... A1/P1 5.94 12/20/95 23,850 23,874,161
Nations Bank Texas -- Floating Rate Medium Term
Note*.......................................... A1/P1 5.87 12/1/95 25,000 25,000,000
--------------
Total Bank Notes
(amortized cost -- $156,874,161)................. 156,874,161
--------------
BANKERS ACCEPTANCES -- 1.9%
Corestates Bank.................................
Corestates Bank.................................
First Alabama Bank..............................
First Alabama Bank..............................
Fuji Bank, Ltd., Los Angeles Branch............. A1/P1 5.81 12/6/95 10,000 9,991,931
Fuji Bank, Ltd., Los Angeles Branch............. A1/P1 5.79 12/11/95 15,000 14,975,875
Mellon Bank.....................................
--------------
Total Bankers Acceptances
(amortized cost $37,349,061)..................... 24,967,806
--------------
YANKEE CERTIFICATES OF DEPOSIT -- 14.0%
Bank of Tokyo, Ltd., Portland, Oregon Branch.... A1/P1 5.95 12/29/95 25,000 25,000,000
Canadian Imperial Bank of Commerce, N.Y.........
Dai Ichi Kangyo Bank, Ltd., New York Branch..... A1/P1 5.83 12/20/95 35,000 34,999,722
Deutsche Bank, New York Branch.................. A1+/P1 6.05 7/25/96 35,000 35,000,000
Fuji Bank, Ltd., New York Branch................ A1/P1 5.96 12/7/95 55,000 55,000,631
Sanwa Bank, Ltd., New York Branch............... A1+/P1 5.94 12/7/95 12,000 12,000,138
Sanwa Bank, Ltd., New York Branch............... A1+/P1 5.92 12/11/95 25,000 25,000,069
Societe Generale, N.Y...........................
Sumitomo Bank, Ltd., New York Branch............ A1/P1 5.87 12/11/95 30,000 30,000,166
Sumitomo Bank, Ltd., New York Branch............ A1/P1 5.82 12/13/95 20,000 20,000,066
Sumitomo Bank, Ltd., New York Branch............ A1/P1 5.86 12/27/95 25,000 25,000,180
--------------
Total Yankee Certificates of Deposit
(amortized cost $272,000,972).................... 262,000,972
--------------
COMMERCIAL PAPER -- 23.1%
Domestic -- 16.7%
Alpine Securitization........................... A1+/P1 5.78 12/19/95 71,133 70,927,426
Bankers Trust -- Floating Rate*................. A1/P1 5.89 12/1/95 25,000 25,000,000
Bear Stearns.................................... A1/P1 5.72 12/22/95 20,000 19,933,267
Bridgestone/Firestone........................... A1/P1 5.80 12/4/95 14,000 13,993,233
Countrywide Funding............................. A1/F1**** 5.75 12/8/95 23,000 22,974,285
Countrywide Funding............................. A1/F1**** 5.77 12/12/95 22,000 21,961,213
Dakota SCCMT.................................... A1+/P1 5.73 12/6/95 35,000 34,972,146
Dynamic Funding................................. A1/P1 5.80 12/1/95 23,200 23,200,000
Enterprise Funding (c) A1/P1 5.77 12/26/95 13,601 13,546,501
Ford Motor Credit Corp.......................... A1/P1 5.70 12/22/95 38,000 37,873,650
CSR America, Inc................................
CSR America, Inc................................
<CAPTION>
PRIME TRUST FUND PRO FORMA
------------------------------------------------------- COMBINED
PRINCIPAL AMORTIZED AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST COST
RATING RATE DATE (000) (NOTE 2) (NOTE 1)
----------- ----- -------- --------- ------------ --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BANK NOTES -- 8.1%
Bank of America, Seattle First National Medium
Term Note*..................................... $ 35,000,000
Bank of New York (Delaware), Medium Term
Note*.......................................... 38,000,000
Huntington National Bank -- Floating Rate Bank
Note*.......................................... 35,000,000
Nations Bank Corp -- Floating Rate Medium Term
Note*.......................................... 23,874,161
Nations Bank Texas -- Floating Rate Medium Term
Note*.......................................... 25,000,000
--------------
Total Bank Notes
(amortized cost -- $156,874,161)................. 156,874,161
--------------
BANKERS ACCEPTANCES -- 1.9%
Corestates Bank................................. A1/P1 5.70% 12/19/95 $2,500 $ 2,492,875 2,492,875
Corestates Bank................................. A1/P1 5.70 12/27/95 2,500 2,489,708 2,489,708
First Alabama Bank.............................. A1/P1 5.60 4/10/96 1,500 1,469,433 1,469,433
First Alabama Bank.............................. A1+/P1 5.54 5/7/96 2,500 2,439,214 2,439,214
Fuji Bank, Ltd., Los Angeles Branch............. 9,991,931
Fuji Bank, Ltd., Los Angeles Branch............. 14,975,875
Mellon Bank..................................... A1/P1 5.70 12/19/95 3,500 3,490,025 3,490,025
------------ --------------
Total Bankers Acceptances
(amortized cost $37,349,061)..................... 12,381,255 37,349,061
------------ --------------
YANKEE CERTIFICATES OF DEPOSIT -- 14.0%
Bank of Tokyo, Ltd., Portland, Oregon Branch.... 25,000,000
Canadian Imperial Bank of Commerce, N.Y......... A1+/P1 5.81 1/29/96 5,000 5,000,000 5,000,000
Dai Ichi Kangyo Bank, Ltd., New York Branch..... 34,999,722
Deutsche Bank, New York Branch.................. 35,000,000
Fuji Bank, Ltd., New York Branch................ 55,000,631
Sanwa Bank, Ltd., New York Branch............... 12,000,138
Sanwa Bank, Ltd., New York Branch............... 25,000,069
Societe Generale, N.Y........................... A1+/P1 5.74 3/1/96 5,000 5,000,000 5,000,000
Sumitomo Bank, Ltd., New York Branch............ 30,000,166
Sumitomo Bank, Ltd., New York Branch............ 20,000,066
Sumitomo Bank, Ltd., New York Branch............ 25,000,180
------------ --------------
Total Yankee Certificates of Deposit
(amortized cost $272,000,972).................... 10,000,000 272,000,972
------------ --------------
COMMERCIAL PAPER -- 23.1%
Domestic -- 16.7%
Alpine Securitization........................... 70,927,426
Bankers Trust -- Floating Rate*................. 25,000,000
Bear Stearns.................................... 19,933,267
Bridgestone/Firestone........................... 13,993,233
Countrywide Funding............................. 22,974,285
Countrywide Funding............................. 21,961,213
Dakota SCCMT.................................... 34,972,146
Dynamic Funding................................. 23,200,000
Enterprise Funding (c) 13,546,501
Ford Motor Credit Corp.......................... 37,873,650
CSR America, Inc................................ A1/P1 5.72 12/26/95 3,000 2,988,083 2,988,083
CSR America, Inc................................ A1/P1 5.62 2/29/96 3,000 2,957,850 2,957,850
</TABLE>
F-6
<PAGE>
Commercial Paper, continued:
<TABLE>
<CAPTION>
PRIME FUND
----------------------------------------------------------
PRINCIPAL AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST
RATING RATE DATE (000) (NOTE 2)
------------ ----- -------- --------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
E.I. Du Pont De Nemours Co......................
Goldman Sachs L.P...............................
International Leasing Finance Corp..............
PGA Tour Investment Finance, Inc................
Toronto Dominion Holdings, U.S.A................
Vehicle Services of America, Inc................
Vehicle Services of America, Inc................
Zeneca Wilmington, Inc..........................
--------------
$ 284,381,721
--------------
Foreign -- 6.4%
Akzo Nobel, Inc.................................
Daewoo International............................
Daimler-Benz, N.A...............................
Den Danske Bank................................. A1/P1 5.73% 12/29/95 $28,000 27,875,213
Ontario Hydro................................... A1+/P1 5.69 12/29/95 35,000 34,845,106
Yorkshire Building Society...................... A1/P1 5.71 12/29/95 48,000 47,786,827
--------------
110,507,146
--------------
Total Commercial Paper
(amortized cost $448,872,724) 394,888,867
--------------
CORPORATE OBLIGATIONS -- 28.6%
Bankers Trust -- Floating Rate Note*............ A1/P1 5.89 12/1/95 50,000 50,000,000
Beta Finance -- Medium Term Corporate Note
(a)............................................ A1+/P1 5.97 7/17/96 35,000 35,000,000
Beta Finance -- Corporate Floating Rate Note*... A1+/P1 5.90 12/1/95 40,000 40,000,000
C.S. First Boston Corp., -- Medium Term Floating
Rate Note*..................................... A1/P1 5.99 1/2/96 40,000 40,000,000
C.S. First Boston Corp., -- Extendible Floating
Rate Note (c)*................................. A1/P1 5.91 12/21/95 35,000 35,000,000
Ford Motor Credit Corp., -- Medium Term Floating
Rate Note*..................................... A1/P1 6.06 1/15/96 40,000 40,084,758
Goldman Sachs & Co., -- Floating Rate Note*..... A1+/P1 5.91 12/5/95 50,000 50,000,000
PHH Corp., -- Medium Term Floating Rate Note*... A1/P1 5.86 12/1/95 50,000 49,989,380
SMM Trust 1995 B -- Medium Term Floating Rate
Note*.......................................... A1+/P1 5.88 12/4/95 30,000 30,000,000
SMM Trust 1995 N -- Medium Term Floating Rate
Note*.......................................... A1+/P1 5.93 2/15/96 35,000 35,000,000
Steers 1994-1st USA Bank -- Medium Term Floating
Rate Note*(a).................................. A1+/P1 5.81 12/15/95 50,000 50,000,000
Steers/Anagram -- Floating Rate Note*(a)........ A1+/D1+** 5.86 12/26/95 35,000 35,000,000
Steers/Merrill Lynch -- Floating Rate
Note*(a)....................................... F1**/P1 5.86 12/18/95 65,000 64,999,387
--------------
Total Corporate Obligations
(amortized cost $555,073,525).................... 555,073,525
--------------
MASTER NOTE -- 2.6%
Lehman Brothers PLC, Master Note (c).............. A1/D1** 5.91 12/20/95 50,000 50,000,000
--------------
Total Master Notes
(Amortized Cost $50,000,000)..................... 50,000,000
--------------
TAXABLE OBLIGATIONS -- 0.5%
Genesys Health System, Series 1995A*............
New York City Taxable, Series B**...............
Total Taxable Obligations
(amortized cost $10,000,000).....................
<CAPTION>
PRIME TRUST FUND PRO FORMA
------------------------------------------------------- COMBINED
PRINCIPAL AMORTIZED AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST COST
RATING RATE DATE (000) (NOTE 2) (NOTE 1)
----------- ----- -------- --------- ------------ --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
E.I. Du Pont De Nemours Co...................... A1+/P1 5.63% 12/21/95 $5,000 $ 4,984,361 $ 4,984,361
Goldman Sachs L.P............................... A1+/P1 5.55 2/16/96 5,000 4,940,646 4,940,646
International Leasing Finance Corp.............. A1/P1 5.70 12/15/95 6,000 5,986,700 5,986,700
PGA Tour Investment Finance, Inc................ A1/P1 5.80 12/20/95 5,000 4,984,694 4,984,694
Toronto Dominion Holdings, U.S.A................ A1/P1 5.60 4/25/95 3,500 3,420,511 3,420,511
Vehicle Services of America, Inc................ A1/P1 5.72 2/8/96 1,000 989,037 989,037
Vehicle Services of America, Inc................ A1/P1 5.70 2/15/96 4,000 3,951,867 3,951,867
Zeneca Wilmington, Inc.......................... A1/P1 5.73 1/19/96 5,000 4,961,004 4,961,004
------------ --------------
40,164,753 324,546,474
------------ --------------
Foreign -- 6.4%
Akzo Nobel, Inc................................. A1/P1 5.68 1/18/96 4,000 3,969,707 3,969,707
Daewoo International............................ A1/P1 5.70 2/27/96 5,000 4,930,333 4,930,333
Daimler-Benz, N.A............................... A1/P1 5.55 3/15/96 5,000 4,919,063 4,919,063
Den Danske Bank................................. 27,875,213
Ontario Hydro................................... 34,845,106
Yorkshire Building Society...................... 47,786,827
------------ --------------
13,819,103 124,326,249
------------ --------------
Total Commercial Paper
(amortized cost $448,872,724) 53,983,856 448,872,723
------------ --------------
CORPORATE OBLIGATIONS -- 28.6%
Bankers Trust -- Floating Rate Note*............ 50,000,000
Beta Finance -- Medium Term Corporate Note
(a)............................................ 35,000,000
Beta Finance -- Corporate Floating Rate Note*... 40,000,000
C.S. First Boston Corp., -- Medium Term Floating
Rate Note*..................................... 40,000,000
C.S. First Boston Corp., -- Extendible Floating
Rate Note (c)*................................. 35,000,000
Ford Motor Credit Corp., -- Medium Term Floating
Rate Note*..................................... 40,084,758
Goldman Sachs & Co., -- Floating Rate Note*..... 50,000,000
PHH Corp., -- Medium Term Floating Rate Note*... 49,989,380
SMM Trust 1995 B -- Medium Term Floating Rate
Note*.......................................... 30,000,000
SMM Trust 1995 N -- Medium Term Floating Rate
Note*.......................................... 35,000,000
Steers 1994-1st USA Bank -- Medium Term Floating
Rate Note*(a).................................. 50,000,000
Steers/Anagram -- Floating Rate Note*(a)........ 35,000,000
Steers/Merrill Lynch -- Floating Rate
Note*(a)....................................... 64,999,387
--------------
Total Corporate Obligations
(amortized cost $555,073,525).................... 555,073,525
--------------
MASTER NOTE -- 2.6%
Lehman Brothers PLC, Master Note (c).............. 50,000,000
--------------
Total Master Notes
(Amortized Cost $50,000,000)..................... 50,000,000
--------------
TAXABLE OBLIGATIONS -- 0.5%
Genesys Health System, Series 1995A*............ A1/VMIG1 5.89 12/7/95 5,000 5,000,000 5,000,000
New York City Taxable, Series B**............... A1+/VMIG1 5.90 12/6/95 5,000 5,000,000 5,000,000
------------ --------------
Total Taxable Obligations
(amortized cost $10,000,000)..................... 10,000,000 10,000,000
------------ --------------
</TABLE>
F-7
<PAGE>
<TABLE>
<CAPTION>
PRIME FUND
----------------------------------------------------------
PRINCIPAL AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST
RATING RATE DATE (000) (NOTE 2)
------------ ----- -------- --------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
TIME DEPOSITS -- 6.4%
Bank of Tokyo, Ltd., Grand Cayman Branch........ A1/P1 5.90% 12/28/95 $25,000 $ 25,000,000
Bank of Tokyo, Ltd., Grand Cayman Branch........ A1/P1 5.97 12/29/95 30,000 30,000,000
Mitsubishi Bank, Ltd., London Branch............ A1+/P1 5.81 12/27/95 30,000 30,000,000
South Trust Bank Variable Rate, Grand Cayman
Branch*........................................ A1/P1 5.81 12/29/95 40,000 40,000,000
--------------
Total Time Deposits
(amortized cost $125,000,000).................... 125,000,000
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.3%
Federal Home Loan Bank.......................... AAA/Aaa*** 5.90 7/25/96 30,000 30,000,000
Federal National Mortgage Assoc., Variable Rate
Medium Term Note*.............................. AAA/Aaa*** 5.81 10/4/96 35,000 34,988,218
--------------
Total U.S. Government Agency Obligations
(amortized cost $64,988,218)..................... 64,988,218
--------------
Total Investments in Securities
(amortized cost $1,720,158,660)................. 1,633,793,549
--------------
REPURCHASE AGREEMENTS -- 13.0%
C.S. First Boston Corp., dated 11/30/95, with a
a maturity value of $25,283,971 (Collateralized
by $27,060,000 Federal National Mortgage Assoc.
Discount Notes, 0.00%, 9/30/96, market value --
$25,839,593)...................................
Fuji Securities, Inc., dated 11/30/95, with a
maturity value of $20,003,294 (Collateralized
by $37,876,000 various U.S. Treasury and U.S.
Government securities, 0.00% - 11.75%, 3/31/96
- 11/15/18, market value -- $20,400,264).......
Merrill Lynch Securities, Inc., dated 11/30/95
with a maturity value of $103,755,219
(Collateralized by $164,243,682 various U.S.
Government Agencies, 3.63% - 13.90%, 3/15/97 -
11/25/23, market value -- $105,813,665)........ 5.95 12/1/95 103,738 103,738,073
Salomon Brothers, dated 11/30/95, with a
maturity value of $103,755,219 (Collateralized
by $135,515,984 various U.S. Government
agencies, 5.50% - 9.50%, 10/1/06 - 11/1/25,
market value -- $106,407,853).................. 5.95 12/1/95 103,738 103,738,073
--------------
Total Repurchase Agreements
(amortized cost $252,755,946).................... 207,476,146
--------------
Total
(amortized cost $1,841,269,695, $131,644,911, and
$1,962,914,606 respectively) -- 101.7%........... $1,841,269,695
--------------
--------------
<CAPTION>
PRIME TRUST FUND PRO FORMA
------------------------------------------------------- COMBINED
PRINCIPAL AMORTIZED AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST COST
RATING RATE DATE (000) (NOTE 2) (NOTE 1)
----------- ----- -------- --------- ------------ --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
TIME DEPOSITS -- 6.4%
Bank of Tokyo, Ltd., Grand Cayman Branch........ $ 25,000,000
Bank of Tokyo, Ltd., Grand Cayman Branch........ 30,000,000
Mitsubishi Bank, Ltd., London Branch............ 30,000,000
South Trust Bank Variable Rate, Grand Cayman
Branch*........................................ 40,000,000
--------------
Total Time Deposits
(amortized cost $125,000,000).................... 125,000,000
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.3%
Federal Home Loan Bank.......................... 30,000,000
Federal National Mortgage Assoc., Variable Rate
Medium Term Note*.............................. 34,988,218
--------------
Total U.S. Government Agency Obligations
(amortized cost $64,988,218)..................... 64,988,218
------------ --------------
Total Investments in Securities
(amortized cost $1,720,158,660)................. $ 86,365,111 1,720,158,660
------------ --------------
REPURCHASE AGREEMENTS -- 13.0%
C.S. First Boston Corp., dated 11/30/95, with a
a maturity value of $25,283,971 (Collateralized
by $27,060,000 Federal National Mortgage Assoc.
Discount Notes, 0.00%, 9/30/96, market value --
$25,839,593)................................... 5.94% 12/1/95 $25,280 25,279,800 25,279,800
Fuji Securities, Inc., dated 11/30/95, with a
maturity value of $20,003,294 (Collateralized
by $37,876,000 various U.S. Treasury and U.S.
Government securities, 0.00% - 11.75%, 3/31/96
- 11/15/18, market value -- $20,400,264)....... 5.93 12/1/95 20,000 20,000,000 20,000,000
Merrill Lynch Securities, Inc., dated 11/30/95
with a maturity value of $103,755,219
(Collateralized by $164,243,682 various U.S.
Government Agencies, 3.63% - 13.90%, 3/15/97 -
11/25/23, market value -- $105,813,665)........ 103,738,073
Salomon Brothers, dated 11/30/95, with a
maturity value of $103,755,219 (Collateralized
by $135,515,984 various U.S. Government
agencies, 5.50% - 9.50%, 10/1/06 - 11/1/25,
market value -- $106,407,853).................. 103,738,073
------------ --------------
Total Repurchase Agreements
(amortized cost $252,755,946).................... 45,279,800 252,755,946
------------ --------------
Total
(amortized cost $1,841,269,695, $131,644,911, and
$1,962,914,606 respectively) -- 101.7%........... $131,644,911 $1,972,914,606
------------ --------------
------------ --------------
</TABLE>
- ----------------------------------
Percentages are based on net assets of $1,940,748,557.
(a) 144a security which is restricted as to resale to
institutional investors.
(b) Cost for federal income tax and financial reporting are the
same.
(c) Represents a restricted security.
* Variable rate security. Maturity date reflects the later of
the next interest rate change date or the next put date.
** Commercial paper.
*** Long-Term rating.
**** Duff Phelps or Fitch Investors ratings.
See Notes to Pro Forma Financial Statements.
F-8
<PAGE>
EMERALD FUNDS
TREASURY FUND AND TREASURY TRUST FUND
PRO FORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
NOVEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
TREASURY FUND TREASURY TRUST FUND PRO FORMA
------------------------------------------- ----------------------------------------- COMBINED
PRINCIPAL AMORTIZED PRINCIPAL AMORTIZED AMORTIZED
MATURITY AMOUNT COST MATURITY AMOUNT COST COST
RATE DATE (000) (NOTE 2) RATE DATE (000) (NOTE 2) (NOTE 1)
------ -------- --------- ------------ ----- -------- --------- ----------- ------------
SHORT-TERM INVESTMENTS --
94.9%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS --
37.5%
U.S. Treasury Bills -- 16.8%
U.S. Treasury Bill.......... 5.64%+ 12/21/95 $ 50,000 $ 49,844,722 $ 49,844,722
U.S. Treasury Bill.......... 5.36%+ 1/11/96 $10,000 $ 9,938,842 9,938,842
U.S. Treasury Bill.......... 5.29+ 3/7/96 100,000 98,571,271 98,571,271
------------ ----------- ------------
148,415,993 9,938,842 158,354,835
------------ ----------- ------------
U.S. Treasury Notes -- 20.7%
U.S. Treasury Note.......... 4.00 1/31/96 75,000 74,789,094 74,789,094
U.S. Treasury Note.......... 4.63 2/15/96 35,000 34,927,637 34,927,637
U.S. Treasury Note.......... 4.63 2/29/96 25,000 24,941,084 24,941,084
U.S. Treasury Note.......... 9.38 4/15/96 50,000 50,676,676 50,676,676
U.S. Treasury Note.......... 7.88 7/31/96 10,000 10,133,799 10,133,799
------------ ----------- ------------
185,334,491 10,133,799 195,468,290
------------ ----------- ------------
Total U.S. Government
Obligations
(amortized cost
$358,823,125)................ 333,750,484 20,072,641 353,823,125
------------ ----------- ------------
REPURCHASE AGREEMENTS -- 57.4%
CS First Boston Corp., dated
11/30/95, with a maturity
value of $40,006,556
(Collateralized by
$36,545,000 U.S. Treasury
Notes, 8.88%, 2/15/99,
market value --
$40,994,173)............... 5.90 12/1/95 40,000 40,000,000 40,000,000
CS First Boston Corp., dated
11/30/95, with a maturity
value of $31,573,674
(Collateralized by
$23,994,000 U.S. Treasury
Bonds, 9.13% - 10.75%,
8/15/05 - 5/15/18, market
value -- $32,296,644)...... 5.90 12/1/95 31,569 31,568,500 31,568,500
Fuji Securities, Inc., dated
11/30/95, with a maturity
value of $32,005,244
(Collateralized by
$55,030,000 various U.S.
Treasury securities, 0.00%
- 13.88% 7/15/96 - 8/15/20,
market value --
$32,641,303)............... 5.90 12/1/95 32,000 32,000,000 32,000,000
</TABLE>
F-9
<PAGE>
Repurchase Agreements, continued:
Fuji Securities, continued:
<TABLE>
<CAPTION>
TREASURY FUND TREASURY TRUST FUND PRO FORMA
------------------------------------------- ----------------------------------------- COMBINED
PRINCIPAL AMORTIZED PRINCIPAL AMORTIZED AMORTIZED
MATURITY AMOUNT COST MATURITY AMOUNT COST COST
RATE DATE (000) (NOTE 2) RATE DATE (000) (NOTE 2) (NOTE 1)
------ -------- --------- ------------ ----- -------- --------- ----------- ------------
Fuji Securities, Inc., dated
11/30/95, with a maturity
value of $74,197,115
(Collateralized by
$144,660,000 various U.S.
Government securities,
0.00% - 12.75% 4/30/96 -
2/15/23, market value --
$75,669,761)............... 5.90% 12/1/95 $ 74,185 $ 74,184,957 $ 74,184,957
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J.P. Morgan Securities,
dated 11/30/95, with a
maturity value of
$40,006,556 (Collateralized
by $37,218,000 U.S.
Treasury Notes, 8.25%,
7/15/98, market value --
$41,951,664)............... 5.90 12/1/95 40,000 40,000,000 40,000,000
Merrill Lynch Securities,
Inc., dated 11/30/95, with
a maturity value of
$74,197,116 (Collateralized
by $168,004,000 U.S.
Treasury Stripped Notes,
5.75% - 12.00%, 2/15/96 -
2/15/20, $75,669,442)...... 5.90 12/1/95 74,185 74,184,958 74,184,958
Morgan Stanley & Co., dated
11/30/95, with a maturity
value of $150,096,833
(Collateralized by
$184,699,338 Government
National Mortgage Assoc.,
6.50% - 8.50%, 1/1/00 -
3/20/25, market value --
$154,946,737).............. 5.81 12/4/95 150,000 150,000,000 150,000,000
Prudential-Bache Securities,
Inc., dated 11/30/95, with
a maturity value of
$40,006,544 (Collateralized
by $50,437,000 various U.S.
Government securities,
0.00% - 6.88%, 4/30/97 -
6/15/23, market value --
$40,800,025)............... 5.89 12/1/95 40,000 40,000,000 40,000,000
Sanwa BGK Securities, dated
11/30/95, with a maturity
value of $60,009,833
(Collateralized by
$59,233,000 various U.S.
Government securities,
0.00% - 6.88%, 9/19/96 -
2/15/03, market value --
$61,200,163)............... 5.90 12/1/95 60,000 60,000,000 60,000,000
------------ ------------
Total Repurchase Agreements
(amortized cost
$541,938,415)................ 478,369,915 $63,568,500 541,938,415
------------ ----------- ------------
Total
(amortized cost $812,120,399,
$83,641,141, and $895,761,540
respectively) -- 94.9%....... $812,120,399 $83,641,141 $895,761,540
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
- ------------------------------
Percentages are based on net assets of $943,898,039.
+ Effective yield at date of issuance.
Cost for federal income tax and financial reporting purposes are the same.
See Notes to Pro Forma Financial Statements.
F-10
<PAGE>
EMERALD FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The unaudited Pro Forma Combining Statements of Assets and Liabilities,
Statements of Operations, and Schedules of Portfolio Investments reflect the
accounts of four investment portfolios offered by Emerald Funds (the "Company"):
Prime Trust Fund and Treasury Trust Fund (the "Transferor Funds") and Prime Fund
and Treasury Fund (the "Surviving Funds"), (collectively, "Funds") as if the
proposed reorganization occurred as of and for the year ended November 30, 1995.
These statements have been derived from books and records utilized in
calculating daily net asset values at November 30, 1995.
The Plan of Reorganization provides that at the time the reorganization
becomes effective (the "Effective Time of the Reorganization"), all of the
assets and liabilities of the Company's Prime Trust Fund and Treasury Trust Fund
will be transferred to the Company's Prime Fund and Treasury Fund, respectively,
such that at and after the Effective Time of the Reorganization, the assets and
liabilities of the Transferor Fund will become and be the assets and liabilities
of the Surviving Fund. In exchange for the transfer of assets and liabilities,
the Company will issue to each Transferor Fund full and fractional Emerald
Shares of the corresponding Surviving Fund, and the Transferor Fund will make a
liquidating distribution of such Emerald Shares to its shareholders. The number
of Emerald Shares of each Surviving Fund so issued will be equal in number to
the number of full and fractional shares representing interests in the
corresponding Transferor Fund that are outstanding immediately prior to the
Effective Time of the Reorganization. At and after the Effective Time of the
Reorganization, all debts, liabilities and obligations of each Transferor Fund
will attach to its corresponding Surviving Fund and may thereafter be enforced
against the Surviving Fund to the same extent as if they had been incurred by
it. The pro forma statements give effect to the proposed transfers described
above.
Under the pooling method of accounting for business combinations under
generally accepted accounting principles, the basis on the part of the Surviving
Funds of the assets of the Transferor Funds will be the fair market value of
such assets on the closing date of the transaction. The Surviving Funds will
recognize no gain or loss for federal tax purposes on their issuance of shares
in the reorganization, and the basis to the Surviving Funds of the assets of the
Transferor Funds received pursuant to the reorganization will equal the fair
market value of the consideration furnished, and costs incurred, by the
Surviving Funds in the reorganization -- I.E., the sum of the liabilities
assumed, the fair market value of the Surviving Fund shares issued, and such
costs. For accounting purposes, the Surviving Funds are the survivors of this
reorganization. The pro forma statements reflect the combined results of
operations of the Transferor Funds and the Surviving Funds. However, should such
reorganization be effected, the statements of operations of the Surviving Funds
will not be restated for precombination period results of the corresponding
Transferor Funds.
The Pro Forma Combining Statements of Assets and Liabilities, Statements of
Operations, and Schedules of Portfolio Investments should be read in conjunction
with the historical financial statements of the Funds which are incorporated by
reference in the Statement of Additional Information.
The Transferor Funds and the Surviving Funds are each separate money market
portfolios of the Company, which is registered as an open-end management company
under the Investment Company Act of 1940 (the "1940 Act"). The investment
objectives, policies and fundamental limitations of the Prime Trust Fund and the
Prime Fund are the same, and those of the Treasury Trust Fund and the Treasury
Fund are the same. In addition, the purchase and redemption policies of each of
these Funds are substantially similar and, except for the sub-adviser for the
Transferor Funds, the service providers for each of the Funds are the same.
F-11
<PAGE>
EMERALD FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
1. BASIS OF COMBINATION: (CONTINUED)
EXPENSES:
Barnett Banks Trust Company, N.A. ("Barnett") serves as the Funds'
investment adviser. Rodney Square Management Corporation (The "Sub-Adviser"), a
subsidiary of Wilmington Trust Company, serves as the Transferor Funds'
investment sub-adviser. Concord Holding Corporation ("Concord") served as the
Funds' administrator for the period referenced and Emerald Asset Management,
Inc. (the "Distributor") serves as the distributor of the Funds' shares. Concord
and the Distributor are wholly owned subsidiaries of The BISYS Group, Inc.
TRANSFEROR FUNDS:
The Company has entered into an Investment Advisory Agreement with Barnett.
Barnett, in turn, had entered into a Sub-Advisory Agreement with the
Sub-Adviser. The Company has entered into an Administration Agreement with
Concord for the period referenced and a Distribution Agreement with the
Distributor.
Because of state and federal requirements applicable to the fiduciary
accounts whose assets are invested in the Transferor Funds, the Investment
Advisory Agreement for the Transferor Funds provides that Barnett is not
entitled to any compensation from the Transferor Funds for its advisory
services. The Company has agreed to pay the Sub-Adviser a fee at an annual rate
of 0.15% of the average daily net assets of each of the Transferor Funds. Such
fees are accrued daily and paid monthly. The Sub-Adviser is responsible for all
purchases and sales of each Transferor Fund's portfolio securities, subject to
the general supervision of both the Board of Trustees and Barnett. As
Administrator, Concord assists in supervising the operations of the Transferor
Funds and, for such services, is entitled to receive a fee at an annual rate of
0.15% of the average daily net assets of each of the Transferor Funds. Such fees
are accrued daily and paid monthly. The Distributor does not receive a fee under
the Distribution Agreement.
The Sub-Adviser and Concord have voluntarily agreed to waive fees payable to
them with respect to each Transferor Fund to the extent a Transferor Fund's
ordinary operating expenses (including fees payable to the Sub-Adviser and
Concord) exceed 0.40% of such Transferor Fund's average daily net assets. As a
result of such expense limitations, both the Sub-Adviser and Concord have
reimbursed $32,074 of their fees from the Prime Trust Fund and $32,055 of their
fees from the Treasury Trust Fund for the year ended November 30, 1995.
SURVIVING FUNDS:
The Surviving Funds each issue three classes of shares: Emerald Shares,
Emerald Service Shares and Investor Shares. Emerald Shares, Emerald Service
Shares and Investor Shares are substantially the same except that Emerald
Service Shares bear the fees that are payable under a Shareholder Services Plan
(the "Service Plan"), and Investor Shares bear the fees that are payable under a
plan adopted by the Board of Trustees pursuant to Rule 12b-1 under the Act (the
"Distribution Plan") and fees payable under a Shareholder and Administrative
Services Plan (the "Shareholder Plan"). In addition to fees paid pursuant to the
Service Plan, the Distribution Plan and the Shareholder Plan, each class of
shares of each Surviving Fund also bears the expenses associated with the
printing of their shareholder reports.
The Company has entered into an Investment Advisory Agreement with Barnett,
an Administration Agreement with Concord for the period referenced and a
Distribution Agreement with the Distributor.
As investment adviser, Barnett manages the investments of each Surviving
Fund and is responsible for all purchases and sales of each Surviving Fund's
portfolio securities. For its services, Barnett is
F-12
<PAGE>
EMERALD FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
1. BASIS OF COMBINATION: (CONTINUED)
entitled to receive a fee at the annual rate of 0.25% of each Surviving Fund's
average daily net assets. Barnett has voluntarily agreed to limit the fees it
receives from the Surviving Funds to the following annual rates: 0.25% of each
Fund's first $600 million of average daily net assets, 0.23%of the next $400
million of each Fund's average daily net assets, 0.21% of the next $1 billion of
each of the Fund's average daily net assets and 0.19% of each Fund's average
daily net assets in excess of $2 billion. For the year ended November 30, 1995,
Barnett waived fees of $325,805 and $43,932 for the Prime Fund and Treasury
Fund, respectively.
As administrator, Concord assisted in supervising the operations of the
Surviving Funds. For its services, Concord was entitled to a fee, accrued daily
and payable monthly, at the following annual rates: 0.10% of each Fund's first
$600 million of daily net assets, 0.09% of each Fund's next $400 million of
daily net assets, 0.08% of each Fund's next $1 billion of daily net assets, and
0.07% of each Fund's daily net assets in excess of $2 billion. For the year
ended November 30, 1995, there were no fees waived by Concord for the Surviving
Funds.
Barnett, Concord and the Sub-Adviser voluntarily agreed to waive fees
payable to them with respect to each Surviving Fund to the extent a Fund's
ordinary operating expenses (excluding fees payable under the Service Plan, the
then-current Distribution Plan and the then-current Shareholder Plan) exceeded
0.40% of such Fund's average daily net assets. This voluntary waiver may be
terminated at any time. For the year ended November 30, 1995, Barnett and
Concord each agreed to reimburse expenses in the amount of $33,145 to the Prime
Fund and $91,028 to the Treasury Fund for expenses in excess of this limitation.
Under the Service Plan, institutions ("Service Organizations") agreed to
provide support services to their clients who are beneficial owners of Emerald
Service Shares of the Surviving Funds. For these services, the Surviving Funds
agreed to pay the Service Organizations an annual fee of 0.35% of the average
daily net asset value of each Surviving Fund's Emerald Service Shares
outstanding. These payments are borne solely by Emerald Service Shares. Services
are provided by Service Organizations which may include the Distributor,
Barnett, the Sub-Adviser and their affiliates. For the year ended November 30,
1995, the Prime Fund and the Treasury Fund incurred expenses of $2,814,354 and
$1,898,193, respectively, pursuant to the Service Plan, substantially all of
which was earned by Barnett and its affiliates.
Under the Distribution Plan in effect for the period referenced with respect
to Investor Shares (now called "Retail" Shares) of the Surviving Funds, each
Surviving Fund paid the Distributor for distribution expenses incurred in
connection with the advertising and marketing of its Investor Shares and with
the implementation and operation of the Distribution Plan. Payments by each
Surviving Fund for distribution expenses under the Distribution Plan may not
exceed an annual rate of 0.25% of the average daily net asset value of that
Fund's outstanding Investor Shares. In addition, the Shareholder Plan provides
for payments to the Administrator for certain administrative services that are
related to the distribution of Investor Shares. The Administrator was entitled
to payment for these services at the annual rate of 0.25% of the average daily
net asset value of each Surviving Fund's outstanding Investor Shares. For the
year ended November 30, 1995, the Prime Fund and the Treasury Fund paid the
Distributor fees of $1,523,904 and $200,869, respectively pursuant to the
Distribution Plan and the Shareholder Plan.
PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS
The pro forma adjustments and pro forma combined columns of the statements
of operations reflect the adjustments necessary to show expenses at the rates
which would have been in effect if the
F-13
<PAGE>
EMERALD FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
1. BASIS OF COMBINATION: (CONTINUED)
Transferor Funds were included in the Surviving Funds for the year ended
November 30, 1995. Investment advisory and administration fees in the pro forma
combined column are calculated at the rates in effect for the Surviving Funds
based upon the combined net assets of the Transferor Funds and the Surviving
Funds. Legal and audit fees on a pro forma combined basis are estimated to be
the amount reported for the Surviving Funds for the year ended November 30,
1995. All other pro forma combined expenses are based on the combined net assets
of the funds and are, therefore, equal to the sum of the Transferor Funds'
expenses and the Surviving Funds' expenses.
For the year ended November 30, 1995, a portion of the investment advisory
fees on a pro forma combined basis for each of the Surviving Funds were waived
and certain fees were reimbursed as follows:
<TABLE>
<CAPTION>
ADVISORY FEES
FEES WAIVED REIMBURSED
------------ -----------
<S> <C> <C>
Prime Fund.............................................. $ 349,132 $ 130,442
Treasury Fund........................................... $ 51,453 $ 246,166
</TABLE>
The pro forma schedules of portfolio investments give effect to the proposed
transfer of such assets as if the reorganization had occurred at November 30,
1995.
2. PORTFOLIO VALUATION AND SECURITIES TRANSACTIONS:
Portfolio securities are value at amortized cost, which approximates market
value. The amortized cost method involves valuing a security at cost on the date
of purchase and thereafter assuming a constant amortization to maturity of the
difference between the principal amount due at maturity and initial cost. In
addition, the Funds may not (a) purchase any instrument with a remaining
maturity greater than thirteen months unless such instrument is subject to a
demand feature, or (b) maintain a dollar-weighted average maturity which exceeds
90 days.
Securities transactions are recorded on the trade date. Realized gains and
losses on the sales of investments are calculated on the identified cost basis.
Interest income, including accretion of discount and amortization of premium on
investment, is accrued daily.
3. CAPITAL SHARES:
The pro forma net asset values per share assume the issuance of Emerald
Shares of the Surviving Funds which would have occurred at November 30, 1995 in
connection with the proposed reorganization. The pro forma number of shares
outstanding consists of the following:
<TABLE>
<CAPTION>
ADDITIONAL
EMERALD SHARES
SHARES ASSUMED ISSUED IN PRO FORMA COMBINED
OUTSTANDING AT THE SHARES AT NOVEMBER
NOVEMBER 30, 1995 REORGANIZATION 30, 1995
----------------- ----------------- ------------------
<S> <C> <C> <C>
Prime Fund.................................. 1,809,309,750 131,098,672 1,940,408,422
Treasury Fund............................... 811,355,627 132,855,897 944,211,524
</TABLE>
F-14
<PAGE>
FORM N-14
PART C. OTHER INFORMATION
Item 15. INDEMNIFICATION
Indemnification of Registrant's principal underwriter against certain losses
is provided for in Section V.3. of the Distribution Agreement incorporated
herein by reference as Exhibit (7) (a). Indemnification of Registrant's
Custodian is provided for in Article XV, Section 15, of the Custody Agreement
incorporated herein by reference as Exhibit (9) (a). Indemnification of
Registrant's Transfer Agent and Dividend Disbursing Agent is provided for in
Section 9 of the Form of Transfer Agency Agreement incorporated herein by
reference as Exhibit (13)(s). Indemnification of Registrant's Cash Management
Service Provider is provided for in Article VI, Section 3, of the Cash
Management and Related Services Agreement incorporated herein by reference as
Exhibit (13)(t). Registrant has obtained from a major insurance carrier a
trustees' and officers' liability policy covering certain types of errors and
omissions. In addition, Section 9.3 of the Registrant's Agreement and
Declaration of Trust incorporated herein by reference as Exhibit (1), provides
as follows:
9.3 INDEMNIFICATION OF TRUSTEES, REPRESENTATIVES AND EMPLOYEES. The
Trust shall indemnify each of its Trustees against all liabilities and
expenses (including amounts paid in satisfaction of judgments, in
compromise, as fines and penalties, and as counsel fees) reasonably incurred
by him in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which he may be involved or
with which he may be threatened, while as a Trustee or thereafter, by reason
of his being or having been such a Trustee EXCEPT with respect to any matter
as to which he shall have been adjudicated to have acted in bad faith,
willful misfeasance, gross negligence or reckless disregard of his duties,
PROVIDED that as to any matter disposed of by a compromise payment by such
person, pursuant to a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be provided unless the
Trust shall have received a written opinion from independent legal counsel
approved by the Trustees to the effect that if either the matter of willful
misfeasance, gross negligence or reckless disregard of duty, or the matter
of bad faith had been adjudicated, it would in the opinion of such counsel
have been adjudicated in favor of such person. The rights accruing to any
person under these provisions shall not exclude any other right to which he
may be lawfully entitled, PROVIDED that no person may satisfy any right of
indemnity or reimbursement hereunder except out of the property of the
Trust. The Trustees may make advance payments in connection with the
indemnification under this Section 9.3, provided that the indemnified person
shall have given a written undertaking to reimburse the Trust in the event
it is subsequently determined that he is not entitled to such
indemnification.
The Trustees shall indemnify representatives and employees of the Trust
to the same extent that Trustees are entitled to indemnification pursuant to
this Section 9.2.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer
or controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-1
<PAGE>
Section 9.6 of the Registrant's Agreement and Declaration of Trust,
incorporated herein by reference as Exhibit (1), also provides for the
indemnification of shareholders of the Registrant. Section 9.6 states as
follows:
9.6 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or, in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the classes of
shares with the same alphabetical designation as that of the shares owned by
such Shareholder to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust shall, upon request by
the Shareholder, assume the defense of any claim made against any
Shareholder for any act or obligations of the Trust and satisfy any judgment
thereon from such assets.
Item 16. EXHIBITS
(1) Agreement and Declaration of Trust of the Registrant dated March 15,
1988 is incorporated by reference to Exhibit (1) of Registrant's
Registration Statement on Form N-1A filed on March 21, 1988.
(2) Registrant's Code of Regulations is incorporated by reference to Exhibit
(2) of Form N-1A, filed on March 21, 1988.
(3) None.
(4) Plan of Reorganization filed herewith as Appendix A to the Combined
Proxy Statement/ Prospectus.
(5) Form of Generic Share Certificate for all of the portfolios of
Registrant is herein incorporated by reference to Exhibit 4(a) to
Post-Effective Amendment No. 13 to Registrant's Registration Statement on
Form N-1A filed on September 16, 1994.
(6) (a) Investment Advisory Agreement between Registrant and Barnett Banks
Trust Company, N.A. (Treasury Trust Fund and Prime Trust Fund) is
incorporated by reference to Exhibit (5) (a) to Registrant's
Post-Effective Amendment No. 1 to Registration Statement on Form
N-1A, filed on June 7, 1989.
(b) Investment Advisory Agreement between Registrant and Barnett Banks
Trust Company, N.A. (Tax-Exempt Trust Fund) is incorporated by
reference to Exhibit (5) (b) to Registrant's Post-Effective Amendment
No. 1 to Registration Statement on Form N-1A, filed on June 7, 1989.
(c) Investment Advisory Agreement between Registrant and Barnett Banks
Trust Company, N.A. (Treasury Fund and Prime Fund) is incorporated by
reference to Exhibit (5) (e) to Registrant's Post-Effective Amendment
No. 1 to Registration Statement on Form N-1A, filed on June 7, 1989.
(d) Investment Advisory Agreement between Registrant and Barnett Banks
Trust Company, N.A. (Equity Fund, Equity Income Fund, Short-Term
Fixed Income Fund, U.S. Government Securities Fund, Florida
Tax-Exempt Fund, Tax-Exempt Target Fund (Maturity 1995), Tax-Exempt
Target Fund (Maturity 2000), and Tax-Exempt Target Fund (Maturity
2005)) is incorporated by reference to Exhibit (5) (h) to
Registrant's Post-Effective Amendment No. 5 to Registration Statement
on form N-1A, filed on December 20, 1991.
II-2
<PAGE>
(e) Amended Investment Advisory Agreement between Registrant and Barnett
Banks Trust Company, N.A. (Tax-Exempt Fund) is incorporated by
reference to Exhibit (5) (f) to Registrant's Post-Effective Amendment
No. 7 to Registration Statement on Form N-1A, filed on January 29,
1993.
(f) Sub-Investment Advisory Agreement between Barnett Banks Trust
Company, N.A. and Rodney Square Management Corporation (Treasury
Trust Fund and Prime Trust Fund) is incorporated by reference to
Exhibit (5) (g) to Registrant's Post-Effective Amendment No. 7 to
Registration Statement on Form N-1A, filed on January 29, 1993.
(g) Sub-Investment Advisory Agreement between Barnett Banks Trust
Company, N.A. and Rodney Square Management Corporation (Tax-Exempt
Fund) is incorporated by reference to Exhibit (5) (h) to Registrant's
Post-Effective Amendment No. 7 to Registration Statement on Form
N-1A, filed on January 29, 1993.
(h) Form of Sub-Investment Advisory Agreement (International Equity
Fund) is incorporated by reference to Exhibit (5)(h) to Registrant's
Post-Effective Amendment No. 16 to Registration Statement on Form
N-1A, filed on October 11, 1995.
(i) Amendment No. 1 to Investment Advisory Agreement between Registrant
and Barnett Banks Trust Company, N.A. dated January 4, 1994 is
incorporated by reference to Exhibit (5) (i) to Registrant's
Post-Effective Amendment No. 10 to Registration Statement on Form
N-1A, filed on January 28, 1994.
(j) Amendment No. 2 to Investment Advisory Agreement between Registrant
and Barnett Banks Trust Company, N.A. is incorporated by reference to
Exhibit (5)(j) to Registrant's Post-Effective Amendment No. 16 to
Registration Statement on Form N-1A, filed on October 11, 1995.
(7) (a) Distribution Agreement between Registrant and Emerald Asset
Management, Inc. dated as of January 4, 1994 is incorporated by
reference to Exhibit (6) (b) to Registrant's Post-Effective Amendment
No. 10 to Registration Statement on Form N-1A, filed on January 28,
1994.
(b) Amendment No. 1 to Distribution Agreement between Registrant and
Emerald Asset Management, Inc. is incorporated by reference to
Exhibit (6)(b) to Registrant's Post-Effective Amendment No. 16 to
Registration Statement on Form N-1A, filed on October 11, 1995.
(8) None.
(9) (a) Custody Agreement between Registrant and The Bank of New York is
incorporated by reference to Exhibit (8) (a) to Registrant's
Post-Effective Amendment No. 1 to Registration Statement on Form
N-1A, filed on June 7, 1989.
(b) Form of Amendment No. 1 to Custody Agreement with respect to the
addition of global custody with respect to the International Equity
Fund is incorporated by reference to Exhibit (8)(b) to Registrant's
Post-Effective Amendment No. 17 to Registration Statement on Form
N-1A, filed on February 1, 1996.
(10)(a) Distribution Plan with Related Agreements for Class A Shares (Equity
Fund, U.S. Government Securities Fund, Florida Tax-Exempt Fund, Small
Capitalization Fund, Balanced Fund, Short-Term Fixed Income Fund and
Managed Bond Fund) is incorporated by reference to Exhibit (15) (b)
to Registrant's Post-Effective Amendment No. 11 to Registration
Statement on Form N-1A, filed March 31, 1994.
(b) Distribution Plan with Related Agreements for Class B Shares (Equity
Fund, U.S. Government Securities Fund, Florida Tax-Exempt Fund, Small
Capitalization Fund,
II-3
<PAGE>
Balanced Fund, Short-Term Fixed Income Fund and Managed Bond Fund) is
incorporated by reference to Exhibit (15) (c) to Registrant's
Post-Effective Amendment No. 11 to Registration Statement on Form
N-1A, filed March 31, 1994.
(c) Distribution Plan with Related Agreements for Investor Class Shares
(Prime Fund, Treasury Fund and Tax-Exempt Fund) is incorporated by
reference to Exhibit (15) (d) to Registrant's Post-Effective
Amendment No. 11 to Registration Statement on Form N-1A, filed March
31, 1994.
(d) Combined Amended and Restated Distribution and Service Plan with
Related Agreement for Retail Shares (All Funds) is incorporated by
reference to Exhibit (15)(b) to Registrant's Post-Effective Amendment
No. 17 to Registration Statement on Form N-1A, filed on February 1,
1996.
(e) Revised Plan pursuant to Rule 18f-3 for operation of a Multi-Class
System is incorporated by reference to Exhibit (18) to Registrant's
Post-Effective Amendment No. 17 to Registration Statement on Form
N-1A filed in February, 1996.
*(11) Opinion and consent of counsel that shares are validly issued, fully
paid and non-assessable.
(12) Opinion of Drinker Biddle & Reath as to tax matters and consequences
(including consent of such firm).
(13)(a) Administration Agreement between Registrant and Concord Holding
Corporation (Treasury Trust Fund and Prime Trust Fund) is
incorporated by reference to Exhibit (9) (a) to Registrant's
Post-Effective Amendment No. 1 to Registration Statement on Form
N-1A, filed on June 7, 1989.
(b) Administration Agreement between Registrant and Concord Holding
Corporation (Tax-Exempt Trust Fund) is incorporated by reference to
Exhibit (9) (b) to Registrant's Post-Effective Amendment No. 1 to
Registration Statement on Form N-1A, filed on June 7, 1989.
(c) Administration Agreement between Registrant and Concord Holding
Corporation (Treasury Fund and Prime Fund) is incorporated by
reference to Exhibit (9) (c) to Registrant's Post-Effective Amendment
No. 2 to Registration Statement on Form N-1A, filed on March 30,
1990.
(d) Amendment No. 1 to Administration Agreement dated October 1, 1989
between Registrant and Concord Holding Corporation (Treasury Fund and
Prime Fund) is incorporated by reference to Exhibit (9)(d) to
Registrant's Post-Effective Amendment No. 16 to Registration
Statement on Form N-1A, filed on October 11, 1995.
(e) Administration Agreement between Registrant and Concord Holding
Corporation (Tax-Exempt Fund) is incorporated by reference to Exhibit
9(d) to Registrant's Post-Effective Amendment No. 2 to Registration
Statement on Form N-1A, filed on March 30, 1990.
(f) Administration Agreement between Registrant and Concord Holding
Corporation (Equity Fund, U.S. Government Securities Fund, Florida
Tax-Exempt Fund, Small Capitalization Fund, Short-Term Fixed Fund,
Managed Bond Fund and Balanced Fund) dated as of March 1, 1994 is
incorporated by reference to Exhibit (9) (g) to Registrant's Post-
Effective Amendment No. 11 to Registration Statement on Form N-1A,
filed on March 31, 1994.
- ------------------------
* Filed with the Securities and Exchange Commission under Rule 24f-2 as part of
the Registrant's Rule 24f-2 Notice.
II-4
<PAGE>
(g) Form of Amendment No. 2 to Administration Agreement between
Registrant and Concord Holding Corporation is incorporated by
reference to Exhibit (9)(g) to Registrant's Post-Effective Amendment
No. 16 to Registration Statement on Form N-1A, filed on October 11,
1995.
(h) Form of Administration Agreement between Registrant and BISYS Fund
Services Limited Partnership is incorporated by reference to Exhibit
(9)(a) to Registrant's Post-Effective Amendment No. 17 to
Registration Statement on Form N-1A, filed on February 1, 1996.
(i) Shareholder Servicing Agent Agreement between Registrant and Concord
Financial Services, Inc. dated as of January 3, 1994 is incorporated
by reference to Exhibit (9) (o) to Registrant's Post-Effective
Amendment No. 10 to Registration Statement on Form N-1A, filed on
January 28, 1994.
(j) Revised Shareholder Services Plan for Emerald Service Shares is
incorporated by reference to Exhibit (9) (f) to Registrant's
Post-Effective Amendment No. 10 to Registration Statement, filed on
January 28, 1994.
(k) Shareholder and Administrative Services Plan with Shareholder and
Administrative Service Agreement for Investor Shares (Prime Fund,
Treasury Fund and Tax-Exempt Fund) dated as of March 1, 1994 is
incorporated by reference to Exhibit (9) (h) to Registrant's
Post-Effective Amendment No. 11 to Registration Statement on Form
N-1A, filed on March 31, 1994.
(l) Shareholder and Administrative Services Plan with Shareholder and
Administrative Service Agreement for Class A Shares for the Trust's
non-money market funds dated as of March 1, 1994 is incorporated by
reference to Exhibit (9) (i) to Registrant's Post-Effective Amendment
No. 11 to Registration Statement on Form N-1A, filed on March 31,
1994.
(m) Shareholder and Administrative Services Plan with form of
Shareholder and Administrative Service Agreement for Class B Shares
for the Trust's non-money market funds dated as of March 1, 1994 is
incorporated by reference to Exhibit (9) (j) to Registrant's
Post-Effective Amendment No. 11 to Registration Statement on Form
N-1A, filed on March 31, 1994.
(n) Revised form of Servicing Agreement for Emerald Service Shares is
incorporated by reference to Exhibit (9)(g) to Registrant's
Post-Effective Amendment No. 14 to Registration Statement on Form
N-1A, filed on March 28, 1995.
(o) Shareholder Processing and Services Plan and Form of Servicing
Agreement for Emerald Service Shares is incorporated by reference to
Exhibit (9)(b) to Registrant's Post-Effective Amendment No. 17 to
Registration Statement on Form N-1A, filed on February 1, 1996.
(p) Shareholder Processing Plan and Form of Servicing Agreement for
Retail Shares is incorporated by reference to Exhibit (9)(c) to
Registrant's Post-Effective Amendment No. 17 to Registration
Statement on Form N-1A, filed on February 1, 1996.
(q) Transfer Agency Agreement between Registrant and DST Systems,Inc.
(formerly Supervised Services Company, Inc.) is incorporated by
reference to Exhibit (8) (b) to Registrant's Post-Effective Amendment
No. 7 to Registration Statement on Form N-1A, filed on January 29,
1993.
II-5
<PAGE>
(r) Sub-Transfer Agency Agreement Among Registrant, DST Systems, Inc.
(formerly Supervised Services Company, Inc.) and Concord Financial
Services, Inc. dated as of January 3, 1994 is incorporated by
reference to Exhibit (9) (p) to Registrant's Post-Effective Amendment
No. 10 to registration Statement on Form N-1A, filed on January 28,
1994.
(s) Form of Transfer Agency Agreement between Registrant and BISYS Fund
Services, Inc. is incorporated by reference to Exhibit (9)(d) to
Registrant's Post-Effective Amendment No. 17 to Registration
Statement on Form N-1A, filed on February 1, 1996.
(t) Cash Management and Related Services Agreement between Registrant
and the Bank of New York dated as of January 3, 1994 is incorporated
by reference to Exhibit (9) (q) to Registrant's Post-Effective
Amendment No. 10 to registration Statement on Form N-1A, filed on
January 28, 1994.
(u) Fund Accounting Agreement between Concord Holding Corporation and
The Bank of New York (all Funds) is incorporated by reference to
Exhibit (9) (e) to Registrant's Post-Effective Amendment No. 1 to
Registration Statement on Form N-1A, filed on June 7, 1989.
(v) Form of Fund Accounting Agreement between BISYS Fund Services
Limited Partnership and BISYS Fund Services, Inc. is incorporated by
reference to Exhibit (9)(f) to Registrant's Post-Effective Amendment
No. 17 to Registration Statement on Form N-1A, filed on February 1,
1996.
(14)(a) Consent of Price Waterhouse LLP.
(b) Consent of Drinker Biddle & Reath.
(15) None.
(16) Powers of Attorney for Chesterfield H. Smith, John G. Grimsley, Raynor
E. Bowditch, Mary Doyle, Albert D. Ernest and Martin R. Dean.
(17)(a) Declaration pursuant to Rule 24f-2 under the Investment Company Act
of 1940 of the Registrant.
(b) Forms of Proxy.
(c) Prospectus dated April 1, 1996 for Emerald Funds' Prime, Treasury
and Tax-Exempt Funds (Emerald and Emerald Service Shares) is
incorporated by reference to Registrant's Post-Effective Amendment
No. 17 to Registration Statement on Form N-1A, filed on February 1,
1996.
(d) Prospectus dated April 1, 1996 for Emerald Funds' Prime Trust and
Treasury Trust Funds is incorporated by reference to Registrant's
Post-Effective Amendment No. 17 to Registration Statement on Form
N-1A, filed on February 1, 1996.
(e) Statement of Additional Information dated April 1, 1996 for Emerald
Funds' Prime, Treasury and Tax-Exempt Funds (Emerald and Emerald
Service Shares) is incorporated by reference to Registrant's
Post-Effective Amendment No. 17 to Registration Statement on Form
N-1A, filed on February 1, 1996.
(f) Prospectus dated April 1, 1996 for Emerald Funds' Prime Trust and
Treasury Trust Funds is incorporated by reference to Registrant's
Post-Effective Amendment No. 17 to Registration Statement on Form
N-1A, filed on February 1, 1996.
(g) Annual Report to Shareholders dated November 30, 1995 for Emerald
Funds' Prime, Treasury and Tax-Exempt Funds (Emerald and Emerald
Service Shares) is incorporated by reference to the Registrant's File
No. 811-5515, filed on January 29, 1996.
II-6
<PAGE>
(h) Annual Report to Shareholders dated November 30, 1995 for Emerald
Funds' Prime Trust and Treasury Trust Funds is incorporated by
reference to the Registrant's File No. 811-5515, filed on January 30,
1996.
Item 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act of
1933, as amended (the "1933 Act"), the reoffering prospectus will contain
the information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
II-7
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant, in the City of Jacksonville and State
of Florida, on this 26th day of February, 1996.
EMERALD FUNDS
Registrant
By: /s/ John G. Grimsley
-----------------------------------
John G. Grimsley, President
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ --------------------------------- ----------------------
<C> <S> <C>
*Chesterfield H. Smith
------------------------------------------- Chairman of the Board of Trustees February 26, 1996
Chesterfield H. Smith
/s/ John G. Grimsley
------------------------------------------- President (Chief Executive February 26, 1996
John G. Grimsley Officer and Trustee)
*Martin R. Dean
------------------------------------------- Treasurer (Principal Financial February 26, 1996
Martin R. Dean and Accounting Officer)
*Raynor E. Bowditch
------------------------------------------- Trustee February 26, 1996
Raynor E. Bowditch
*Albert D. Ernest
------------------------------------------- Trustee February 26, 1996
Albert D. Ernest
*Mary Doyle
------------------------------------------- Trustee February 26, 1996
Mary Doyle
</TABLE>
*By: John G. Grimsley,
Attorney-in-Fact
II-8
<PAGE>
EMERALD FUNDS
CERTIFICATE OF SECRETARY
The following resolution was duly adopted by the Board of Trustees of
Emerald Funds at a meeting held on January 31, 1996 and remains in effect on
the date hereof:
FURTHER RESOLVED, that the trustees and officers of the Trust who
may be required to execute such Registration Statement on Form N-14 (and
any amendments thereto), and each of them, hereby appoint John G. Grimsley
and William B. Blundin, and either of them, their true and lawful
attorney, or attorneys to execute in their name, place and stead, in their
capacity as trustee or officer, or both, of the Trust, the Registration
Statement on Form N-14, and any amendments thereto, and all instruments
necessary or incidental in connection therewith, and to file the same
with the Securities and Exchange Commission; and either of said attorneys
shall have power to act thereunder with or without the other of said
attorney and shall have full power of substitution and re-substitution;
and either of said attorneys shall have full power and authority to do
and perform in the name and on behalf of each of said trustees or
officers, or any or all of them, in any and all capacities, every act
whatsoever requisite or necessary to be done in the premises, as fully
and to all intents and purposes as each of said trustees or officers,
or any or all of them, might or could do in person, said acts of said
attorneys, or either of them, being hereby ratified and approved.
EMERALD FUNDS
By: /s/ Jeffrey Dalke
-----------------
Jeffrey Dalke
Secretary
Dated: March 1, 1996
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- --------------- ------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
(12) Opinion and consent of Drinker Biddle & Reath as to tax matters and consequences.
(14)(a) Consent of Price Waterhouse LLP.
(14)(b) Consent of Drinker Biddle & Reath.
(16) Powers of Attorney for Chesterfield H. Smith, John G. Grimsley, Raynor E. Bowditch, Mary
Doyle, Albert D. Ernst and Martin R. Dean.
(17)(a) Declaration pursuant to Rule 24f-2 under Investment Company Act of 1940 of the Registrant.
(17)(b) Forms of Proxy.
</TABLE>
<PAGE>
February 29, 1996
Emerald Funds
3435 Stelzer Road
Columbus, OH 43219-3035
Re: Plan of Reorganization by Emerald Funds for
Prime Trust Fund, Treasury Trust Fund,
Prime Fund and Treasury Fund.
-------------------------------------------------
Dear Sirs and Mesdames:
We have been asked to give our opinion, in accordance with the above Plan of
Reorganization by Emerald Funds (the "Plan"), as to certain Federal income tax
consequences of the transactions contemplated in that agreement.
BACKGROUND
Emerald Funds ("Emerald") is a Massachusetts business trust consisting of
multiple investment portfolios, including Prime Fund and Treasury Fund
(individually, a "Surviving Fund" and collectively, the "Surviving Funds") and
also Prime Trust Fund and Treasury Trust Fund (individually, a "Transferor Fund"
and collectively, the "Transferor Funds"). Emerald is an open-end management
investment company registered with the Securities and Exchange Commission (the
"SEC") under the Investment Company Act of 1940, as amended (the "1940 Act").
At the Closing (as defined in the Plan), it is contemplated that each
Transferor Fund will transfer all of its assets and liabilities to a
corresponding Surviving Fund in exchange for shares of the Surviving Fund.
Emerald will then distribute the shares of each Surviving Fund to the
shareholders of the corresponding Transferor Fund in cancellation of all
outstanding shares of the Transferor Fund, and the existence of the Transferor
Funds will be terminated. All of the above steps constitute the "Transactions."
After the Transactions, each Surviving Fund will continue the investment
operations of the corresponding Transferor Fund.
ASSUMPTIONS
For purposes of this opinion, we have made certain assumptions. Please
advise us if you are aware of any facts inconsistent with any of these
assumptions:
First, both of the Transferor Funds and both of the Surviving Funds
qualified as "regulated investment companies" under Part I of Subchapter M of
Subtitle A, Chapter 1, of the Internal Revenue Code of 1986, as amended (the
"Code"), for their most recently ended fiscal years and will so qualify for
their current fiscal years.
Second, each Transferor Fund will tender for acquisition by the
corresponding Surviving Fund assets consisting of at least 90% of the fair
market value of the net assets of the Transferor Fund and at least 70% of the
fair market value of its gross assets immediately prior to the Transactions. For
purposes of this assumption, all of the following shall be considered as assets
of such Transferor Fund held immediately prior to the Transactions: (a) amounts
used by the Transferor Fund to pay its expenses in connection with the
transactions contemplated hereby and (b) all amounts used to make redemptions of
or distributions on such Transferor Fund's shares (except for redemptions in the
ordinary course of its business, as required by section 22(e) of the 1940 Act
pursuant to a demand for redemption by a shareholder of the Transferor Fund, and
distributions of net investment income and net capital gains, other than net
capital gains resulting from sales of assets for the purpose of satisfying
investment objectives of the Surviving Fund, if any, that differ from the
existing investment objectives of the Transferor Fund).
<PAGE>
Emerald Funds
February 29, 1996
Page 2
Third, each Transferor Fund will distribute to its shareholders in complete
liquidation of the Transferor Fund the corresponding Surviving Fund shares that
it will receive in the Transactions as promptly as practicable and having made
such distributions will take all necessary steps to terminate its existence.
Fourth, prior to the Transactions, each Transferor Fund will continue its
historic business within the meaning of Treasury Regulations section 1.368-1(d)
and will not dispose of more than fifty percent (50%) of the fair market value
of its assets for the purpose of satisfying investment objectives of the
corresponding Surviving Fund, if any, that differ from the existing investment
objectives of the Transferor Fund.
Fifth, following the Transactions, each Surviving Fund will continue the
historic business of the corresponding Transferor Fund or will use a significant
portion of the Transferor Fund's historic business assets in a business.
Sixth, at the time of the Transactions, the adjusted income tax basis and
the fair market value of the assets to be transferred by each Transferor Fund to
the corresponding Surviving Fund will each equal or exceed the sum of the
liabilities to be assumed by such Surviving Fund or to which such transferred
assets are subject.
Seventh, at the time of the Transactions, there will be no plan or intention
by the shareholders of any Transferor Fund who own five percent (5%) or more of
the Transferor Fund's stock and, to the best of the knowledge of the management
of Emerald, no current plan or intention on the part of the remaining
shareholders of the Transferor Fund, to sell, exchange, or otherwise dispose of
a number of shares of the corresponding Surviving Fund's stock to be received in
the Transactions that would reduce the Transferor Fund shareholders' ownership
of Surviving Fund stock to a number of shares having a value, as of the time of
the Transactions, of less than fifty percent (50%) of the value of all of the
formerly outstanding stock of the Transferor Fund immediately prior to the
Transactions. For purposes of this assumption, (a) shares of the Transferor Fund
surrendered by dissenters will be treated as outstanding Transferor Fund stock
immediately prior to the Transactions, and (b) shares of the Transferor Fund and
the Surviving Fund held by Transferor Fund shareholders and otherwise sold,
redeemed or disposed of in anticipation of the Transactions, or subsequent to
the Transactions pursuant to a plan or intention that existed at the time of the
Transactions, also will be taken into account.
Eighth, at the time of the Transactions, no Surviving Fund will have any
plan or intention to reacquire any of its shares issued in the Transactions,
except in the ordinary course of business.
Ninth, at the time of the Transactions, no Surviving Fund will have any plan
or intention to sell or otherwise to dispose of any of the assets of the
corresponding Transferor Fund acquired in the Transactions, except for
dispositions made in the ordinary course of business.
Tenth, there is and will be no intercorporate indebtedness between any
Surviving Fund and its corresponding Transferor Fund that was issued, acquired
or will be settled at a discount.
Eleventh, no Surviving Fund owns or will own, directly or indirectly, nor
has it owned during the past five years, directly or indirectly, any stock of
the corresponding Transferor Fund.
Twelfth, no Transferor Fund is or will be under the jurisdiction of a court
in a case under Title 11 of the United States Code or a receivership,
foreclosure or similar proceeding in any Federal or State court.
Thirteenth, the liabilities of each Transferor Fund that will be assumed by
the corresponding Surviving Fund and the liabilities, if any, to which the
transferred assets will be subject were incurred by the Transferor Fund in the
ordinary course of its business.
<PAGE>
Emerald Funds
February 29, 1996
Page 3
Fourteenth, the Transactions will be accomplished for the purposes set forth
in the Combined Proxy Statement/Prospectus (the "Proxy Statement"), a draft of
which is part of the Registration Statement (the "Registration Statement") being
filed this day with the SEC.
Fifteenth, the Plan substantially in the form included as an exhibit in the
Proxy Statement will be duly authorized by the parties and approved by the
shareholders of each Transferor Fund, and the appropriate documents will be
filed with the appropriate government agencies.
CONCLUSIONS
Based upon the Code, applicable Treasury Department regulations in effect as
of the date hereof, current published administrative positions of the Internal
Revenue Service contained in revenue rulings and procedures, and judicial
decisions, and upon the information, representations and assumptions contained
herein and in the documents provided to us by you (including the Proxy Statement
and the Plan), it is our opinion for Federal income tax purposes that:
(i) the transfer by each Transferor Fund of all of its assets and
liabilities to the corresponding Surviving Fund in exchange for shares of
the corresponding Surviving Fund, and the distribution of said shares to the
shareholders of the Transferor Fund, as provided in the Plan, will
constitute a reorganization within the meaning of section 368(a)(1)(C) or
368(a)(1)(D) of the Code and each of the Surviving Funds and the Transferor
Funds will be "a party to the 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 any Transferor Fund as a result
of the Transactions;
(iii) in accordance with section 1032(a) of the Code, no gain or loss
will be recognized by any Surviving Fund as a result of the Transactions;
(iv) in accordance with section 354(a)(1) of the Code, no gain or loss
will be recognized by the shareholders of any Transferor Fund on the
distribution to them by the Transferor Fund of shares of the corresponding
Surviving Fund in exchange for their shares of the Transferor Fund;
(v) in accordance with section 358(a)(1) of the Code, the aggregate
basis of the Surviving Fund shares received by each shareholder of an
Transferor Fund will be the same as the aggregate basis of the shareholder's
Transferor Fund shares exchanged therefor in the Transactions;
(vi) in accordance with section 362(b) of the Code, the basis of the
assets received by each Surviving Fund in the Transactions will be the same
as the basis of such assets in the hands of the corresponding Transferor
Fund immediately before the Transactions;
(vii) in accordance with section 1223(1) of the Code, a shareholder's
holding period for Surviving Fund shares will be determined by including the
period for which the shareholder held the shares of the Transferor Fund
exchanged therefor, provided that the shareholder held such shares of the
Transferor Fund as a capital asset;
(viii) in accordance with section 1223(2) of the Code, the holding period
of each Surviving Fund with respect to the assets acquired in the
Transactions will include the period for which such assets were held by the
corresponding Transferor Fund; and
(ix) in accordance with section 381(a) of the Code, each Surviving Fund
will succeed to the tax attributes of the corresponding Transferor Fund
described in section 381(c) of the Code.
We express no opinion relating to any Federal income tax matter except on
the basis of the documents and assumptions described above. In issuing our
opinion, we have relied solely upon
<PAGE>
Emerald Funds
February 29, 1996
Page 4
existing provisions of the Code, existing and proposed regulations thereunder,
and current administrative positions and judicial decisions are subject to
change at any time. Any such change could affect the validity of the opinion set
forth above.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm under the caption
"Information Relating to the Proposed Reorganization -- Federal Income Tax
Consequences" in the Proxy Statement. This does not constitute a consent under
section 7 of the Securities Act of 1933, and in consenting to such references to
our firm we have not certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent is required under
section 7 or under the rules and regulations of the SEC issued thereunder.
Very truly yours,
/s/ DRINKER BIDDLE & REATH
--------------------------------------
DRINKER BIDDLE & REATH
<PAGE>
EXHIBIT (14)(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses and
related Statements of Additional Information of the Emerald Prime Fund, Emerald
Treasury Fund, Emerald Prime Trust Fund and Emerald Treasury Trust Fund (four of
the portfolios constituting the Emerald Funds, hereafter referred to as the
"Funds") dated April 1, 1996, which Prospectuses and Statements of Additional
Information are incorporated by reference and included in the Combined Proxy
Statement/ Prospectus and related Statement of Additional Information
constituting parts of this registration statement on Form N-14, (the
"Registration Statement") of our reports dated January 24, 1996, relating to the
financial statements and financial highlights appearing in the November 30, 1995
Annual Reports to Shareholders of the Funds, which reports are also incorporated
by reference and included in the Registration Statement. We also consent to the
references to us under the heading "Financial Highlights" in the Prospectuses
and under the headings "Financial Statements" and "Independent
Accountants/Experts" in the Statements of Additional Information dated April 1,
1996.
Price Waterhouse LLP
New York, New York
February 27, 1996
<PAGE>
EXHIBIT (14)(B)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the references to our Firm
included in the Registration Statement on Form N-14 under the Securities Act of
1933 and the Investment Company Act of 1940, respectively. However, this action
does not constitute a consent under Section 7 of the Securities Act of 1933,
because we have not certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent is required under
Section 7 or under the rules and regulations of the Securities and Exchange
Commission thereunder.
/s/ DRINKER BIDDLE & REATH
--------------------------------------
DRINKER BIDDLE & REATH
Philadelphia, Pennsylvania
February 27, 1996
<PAGE>
EXHIBIT 16
EMERALD FUNDS
POWER OF ATTORNEY
Chesterfield H. Smith, whose signature appears below, does hereby constitute
and appoint John G. Grimsley and William B. Blundin, and each of them, his true
and lawful attorney to execute in his name, place and stead, in his capacity as
trustee or officer, or both, of Emerald Funds (the "Fund"), the Registration
Statement of the Fund on Form N-14 pertaining to the reorganization of the Prime
Trust Fund and Treasury Trust Fund, any amendments thereto, and all instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission; and either of said attorneys shall have
power to act with or without the other of said attorneys and shall have full
power of substitution and re-substitution; and either of said attorneys shall
have full power and authority to do and perform in the name and on the behalf of
the undersigned trustee and/or officer of the Fund, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises, as fully
and to all intents and purposes as the undersigned trustee and/or officer of the
Fund might or could do in person, said acts of said attorney being hereby
ratified and approved.
/s/ Chesterfield H. Smith
--------------------------------------
Chesterfield H. Smith
Date: February 26, 1996
<PAGE>
EMERALD FUNDS
POWER OF ATTORNEY
John G. Grimsley, whose signature appears below, does hereby constitute and
appoint William B. Blundin, his true and lawful attorney to execute in his name,
place and stead, in his capacity as trustee or officer, or both, of Emerald
Funds (the "Fund"), the Registration Statement of the Fund on Form N-14
pertaining to the reorganization of the Prime Trust Fund and Treasury Trust
Fund, any amendments thereto, and all instruments necessary or incidental in
connection therewith, and to file the same with the Securities and Exchange
Commission; and said attorney shall have full power and authority to do and
perform in the name and on the behalf of the undersigned trustee and/or officer
of the Fund, in any and all capacities, every act whatsoever requisite or
necessary to be done in the premises, as fully and to all intents and purposes
as the undersigned trustee and/or officer of the Fund might or could do in
person, said acts of said attorney being hereby ratified and approved.
/s/ John G. Grimsley
--------------------------------------
John G. Grimsley
Date: February 26, 1996
<PAGE>
EMERALD FUNDS
POWER OF ATTORNEY
Raynor E. Bowditch, whose signature appears below, does hereby constitute
and appoint John G. Grimsley and William B. Blundin, and each of them, his true
and lawful attorney to execute in his name, place and stead, in his capacity as
trustee or officer, or both, of Emerald Funds (the "Fund"), the Registration
Statement of the Fund on Form N-14 pertaining to the reorganization of the Prime
Trust Fund and Treasury Trust Fund, any amendments thereto, and all instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission; and either of said attorneys shall have
power to act thereunder with or without the other of said attorneys and shall
have full power of substitution and re-substitution; and either of said
attorneys shall have full power and authority to do and perform in the name and
on the behalf of the undersigned trustee and/or officer of the Fund, in any and
all capacities, every act whatsoever requisite or necessary to be done in the
premises, as fully and to all intents and purposes as the undersigned trustee
and/or officer of the Fund might or could do in person, said acts of said
attorney being hereby ratified and approved.
/s/ Raynor E. Bowditch
--------------------------------------
Raynor E. Bowditch
Date: February 26, 1996
<PAGE>
EMERALD FUNDS
POWER OF ATTORNEY
Mary Doyle, whose signature appears below, does hereby constitute and
appoint John G. Grimsley and William B. Blundin, and each of them, her true and
lawful attorney to execute in her name, place and stead, in her capacity as
trustee or officer, or both, of Emerald Funds (the "Fund"), the Registration
Statement of the Fund on Form N-14 pertaining to the reorganization of the Prime
Trust Fund and Treasury Trust Fund, any amendments thereto, and all instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission; and either of said attorneys shall have
power to act with or without the other of said attorneys and shall have full
power of substitution and re-substitution; and either of said attorneys shall
have full power and authority to do and perform in the name and on the behalf of
the undersigned trustee and/or officer of the Fund, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises, as fully
and to all intents and purposes as the undersigned trustee and/or officer of the
Fund might or could do in person, said acts of said attorneys being hereby
ratified and approved.
/s/ Mary Doyle
--------------------------------------
Mary Doyle
Date: February 26, 1996
<PAGE>
EMERALD FUNDS
POWER OF ATTORNEY
Albert D. Ernest, whose signature appears below, does hereby constitute and
appoint John G. Grimsley and William B. Blundin, and each of them, his true and
lawful attorney to execute in his name, place and stead, in his capacity as
trustee or officer, or both, of Emerald Funds (the "Fund"), the Registration
Statement of the Fund on Form N-14 pertaining to the reorganization of the Prime
Trust Fund and Treasury Trust Fund, any amendments thereto, and all instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission; and either of said attorneys shall have
power to act with or without the other of said attorneys and shall have full
power of substitution and re-substitution; and either of said attorneys shall
have full power and authority to do and perform in the name and on the behalf of
the undersigned trustee and/or officer of the Fund, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises, as fully
and to all intents and purposes as the undersigned trustee and/or officer of the
Fund might or could do in person, said acts of said attorney being hereby
ratified and approved.
/s/ Albert D. Ernest
--------------------------------------
Albert D. Ernest
Date: February 26, 1996
<PAGE>
EMERALD FUNDS
POWER OF ATTORNEY
Martin R. Dean, whose signature appears below, does hereby constitute and
appoint John G. Grimsley and William B. Blundin, and each of them, his true and
lawful attorney to execute in his name, place and stead, in his capacity as
officer of Emerald Funds (the "Fund"), the Registration Statement of the Fund on
Form N-14 pertaining to the reorganization of the Prime Trust Fund and Treasury
Trust Fund, any amendments thereto, and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange
Commission; and either of said attorneys shall have power to act with or without
the other of said attorneys and shall have full power of substitution and
re-substitution; and said attorneys shall have full power and authority to do
and perform in the name and on the behalf of the undersigned officer of the
Fund, in any and all capacities, every act whatsoever requisite or necessary to
be done in the premises, as fully and to all intents and purposes as the
undersigned officer of the Fund might or could do in person, said acts of said
attorneys being hereby ratified and approved.
/s/ Martin R. Dean
--------------------------------------
Martin R. Dean
Date: February 26, 1996
<PAGE>
EXHIBIT 17(A)
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 21, 1988
SECURITIES ACT FILE NO. 33-20658
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. / /
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. / /
(Check appropriate box or boxes)
------------------------
EMERALD FUNDS
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
156 WEST 56TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10019
(Address of Principal Executive (Zip Code)
Offices)
</TABLE>
Registrant's Telephone Number, including Area Code: 212-492-1600
JEFFREY A. DALKE, ESQUIRE
DRINKER BIDDLE & REATH
1100 PNB BUILDING
BROAD AND CHESTNUT STREETS
PHILADELPHIA, PA 19107
(Name and Address of Agent for Service)
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
TITLE OF PROPOSED MAXIMUM
SECURITIES BEING AMOUNT BEING OFFERING PRICE AMOUNT OF
REGISTERED REGISTERED PER UNIT REGISTRATION FEE
<S> <C> <C> <C>
Shares of beneficial Indefinite Net Asset Value (plus $500*
interest ($.001 par sales load, if any)
value per share)
</TABLE>
* Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, Registrant hereby elects to register an indefinite number of its
shares of beneficial interest, including shares of beneficial interest in
its Treasury Trust Fund, Prime Trust Fund, Tax-Exempt Trust Fund, Treasury
Fund, Prime Fund and Tax-Exempt Fund.
------------------------
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 17(B)
[PRELIMINARY COPY]
EMERALD FUNDS
PROXY
PRIME TRUST FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of Emerald Funds (the
"Company") for use at a Special Meeting of Shareholders to be held at the
Company's offices, 3435 Stelzer Road, Columbus, Ohio 43219-3035 on May 10, 1996
at 10:00 A.M. Eastern Time.
THE UNDERSIGNED HEREBY APPOINTS and
, and each of them, with full power of substitution, as proxies of the
undersigned to vote at the above-stated Special Meeting, and at all adjournments
thereof, all shares of beneficial interest evidencing interests in the Company's
Prime Trust Fund that are held of record by the undersigned on the record date
for the Special Meeting, upon the following proposal and upon any other matter
that may come before the Special Meeting.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED THEREON
AND, IN THE ABSENCE OF SPECIFICATION WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR PROPOSAL 1 AS STATED ON THE REVERSE SIDE.
<PAGE>
/ / / / / /
For Against Abstain
To approve with respect to the Prime Trust Fund a Plan of Reorganization and
the transactions contemplated thereby, including the transfer of all of the
assets and liabilities of the Company's Prime Trust Fund to the Company's Prime
Fund in exchange for Emerald Shares of the Prime Fund, and a liquidating
distribution of such shares to shareholders of the Prime Trust Fund.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before a Special Meeting or any adjournment
thereof.
Receipt of Notice of Special Meeting and
Proxy Statement is hereby acknowledged.
IMPORTANT: Joint Tenants must EACH sign.
When signing as attorney, trustee,
executor, administrator, guardian or
corporate officer, please give your FULL
title.
Dated: ____________________________ , 1996
__________________________________________
Sign here exactly as name(s) appear on
left
<PAGE>
[PRELIMINARY COPY]
EMERALD FUNDS
PROXY
TREASURY TRUST FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES of Emerald Funds (the
"Company") for use at a Special Meeting of Shareholders to be held at the
Company's offices, 3435 Stelzer Road, Columbus, Ohio 43219-3035 on May 10, 1996
at 10:00 A.M. Eastern Time.
THE UNDERSIGNED HEREBY APPOINTS and
, and each of them, with full power of substitution, as proxies of the
undersigned to vote at the above-stated Special Meeting, and at all adjournments
thereof, all shares of beneficial interest evidencing interests in the Company's
Treasury Trust Fund that are held of record by the undersigned on the record
date for the Special Meeting, upon the following proposal and upon any other
matter that may come before the Special Meeting.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED THEREON
AND, IN THE ABSENCE OF SPECIFICATION WILL BE TREATED AS GRANTING AUTHORITY TO
VOTE FOR PROPOSAL 1 AS STATED ON THE REVERSE SIDE.
<PAGE>
/ / / / / /
For Against Abstain
To approve with respect to the Treasury Trust Fund a Plan of Reorganization
and the transactions contemplated thereby, including the transfer of all of the
assets and liabilities of the Company's Treasury Trust Fund to the Company's
Treasury Fund in exchange for Emerald Shares of the Treasury Fund, and a
liquidating distribution of such shares to shareholders of the Treasury Trust
Fund.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before a Special Meeting or any adjournment
thereof.
Receipt of Notice of Special Meeting and
Proxy Statement is hereby acknowledged.
IMPORTANT: Joint Tenants must EACH sign.
When signing as attorney, trustee,
executor, administrator, guardian or
corporate officer, please give your FULL
title.
Dated: ____________________________ , 1996
__________________________________________
Sign here exactly as name(s) appear on
left
