1933 Act File No. 333-35785
1940 Act File No. 811-08335
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933.................. X
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Pre-Effective Amendment No. 2 ........................................ X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 2 ...................................................... X
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WCT FUNDS
(Exact name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esq.,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering As soon as possible after the
effectiveness of the Registration Statement
Pursuant to the provisions of Rule 24f-2 of the Investment Company Act of 1940,
Registrant hereby elects to register an indefinite number of shares.
Amendment Pursuant to Rule 473
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the 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.
Copies To:
Matthew G. Maloney, Esquire
Dickstein, Shapiro, Morin & Oshinsky, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
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CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of WCT FUNDS consists of
one portfolio, West Coast Equity Fund, and is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
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Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page.......................Cover Page.
Item 2. Synopsis.........................Summary of Fund Expenses.
Item 3. Condensed Financial
Information Performance Information.
Item 4. General Description of
Registrant.......................General Information; Investment Information; Investment Objective;
Investment Policies; Acceptable Investments; Investment Limitations.
Item 5. Management of the Fund WCT Funds Management; Management of the WCT Funds; Distribution of
Fund Shares; Administration of the Fund; Expenses of the Fund.
Item 6. Capital Stock and Other
Securities.......................Dividends and Distributions; Shareholder Information; Voting Rights;
Tax Information; Federal Income Tax; State and Local Taxes; Effect of
Banking Laws.
Item 7. Purchase of Securities Being ....
Offered..........................Net Asset Value;
Investing in the
Fund; Share
Purchases; Minimum
Investment
Required; What
Shares Cost;
Purchases at Net
Asset Value;
Purchases with
Proceeds from
Redemption of
Unaffiliated
Mutual Fund
Shares; Sales
Charge
Reallowance;
Reducing or
Eliminating the
Sales Charge;
Systematic
Investment
Program;
Retirement Plans;
Confirmations and
Account
Statements;
Exchange
Privilege;
Exchanging Shares.
Item 8. Redemption or Repurchase.........Redeeming Shares; Systematic Withdrawal Program; Account with Low Balances.
Item 9. Pending Legal Proceedings........None.
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PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page.........................Cover Page.
Item 11. Table of Contents..................Table of Contents.
Item 12. General Information and
History General Information About the Fund.
Item 13. Investment Objectives and
Policies...........................Investment Objective and Policies; Investment Limitations; Appendix.
Item 14. Management of the Fund WCT Funds Management; Trustees Compensation.
Item 15. Control Persons and Principal
Holders of Securities Fund Ownership.
Item 16. Investment Advisory and Other
Services...........................Investment Advisory Services; Distribution and
Shareholder Services Plans; Other Services; Fund Administration;
Custodian and Portfolio
Accountant; Transfer Agent, Dividend Disbursing Agent,
and Shareholder Servicing Agent; Independent Auditors.
Item 17. Brokerage Allocation...............Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered......................Purchasing Shares; Determining Net Asset Value; Exchange
Privilege; Redeeming Shares; Redemption in Kind; Massachusetts
Partnership Law.
Item 20. Tax Status.........................Tax Status; The Fund's Tax Status; Shareholders' Tax Status.
Item 21. Underwriters.......................Not Applicable.
Item 22. Calculation of Performance
Data...............................Total Return; Yield; Performance Comparisons.
Item 23. Financial Statements...............To Be Filed in Part A By Amendment.
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WCT Equity Fund
(A Portfolio of the WCT Funds)
Prospectus
The shares of WCT Equity Fund (the "Fund") offered by this prospectus represent
interests in a diversified portfolio in the WCT Funds (the "Trust"), an open-end
management investment company (a mutual fund). The investment objective of the
Fund is to provide long-term capital appreciation. The Fund pursues this
objective by investing primarily in common or preferred stock of large or medium
sized companies with market capitalizations in excess of $1.5 billion.
The shares offered by this prospectus are not deposits or obligations of West
Coast Trust Company, Inc. or its affiliates, are not endorsed or guaranteed by
West Coast Trust Company, Inc. or its affiliates, and are not insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in these shares involves investment risks,
including the possible loss of principal.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated November __,
1997 with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information,
or a paper copy of this prospectus, if you have received your prospectus
electronically, free of charge, obtain other information, or make inquiries
about the Fund by writing to the Fund or by calling the Fund at 1-800-___-____.
The Statement of Additional Information, material incorporated by reference into
this document, and other information regarding the Fund is maintained
electronically with the SEC at Internet Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Prospectus dated November __, 1997
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Table of Contents
To be generated by typesetter
<PAGE>
Summary of Fund Expenses
Shareholder Transaction Expenses
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Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)............................................................................... 4.50%
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage
of offering price)................................................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable).................................................. None
Redemption Fees (as a percentage of amount redeemed, if applicable)..................... None
Exchange Fee............................................................................ None
Annual Fund Operating Expenses *
(As a percentage of projected average net assets)
Management Fee(1)....................................................................... 0.50%
12b-1 Fee (2)........................................................................... 0.00%
Total Other Expenses.................................................................... 0.65%
Shareholder Servicing Fee(3)......................................................... 0.00%
Total Fund Operating Expenses(4)..................................................... 1.15%
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(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of the management fee by the investment adviser. The adviser
can terminate this voluntary waiver at any time at its sole discretion. The
maximum management fee is 0.75%.
(2) As of the date of this prospectus, the Fund is not paying or accruing 12b-1
fees. The Fund will not pay or accrue 12b-1 fees until a separate class of
shares has been created for certain institutional investors. The Fund's
distributor can pay up to 0.25% as a 12b-1 fee which is reimbursed to the
distributor by the Fund. See "Distribution of Fund Shares." Long-term
shareholders may pay more than the economic equivalent of the maximum front-end
sales charges permitted under the rules of the National Association of
Securities Dealers, Inc.
(3) As of the date of this prospectus, the Fund is not paying or accruing
Shareholder Servicing fees. The Fund will not pay or accrue Shareholder
Servicing fees until a separate class of shares has been created for certain
institutional investors. The Fund can pay up to 0.25% as a Shareholder Servicing
fee. See "Distribution of Fund Shares."
(4) The Total Fund Operating Expenses are estimated to be 1.40% absent the
voluntary waiver described in Note 1 above.
* Expenses in this table are estimated based on average expenses expected to be
incurred during the fiscal year ending October 31, 1998. During the course of
this period, expenses may be more or less than the average amount shown.
The purpose of this table is to assist the investor in understanding the various
costs and expenses that a shareholder in the Fund will bear, either directly or
indirectly. For more complete descriptions of the various costs and expenses,
see "WCT Funds Information" and "Investing in the Fund". Wire-transferred
redemptions may be subject to additional fees.
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return; (2) redemption at the end of each time period; and (3) payment of
the maximum sales charge. As noted in the table above, the Fund charges no
contingent deferred sales charge
1 Year.................................................. $56
3 Years................................................. $80
The above example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. This example
is based on estimated data for the fiscal year ending October 31, 1998.
<PAGE>
General Information
The WCT Funds was established as a Massachusetts business trust under a
Declaration of Trust dated July 1, 1997. The Declaration of Trust permits the
WCT Funds to offer separate series of shares of beneficial interest representing
interests in separate portfolios of securities. This prospectus relates only to
the WCT Funds' equity portfolio, known as WCT Equity Fund. The Fund is for trust
clients of WCT Trust Company, Inc. and its affiliates and individual investors
who desire a convenient means of accumulating an interest in a professionally
managed, diversified portfolio investing primarily in common or preferred stock
of large or medium sized companies with market capitalizations in excess of $1.5
billion. West Coast Trust Company, Inc. is the investment adviser to the Fund,
and Becker Capital Management, Inc. is the Fund's sub-adviser. The minimum
initial investment by a trust customer is $5,000 and $1,000 for individual
investors. Subsequent investments must be in amounts of at least $100.
Fund shares are sold at net asset value plus an applicable sales charge and are
redeemed at net asset value.
Investment Information
Investment Objective
The investment objective of the Fund is to provide long-term capital
appreciation. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by investing in companies believed
to represent good long-term values not currently recognized in the market prices
of their securities identified through fundamental analysis, systematic stock
valuation and disciplined portfolio construction. The investment objective
cannot be changed without approval of shareholders. Unless indicated otherwise,
the investment policies described below may be changed by the Board of Trustees
(the "Trustees") without the approval of shareholders. Shareholders will be
notified before any material changes in these policies become effective.
Investment Policies
The Fund pursues its objective by investing primarily in common or preferred
stock of large or medium sized companies with market capitalizations in excess
of $1.5 billion. Occasionally, the Fund will hold small cap issues which satisfy
the adviser's and sub-adviser's valuation discipline. The common and preferred
stocks the Fund invests in are generally characterized as having low price to
earnings ratios, and as having growth and quality characteristics which match or
exceed those companies which comprise the Standard & Poor's 500 Index ("S&P").
As a matter of investment policy, the Fund will invest so that, under normal
circumstances, at least 80% of its total assets are invested in equity
securities.
Acceptable Investments
The securities in which the Fund invests include, but are not limited to:
o common stocks of U.S. companies which are either listed on the New
York or American Stock Exchanges or traded in over-the-counter
markets, and preferred stocks, warrants, and preferred stocks
convertible into common stocks of such companies;
o American Depositary Receipts ("ADRs") of foreign companies traded on
the New York or American Stock Exchanges or in the over-the-counter market;
o obligations of the United States government;
o notes, bonds, and discount notes of U.S. government agencies or
instrumentalities;
o money market instruments rated, at the time of purchase, A-1 or A-2
by Standard & Poor's ("S&P"), Prime-1 or Prime-2 by Moody's
Investors Service, Inc. ("Moody's"), or F-1 or F-2 by Fitch Investor
Services ("Fitch"), or, if not rated, determined by the adviser or
sub-adviser to be of comparable quality; and
o repurchase agreements collateralized by eligible investments.
In addition, the Fund may lend portfolio securities, invest in securities of
other investment companies, and engage in when-issued and delayed delivery
transactions.
The prices of fixed income securities fluctuate inversely to the direction of
interest rates.
Common Stocks. As described above, the Fund invests primarily in common and
preferred stocks. As with other mutual funds that invest primarily in common and
preferred stocks, the Fund is subject to market risks. That is, the possibility
exists that common and preferred stocks will decline over short or even extended
periods of time, and the United States equity market tends to be cyclical,
experiencing both periods when stock prices generally increase and periods when
stock prices generally decrease. The Fund may, from time to time, invest in
issuers with smaller capitalizations. Small capitalization stocks have
historically been more volatile in price than larger capitalization stocks, such
as those included in the S&P 500. This is because, among other things, smaller
companies have a lower degree of liquidity in the equity market and tend to have
a greater sensitivity to changing economic conditions than larger companies.
Further, in addition to exhibiting greater volatility, these stocks may, to some
degree, fluctuate independently of the stocks of large companies. That is, the
stocks of small capitalization companies may decline in price as the price of
large company stocks rises or vice versa. Therefore, investors should expect
that there will be periods of time when the Fund will exhibit greater volatility
than broad stock market indices such as the S&P 500.
Convertible Securities. Convertible securities are fixed income securities which
may be exchanged or converted into a predetermined number of the issuer's
underlying common stock at the option of the holder during a specified time
period. Convertible securities may take the form of convertible preferred stock
or debentures, units consisting of warrants or a combination of the features of
several of these securities.
Convertible preferred stocks generally retain the investment characteristics of
fixed income securities until they have been converted but also react to
movements in the underlying equity securities. The holder is entitled to receive
the dividend preference of a preferred stock until the holder elects to exercise
the conversion privilege.
Securities of Foreign Issuers. The Fund may invest (up to 20% of its total
assets) in securities of foreign issuers traded on the New York or American
Stock Exchanges or in the over-the-counter market in the form of depositary
receipts. Securities of a foreign issuer may present greater risks in the form
of nationalization, confiscation, domestic marketability, or other national or
international restrictions. As a matter of practice, the Fund will not invest in
the securities of a foreign issuer if any such risk appears to the adviser or
sub-adviser to be substantial.
Other differences between investing in foreign and U.S. companies include:
o less publicly available information about foreign companies;
o the lack of uniform financial accounting standards applicable to
foreign companies;
o less readily available market quotations on foreign companies;
o differences in government regulation and supervision of foreign
securities exchanges, brokers, listed companies, and banks;
o generally lower foreign securities market volume;
o the likelihood that foreign securities may be less liquid or more
volatile;
o generally higher foreign brokerage commissions;
o possible difficulty in enforcing contractual obligations or obtaining
court judgments abroad because of differences in the legal systems;
o unreliable mail service between countries; and
o political or financial changes which adversely affect investments in
some countries.
U.S. Government Obligations. These securities include but are not limited to:
o direct obligations of the U.S. Treasury, such as U.S. Treasury
bills, notes, and bonds; and
o notes, bonds and discount notes of U.S. government agencies or
instrumentalities.
Some of these obligations are backed by the full faith and credit of the U.S.
Treasury. No assurances can be given that the U.S. government will provide
financial support to other agencies or instrumentalities, since it is not
obligated to do so. These agencies and instrumentalities are supported by:
o the issuer's right to borrow an amount limited to a specific line
of credit from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase
certain obligations of an agency or instrumentality; or
o the credit of the agency or instrumentality.
Investing in Securities of Other Investment Companies. The Fund may invest its
assets in securities of other investment companies as an efficient means of
carrying out its investment policies. It should be noted that investment
companies incur certain expenses, such as management fees, and , therefore, any
investment by the Fund in shares of other investment companies may be subject to
such duplicate expenses.
Temporary Investments. In such proportions as, in the judgment of its adviser
and sub-adviser, prevailing market conditions warrant, the Fund may, for
temporary defensive purposes, invest in:
o commercial paper which matures in 270 days or less so long as at
least two ratings are high quality ratings by nationally
recognized statistical rating organizations;
o time and savings deposits (including certificates of deposit) in
commercial or savings banks whose accounts are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC"), or in institutions whose accounts
are insured by the Savings Association Insurance Fund ("SAIF"),
which is also administered by the FDIC, including certificates of
deposit issued by, and other time deposits in, foreign branches of
BIF-insured banks; and
o bankers' acceptances.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities. Other than Section 4(2) commercial paper, restricted securities are
any securities in which the Fund may otherwise invest pursuant to its investment
objective and policies, but which are subject to restrictions on resale under
federal securities laws. However, the Fund will limit investments in illiquid
securities, including certain restricted securities not determined by the
Trustees to be liquid, non-negotiable time deposits and repurchase agreements
providing for settlement in more than seven days after notice, to 15% of its net
assets.
When-Issued and Delayed Delivery Transactions. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
The Fund may dispose of a commitment prior to settlement if the adviser and
sub-adviser deem it appropriate to do so. In addition, the Fund may enter into
transactions to sell its purchase commitments to third parties at current market
values and simultaneously acquire other commitments to purchase similar
securities at later dates. The Fund may realize short-term profits or losses
upon the sale of such commitments.
Lending of Portfolio Securities. In order to generate additional income, the
Fund may lend portfolio securities on a short-term or long-term basis, or both,
to broker/dealers, banks, or other institutional borrowers of securities. The
Fund will only enter into loan arrangements with broker/dealers, banks, or other
institutions which the investment adviser and sub-adviser have determined are
creditworthy under guidelines established by the Trustees and will receive
collateral in the form of cash or U.S. government securities equal to at least
100% of the value of the securities loaned. There is the risk that when lending
portfolio securities, the securities may not be available to the Fund on a
timely basis and the Fund may, therefore, lose the opportunity to sell the
securities at a desirable price. In addition, in the event that a borrower of
securities would file for bankruptcy or become insolvent, disposition of the
securities may be delayed pending court action.
Repurchase Agreements. The U.S. government securities and other securities in
which the Fund invests may be purchased pursuant to repurchase agreements.
Repurchase agreements are arrangements in which banks, broker/dealers, and other
recognized financial institutions sell U.S. government securities or other
securities to the Fund and agree at the time of sale to repurchase them at a
mutually agreed upon time and price. To the extent that the original seller does
not repurchase the securities from the Fund, the Fund could receive less than
the repurchase price on any sale of such securities.
Portfolio Turnover. Although the Fund does not intend to invest for the purpose
of seeking short-term profits, securities in the Fund's portfolio will be sold
whenever the adviser and sub-adviser believe it is appropriate to do so in light
of the Fund's investment objective, without regard to the length of time a
particular security may have been held. A high portfolio turnover rate may also
result in higher taxes paid by the Fund's shareholders. See "Tax Information" in
this Prospectus.
Investment Limitations
As a matter of fundamental investment policy, which cannot be changed without
shareholder approval, the Fund will not borrow money directly or through reverse
repurchase agreements (arrangements in which the Fund sells a portfolio
instrument for a percentage of its cash value with an arrangement to buy it back
on a set date) or pledge securities except, under certain circumstances, the
Fund may borrow up to one-third of the value of its total assets and pledge up
to 15% of its total assets to secure such borrowings.
Hub and Spoke (R) Option
If the Trustees determine it to be in the best interest of the Fund and its
shareholders, the Fund may in the future seek to achieve its investment
objective by investing all of its assets in another investment company having
the same investment objective and substantially the same investment policies and
restrictions as those applicable to the Fund. It is expected that any such
investment company would be managed in substantially the same manner as the
Fund.
The initial shareholder of the Fund (which is an affiliate of Edgewood Services,
Inc.) voted to vest authority to use this investment structure in the sole
discretion of the Trustees. No further approval of shareholders is required.
Shareholders will receive at least 30 days prior notice of any such investment.
In making its determination, the Trustees will consider, among other things, the
benefits to shareholders and/or the opportunity to reduce costs and achieve
operational efficiencies. Although it is expected that the Trustees will not
approve an arrangement that is likely to result in higher costs, no assurance is
given that costs will remain the same or be materially reduced if this
investment structure is implemented.
WCT Funds Information
Management of the WCT Funds
Board of Trustees. The WCT Funds are managed by a Board of Trustees. The Board
of Trustees is responsible for managing the business affairs of the WCT Funds
and for exercising all of the powers of the WCT Funds except those reserved for
the shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
Investment Adviser. Pursuant to an investment advisory contract with the WCT
Funds, investment decisions for the Fund are made by West Coast Trust Company,
Inc. (hereinafter referred to as the "Adviser" or "West Coast Trust"), the
Fund's investment adviser, subject to direction by the Trustees. The Adviser, in
consultation with Becker Capital Management, Inc. (the "Sub-Adviser"),
continually conducts investment research and supervision for the Fund and is
responsible for the purchase or sale of portfolio instruments.
Advisory Fees. The Fund's Adviser receives an annual investment advisory fee
equal to 0.75% of the Fund's average daily net assets. The Adviser may voluntary
choose to waive a portion of its fee or reimburse the Fund for certain operating
expenses. The Adviser can terminate this voluntary waiver of its advisory fee at
any time at its sole discretion.
Adviser's Background. The Adviser is a wholly-owned subsidiary of West Coast
Bancorp ("Bancorp"). Organized in 1981, Bancorp held approximately $____ million
in total assets as of December 31, 1996, and is the second largest bank holding
company based in Oregon. Through its subsidiaries - The Commercial Bank, Valley
Commercial Bank, The Bank of Newport, The Bank of Vancouver and West Coast
Trust, Bancorp offers a full range of commercial banking services, including
trust services to individuals, partnerships, corporations, and institutions and
acts as fiduciary of estates and conservatorships, and as a trustee under
various wills, trusts and pension and profit-sharing plans. In addition, Bancorp
and its subsidiaries offer tax-deferred annuities, single-premium whole life
insurance, other insurance investment products and securities products. The
Adviser has not previously served as an investment adviser to a mutual fund.
The Adviser has common and collective funds with assets totaling approximately
$___.
As part of their regular banking operations, Bancorp and its subsidiaries may
make loans to public companies. Thus, it may be possible, from time to time, for
the Fund to hold or acquire the securities of issuers which are lending clients
of Bancorp and its subsidiaries. The lending relationship will not be a factor
in the selection of securities.
Sub-Adviser. Pursuant to the terms of an investment sub-advisory agreement
between the Adviser and Becker Capital Management, Inc., the Sub-Adviser will
make all determinations with respect to the investment of assets of the Fund,
and shall take such steps as may be necessary to implement the same, including
the placement of purchases and sale orders on behalf of the Fund. For the
services provided and the expenses incurred by the Sub-Adviser pursuant to the
sub-advisory agreement, the Sub-Adviser is entitled to receive an annual
sub-advisory fee equal to 0.50% of the daily assets of the Fund payable by the
Adviser from the advisory fees. The Sub-Adviser may elect to waive some or all
of its fee. In no event shall the Fund be responsible for any fees due to the
Sub-Adviser for its services to the Adviser.
Sub-Adviser's Background. The Sub-Adviser is a registered investment advisory
firm founded in 1976 as P.E. Becker Inc. In 1992, the Sub-Adviser changed its
name to Becker Capital Management, Inc. The Sub-Adviser manages assets totaling
approximately $2.0 billion for individuals, corporate pensions and profit
sharing trusts, multi-employer trusts and endowment funds. The Sub-Adviser is a
100% employee owned firm. The Sub-Adviser is currently a sub-adviser for another
mutual fund.
Donald L. Wolcott has been the Fund's portfolio manager since its inception. Mr.
Wolcott is a Vice President and Portfolio Manager of Becker Capital Management,
Inc., and has served in that capacity since 1987. His responsibilities include
the management of portfolios for taxable individuals and charitable foundations
and Mr. Wolcott also participates in strategic asset allocation decisions for
the firm's balanced account portfolios. Mr. Wolcott received a B.A. in business
from the University of Nebraska and is a Chartered Financial Analyst.
Distribution of Fund Shares
Edgewood Services, Inc. is the principal distributor for shares of the Fund. It
is a New York corporation organized on October 26, 1993, and is the principal
distributor for a number of investment companies. Edgewood Services, Inc. is a
subsidiary of Federated Investors.
Distribution and Shareholder Services Plans. Under a distribution plan adopted
in accordance with Investment Company Act Rule 12b-1 (the "Plan"), the Fund may
pay to the distributor an amount computed at an annual rate of .25% of the
average daily net assets of the Fund to finance any activity which is
principally intended to result in the sale of shares subject to the Plan. The
distributor may select financial institutions such as banks, fiduciaries,
custodians for public funds, investment advisers, and broker/dealers ("brokers")
to provide distribution and/or administrative services as agents for their
clients or customers.
The distributor may from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plan to the extent
the expenses attributable to the shares exceed such lower expense limitations as
the distributor may, by notice to the Trust, voluntarily declare to be
effective.
The distributor will pay financial institutions a fee based upon the shares
subject to the Plan and owned by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid will be determined
from time to time by the distributor.
The Plan is a compensation type plan. As such, the Fund makes no payments to the
distributor except as described above. Therefore, the Fund does not pay for
unreimbursed expenses of the distributor, including amounts expended by the
distributor in excess of amounts received by it from the Fund, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by shares
under the Plan.
Certain trust clients of West Coast Trust will not be affected by the Plan
because the Plan will not be activated unless and until a separate class of
shares of the Fund (which would not have a Rule 12b-1 plan) is created and such
trust clients' investments in the Fund is converted to such class.
In addition, the Fund has adopted a Shareholder Services Plan (the "Services
Plan") with respect to its shares. Under the Services Plan, financial
institutions will enter into shareholder service agreements with the Fund to
provide administrative support services to their customers who, from time to
time, may be owners of record or beneficial owners of the shares. In return for
providing these support services, a financial institution may receive payments
from the Fund at a rate not exceeding .25% of the average daily net assets of
the shares beneficially owned by the financial institution's customers for whom
it is the holder of record or with whom it has a servicing relationship. These
administrative services may include, but are not limited to, the provision of
personal services and maintenance of shareholder accounts.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or savings association) from being an underwriter or distributor of most
securities. In the event the Glass-Steagall Act is deemed to prohibit depository
institutions from acting in the capacities described above or should Congress
relax current restrictions on depository institutions, the Trustees will
consider appropriate changes in the services.
Supplemental Payments to Financial Institutions. In addition to payments made
pursuant to the Plan and Services Plan, Edgewood Services, Inc. and Federated
Shareholder Services, from their own assets, may pay financial institutions
supplemental fees for the performance of substantial sales services,
distribution-related support services, or shareholder services. The support may
include sponsoring sales, educational and training seminars for their employees,
providing sales literature, and engineering computer software programs that
emphasize the attributes of the Fund. Such assistance will be predicated upon
the amount of Shares the financial institution sells or may sell, and/or upon
the type and nature of sales or marketing support furnished by the financial
institution. Any payments made by the distributor may be reimbursed by the Fund'
s Adviser or its affiliates.
Administration of the Fund
Administrative Services. Federated Services Company, a subsidiary of Federated
Investors, provides the Fund with the administrative personnel and services
(including certain legal and financial reporting services) necessary to operate
the Fund. Such services include shareholder servicing and certain legal and
accounting services. Federated Services Company provides these at an annual rate
as specified below:
Maximum Average Aggregate
Administrative Fee Daily Net Assets of the Trust
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000. Federated Services Company may choose voluntarily to waive a portion of
its fee.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Sub-Adviser looks for prompt execution of the order at a
favorable price. In working with dealers, the Sub-Adviser will generally utilize
those who are recognized dealers in specific portfolio instruments, except when
a better price and execution of the order can be obtained elsewhere. In
selecting among firms believed to meet these criteria, the Sub-Adviser may give
consideration to those firms which have sold or are selling shares of the Fund.
The Sub-Adviser makes decisions on portfolio transactions and selects brokers
and dealers subject to review by the Trustees.
Expenses of the Fund
The Fund pays all of its own expenses and its allocable share of Trust expenses.
These expenses include, but are not limited to, the cost of: organizing the
Trust and continuing its existence; registering the Trust and its shares;
Trustees fees; meetings of Trustees and shareholders and proxy solicitations
therefor; auditing, accounting, and legal services; investment advisory and
administrative services; custodians, transfer agents, dividend disbursing
agents, shareholder servicing agents, and registrars; issuing, purchasing,
repurchasing, and redeeming shares; reports to government agencies; preparing,
printing and mailing documents to shareholders such as financial statements,
prospectuses and proxies; taxes and commissions; insurance premiums; association
membership dues; and such non-recurring and extraordinary items as may arise.
Net Asset Value
The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and all other assets, less
liabilities, by the number of shares outstanding.
The net asset value is determined as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday through Friday,
except on: (i) days on which there are not sufficient changes in the value of
the Fund's portfolio securities that its net asset value might be materially
affected; (ii) days during which no shares are tendered for redemption and no
orders to purchase shares are received; and (iii) the following holidays: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day, and
Christmas Day.
Investing in the Fund
Share Purchases
Fund shares are sold on days on which the New York Stock Exchange and the
Federal Reserve Wire System are open for business. In connection with qualified
account relationships with West Coast Trust, Fund shares may be purchased by
telephone through procedures established with West Coast Trust and its
affiliates. Individual investors may place orders to purchase shares either by
telephone or by mail. In connection with the sale of Fund shares, Edgewood
Services, Inc. (the "distributor") may from time to time offer certain items of
nominal value to any shareholder or investor. The Fund reserves the right to
reject any purchase request.
Through West Coast Trust. Trust customers placing an order to purchase shares of
the Fund may open an account by calling West Coast Trust at _______________.
Information needed to establish the account will be taken over the telephone.
Individual investors may open an account by completing a new account application
form available from _________ at (address) or by telephoning ____________ at
1-800-___-____. Mail the completed account application along with a check made
payable to the Fund to: __________________________________________.
Payment may be made by check, transfer from an Automated Clearing House ("ACH")
member institution, federal funds or by debiting a customer's account at West
Coast Trust. Purchase orders must be received by 3:00 p.m. (Eastern time)/12:00
Noon (Pacific time) in order for shares to be purchased at that day's price.
Orders by mail are considered received after payment by check is converted into
federal funds. This is generally the next business day after the transfer agent
receives the check.
Purchases By Wire. You may also purchase shares by bank wire. For opening new
accounts in this manner, please call 1-800-___-____ (toll free) before wiring
your funds, and furnish the following information: the account registration and
address, and your taxpayer identification number (for individuals, a Social
Security number). When making additional investments by wire to your existing
account, please provide your account number(s). You must include your name and
telephone number, the amount being wired and the name of the wiring bank with
both new and existing account purchases.
You should instruct your bank to wire Federal funds to: State Street Bank and
Trust Company, ABA number 011000028, Account Number _________, Boston,
Massachusetts 02266, indicating your account number and the account
registration. Shares cannot be purchased on days on which the New York Stock
Exchange is closed or on federal holidays restricting wire transfers. Questions
on wire purchases should be directed to your shareholder representative at the
telephone number listed on your account statement.
Minimum Investment Required
The minimum initial investment in the Fund by a trust customer is $5,000 and
$1,000 for individual investors. Subsequent investments must be in amounts of at
least $100. The Fund may waive the initial minimum investment from time to time.
An institutional investor's minimum investment will be calculated by combining
all accounts it maintains with the Fund.
What Shares Cost
Fund shares are sold at their net asset value next determined after an order is
received, plus a sales charge, as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Sales Charge
Sales Charge as % of Dealer Allowance
as % of Net Amount as % of
Offering Price Invested Offering Price
Less than $100,000.......................... 4.50% 4.71% 4.00%
$100,000 but less than $250,000............. 3.75% 3.90% 3.50%
$250,000 but less than $500,000............. 2.50% 2.56% 2.75%
$500,000 but less than $750,000............. 2.00% 2.04% 2.25%
$750,000 but less than $1 million........... 1.00% 1.01% 1.25%
$1 million or more.......................... 0.00% 0.00% 0.00%
</TABLE>
Purchases at Net Asset Value
Shares of the Fund may be purchased at net asset value, without a sales charge,
by West Coast Trust for accounts in which West Coast Trust holds or manages
assets, by trust companies, trust departments of other financial institutions
and by banks and savings and loans for their own accounts. Trustees, emeritus
trustees, employees and retired employees of the Trust, West Coast Trust, West
Coast Bancorp and its subsidiaries, or Edgewood Services, Inc. or their
affiliates, or any bank or investment dealer who has a sales agreement with
Edgewood Services, Inc. with regard to the Fund, and their spouses and children
under 21, may also buy shares at net asset value, without a sales charge. In
addition, customers, employee benefit plans, and employees of Becker Capital
Management, Inc. and their spouses and children under 21 may also buy shares at
net asset value, without a sales charge.
Purchases with Proceeds from Redemptions of Unaffiliated Mutual Fund Shares
Investors may purchase shares of the Fund at net asset value, without a sales
charge, with the proceeds from redemption of shares of a mutual fund which was
sold with a sales charge or commission. The purchase must be made within 60 days
of the redemption, and the distributor must be notified by the investor in
writing, or by his financial institution, at the time the purchase is made. To
provide adequate proof, an investor must provide a statement showing the value
liquidated from the other mutual fund. This offer is not available for the
redemption of mutual fund shares that were or would be subject to a contingent
deferred sales charge upon redemption.
Sales Charge Reallowance
For sales of shares of the Fund, a dealer will normally receive up to 85% of the
applicable sales charge. For shares sold with a sales charge, West Coast Trust
will receive 85% of the applicable sales charge for purchases of Fund shares
made directly through West Coast Trust.
The sales charge for shares sold other than through West Coast Trust or
registered broker/dealers will be retained by the distributor. However, the
distributor will, periodically, uniformly offer to pay to dealers additional
amounts in the form of cash or promotional incentives, such as reimbursement of
certain expenses of qualified employees and their spouses to attend
informational meetings about the Fund or other special events at
recreational-type facilities, or items of material value. Such payments, all or
a portion of which may be paid from the sales charge the distributor normally
retains or any other source available to it, will be predicated upon the amount
of shares of the Fund that are sold by the dealer.
Reducing or Eliminating the Sales Charge
The sales charge can be reduced or eliminated on the purchase of Fund shares
through:
o quantity discounts and accumulated purchases;
o signing a 13-month letter of intent;
o using the reinvestment privilege; or
o concurrent purchases.
Quantity Discounts and Accumulated Purchases. As shown in the table under "What
Shares Cost", larger purchases reduce or eliminate the sales charge paid. The
Fund will combine purchases made on the same day by the investor, his spouse,
and his children under age 21 when it calculates the sales charge.
If an additional purchase of Fund shares is made, the Fund will consider the
previous purchases still invested in the Fund. For example, if a shareholder
already owns shares having a current value at the public offering price of
$90,000 and he purchases $10,000 more at the current public offering price, the
sales charge on the additional purchase according to the schedule now in effect
would be 3.75%, not 4.50%.
To receive the sales charge reduction or elimination, West Coast Trust or the
distributor must be notified by the shareholder in writing or by his financial
institution at the time the purchase is made that Fund shares are already owned
or that purchases are being combined. The Fund will reduce the sales charge
after it confirms the purchases.
Letter of Intent. If a shareholder intends to purchase at least $100,000 of
shares in the Fund over the next 13 months, the sales charge may be reduced or
eliminated by signing a letter of intent to that effect. This letter of intent
includes a provision for a sales charge adjustment depending on the amount
actually purchased within the 13-month period and a provision for the custodian
to hold up to 4.50% of the total amount intended to be purchased in escrow (in
shares of the Fund) until such purchase is completed.
The shares held in escrow will be applied to the shareholder's account at the
end of the 13-month period unless the amount specified in the letter of intent
is not purchased. In this event, an appropriate number of escrowed shares may be
redeemed in order to realize the difference in the sales charge.
This letter of intent will not obligate the shareholder to purchase shares, but
if the shareholder does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. This letter may
be dated as of a prior date to include any purchases made within the past 90
days; however, these previous purchases will not receive the reduced sales
charge.
Reinvestment Privilege. If shares in the Fund have been redeemed, the
shareholder has a one-time right, within 30 days, to reinvest the redemption
proceeds at the next-determined net asset value without any sales charge. West
Coast Trust or the distributor must be notified by the shareholder in writing or
by his financial institution of the reinvestment in order to eliminate a sales
charge. If the shareholder redeems his shares in the Fund, there may be tax
consequences. Shareholders contemplating such transactions should consult their
own tax advisers.
Concurrent Purchases. For purposes of qualifying for a sales charge reduction, a
shareholder has the privilege of combining concurrent purchases of two or more
WCT Funds, when and if created, or two or more Federated Funds (as defined under
"Exchange Privilege"), the purchase price of which includes a sales charge. For
example, if a shareholder concurrently invested $30,000 in a Federated Fund with
a sales charge, and $70,000 in this Fund, the sales charge would be reduced.
To receive this sales charge reduction, the ___________ or the distributor must
be notified by the shareholder in writing at the time the concurrent purchases
are made. The Fund will reduce the sales charge after it confirms the purchases.
Systematic Investment Program
Once a Fund account has been opened, shareholders may add to their investment on
a regular basis in a minimum amount of $100. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account at
West Coast Trust and invested in Fund shares at the net asset value next
determined after an order is received by the Fund, plus the applicable sales
charge. A shareholder may apply for participation in this program through West
Coast Trust or through the distributor.
Retirement Plans
Shares of the Fund can be purchased as an investment for retirement plans or for
IRA accounts. For further details, contact ___________________ and consult a tax
adviser.
Confirmations and Account Statements
Shareholders will receive detailed confirmations of transactions (except for
systematic program transactions). In addition, shareholders will receive
periodic statements reporting all account activity, including dividends paid.
The Fund will not issue share certificates.
Dividends and Distributions
Dividends are declared quarterly and paid quarterly to all shareholders invested
in the Fund on the record date. All shareholders on the record date are entitled
to the dividend. If shares are redeemed or exchanged prior to the record date,
or purchased after the record date, those shares are not entitled to that
quarter's dividend.
Distribution of any realized net long-term capital gains will be made at least
once every 12 months. Dividends are automatically reinvested in additional
shares of the Fund on payment dates at the ex-dividend date's net asset value
without a sales charge, unless cash payments are requested by writing to the
Fund or West Coast Trust, as appropriate.
Exchange Privilege
An investor may, exchange shares of the Fund into any other portfolio of the
Trust, when and if created, subject to the minimum initial investment
requirements for the Fund. In addition, shares of the Fund may also be exchanged
for certain other funds administered or distributed by subsidiaries of Federated
Investors that are not advised by West Coast Trust ("Federated Funds"). For
further information on the availability of Federated Funds for exchange, call
__________ at 1-800-___-____.
Exchanging Shares
Shareholders of any Fund in the WCT Funds may exchange shares for the shares of
any other Fund in the WCT Funds, when and if created. Prior to any exchange, the
shareholder must receive a copy of the current prospectus of the fund into which
an exchange is to be effected. Shares may be exchanged at net asset value, plus
the difference between the sales charge (if any) already paid and any sales
charge of the Fund into which shares are to be exchanged, if higher.
When an exchange is made from a fund with a sales charge to a fund with no sales
charge, the shares exchanged and additional shares which have been purchased by
reinvesting dividends on such shares retain the character of the exchanged
shares for purposes of exercising further exchange privileges; thus, an exchange
of such shares for shares of a fund with a sales charge would be at net asset
value.
Upon receipt of proper instructions and all necessary supporting documents,
shares submitted for exchange will be redeemed at the next-determined net asset
value. Written exchange instructions may require a signature guarantee. Exercise
of this privilege is treated as a sale for federal income tax purposes and,
depending on the circumstances, a short or long-term capital gain or loss may be
realized. The exchange privilege may be terminated at any time. Shareholders
will be notified of the termination of the exchange privilege. A shareholder may
obtain further information on the exchange privilege by calling West Coast
Trust. Telephone exchange instructions may be recorded. If reasonable procedures
are not followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
Exchange by Telephone
Shareholders may provide instructions for exchanges between participating funds,
when and if created, by telephone to __________________ at 1-800-___-____.
An authorization form permitting the Fund to accept telephone exchange requests
must first be completed. It is recommended that investors request this privilege
at the time of their initial application. If not completed at the time of
initial application, authorization forms and information on this service can be
obtained through a __________________ representative.
Shares may be exchanged by telephone only between fund accounts having identical
shareholder registrations. Telephone exchange instructions may be recorded. If
reasonable procedures are not followed by the Fund, it may be liable for losses
due to unauthorized or fraudulent telephone instructions.
Telephone exchange instructions must be received by ____________________ and
transmitted to ____________________ before _______ p.m. (Eastern time) for
shares to be exchanged the same day. Shareholders who exchange into shares of
the Fund will not receive a dividend from the Fund on the date of the exchange.
Shareholders of the Fund may have difficulty in making exchanges by telephone
through banks or other financial institutions during times of drastic economic
or market changes. If shareholders cannot contact their _______________
representative by telephone, it is recommended that an exchange request be made
in writing and sent by mail for next day delivery.
Written Exchange
A shareholder wishing to make an exchange by written request may do so by
sending it to: _____________________________________________.
Redeeming Shares
The Fund redeems shares at its net asset value next determined after West Coast
Trust receives the redemption request. Redemptions will be made on days on which
the Fund computes its net asset value. Redemption requests cannot be executed on
days on which the New York Stock Exchange is closed or on federal holidays when
wire transfers are restricted. Requests for redemption can be made in person or
by telephone for trust customers. Individual investors can make requests for
redemption in person, by telephone or by mail through ________________.
By Telephone. A shareholder who is a trust customer of West Coast Trust may
redeem shares of the Fund by telephoning West Coast Trust at 1-800-___-____. A
shareholder who is an individual investor may redeem shares by telephoning
1-800-___-____. For calls received before 3:00 p.m. (Eastern time)/12:00 Noon
(Pacific time), proceeds will normally be wired the following day to the
shareholder's account at West Coast Trust, transferred through ACH to a member
institution, or a check will be sent to the address of record. In no event will
proceeds be sent more than seven days after a proper request for redemption is
received. An authorization form permitting the Fund to accept telephone requests
must first be completed. Authorization forms and information on this service are
available from _________. Telephone redemption instructions may be recorded. If
reasonable procedures are not followed by the Fund, it may be liable for losses
due to unauthorized or fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption should be utilized, such as a written request to Federated
Shareholder Services Company or ______________________.
If at any time, the Fund shall determine it necessary to terminate or modify
this method of redemption, shareholders would be promptly notified.
By Mail. Any shareholder may redeem Fund shares by sending a written request to
West Coast Trust. Telephone West Coast Trust for specific instructions before
redeeming by letter. The shareholder will be asked to provide in the request his
name, the Fund name, his account number, and the share or dollar amount
requested.
Signatures. Shareholders requesting a redemption of any amount to be sent to an
address other than on record with the Fund, or a redemption payable other than
to the shareholder of record must have their signatures guaranteed by:
o a trust company or commercial bank whose deposits are insured by
the Bank Insurance Fund, which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
o a member of the New York, American, Boston, Midwest, or Pacific
Stock Exchange;
o a savings bank or savings association whose deposits are insured by
the Savings Association Insurance Fund, which is administered by the FDIC; or
o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.
Systematic Withdrawal Program
Shareholders who desire to receive payments of a predetermined amount may take
advantage of the Systematic Withdrawal Program. Under this program, Fund shares
are redeemed to provide for periodic withdrawal payments in an amount directed
by the shareholder. Depending upon the amount of the withdrawal payments, the
amount of dividends paid and capital gains distributions with respect to Fund
shares, and the fluctuation of the net asset value of Fund shares redeemed under
this program, redemptions may reduce, and eventually deplete, the shareholder's
investment in the Fund. For this reason, payments under this program should not
be considered as yield or income on the shareholder's investment in the Fund. To
be eligible to participate in this program, a shareholder must have an account
value of at least $10,000, other than retirement accounts subject to required
minimum distributions. A shareholder may apply for participation in this program
through his financial institution. For shares sold with a sales charge, it is
not advisable for shareholders to be purchasing shares while participating in
this program.
Accounts with Low Balances
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below the required minimum value of $5,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $5,000 because of changes in the Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
Shareholder Information
Voting Rights
Each share of the Trust owned by a shareholder gives that shareholder one vote
in Trustee elections and other matters submitted to shareholders for vote. All
shares of each portfolio in the Trust have equal voting rights, except that in
matters affecting only a particular portfolio, only shareholders of that
portfolio Fund are entitled to vote.
The Trust is not required to hold annual shareholder meetings. Shareholder
approval will be sought only for certain changes in the Trust's or the Fund's
operation and for the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the outstanding shares of
the Trust entitled to vote.
Effect of Banking Laws
The Glass-Steagall Act and other banking laws and regulations presently prohibit
a bank holding company registered under the Bank Holding Company Act of 1956 or
any affiliate thereof from sponsoring, organizing or controlling, a registered,
open-end investment company continuously engaged in the issuance of its shares,
and from issuing, underwriting, selling or distributing securities in general.
Such laws and regulations do not prohibit such a holding company or affiliate
from acting as investment adviser, transfer agent or custodian to such an
investment company or from purchasing shares of such a company as agent for and
upon the order of their customers.
Some entities providing services to the Trust are subject to such banking laws
and regulations. They believe that they may perform those services for the Fund
contemplated by any agreement entered into with the Trust without violating
those laws or regulations. Changes in either federal or state statutes and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of present or future statutes and regulations,
could prevent these entities from continuing to perform all or a part of the
above services. If this happens, the Trustees would consider alternative means
of continuing available investment services. It is not expected that
shareholders would suffer any adverse financial consequences as a result of any
of these occurrences.
Tax Information
Federal Income Tax
The Fund will pay no federal regular income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares. The Fund will
provide detailed tax information for reporting purposes.
State and Local Taxes
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
<PAGE>
Performance Information
From time to time, the Fund advertises its total return and yield.
Total return represents the change, over a specified period of time, in the
value of an investment in the Fund after reinvesting all income and capital
gains distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the maximum offering price per share of the Fund on
the last day of the period. This number is then annualized using semi-annual
compounding. The yield does not necessarily reflect income actually earned by
the Fund and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
The performance information reflects the effect of the maximum sales charge
which, if excluded, would increase the total return and yield.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
Performance Information for Predecessor Common Trust Fund
The Fund is the successor to the portfolio of a common trust fund managed by the
Sub-Adviser. It is anticipated that, at the Fund's commencement of operations,
the assets from the common trust fund will be transferred to the Fund in
exchange for Fund shares. The Sub-Adviser has represented that the Fund's
investment objective, policies and limitations are in all material respects
identical to those of the common trust fund.
The Fund's average annual compounded total returns for the one-, three-, five-
and ten-year periods ended June 30, 1997, and since inception (August 31, 1985),
reflecting the maximum sales charge (i.e., 4.50%) were 23.04%, 18.94,%, 17.46%
and 12.99%, respectively. The Fund's average annual compounded total returns for
the one-, five- and ten-year periods ended June 30, 1997, and since inception
(August 31, 1985), without reflecting the sales charge were 28.84%, 20.78,%,
18.54% and 13.51%, respectively. The quoted performance data includes the
performance of the common trust fund for periods before the Fund's registration
statement became effective, as adjusted to reflect the Fund's anticipated
expenses as set forth in the "Expenses of the Fund" section of this prospectus.
The common trust fund was not registered under the Investment Company Act of
1940 ("1940 Act") and therefore was not subject to certain investment
restrictions that are imposed by the 1940 Act. If the common trust fund had been
registered under the 1940 Act, the performance may have been adversely affected.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Addresses
WCT Funds
WCT Equity Fund Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Edgewood Services, Inc. Clearing Operations
P.O. Box 897
Pittsburgh, PA 15222-3779
Investment Adviser
West Coast Trust Company, Inc. 1000 Broadway, Suite 1100
Portland, OR 97205
Sub-Adviser
Becker Capital Management, Inc. 1211 SW Fifth Avenue, Ste. 2185
Portland, OR 97204
Custodian
State Street Bank and P.O. Box 1713
Trust Company Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company Federated Investors Tower
Pittsburgh, PA 15222-3779
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
</TABLE>
<PAGE>
WCT Equity Fund
- -------------------------------------------------------------------------------
Prospectus
A Portfolio of WCT Funds, an Open-End
Management Investment Company
Prospectus Dated November __, 1997
Edgewood Services, Inc.
Distributor
A subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip ______________________
G02161-01(9/97)
WCT Equity Fund
(A Portfolio of the WCT Funds)
Statement of Additional Information
This Statement of Additional Information should be read with the
prospectus of WCT Equity Fund (the "Fund"), a portfolio of WCT Funds
(the "Trust") dated November __, 1997. This Statement is not a
prospectus. You may request a copy of a prospectus or a paper copy of
this Statement, if you have received it electronically, free of charge
by calling 1-800-___-____.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated November __, 1997
[GRAPHIC OMITTED]
Cusip #########
G02161-02 (9/97)
[GRAPHIC OMITTED]
<PAGE>
- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
General Information About the Fund 1
Investment Objective and Policies 1
Types of Investments 1
Convertible Preferred Stock 1
Warrants 1
Restricted and Illiquid Securities 1
When-Issued and Delayed Delivery Transactions 2
Repurchase Agreements 2
Reverse Repurchase Agreements 2
Lending of Portfolio Securities 2
Portfolio Turnover 2
Investment Limitations 2
WCT Funds Management 4
Trust Ownership 4
Trustees' Compensation 4
Trustee Liability 4
Investment Advisory Services 4
Adviser to the Fund 4
Advisory Fees 5
Sub-Adviser to the Fund 5
Sub-Advisory Fees 5
Brokerage Transactions 5
Other Services 5
Fund Administration 5
Custodian and Portfolio Accountant 5
Transfer Agent, Dividend Disbursing
Agent, and Shareholder Servicing Agent 6
Independent Auditors 6
Purchasing Shares 6
Distribution and Shareholder Services Plans6
Determining Net Asset Value 6
Determining Market Value of Securities 6
Exchange Privilege 7
Requirements for Exchange 7
Making an Exchange 7
Redeeming Shares 7
Redemption in Kind 7
Massachusetts Partnership Law 7
Tax Status 8
The Fund's Tax Status 8
Shareholders' Tax Status 8
Total Return 8
Yield 8
Performance Comparisons 8
Economic and Market Information 9
Appendix 10
<PAGE>
General Information About the Fund
The Fund is a portfolio in the WCT Funds (the "Trust"), which was established as
a Massachusetts business trust under a Declaration of Trust dated July 1, 1997.
Investment Objective and Policies
The Fund's investment objective is to provide long-term capital appreciation.
The investment objective cannot be changed without approval of shareholders.
Unless otherwise indicated, the investment policies described below may be
changed by the Board of Trustees ("Trustees") without shareholder approval.
Shareholders will be notified before any material change in these policies
becomes effective.
Types of Investments
The Fund pursues its objective by investing primarily in common or preferred
stock of large or medium sized companies with market capitalizations in excess
of $1.5 billion. Occasionally, the Fund will hold small cap issues which satisfy
the manager's valuation discipline. The common and preferred stocks the Fund
invests in are generally characterized as having low price to earnings ratios,
and as having growth and quality characteristics which match or exceed those
companies which comprise the S&P 500 Index. As a matter of investment policy,
the Fund will invest so that, under normal circumstances, at least 80% of its
total assets are invested in equity securities.
Convertible Preferred Stock
Convertible preferred stock is senior to common stock, and therefore, has a
claim to assets of the corporation prior to the holders of common stock in the
case of liquidation. However, preferred stock is generally subordinated to debt
securities of the same company. The dividends from preferred stock provides a
stable stream of income with generally higher yields than common stocks, but
lower than debt securities.
The Fund will exchange or convert the convertible preferred stock held in its
portfolio into shares of the underlying common stock in instances in which, in
the adviser's and sub-adviser's opinions, the investment characteristics of the
underlying common shares will assist the Fund in achieving its investment
objective. Otherwise, the Fund will hold or trade the convertible preferred
stock. In selecting convertible preferred stock for the Fund, the Fund's adviser
and sub-adviser evaluate the investment characteristics of the convertible
preferred stock as a fixed income instrument, and the investment potential of
the underlying equity security for capital appreciation. In evaluating these
matters with respect to a particular convertible preferred stock, the Fund's
adviser and sub-adviser consider numerous factors, including the economic and
political outlook, the value of the security relative to other investment
alternatives, trends in the determinants of the issuer's profits, and the
issuer's management capability and practices.
Warrants
Warrants are basically options to purchase common stock at a specific price
(usually at a premium above the market value of the optioned common stock at
issuance) valid for a specific period of time. Warrants may have a life ranging
from less than a year to twenty years or may be perpetual. However, most
warrants have expiration dates after which they are worthless. In addition, if
the market price of the common stock does not exceed the warrant's exercise
price during the life of the warrant, the warrant will expire as worthless.
Warrants have no voting rights, pay no dividends, and have no right with respect
to the assets of the corporation issuing them. The percentage increase or
decrease in the market price of the warrant may end up to be greater than the
percentage increase or decrease in the market price of the optioned common
stock.
Restricted and Illiquid Securities
The Fund may invest in commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933. Section
4(2) commercial paper is restricted as to disposition under federal securities
law, and is generally sold to institutional investors, such as the Fund, who
agree that they are purchasing the paper for investment purposes and not with a
view to public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus providing liquidity. The Trust believes that Section 4(2) commercial paper
is quite liquid. The Fund intends, therefore, to treat Section 4(2) commercial
paper as liquid and not subject to the investment limitation applicable to
illiquid securities.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an advantageous
price and yield for the Fund. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of the Fund sufficient
to make payment for the securities to be purchased are segregated on the Fund's
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled. The Fund does not intend to
engage in when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of its assets.
Repurchase Agreements
The Fund or its custodian will take possession of the securities subject to
repurchase agreements and these securities are marked to market daily. To the
extent that the original seller does not repurchase the securities from the
Fund, the Fund could receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that, under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor of
the Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized financial
institutions, such as broker/dealers, which are deemed by the Fund's adviser and
sub-adviser to be creditworthy pursuant to guidelines established by the
Trustees.
Reverse Repurchase Agreements
The Fund may also enter into reverse repurchase agreements. These transactions
are similar to borrowing cash. In a reverse repurchase agreement, the Fund
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agrees that on a stipulated date in the
future the Fund will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate.
When effecting reverse repurchase agreements, liquid assets of the Fund in a
dollar amount sufficient to make payment for the obligations to be purchased are
segregated at the trade date. These securities are marked to market daily and
are maintained until the transaction is settled.
The use of reverse repurchase agreements may enable the Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not ensure that
the Fund will be able to avoid selling portfolio instruments at a
disadvantageous time.
Lending of Portfolio Securities
The collateral received when the Fund lends portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends or
interest paid on such securities. Loans are subject to termination at the option
of the Fund or the borrower. The Fund may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker.
Portfolio Turnover
The Fund does not intend to invest for the purpose of seeking short-term
profits. Securities in the portfolio will be sold whenever the Adviser and
Sub-Adviser believe it is appropriate to do so in light of the Fund's investment
objective, without regard to the length of time a particular security may have
been held. The Adviser and Sub-Adviser do not anticipate that the Fund's
portfolio turnover rate will exceed 50%.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any securities on
margin, but may obtain such short-term credits as may be necessary for clearance
of purchases and sales of portfolio securities.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may borrow
money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its total assets; provided that, while
borrowings exceed 5% of the Fund's total assets, any such borrowings will
be repaid before any additional investments are made. The Fund will not
borrow money or engage in reverse repurchase agreements for investment
leverage.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, the Fund may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the total assets at the time of the pledge. For
purposes of this limitation, the purchase of securities on a when-issued
basis will not be deemed to be a pledge.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts.
Underwriting
The Fund will not underwrite any issue of securities or participate in the
marketing of securities of other issuers, except as the Fund may be deemed to be
an underwriter under the Securities Act of 1933 in connection with the sale of
securities in accordance with the Fund's investment objective, policies, and
limitations.
Diversification of Investments
With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer (other
than cash, cash items, securities issued or guaranteed by the government
of the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities; and
securities of other investment companies) if, as a result, more than 5% of
the value of the its total assets would be invested in the securities of
that issuer, or it would own more than 10% of the outstanding voting
securities of that issuer.
Concentration of Investments
The Fund will not purchase securities if, as a result of such purchases,
25% or more of the value of its total assets would be invested in any one
industry. The Fund may at times invest 25% or more of the value of its
total assets in securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio securities, but
it may purchase or hold corporate or government bonds, notes, bonds
debentures, notes, certificates of indebtedness, or other debt securities
of an issuer, repurchase agreements, or other transactions which are
permitted by the Fund's investment objective and policies, or the Trust's
Declaration of Trust.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Trustees without
shareholder approval [except that no investment limitation of the Fund shall
prevent the Fund from investing substantially all of its assets (except for
assets which are not considered "investment securities" under the Investment
Company Act of 1940, or assets exempted by the Securities and Exchange
Commission) in an open-end investment company with substantially the same
investment objectives]. Shareholders will be notified before any material
changes in these limitations become effective.
Investing in Restricted and Illiquid Securities
The Fund will not invest more than 15% of its net assets in illiquid
securities, including certain restricted securities (except for Section
4(2) commercial paper and certain other restricted securities which
meet the criteria for liquidity as established by the Trustees),
non-negotiable time deposits, and repurchase agreements providing for
settlement in more than seven days after notice.
Purchasing Securities to Exercise Control
The Fund will not purchase securities of a company for purpose of
exercising control or management.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction.
The Fund does not intend to borrow money or pledge securities in excess of 5% of
the value of its net assets during the coming fiscal year.
For purposes of its policies and limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings and loan having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment to be "cash items."
WCT Funds Management
Officers and Trustees are listed with their addresses, birthdates, present
positions with WCT Funds, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director or Trustee of the Funds.
Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Chairman of the Board, Children's Hospital of Pittsburgh; formerly, Senior
Partner, Ernst & Young LLP; Director, MED 3000 Group, Inc.; Director, Member of
Executive Committee, University of Pittsburgh; Director or Trustee of the Funds.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; Partner or Trustee in private real estate
ventures in Southwest Florida; formerly, President, Naples Property Management,
Inc. and Northgate Village Development Corporation; Director or Trustee of the
Funds.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp.; Director, Ryan
Homes, Inc.; Director or Trustee of the Funds.
<PAGE>
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director of the
Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine, University of Pittsburgh; Medical Director, University of
Pittsburgh Medical Center - Downtown; Member, Board of Directors, University of
Pittsburgh Medical Center; formerly, Hematologist, Oncologist, and Internist,
Presbyterian and Montefiore Hospitals; Director or Trustee of the Funds.
Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western Region;
Director or Trustee of the Funds.
Edward C. Gonzales*
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President, Treasurer and Trustee
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated Research
Corp., Federated Global Research Corp. and Passport Research, Ltd.; Executive
Vice President and Director, Federated Securities Corp.; Trustee, Federated
Shareholder Services Company; Trustee or Director of some of the Funds;
President, Executive Vice President and Treasurer of some of the Funds.
Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
Birthdate: March 16, 1942
Trustee
Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street Boston
Corporation; Director or Trustee of the Funds.
<PAGE>
Gregor F. Meyer
203 Kensington Ct.
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Chairman, Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Retired from
the law firm of Miller, Ament, Henny & Kochuba; Director or Trustee of the
Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica and
Murray; Director or Trustee of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., National Defense University and U.S. Space Foundation; President
Emeritus, University of Pittsburgh; Founding Chairman, National Advisory Council
for Environmental Policy and Technology, Federal Emergency Management Advisory
Board and Czech Management Center, Prague; Director or Trustee of the Funds.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public Relations/Marketing/Conference Planning; Director or Trustee of the
Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder Services Company, and Federated Shareholder
Services; Director, Federated Services Company; President or Executive Vice
President of the Funds; Director or Trustee of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Chairman and Trustee of the Trust.
<PAGE>
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, and Trustee, Federated Investors; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Trustee, Federated
Shareholder Services Company; Director, Federated Services Company; President
and Trustee, Federated Shareholder Services; Director, Federated Securities
Corp.; Executive Vice President and Secretary of the Funds; Treasurer of some of
the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of the
Funds; Director or Trustee of some of the Funds.
C. Christine Thomson
Federated Investors Tower
Pittsburgh, PA
Birthdate: September 1, 1957
Vice President and Assistant Treasurer
Vice President and Assistant Treasurer of some of the Funds.
* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.
@ Member of the Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board between meetings of
the Board.
As referred to in the list of Trustees and Officers, "Funds" includes the
following investment companies:
111 Corcoran Funds; Arrow Funds; Automated Government Money Trust; Blanchard
Funds; Blanchard Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust
Series, Inc. ; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated Adjustable Rate U.S. Government Fund, Inc.; Federated American
Leaders Fund, Inc.; Federated ARMs Fund; Federated Equity Funds; Federated
Equity Income Fund, Inc.; Federated Fund for U.S. Government Securities, Inc.;
Federated GNMA Trust; Federated Government Income Securities, Inc.; Federated
Government Trust; Federated High Income Bond Fund, Inc.; Federated High Yield
Trust; Federated Income Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust; Federated Insurance Series;
Federated Investment Portfolios; Federated Investment Trust; Federated Master
Trust; Federated Municipal Opportunities Fund, Inc.; Federated Municipal
Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income Securities,
Inc.; High Yield Cash Trust; Intermediate Municipal Trust; International Series,
Inc.; Investment Series Funds, Inc.; Investment Series Trust; Liberty Term
Trust, Inc. - 1999; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Peachtree Funds; RIMCO
Monument Funds; Targeted Duration Trust; Tax-Free Instruments Trust; The
Planters Funds; The Starburst Funds; The Starburst Funds II; The Virtus Funds;
Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
WesMark Funds; and World Investment Series, Inc. Trust Ownership
Officers and Trustees as a group own less than 1% of the Fund`s outstanding
shares.
Trustees' Compensation
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM
TRUST TRUST*#
John F. Donahue $0
Chairman and Trustee
Thomas G. Bigley $0
Trustee
John T. Conroy, Jr. $0
Trustee
William J. Copeland $0
Trustee
James E. Dowd $0
Trustee
Lawrence D. Ellis, M.D. $0
Trustee
Edward L. Flaherty, Jr. $0
Trustee
Edward C. Gonzales $0
President, Treasurer andTrustee
Peter E. Madden $0
Trustee
Gregor F. Meyer $0
Trustee
John E. Murray, Jr. $0
Trustee
Wesley W. Posvar $0
Trustee
Marjorie P. Smuts $0
Trustee
*Information is furnished for the fiscal year ended October 31, 1997.
#The aggregate compensation is provided for the Trust which is comprised of 1
portfolio.
<PAGE>
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees are not liable for
errors of judgment or mistakes of fact or law. However, they are not protected
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of their office.
Investment Advisory Services
Adviser to the Fund
The Fund's investment adviser is West Coast Trust Company, Inc. (the "Adviser").
The Adviser shall not be liable to the Fund or any shareholder for any losses
that may be sustained in the purchase, holding, lending, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Fund.
Because of internal controls maintained by West Coast Trust Company, Inc. to
restrict the flow of non-public information, Fund investments are typically made
without any knowledge of West Coast Trust Company or its affiliates' lending
relationships with an issuer.
Advisory Fees
For its advisory services, the Adviser receives an annual investment advisory
fee as described in the prospectus.
Sub-Adviser to the Fund
The Fund's sub-adviser is Becker Capital Management, Inc. (the "Sub-Adviser").
The Sub-Adviser shall not be liable to the Fund or any shareholder for any
losses that may be sustained in the purchase, holding, lending, or sale of any
security or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Adviser.
Because of internal controls maintained by the Sub-Adviser to restrict the flow
of non-public information, Fund investments are typically made without any
knowledge of the Sub-Adviser's lending relationships with an issuer.
Sub-Advisory Fees
For its sub-advisory services, the Sub-Adviser receives an annual sub-advisory
fee as described in the prospectus.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Sub-Adviser looks for prompt execution of the order at a
favorable price. In working with dealers, the Sub-Adviser will generally use
those who are recognized dealers in specific portfolio instruments, except when
a better price and execution of the order can be obtained elsewhere. The
Sub-Adviser makes decisions on portfolio transactions and selects brokers and
dealers subject to guidelines established by the Trustees. The Sub-Adviser may
select brokers and dealers who offer brokerage and research services. These
services may be furnished directly to the Fund or to the Sub-Adviser and may
include: advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of quotations
for portfolio evaluations; and similar services. Research services provided by
brokers and dealers may be used by the Sub-Adviser or its affiliates in advising
the Fund and other accounts. To the extent that receipt of these services may
supplant services for which the Sub-Adviser or its affiliates might otherwise
have paid, it would tend to reduce their expenses. The Sub-Adviser and its
affiliates exercise reasonable business judgment in selecting brokers who offer
brokerage and research services to execute securities transactions. They
determine in good faith that commissions charged by such persons are reasonable
in relationship to the value of the brokerage and research services provided.
The Fund has adopted certain procedures incorporating the standards of Rule
17e-1 of the Investment Company Act of 1940, which require that the commissions
paid to affiliated broker-dealers of the Sub-Adviser must be reasonable and fair
compared to the commission, fee, or other remuneration received, or to be
received by other brokers in connection with comparable transactions involving
similar securities during a comparable period of time.
Although investment decisions for the Fund are made independently from those of
the other accounts managed by the Sub-Adviser, investments of the type the Fund
may make may also be made by those other accounts. When the Fund and one or more
other accounts managed by the Sub-Adviser are prepared to invest in, or desire
to dispose of, the same security, available investments or opportunities for
sales will be allocated in a manner believed by the Sub-Adviser to be equitable
to each. In some cases, this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained or disposed of by the
Fund. In other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the Fund.
Other Services
Fund Administration
Federated Services Company, a subsidiary of Federated Investors, provides
administrative personnel and services to the Fund for a fee as described in the
prospectus.
Custodian and Portfolio Accountant
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Federated Services Company, Pittsburgh,
Pennsylvania, provides certain accounting and recordkeeping services with
respect to the Fund's portfolio investments. The fee paid for this service is
based upon the level of the Fund's average net assets for the period plus
out-of-pocket expenses.
Transfer Agent, Dividend Disbursing Agent, and Shareholder Servicing Agent
Federated Shareholder Services Company, Pittsburgh, Pennsylvania, a subsidiary
of Federated Investors, serves as transfer agent for the shares of the Fund,
dividend disbursing agent for the Fund, and shareholder servicing agent for the
Fund.
Independent Public Accountants
The independent public accountants for the Fund are Arthur Andersen LLP,
Pittsburgh, Pennsylvania.
Purchasing Shares
Shares of the Fund are sold at their net asset value next determined after an
order is received on days the New York Stock Exchange and Federal Reserve Wire
System are open for business. The procedure for purchasing shares is explained
in the prospectus under "Investing in the Fund."
Distribution and Shareholder Services Plans
These arrangements permit the payment of fees to financial institutions, the
distributor, and Federated Shareholder Services, to stimulate distribution
activities and to cause services to be provided to shareholders by a
representative who has knowledge of the shareholder's particular circumstances
and goals. These activities and services may include, but are not limited to:
marketing efforts; providing office space, equipment, telephone facilities, and
various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses.
By adopting the Distribution Plan, the Board of Trustees expects that the Fund
will be able to achieve a more predictable flow of cash for investment purposes
and to meet redemptions. This will facilitate more efficient portfolio
management and assist the Fund in pursuing its investment objective. By
identifying potential investors whose needs are served by the Fund's objective,
and properly servicing these accounts, it may be possible to curb sharp
fluctuations in rates of redemptions and sales.
Other benefits, which may be realized under either arrangement, may include: (1)
providing personal services to shareholders; (2) investing shareholder assets
with a minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests and
inquiries concerning their accounts.
Conversion to Federal Funds
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. West Coast Trust Company, Inc.
("West Coast Trust"), as well as Federated Shareholder Services Company, act as
the shareholder's agent in depositing checks and converting them to federal
funds.
Determining Net Asset Value
Net asset value generally changes each day. The days on which net asset value is
calculated by the Fund are described in the prospectus.
Determining Market Value of Securities
Market values of the Fund's securities, other than options, are determined as
follows:
o for equity securities, according to the last sale price in the
market in which they are primarily traded (either national
securities exchange or the OTC market), if available;
o in the absence of recorded sales for equity securities, according
to the mean between the last closing bid and asked prices;
o according to the prices provided by an independent pricing
service if available, or at fair market value as determined in
good faith by the Trustees; or
o for short-term obligations with remaining maturities of 60 days
or less at the time of purchase, at amortized cost, unless the
Trustees determine that particular circumstances of the security
indicate otherwise.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider: institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics, and other market data.
Exchange Privilege
Requirements for Exchange
Before the exchange, the shareholder must receive a prospectus of the fund for
which the exchange is being made. This privilege is available to shareholders
resident in any state in which the fund shares being acquired may be sold. Upon
receipt of proper instructions and required supporting documents, shares
submitted for exchange are redeemed and the proceeds invested in shares of the
other fund.
Further information on the exchange privilege may be obtained by calling the
Fund.
Making an Exchange
Instructions for exchanges may be given in writing. Written instructions may
require a signature guarantee.
Redeeming Shares
Shares of the Fund are redeemed at the next computed net asset value after the
West Coast Trust receive the redemption request. Redemption procedures are
explained in the prospectus under "Redeeming Shares." Redemption requests cannot
be executed on days on which the New York Stock Exchange is closed or on federal
holidays when wire transfers are restricted. Although State Street Bank does not
charge for telephone redemptions, it reserves the right to charge a fee for the
cost of wire-transferred redemptions of less than $5,000.
Redemption in Kind
Although the Fund intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Fund's portfolio. Redemption in kind will be
made in conformity with applicable Securities and Exchange Commission rules,
taking such securities at the same value employed in determining net asset value
and selecting the securities in a manner the Trustees determine to be fair and
equitable. The Fund has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Fund is obligated to redeem shares for any
one shareholder in cash only up to the lesser of $250,000 or 1% of the Fund's
net asset value during any 90-day period. Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
Tax Status
The Fund's Tax Status
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Fund must, among other
requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities; o invest in securities within certain
statutory limits; and o distribute to its shareholders at least 90% of its
net income earned during the year.
Shareholders' Tax Status
Shareholders of the Fund are subject to federal income tax on dividends received
as cash or additional shares. These dividends, and any short-term capital gains,
are taxable as ordinary income. No portion of any income dividend paid by the
Fund is eligible for the dividends received deduction available to corporations.
Total Return
Average annual total return is the average compounded rate of return for a given
period that would equate a $1,000 initial investment to the ending redeemable
value of that investment. The ending redeemable value is computed by multiplying
the number of shares owned at the end of the period by the net asset value per
share at the end of the period. The number of shares owned at the end of the
period is based on the number of shares purchased at the beginning of the period
with $1,000, adjusted over the period by any additional shares, assuming the
monthly reinvestment of all dividends and distributions.
Yield
The yield for the shares of the Fund is determined by dividing the net
investment income per share (as defined by the Securities and Exchange
Commission) earned by shares of the Fund over a thirty-day period by the maximum
offering price per share of the respective class on the last day of the period.
This value is annualized using semi-annual compounding. This means that the
amount of income generated during the thirty-day period is assumed to be
generated each month over a 12-month period and is reinvested every six months.
The yield does not necessarily reflect income actually earned by the Fund
because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to the shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares of
the Fund, the performance will be reduced for those shareholders paying those
fees.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may include:
o S&P 500 is an unmanaged capitalization weighted index of 500
stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500
stocks representing all major industries.
o S&P 400 Mid Cap Index is an unmanaged capitalization weighted
index that measures the performance of the mid-range of the U.S.
stock market.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. These total returns
represent the historic change in the value of an investment in the Fund based on
monthly reinvestment of dividends over a specified period of time. Advertising
and other promotional literature may include charts, graphs and other
illustrations using the Fund's returns in general, that demonstrate basic
investment concepts such as tax-deferred compounding, dollar-cost averaging and
systematic investment. In addition, the Fund can compare its performance, or
performance for the types of securities in which it invests, to a variety of
other investments, such as bank savings accounts, certificates of deposit, and
Treasury bills.
Advertisements may quote performance information which does not reflect the
effect of the sales load.
Economic and Market Information
Advertising and sales literature for the Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Fund portfolio managers and their views and analysis on how such
developments could affect the Fund. In addition, advertising and sales
literature may quote statistics and give general information about the mutual
fund industry, including the growth of the industry, from sources such as the
Investment Company Institute ("ICI"). For example, according to the ICI,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $3.5 trillion to the more than 6,000 funds available.
<PAGE>
Appendix
Standard & Poor's Bond Ratings
AAA--Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA--Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A--Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effect of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
NR--NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy. S&P may apply a plus (+) or
minus (-) to the above rating classifications to show relative standing within
the classifications.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
Moody's Investors Service, Inc. Bond Ratings
Aaa--Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group, they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in "Aaa"
securities.
A--Bonds which are rated "A" possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa--Bonds which are rated "Baa" are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
NR--Not rated by Moody's. Moody's applies numerical modifiers, 1, 2 and 3 in
each generic rating classification from "Aa" through "B" in its corporate bond
rating system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.
Fitch Investors Service, Inc., Long-Term Debt Ratings
AAA--Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated "AAA". Because bonds rated in the "AAA" and
"AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rate "F-1+."
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--Bonds are considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore
impair timely payment.
The likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
NR--NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category, Plus and
minus signs, however, are not used in the "AAA" category.
Standard & Poor's Commercial Paper Ratings
A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."
Moody's Investors Service, Inc., Commercial Paper Ratings
PRIME-1--Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
leading market positions in well-established industries, high rates of return on
funds employed, conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earning coverage of fixed
financial charges and high internal cash generation; well-established access to
a range of financial markets and assured sources of alternate liquidity.
PRIME-2--Issuers rated Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
Fitch Investors Service, Inc., Short-Term Debt Ratings
F-1+--Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+."
F-2--Good Credit Quality. Issues carrying this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as for
issues assigned "F-1+" and "F-1" ratings.
PART C. OTHER INFORMATION.
<TABLE>
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Item 24. Financial Statements and Exhibits:
(a) Financial Statements (to be filed in Part A by amendment)
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the Registrant;(1)
(2) Copy of By-Laws of the Registrant;(1)
(3) Not applicable;
(4) Not applicable;
(5) (i) Form of Investment Advisory Contract of the Registrant;(1)
(ii) Form of Sub-Advisory Agreement of the Registrant;(1)
(6) (i) Form of Distributor's Contract of the Registrant;(1)
(ii) Form of Administrative Services Agreement of the Registrant;(1)
(iii) Form of Sales Agreement of the Registrant;(1)
(7) Not applicable;
(8) Form of Custodian Agreement of the Registrant;(1)
(9) (i) Form of Transfer Agency and Service Agreement of the Registrant;(1)
(ii) Form of Shareholder Services Agreement of the Registrant;(1)
(iii) Form of Shareholder Services Plan of the Registrant;(1)
(10) Copy of Opinion and Consent of Counsel as to legality of shares being registered;
(to be filed by amendment)
(11) (i) Copy of Consent of Independent Public Accountants;(to be filed by amendment)
(ii) Not applicable;
(12) Not applicable;
(13) Copy of Initial Capital Understanding;(to be filed by amendment)
(14) Not applicable;
(15) (i) Form of Distribution Plan;(1)
(ii) Form of 12b-1 Agreement;(1)
(16) Schedule for Computation of Fund Performance Data;(to be filed by amendment)
(17) Financial Data Schedule;
(18) Not applicable;
(19) Power of Attorney.+
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial Registration Statement on Form N-1A
filed September 17, 1997. (File Nos. 333-35785 and 811-08335).
Item 25. Persons Controlled by or Under Common Control with Registrant:
No persons are controlled by the Registrant.
[TO BE FILED BY PRE-EFFECTIVE AMENDMENT]
[As a newly-formed company, all of the outstanding shares of the Registrant are
currently owned by West Coast Trust Company, Inc.]
</TABLE>
<PAGE>
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of
Shares of
beneficial interest
(no par value)
Item 27. Indemnification:
Indemnification is provided to Officers and Trustees of the
Registrant pursuant to (Section 4 of Article XI of
Registrant's Declaration of Trust. The Investment Advisory
Contract between the Registrant and West Coast Trust Company,
Inc. ("Adviser") provides that, in the absence of willful
misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties under the Investment
Advisory Contract on the part of Adviser, Adviser shall not be
liable to the Registrant or to any shareholder for any act or
omission in the course of or connected in any way with
rendering services or for any losses that may be sustained in
the purchase, holding, or sale of any security. Registrant's
Trustees and Officers are covered by an Investment Trust
Errors and Omissions Policy.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, Officers,
and controlling persons of the Registrant by the Registrant
pursuant to the Declaration of Trust or otherwise, the
Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public
policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by Trustees, Officers,
or controlling persons of the Registrant in connection with
the successful defense of any act, suit, or proceeding) is
asserted by such Trustees, Officers, or controlling persons in
connection with the shares being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issues.
Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940
for Trustees, Officers, and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of
Trust or otherwise, the Registrant is aware of the position of
the Securities and Exchange Commission as set forth in
Investment Company Act Release No. IC-11330. Therefore, the
Registrant undertakes that in addition to complying with the
applicable provisions of the Declaration of Trust or
otherwise, in the absence of a final decision on the merits by
a court or other body before which the proceeding was brought,
that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based
upon factual review has been made (i) by a majority vote of a
quorum of non-party Trustees who are not interested persons of
the Registrant or (ii) by independent legal counsel in a
written opinion that the indemnitee was not liable for an act
of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duties. The Registrant further
undertakes that advancement of expenses incurred in the
defense of a proceeding (upon undertaking for repayment unless
it is ultimately determined that indemnification is
appropriate) against an Officer, Trustee, or controlling
person of the Registrant will not be made absent the
fulfillment of at least one of the following conditions: (i)
the indemnitee provides security for his undertaking; (ii) the
Registrant is insured against losses arising by reason of any
lawful advances; or (iii) a majority of a quorum of
disinterested non-party Trustees or independent legal counsel
in a written opinion makes a factual determination that there
is reason to believe the indemnitee will be entitled to
indemnification.
Item 28. Business and Other Connections of Investment Adviser:
(a) West Coast Trust Company, Inc. ("West Coast Trust") is
a registered investment adviser providing investment
management services to individuals and institutional
clients. West Coast Trust is a wholly-owned subsidiary
of West Coast Bancorp ("Bancorp"). Organized in 1981,
Bancorp is the second largest bank holding company
based in Oregon. through its subsidiaries and
affiliates, Bancorp offers a full range of commercial
banking services, including trust services to
individuals, partnerships, corporations, and
institutions and acts as fiduciary of estates and
conservatorships, and as a trustee under various wills,
trusts and pension and profit-sharing plans. In
addition, Bancorp and its subsidiaries offer
tax-deferred annuities, single-premium whole life
insurance, other insurance investment products and
securities products.
West Coast Trust has common and collective funds with assets
totaling approximately $____. West Coast Trust has managed
the WCT Funds since its inception in October 1997.
The principal executive officers and Directors of West
Coast Trust are set forth in the following table.
Unless otherwise noted, the position listed under Other
Substantial Business, Profession, Vocation or
Employment is with West Coast Trust.
<TABLE>
<CAPTION>
<S> <C> <C>
Other Substantial
Position With Business,Profession,
Name the Adviser Vocation or Employment
Andrew J. Gerlicher President/Director
Marvin C. Abeene Senior Vice President/
Trust Branch Manager
Cheryl Pfenning Assistant Vice President/
Operations Manager and
Compliance Officer
Fred Springsteen Vice President/Newport
Trust Manager
James B. Titus Vice President/Employee
Sales & Administration
<PAGE>
Rick Trout Vice President - Portland/
Vancouver Trust Manager
Dennis B. Munsey Sales Manager
Michael J. Bragg Chairman of the Board/ Attorney-at-law, DirectorGrenley,
Rotenberg,
Evans, Bragg & Bodie, PC
David C. Grove, Sr. Vice Chairman of the President, Grove
Board/Director Securities, Inc.
J. F. Ouderkirk Director Attorney-at-law,
Richardson, Ouderkirk & Hollen
Rodney B. Tibbatts Director Executive Vice President/Director
of Corporate Development, West
Coast Bancorp
Forrest A. Weil Director Personal Investment
Gary D. Putnam Director Executive Vice
President & CFO
Brentwood, Inc.
</TABLE>
(b) Becker Capital Management, Inc. ("Becker") is a registered
investment advisory firm founded in 1976 as P.E. Becker, Inc.
Becker manages assets totaling approximately $2.0 billion for
individuals, corporate pensions, and profit sharing trusts,
multi-employer trusts and endowment funds.
Becker is managed by Patrick E. Becker, Chairman and Chief
Investment Officer; Gerald N. Brown, Equity Trader; Warren
Hastings III C.F.A., Vice President, Fixed Income Portfolio
Manager; Stephen D. Laveson, Vice President, Director of
Fundamental Analysis; Michael C. Malone, Vice President,
Investments; Janeen S. McAninch, President and Chief
Operations Officer; Michael F. McCoy Ph.D., Vice President,
Director of Quantitative Analysis; Michael A. McGarr C.F.A.,
Senior Research Analyst; Robert N. Schaeffer, Vice
President, Equity Portfolio Manager; and Donald L. Wolcott
C.F.A., Vice President, Portfolio Manager.
Item 29. Principal Underwriters:
(a) Edgewood Services, Inc. the Distributor for shares of the
Registrant, acts as principal underwriter for the following
open-end investment companies, including the Registrant: BT
Advisor Funds, BT Pyramid Mutual Funds, BT Investment Funds, BT
Institutional Funds, Excelsior Institutional Trust (formerly, UST
Master Funds, Inc.), Excelsior Tax-Exempt Funds, Inc. (formerly,
UST Master Tax-Exempt Funds, Inc.), Excelsior Institutional
Trust, FTI Funds, FundManager Portfolios, Marketvest Funds,
Marketvest Funds, Inc. and Old Westbury Funds, Inc.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Lawrence Caracciolo Director, President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Arthur L. Cherry Director, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
J. Christopher Donahue Director, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas P. Sholes Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Ronald M. Petnuch Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas P. Schmitt Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Assistant Secretary
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas J. Ward Assistant Secretary, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Kenneth W. Pegher, Jr. Treasurer, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
</TABLE>
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section
31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following locations:
<TABLE>
<CAPTION>
<S> <C>
WCT Funds Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Shareholder Services Company P.O. Box 8600
Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and Shareholder
Servicing Agent
Federated Services Company Federated Investors Tower
Administrator Pittsburgh, PA 15222-3779
West Coast Trust Company, Inc. 1000 Broadway, Suite 1100
Adviser Portland, OR 97205
Becker Capital Management, Inc. 1211 SW Fifth Avenue, Sub-Adviser
Ste. 2185
Portland, OR 97204
State Street Bank and Trust Company P.O. Box 8600
Custodian Boston, MA 02266-8600
Arthur Andersen LLP 2100 One PPG Place
Independent Public Accountants Pittsburgh, PA 15222
</TABLE>
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to file a post-effective
amendment, using financial statements which need not be
certified, within four to six months from the effective date
of Registrant's 1933 Act Registration Statement.
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of Trustees and the
calling of special shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, WCT FUNDS, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on
the 2nd day of October, 1997.
WCT FUNDS
BY: /s/C. Grant Anderson,
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
October 2, 1997
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
NAME TITLE DATE
By: /s/C. Grant Anderson
C. Grant Anderson Attorney In Fact October 2,1997
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Treasurer and Trustee
(Principal Financial and
Accounting Officer)
</TABLE>
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 19 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of WCT FUNDS and the Deputy
General Counsel of Federated Investors, and each of them, their true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for them and in their names, place and stead, in any and all capacities, to sign
any and all documents to be filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, by means of the Securities and Exchange
Commission's electronic disclosure system known as EDGAR; and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as each of them might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/John F. Donahue Chairman and Trustee October 1, 1997
- --------------------------
John F. Donahue (Chief Executive Officer)
/s/Edward C. Gonzales President and Treasurer October 1, 1997
- --------------------------
Edward C. Gonzales and Trustee
(Principal Financial and
Accounting Officer)
/s/Thomas G. Bigley Trustee October 1, 1997
Thomas G. Bigley
/s/John T. Conroy, Jr. Trustee October 1, 1997
- --------------------------
John T. Conroy, Jr.
<PAGE>
SIGNATURES TITLE DATE
/s/William J. Copeland Trustee October 1, 1997
William J. Copeland
/s/James E. Dowd Trustee October 1, 1997
James E. Dowd
/s/Lawrence D. Ellis, M.D. Trustee October 1, 1997
- --------------------------
Lawrence D. Ellis, M.D.
/s/Edward L. Flaherty, Jr. Trustee October 1, 1997
- --------------------------
Edward L. Flaherty, Jr.
/s/Peter E. Madden Trustee October 1, 1997
Peter E. Madden
/s/Gregor F. Meyer Trustee October 1, 1997
Gregor F. Meyer
/s/John E. Murray, Jr. Trustee October 1, 1997
- --------------------------
John E. Murray, Jr.
/s/Wesley W. Posvar Trustee October 1, 1997
Wesley W. Posvar
/s/Marjorie P. Smuts Trustee October 1, 1997
Marjorie P. Smuts
Sworn to and subscribed before me this 1st day of October, 1997
/s/Marie M. Hamm
