WCT FUNDS, 497, 1997-12-03

WCT FUNDS
497, 1997-12-03

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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 December 1,
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 1-888-5-WCT-FUND
(1-888-5-592-8386). 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 December 1, 1997

- --------------------------------------------------------------------------------
TABLE OF CONTENTS

SUMMARY OF FUND EXPENSES...................................................... 1

GENERAL INFORMATION........................................................... 2

INVESTMENT INFORMATION........................................................ 2
INVESTMENT OBJECTIVE....................................................... 2
INVESTMENT POLICIES........................................................ 2
ACCEPTABLE INVESTMENTS..................................................... 2
INVESTMENT LIMITATIONS..................................................... 5
HUB AND SPOKE OPTION....................................................... 5

WCT FUNDS INFORMATION......................................................... 5
MANAGEMENT OF THE WCT FUNDS................................................ 5
DISTRIBUTION OF FUND SHARES................................................ 6
ADMINISTRATION OF THE FUND................................................. 7
BROKERAGE TRANSACTIONS..................................................... 7

NET ASSET VALUE............................................................... 8

INVESTING IN THE FUND......................................................... 8
SHARE PURCHASES............................................................ 8
MINIMUM INVESTMENT REQUIRED................................................ 9
WHAT SHARES COST........................................................... 9
PURCHASES AT NET ASSET VALUE............................................... 9
PURCHASES WITH PROCEEDS FROM REDEMPTIONS
OF UNAFFILIATED MUTUAL FUND SHARES...................................... 9
SALES CHARGE REALLOWANCE................................................... 9
REDUCING OR ELIMINATING THE SALES CHARGE................................... 9
SYSTEMATIC INVESTMENT PROGRAM............................................. 10
RETIREMENT PLANS.......................................................... 10
CONFIRMATIONS AND ACCOUNT STATEMENTS...................................... 10
DIVIDENDS AND DISTRIBUTIONS............................................... 10

EXCHANGE PRIVILEGE........................................................... 11
EXCHANGING SHARES......................................................... 11
EXCHANGE BY TELEPHONE..................................................... 11
WRITTEN EXCHANGE.......................................................... 12

REDEEMING SHARES............................................................. 12
SYSTEMATIC WITHDRAWAL PROGRAM............................................. 13
ACCOUNTS WITH LOW BALANCES................................................ 13

SHAREHOLDER INFORMATION...................................................... 13
VOTING RIGHTS............................................................. 13

EFFECT OF BANKING LAWS....................................................... 13

TAX INFORMATION.............................................................. 14
FEDERAL INCOME TAX........................................................ 14
STATE AND LOCAL TAXES..................................................... 14

PERFORMANCE INFORMATION...................................................... 14
PERFORMANCE INFORMATION FOR
PREDECESSOR COMMON TRUST FUND........................................... 14

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS..................................... 16
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<S> <C> <C>
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 (after waiver)(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%
</TABLE>

(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 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.

<TABLE>
<CAPTION>
EXAMPLE
<S> <C>
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
</TABLE>

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.

------------------------------------------------------
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:

. 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;

. American Depositary Receipts ("ADRs") of foreign companies traded on the New
York or American Stock Exchanges or in the over-the-counter market;

. obligations of the United States government;

. notes, bonds, and discount notes of U.S. government agencies or
instrumentalities;

. 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

. 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 shares 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. The Fund may invest in convertible securities rated
BBB or better by S&P or Fitch or Baa or better by Moody's, or, if unrated, of
comparable quality as determined by the Fund's adviser or sub-adviser.

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:

. less publicly available information about foreign companies;

. the lack of uniform financial accounting standards applicable to foreign
companies;

. less readily available market quotations on foreign companies;

. differences in government regulation and supervision of foreign securities
exchanges, brokers, listed companies, and banks;

. generally lower foreign securities market volume;

. the likelihood that foreign securities may be less liquid or more volatile;

. generally higher foreign brokerage commissions;

. possible difficulty in enforcing contractual obligations or obtaining court
judgments abroad because of differences in the legal systems;

. unreliable mail service between countries; and

. political or financial changes which adversely affect investments in some
countries.

U.S. GOVERNMENT OBLIGATIONS
These securities include but are not limited to:

. direct obligations of the U.S. Treasury, such as U.S. Treasury bills, notes,
and bonds; and

. 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:

. the issuer's right to borrow an amount limited to a specific line of credit
from the U.S. Treasury;

. the discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or

. 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:

. 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;

. 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

. 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 $712.3 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
$88.9 million as of December 31, 1996.

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 and not the Fund.

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:

<TABLE>
<CAPTION>
ADMINISTRATIVE MAXIMUM AVERAGE AGGREGATE
FEE DAILY NET ASSETS OF THE TRUST
<S> <C>
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
on assets in excess of $750
.075% million
</TABLE>

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

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 1-888-5-WCT-FUND. 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 West Coast Trust Shareholder Servicing Center at WCT Funds,
P.O. Box 8612, Boston, MA 02266-8612 or by telephoning West Coast Trust at
1-888-5-WCT-FUND. Mail the completed account application along with a check made
payable to the Fund to the above address.

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. All purchases must be made in U.S. dollars and checks must
be drawn on a United States bank. Payment for shares may not be made by third
party check. Payments transmitted by check are accepted subject to collection at
full face amount which may take up to 7 calendar days.

PURCHASES BY WIRE

You may also purchase shares by bank wire. For opening new accounts in this
manner, please call 1-888-5-WCT-FUND (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 72097967, 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>
DEALER
SALES CHARGE ALLOWANCE AS
AS A PERCENTAGE A PERCENTAGE
OFFERING NET AMOUNT OF OFFERING
PRICE INVESTED PRICE
<S> <C> <C> <C>
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:

. quantity discounts and accumulated purchases;

. signing a 13-month letter of intent;

. using the reinvestment privilege; or

. 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 West Coast Trust Shareholder
Servicing Center 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 West Coast Trust Shareholder Servicing Center at 1-888-5-WCT-FUND 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
West Coast Trust Shareholder Servicing Center at 1-888-5-WCT-FUND.

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 West Coast Trust Shareholder Servicing
Center at 1-888-5-WCT-FUND.

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 by contacting West Coast Trust Shareholder Servicing Center.

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 West Coast Trust before 3:00
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 West Coast Trust Shareholder
Servicing Center or their authorized broker 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: WCT Funds, P.O. Box 8612, Boston, MA 02266-8612.

------------------------------------------------------
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 the West Coast Trust
Shareholder Servicing Center at 1-888-5-WCT-FUND.

BY WIRE

To redeem shares and receive proceeds by Federal Reserve Wire, trust customers
should contact their account officer. All other customers should call West Coast
Trust Shareholder Servicing Center at 1-888-5-WCT-FUND. A $5.00 fee will be
imposed by the Fund for wire redemptions. Wire orders will only be accepted on
days on which the Fund, West Coast Trust and the Federal Reserve Banks are open
for business.

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 1-888-5-WCT-FUND. A shareholder who
is an individual investor may redeem shares by telephoning 1-888-5-WCT-FUND. 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 West Coast Trust Shareholder Servicing Center. 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 West Coast
Trust Shareholder Servicing Center.

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:

. 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");

. a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;

. a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund, which is administered by the FDIC; or

. 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.
------------------------------------------------------
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
(expected to take place on or about December 12, 1997), 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%,
12.99% and 15.26%, respectively. 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), without reflecting the sales charge were
28.84%, 20.78,%, 18.54%, 13.51% and 15.71%, 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 (after waivers) 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.

- --------------------------------------------------------------------------------

STATEMENT OF ASSETS AND LIABILITIES

WCT EQUITY FUND
NOVEMBER 17, 1997

<TABLE>
<S> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------------
Cash $ 100,000
- ------------------------------------------------------------------------------------------------------
LIABILITIES: --
- ------------------------------------------------------------------------------------------------------ -----------
Net Assets for 10,000 shares outstanding $ 100,000
- ------------------------------------------------------------------------------------------------------ -----------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------
Paid in capital $ 100,000
- ------------------------------------------------------------------------------------------------------ -----------
NET ASSET VALUE AND REDEMPTION PROCEEDS PER SHARE:
- ------------------------------------------------------------------------------------------------------
$100,000 / 10,000 shares outstanding $ 10.00
- ------------------------------------------------------------------------------------------------------ -----------
Offering Price Per Share (100/95.5 of $10.00) $ 10.47
- ------------------------------------------------------------------------------------------------------ -----------
</TABLE>

Notes:

(1) WCT Equity Fund (the "Fund") is a diversified portfolio of the WCT Funds
(the "Trust"), an open-end management investment company (a mutual fund).
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated July 1, 1997 and has had no operations since
that date other than those relating to organizational matters including the
issuance on November 17, 1997, of 10,000 shares at $10.00 per share to
Federated Services Company, the Administrator of the Trust, Organizational
expenses estimated at $5,000, were borne initially by the Adviser. The Fund
has agreed to reimburse the Adviser for the organizational expenses with
five years of the date the Fund becomes effective.

(2) Reference is made to the "Management of the WCT Funds" (on page 5),
"Administration of the Fund" (on page 7), and "Tax Information" (on page
14) in the prospectus for descriptions of the investment advisory fee,
administrative and other services and federal tax aspects of the Fund.

(3) Certain Officers and Trustees of the Trust are Officers and Trustees of the
Administrator.

- --------------------------------------------------------------------------------

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS_

To the Shareholder and Board of Trustees of the WCT Funds (WCT Equity Fund):

We have audited the accompanying statement of assets and liabilities of WCT
Equity Fund as of November 17, 1997. This financial statement is the
responsibility of the Fund's management. Our responsibility is to express an
opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit included examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such statement of assets and liabilities presents fairly, in all
material respects, the financial position of WCT Equity Fund as of November 17,
1997, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Pittsburgh, Pennsylvania
November 18, 1997

[LOGO OF FEDERATED INVESTORS] FEDERATED INVESTORS

WCT Funds Custodian WCT
WCT Equity Fund State Street Bank and Equity
Federated Investors Tower Trust Company Fund
Pittsburgh, PA 15222-3779 P.O. Box 1713
Boston, MA 02266-8600

Distributor
Edgewood Services, Inc. Transfer Agent and
Clearing Operations Dividend Disbursing Agent
P.O. Box 897 Federated Shareholder
Pittsburgh, PA 15222-3779 Services Company
Federated Investors Tower
Investment Adviser Pittsburgh, PA 15222-3779
West Coast Trust Company, Inc.
1000 Broadway, Suite 1100 Independent Public
Portland, OR 97205 Accountants
Arthur Andersen LLP
Sub-Adviser 2100 One PPG Place
Becker Capital Management, Inc. Pittsburgh, PA 15222
1211 SW Fifth Avenue, Ste. 2185
Portland, OR 97204

[LOGO OF WCT FUNDS]
WCT FUNDS

Prospectus
December 1, 1997

Edgewood Services, Inc.
Distributor

A subsidiary of Federated Investors
Federated Investors Tower [RECYCLED PAPER LOGO]
Pittsburgh, PA 15222-3779 RECYCLED
PAPER
G02161-01 (12/97)
A Portfolio of WCT Funds, an Open-End
Management Investment Company

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 December 1, 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 1-888-5-WCT-FUND
(1-888-5-592-8386).

Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779

Statement dated December 1, 1997

[GRAPHIC OMITTED]
Cusip #########
G02161-02 (12/97)
[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
Investing in Securities of Other Investment
Companies 1
Restricted and Illiquid Securities 2
When-Issued and Delayed Delivery Transactions 2
Repurchase Agreements 2
Reverse Repurchase Agreements 2
Lending of Portfolio Securities 2
Portfolio Turnover 2

Investment Limitations 3

WCT Funds Management 4
Trust Ownership 8
Trustees' Compensation 8
Trustee Liability 9

Investment Advisory Services 9
Adviser to the Fund 9
Advisory Fees 9
Sub-Adviser to the Fund 9
Sub-Advisory Fees 9

Brokerage Transactions 9

Other Services 10
Fund Administration 10
Custodian and Portfolio Accountant 10
Transfer Agent, Dividend
Disbursing Agent, and Shareholder
Servicing Agent 10
Independent Public Accountants 10

Purchasing Shares 10
Distribution and Shareholder
Services Plans 10
Conversion to Federal Funds 10

Determining Net Asset Value 11
Determining Market Value of
Securities 11

Exchange Privilege 11
Requirements for Exchange 11
Making an Exchange 11

Redeeming Shares 11
Redemption in Kind 11

Massachusetts Partnership Law 12

Tax Status 12
The Fund's Tax Status 12
Shareholders' Tax Status 12

Total Return 12

Yield 12

Performance Comparisons 12
Economic and Market Information 13

Appendix 14

<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 provide 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.

Investing in Securities of Other Investment Companies

The Fund may invest in the securities of affiliated money market funds as an
efficient means of managing the Fund's uninvested cash.

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 up
to one-third of the value of its total assets, 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, pledge securities or lend portfolio
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.

<PAGE>

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.

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.

<PAGE>

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.

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

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 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 West
Coast Trust receives 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.