1933 Act File No. 333-35785
1940 Act File No. 811-08335
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933..... X
Post-Effective Amendment No. 1 .......................... X
----- ---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 4 ......................................... X
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WCT FUNDS
(Exact name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esq.,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
_ on _________________pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a) (i) on pursuant to paragraph
(a) (i). 75 days after filing pursuant to paragraph (a)(ii) on
_________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Copies To:
Matthew G. Maloney, Esquire
Dickstein, Shapiro, Morin & Oshinsky, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
WCT Equity Fund
(A Portfolio of the WCT Funds)
Prospectus
Shares of WCT Equity Fund, like shares of all mutual funds, are not bank
deposits, federally insured, or guaranteed. WCT Fund shares may lose value. As
with all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus,
and any representation to the contrary is a criminal offense.
Prospectus dated ________________, 1998
TABLE OF CONTENTS
Fund Goals, Strategies and Risks..1
What are the risks of investing in the Fund? 1
WCT Equity Fund Fees and Expenses.2
What Are Equity Securities?.......3
Portfolio Turnover................3
What Do Shares Cost?..............3
How is the Fund Sold?.............4
How To Purchase Shares............4
How To Redeem and Exchange Shares.6
Exchange Privileges...............7
Account and Share Information.....8
Dividends and Capital Gains.......8
Accounts with Low Balances........8
Tax Information...................8
Who Manages the Fund..............9
Financial Highlights.............10
<PAGE>
FUND GOALS, STRATEGIES AND RISKS
The Fund's goal is to provide long-term capital appreciation.
The Fund invests in value-oriented common stocks of large and medium-sized
companies with market capitalizations in excess of $1.5 billion. The Fund may
also occasionally invest in stocks of companies with smaller capitalizations
that have value characteristics. The Fund's portfolio manager selects companies
that exhibit traditional value characteristics, such as a price-to earnings
ratio less than stocks in the S&P 500, higher-than-average dividend yields, and
lower-than-average price-to-book value. In addition, these companies may have
under-appreciated assets, or are involves in company turnarounds and/or
corporate restructurings. The Fund will invest at least 80% of its assets in
equity securities.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
Stock Market Risks. The value of the stocks in the Fund's portfolio will go up
and down. These fluctuations could be a sustained trend or a drastic movement.
Fluctuations in the Fund's portfolio may reflect changes in individual portfolio
stocks or general changes in stock valuations and will result in changes in the
Fund's share price. The Adviser attempts to manage market risk through
diversification by limiting the amount the Fund invests in each stock.
Equity risk is also related to the size of the company issuing stock. Companies
may be categorized as having a small, medium, or large capitalization (market
value). The potential risks are higher with small- and medium-capitalization
companies and lower with large-capitalization companies. Therefore, you should
expect that investments in the Fund will be more volatile than broad stock
market indices such as the S&P 500 or funds that invest exclusively in
large-capitalization companies.
Temporary Investments. To minimize potential losses and maintain liquidity to
meet shareholder redemptions during adverse market conditions, the Fund may
temporarily depart from its principal investment strategy by investing up to
100% of Fund assets in cash or short-term, high quality money market instruments
(e.g., commercial paper, repurchase agreements, etc.). This may cause the Fund
to temporarily forego greater investment returns for the safety of principal.
<PAGE>
WCT EQUITY FUND
Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold
shares of the WCT Equity Fund.
Shareholder Fees ( fees paid directly from your investment)
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) 4.50%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase
price or redemption proceeds, as applicable)................... None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
( as a percentage of offering price)........................... None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee................................................... None
Maximum Account Fee........................................................... None
</TABLE>
Annual Fund Operating Expenses (expenses that are deducted from Fund assets) (as
a percentage of average net assets)
Management Fee (1)............................................. 0.75%
Shareholder Services Fee (2)................................... 0.25%
Distribution (12b-1) Fee (3)................................... 0.25%
Other Expenses ................................................ 0.55%
Total Annual Fund Operating Expenses (before waivers) (4)...... 1.80%
(1) The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by the
Fund (after the voluntary waiver) was 0.50% for the year ended October 31, 1998.
(2) The shareholder services fee has been voluntarily reduced. This voluntary
reduction can be terminated at any time. The shareholder services fee paid by
the Fund (after the voluntary reduction) was 0.05% for the year ended October
31, 1998.
(3) The Fund has no present intention of paying or accruing distribution (
12b-1) fees. The Fund will not pay or accrue distribution ( 12b-1) fees until a
separate class of shares has been created for certain institutional investors.
(4) As noted above in (1), (2) and (3), certain fees are being voluntarily
waived or are not currently being accrued. Actual expenses deduction of these
fees is as follows:
Total Annual Fund Operating Expenses (before waivers).......... 1.80%
Waiver of Fund expenses........................................ (0.70%)
Total Actual Annual Fund Operating Expenses (after waivers).... 1.10%
Example
The following Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses are before waivers as shown above and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
.......... 1 Year 3 Years 5 Years 10 Years
Payment of the maximum sales charge
............
WHAT ARE EQUITY SECURITIES?
Equity securities are the fundamental unit of ownership of a company. They
represent a share of the issuer's earnings and assets, after the issuer pays its
liabilities. Generally, issuers have discretion as to the payment of any
dividends or distributions. As a result, investors cannot predict the income
they will receive from equity securities. However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business. The
following describes the types of equity securities in which the Fund invests.
Common Stocks are the most prevalent type of equity security. Common
stockholders receive the residual value of the issuer's earnings and assets
after the issuer pays its creditors and any preferred stockholders. As a
result, changes in an issuer's earnings directly influence the value of its
common stock.
PORTFOLIO TURNOVER
Although the Fund does not intend to invest for the purpose of seeking
short-term profits, securities will be sold without regard to the length of time
they have been held when the Fund's Adviser or Sub-Adviser believe it is
appropriate to do so in light of the Fund's investment goal. A higher portfolio
turnover rate involves greater transaction expenses which must be borne directly
by the Fund (and thus, indirectly by its shareholders), and impact Fund
performance. In addition, a high rate of portfolio turnover may result in the
realization of larger amounts of capital gains which, when distributed to the
Fund's shareholders, are taxable to them.
WHAT DO SHARES COST?
You can purchase, redeem, or exchange shares of the Fund any day the New York
Stock Exchange (NYSE) is open. When the Fund receives your transaction request
in proper form, it is processed at the next determined public offering price.
The public offering price is the net asset value (NAV) plus the applicable sales
charge. NAV is determined at the end of regular trading (normally 4 p.m. eastern
time) each day the NYSE is open, except Columbus Day and Veterans Day.
Fund shares are sold at NAV plus a sales charge, as follows:
------------------------------------------------------------
Purchase Amount Sales Charge as Sales Charge
a Percentage of as a
Public Offering Percentage of
Price NAV
------------------------------------------------------------
------------------------------------------------------------
Less than $100,000 4.50% 4.71%
------------------------------------------------------------
------------------------------------------------------------
$100,000 but less than 3.75% 3.90%
$250,000
------------------------------------------------------------
------------------------------------------------------------
$250,000 but less than 2.50% 2.56%
$500,000
------------------------------------------------------------
------------------------------------------------------------
$500,000 but less than 2.00% 2.04%
$750,000
------------------------------------------------------------
------------------------------------------------------------
$750,000 but less than 1.00% 1.01%
$1 million
------------------------------------------------------------
------------------------------------------------------------
$1 million or greater 0.00% 0.00%
------------------------------------------------------------
The minimum initial investment in the Fund by a trust customer of West Coast
Trust Company or other financial institution 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.
Keep in mind that financial intermediaries may charge you fees for their
services in connection with your share transactions.
The sales charge at purchase may be reduced or eliminated by:
o quantity purchases of shares;
o combining concurrent purchases of shares by you, your spouse, and your
children under age 21;
o accumulating purchases (in calculating the sales charge on an additional
purchase, you may count the current value of previous share purchases still
invested in the Fund);
o signing a letter of intent to purchase a specific dollar amount of shares
within 13 months (call the Fund for an application and more information);
o reinvesting redemption proceeds within 30 days; or
oinvesting the proceeds, within 60 days, from a redemption of unaffiliated
mutual fund shares sold with a sales charge.
If your investment qualifies for a reduction or elimination of the sales charge,
you or your investment professional must notify the Fund's Distributor at the
time of purchase. If you fail to notify the Distributor, you will receive the
reduced sales charge only on additional purchases, and not retroactively on your
previous purchases.
In addition, no sales charge is imposed on:
purchases by West Coast Trust for accounts in which it holds or manages
assets;
trust companies and trust departments of other financial institutions;
banks and savings and loan associations for their own accounts;
trustees, employees, emeritus trustees and retired employees of the Trust,
West Coast Trust, West Coast Bancorp, and Edgewood Services, Inc. and their
respective subsidiaries, and their spouses and children under 21; and
customers, employees and employee benefit plans of Becker Capital
Management, Inc. and their spouses and children under 21.
HOW IS THE FUND SOLD?
The Fund's Distributor, Edgewood Services, Inc. markets the shares described in
this prospectus to institutions or individuals, directly or through financial
intermediaries. When the Distributor receives sales charges and marketing fees,
it may pay some or all of them to financial intermediaries. The Distributor and
its affiliates may pay out of their assets other amounts (including items of
material value) to financial intermediaries for marketing and servicing shares.
The Distributor is a subsidiary of Federated Investors, Inc. (Federated).
Rule 12b-1 Plan. The Fund has adopted a Rule 12b-1 Plan, which allows it to pay
marketing fees to the Distributor and financial intermediaries for the sale,
distribution and customer servicing of the Fund's shares. The Fund is not
presently paying or accruing 12b-1 fees. The Fund will not pay or accrue these
fees until a separate class of shares has been created for certain institutional
investors.
HOW TO PURCHASE SHARES
You may purchase shares through an investment professional or directly from the
Fund.
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 (1-888-592-8386).
Information needed to establish the account will be taken over the telephone.
DIRECTLY FROM THE FUND
w Individual investors may establish an account with the Fund by submitting a
completed account application available from West Coast Trust Shareholder
Servicing Center at WCT Funds, PO Box 8612, Boston, MA 02266-8612 or by
calling West Coast Trust at 1-888-5-WCT-FUND (1-888-592-8386); and
w Send your payment to the Fund by Federal Reserve wire or check.
You will become a shareholder and your shares will be priced at the NAV on the
day the Fund receives your wire or your check.
By Wire. Send your wire to:
State Street Bank and Trust Company, Boston, MA
ABA Number 011000028
Account Number 72097967
Wire Order Number, Dealer Number, or Group Number
Dollar Amount
For Credit to: WCT Equity Fund
Account Name and Number.
You cannot purchase shares by wire on holidays when wire transfers are
restricted.
By Check. Make your check payable to WCT Equity Fund, note your account number
on the check, and mail it to:
WCT Funds
P.O. Box 8612
Boston, MA 02266-8612
If you send your check by a private courier or overnight delivery service that
requires a street address, send it to:
WCT Funds
c/o Federated Services Company
1099 Hingham Street
Rockland, MA 02266
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
the Fund). If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before the end of
regular trading on the NYSE (normally 4 p.m. Eastern time). You will receive
that day's NAV if the investment professional forwards the order to the Fund
on the same day and the Fund receives payment within three business days. You
will become the owner of the shares and receive dividends when the Fund
receives your payment.
o Financial intermediaries should send payments according to the instructions in
the sections By Wire or By Check.
THROUGH AN EXCHANGE
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
(1-888-592-8386). Both accounts must have a common owner.
BY SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
shares on a regular basis by completing the Systematic Investment Program
section of the account application or contacting the Fund or your investment
professional.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the account application.
RETIREMENT INVESTMENTS
You may purchase shares as retirement investments (such as qualified plans and
IRAs). For further details, contact the West Coast Trust Shareholder Servicing
Center at 1-888-5-WCT-FUND (1-888-592-8386). We suggest that you discuss these
retirement investments with your tax adviser.
You may be charged an IRA account fee.
HOW TO REDEEM AND EXCHANGE SHARES
You should redeem or exchange shares:
o through an investment professional if you purchased shares through an
investment professional; or o directly from the Fund if you purchased shares
directly from the Fund.
DIRECTLY FROM WEST COAST TRUST
By Telephone. You may redeem or exchange shares by calling the West Coast
Shareholder Servicing Center at 1-888-5-WCT-FUND (1-888-592-8386) once you have
completed the appropriate authorization form for telephone transactions. If you
call before the end of regular trading on the NYSE (normally 4 p.m. Eastern
time) you will receive a redemption amount based on that day's NAV.
By Mail. You may redeem or exchange shares by mailing a written request to the
Fund. You will receive a redemption amount based on the NAV on the day your
written request is received by the Fund in proper form.
Send requests by mail to:
WCT Funds
P.O. Box 8612, Boston, MA 02266-86012.
Send requests by private courier or overnight delivery to:
WCT Funds
c/o Federated Services Company
1099 Hingham Street
Rockland, MA 02266
All requests must include:
o Fund Name, registered account name and number; o amount to be redeemed or
exchanged; o signatures of all shareholders exactly as registered; and
o if exchanging, the Fund/Class Name, registered account name and number into
which you are exchanging.
Signature Guarantees. Signatures must be guaranteed if:
w your redemption is to be sent to an address other than the address of record;
w your redemption is to be sent to an address of record that was changed within
the last thirty days; or w a redemption is payable to someone other than the
shareholder(s) of record.
Your signature can be guaranteed by any federally insured financial institution
(such as a bank or credit union) or a broker/dealer that is a domestic stock
exchange member, but not by a notary public.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption or exchange request to your investment professional by
the end of regular trading on the NYSE (normally 4 p.m. Eastern time). The
redemption amount you will receive is based upon the NAV on the day the Fund
receives the order from your investment professional.
PAYMENT OPTIONS
Your redemption proceeds will be mailed by check to your address of record.
However, the following payment options are available if you complete the
appropriate authorization form. These payment options require a signature
guarantee if they were not established prior to redeeming shares:
o an electronic transfer to your depository account at a financial institution
that is an ACH member; or o wire payment to your account at a domestic
commercial bank that is a Federal Reserve System member.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. However, payment may be delayed up to seven
days:
w to allow your purchase payment to clear;
w during periods of market volatility; or
w when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
REDEMPTION IN KIND
Although the Fund intends to pay share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets of
the Fund during any 90-day period.
Any share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
RETIREMENT DISTRIBUTIONS
A minimum of 10% of the value of your retirement distribution (redemption) will
be withheld for taxes in the absence of your specific instructions.
EXCHANGE PRIVILEGES
You may exchange shares of the Fund into shares of certain Federated Funds with
common account owners. To do this, you must: w meet any minimum initial
investment requirements; and w receive a prospectus for the fund into which you
wish to exchange. An exchange is treated as a redemption and a subsequent
purchase, and is a taxable transaction. Signatures must be guaranteed if you
request an exchange into another fund with a different shareholder registration.
The Fund may modify or terminate the exchange privilege at any time. The Fund's
management or Adviser may determine from the amount, frequency and pattern of
exchanges that a shareholder is engaged in excessive trading which is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other Federated Funds.
SYSTEMATIC WITHDRAWAL/EXCHANGE PROGRAM
You may automatically redeem or exchange shares on a regular basis by completing
the appropriate form or contacting your investment professional or the Fund.
Your account value must have an account value of at least $10,000 to be eligible
to participate in this program. This program may reduce, and eventually deplete,
your account, and the payments should not be considered yield or income.
Generally, it is not advisable to continue to purchase shares subject to a sales
charge while redeeming shares using this program.
ADDITIONAL CONDITIONS
Telephone Transactions. The Fund will record your telephone instructions. If the
Fund does not follow reasonable procedures, it may be liable for losses due to
unauthorized or fraudulent telephone instructions. The Fund will notify you if
it changes telephone transaction privileges.
ACCOUNT AND SHARE INFORMATION
CONFIRMATIONS AND ACCOUNT STATEMENTS
You will receive confirmation of purchases, redemptions and exchanges (except
for systematic transactions). In addition, you will receive periodic statements
reporting all account activity, including systematic transactions, dividends and
capital gains paid. The Fund does not issue share certificates.
DIVIDENDS AND CAPITAL GAINS
The Fund declares and pays any dividends quarterly to shareholders. Dividends
are paid to all shareholders invested in the Fund on the record date.
In addition, the Fund pays any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
shares without a sales charge, unless you elect cash payments. If you elect cash
payments and the payment is returned as undeliverable, your cash payment will be
reinvested in shares and your distribution option will convert to automatic
reinvestment.
If you purchase shares just before the Fund declares a dividend or capital gain
distribution, you will pay the full price for the shares and then receive a
portion of the price back in the form of a distribution, whether or not you
reinvest the distribution in shares. Therefore, you should consider the tax
implications of purchasing shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
ACCOUNTS WITH LOW BALANCES
Non-retirement accounts may be closed if redemptions or exchanges cause the
account balance to fall below the minimum initial investment amount. Before an
account is closed, the shareholder will be notified and allowed 30 days to
purchase additional shares to meet the minimum.
TAX INFORMATION
The Fund sends you an annual statement of your account activity to assist you in
completing your federal, state and local tax returns.Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Capital gains distributions are taxable at different
rates depending upon the length of time the Fund holds its assets.
Fund distributions are expected to be both dividends and capital gains.
Redemptions and exchanges are taxable sales. Please consult your tax adviser
regarding your federal, state, and local tax liability.
<PAGE>
WHO MANAGES THE FUND?
The WCT Funds are governed by a Board of Trustees. The Board selects and
oversees the Adviser, West Coast Trust Company, Inc. The Adviser manages the
Fund's assets, including buying and selling portfolio securities. The Adviser's
address is 1000 Broadway, Suite 1100, Portland, Oregon 97205.
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. The Adviser has delegated daily management of
the Fund assets to the Sub-Adviser, Becker Capital Management, Inc., who is paid
by the Adviser and not by the Fund.
Adviser's Background. The Adviser is a wholly-owned subsidiary of West Coast
Bancorp ("Bancorp"). Organized in 1981, Bancorp held approximately $_____
million in total assets as of December 31, 1998, 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
$_____million as of October 31, 1998.
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, Chartered Financial Analyst, 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.
Year 2000 Statement. Many computers cannot properly recognize dates of January
1, 2000 and beyond. The Fund's service providers are making changes to their
computer systems to fix this problem since it could disrupt Fund operations. The
financial impact on the Fund is still being determined, but Federated and its
service providers are working to make sure this problem does not adversely
affect the Fund.
<PAGE>
FINANCIAL HIGHLIGHTS -- to be inserted]
<PAGE>
WCT EQUITY FUND
(A Portfolio of the WCT Funds)
An investment in WCT Equity Fund is not a deposit of a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
A Statement of Additional Information (SAI) dated _______________, 1998 is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is available in the Funds' annual and semi-annual reports to
shareholders. The annual report discusses market conditions and investment
strategies that significantly affected the Fund's performance during its last
fiscal year. To obtain the SAI, the annual and semi-annual reports and other
information without charge write to or call West Coast Trust Servicing Center at
1-888-5-WCT-FUND (1-888-592-8386).
You can obtain information about WCT Funds by visiting or writing the Public
Reference Room of the Securities and Exchange Commission in Washington, D.C.,
20549-6009, or from the SEC's Internet Web site at: http://www.sec.gov. You can
call 1-800-SEC-0330 for information on the Public Reference Room's operations
and copying charges.
WCT Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7010
1-888-5-WCT-FUND (1-888-592-8386).
Edgewood Services, Inc.
Distributor
CUSIP 9293E100
G02161-0 (00/98)
SEC File No. 811-08335
WCT Equity Fund
(A Portfolio of WCT Funds)
Statement of Additional Information
This Statement of Additional Information (SAI) is not a prospectus. Read
this SAI in conjunction with the prospectus for WCT Equity Fund (a portfolio
of WCT Funds) dated _____________, 1998. This SAI incorporates by reference
the Fund's Annual Report. You may obtain the prospectus or Annual Report
without charge by calling 1-888-5-WCT-FUND (1-888-592-8386).
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
CUSIP 92923E100G00714-02(00/98)
EDGEWOOD SERVICES, INC.
Distributor
.
<PAGE>
Table of Contents
How are the Funds Organized 1
Securities in Which the Funds Invest 1
Securities Descriptions, Techniques and Risks 2
Investment Limitations 4
Determining Market Value of Securities 5
What Do Shares Cost? 6
How Is the Fund Sold? 6
How To Buy Shares 7
Account and Share Information 7
Effect of Banking Laws 8
Tax Information 8
Who Manages and Provides Services to the Fund 9
How Does the Fund Measure Performance 14
Performance Comparisons 15
Financial Information 15
<PAGE>
40
HOW ARE THE FUNDS ORGANIZED
The Fund is a diversified portfolio of WCT Funds (Trust). The Trust is an
open-end management investment company that was established under the laws of
the Commonwealth of Massachusetts on July 1, 1997. This Statement contains
additional information about the Trust and the Fund. This Statement uses the
same terms as defined in the prospectus.
SECURITIES IN WHICH THE FUND INVESTS
Following is a table that indicates which types of securities are a: P =
Principal investment of the Fund; (shaded in chart) A = Acceptable (but not
principal) investment of the Fund
- -----------------------------------------
- -----------------------------------------
- -----------------------------------------
American Depositary Receipts A
- -----------------------------------------
- -----------------------------------------
Bank Instruments A
- -----------------------------------------
- -----------------------------------------
Borrowing A
- -------------------------------
- -----------------------------------------
Common Stock P
- -----------------------------------------
- -----------------------------------------
Convertible Securities A
- -----------------------------------------
- -----------------------------------------
Foreign Securities A
- -----------------------------------------
- -----------------------------------------
When-Issued and Delayed A
Delivery Transactions
- -----------------------------------------
- -----------------------------------------
Illiquid and Restricted A
Securities
- -----------------------------------------
- -----------------------------------------
Lending of Portfolio A
Securities
- -------------------------------
- -----------------------------------------
Preferred Stocks P
- -----------------------------------------
- -------------------------------
Prime Commercial Paper A
- -----------------------------------------
- -----------------------------------------
Repurchase Agreements A
- -----------------------------------------
- -----------------------------------------
Reverse Repurchase Agreements A
- -----------------------------------------
- -----------------------------------------
Securities of Other A
Investment Companies
- -----------------------------------------
- -----------------------------------------
U.S. Government Securities A
- -----------------------------------------
- -----------------------------------------
Warrants A
- -----------------------------------------
<PAGE>
SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS
As used in this section, the term Adviser means Adviser or Sub-Adviser, as
applicable.
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit and
banker's acceptances. Instruments denominated in U.S. dollars and issued by
non-U.S. branches of U.S. or foreign banks are commonly referred to as
Eurodollar instruments. Instruments denominated in U.S. dollars and issued by
U.S. branches of foreign banks are referred to as Yankee instruments. Borrowing.
The Fund may borrow money from banks or through reverse repurchase agreements in
amounts up to one-third of total assets and pledge some assets as collateral.
The Fund will pay interest on borrowed money and may incur other transaction
costs. These expenses could exceed the income received or capital appreciation
realized by the Fund from any securities purchased with borrowed money. With
respect to borrowings, the Fund is required to maintain continuous asset
coverage to 300% of the amount borrowed. If the coverage declines to less than
300%, the Fund must sell sufficient portfolio securities to restore the coverage
even if it must sell the securities at a loss.
Commercial paper is an issuer's draft or note with a maturity of less than nine
months. Companies typically issue commercial paper to Fund current expenditures.
Most issuers constantly reissue their commercial paper and use the proceeds (or
bank loans) to repay maturing paper. Commercial paper may default if the issuer
cannot continue to obtain liquidity in this fashion. The short maturity of
commercial paper reduces both the market and credit risk as compared to other
debt securities of the same issuer. Convertible securities are fixed income
securities that the Fund has the option to exchange for equity securities at a
specified conversion price. The option allows the Fund to realize additional
returns if the market price of the equity securities exceeds the conversion
price. For example, the Fund may hold fixed income securities convertible into
shares of common stock at a conversion price of $10 per share. If the market
value of the shares reached $12, the Fund could realize an additional $2 per
share by converting its fixed income securities. Convertible securities have
lower yields than comparable fixed income securities to compensate for the value
of the conversion option. In addition, the conversion price exceeds the market
value of the underlying equity securities at the time a convertible security is
issued. Thus, convertible securities may provide lower returns than
non-convertible fixed income securities or equity securities depending upon
changes in the price of the underlying equity securities. However, convertible
securities permit the Fund to realize some of the potential appreciation of the
underlying equity securities with less risk of losing its initial investment.
The Fund treats convertible securities as both fixed income and equity
securities for purposes of its investment policies and limitations, because of
their unique characteristics. Depositary Receipts. American Depositary Receipts
(ADRs) are receipts, issued by a U.S. bank, that represent an interest in shares
of a foreign-based corporation. ADRs provide a way to buy shares of
foreign-based companies in the U.S. rather than in overseas markets. Depositary
Receipts may not be denominated in the same currency as the underlying
securities into which they may be converted, and are subject to currency risks.
Depositary Receipts involve many of the same risks of investing directly in
foreign securities.
Foreign Securities. Foreign securities pose additional risks over U.S.-based
securities for a number of reasons. Foreign economic, governmental, and
political systems may be less favorable than those of the United States. Foreign
governments may exercise greater control over their economies, industries, and
citizen's rights. Specific risk factors related to foreign securities include:
inflation, structure and regulation of financial markets, liquidity and
volatility of investments, taxation policies, currency exchange rates and
regulations, and accounting standards. Because the Fund may invest up to 20% of
its net assets in foreign securities, you should expect that these factors may
adversely affect the value of an investment in the Fund. The Fund may incur
higher costs and expenses when making foreign investments, which will impact the
Fund's total return. Lending of Portfolio Securities. In order to generate
additional income, the Fund may lend portfolio securities. When the Fund lends
portfolio securities, it will receive either cash or liquid securities as
collateral from the borrower. The Fund will reinvest cash collateral in
short-term liquid securities that qualify as an otherwise acceptable investment
for the Fund. If the market value of the loaned securities increases, 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 a securities lending
agent or broker. When the Fund lends its portfolio securities, it may not be
able to get them back from the borrower on a timely basis. If this occurs, the
Fund may lose certain investment opportunities.
Preferred stocks have the right to receive specified dividends or distributions
before the payment of dividends or distributions on common stock. Some preferred
stocks also participate in dividends and distributions paid on common stock.
Preferred stocks may provide for the issuer to redeem the stock on a specified
date. The Fund may treat such redeemable preferred stock as a fixed income
security. Repurchase Agreements and Reverse Repurchase Agreements. The Fund's
custodian is required to take possession of the securities subject to repurchase
agreements. These securities are marked to market daily. To the extent that the
original seller defaults and 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 files for bankruptcy or
becomes insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that, under the procedures normally in
effect for custody of the 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 Adviser to be creditworthy.
Reverse repurchase agreement transactions are similar to borrowing cash. In a
reverse repurchase agreement, the Fund sells a portfolio security 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 at a price
equal to the original sale price plus interest. The Fund may use reverse
repurchase agreements for liquidity and may enable the Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous.
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 maintained until the transaction is settled. Temporary Investments. There
may be times when market conditions warrant a defensive position. During these
market conditions the Fund may temporarily invest without limit in short-term
debt obligations (money market instruments). These investments include
commercial paper, bank instruments, U.S. government obligations, repurchase
agreements, and securities of other investment companies. The Fund's temporary
investments must be of comparable quality to its primary investments. Warrants
give the Fund the option to buy the issuer's stock or other equity securities at
a specified price. The Fund may buy the designated shares by paying the exercise
price before the warrant expires. Warrants may become worthless if the price of
the stock does not rise above the exercise price by the expiration date. Rights
are the same as warrants, except they are typically issued to existing
stockholders. When-Issued and Delayed Delivery Transactions. These transactions
are made to secure what is considered to be an advantageous price or yield.
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. Other than normal transaction costs, no fees or expenses are incurred.
However, liquid assets of the Fund are segregated on the Fund's records at the
trade date in an amount sufficient to make payment for the securities to be
purchased. These assets are marked to market daily and are maintained until the
transaction has been settled. INVESTMENT LIMITATIONS FUNDAMENTAL LIMITATIONS The
following investment limitations are fundamental and cannot be changed without
the vote of a majority of shareholders. 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.
Non-Fundamental Limitations
The following investment limitations are non-fundamental and, therefore, may be
changed by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these limitations becomes effective.
Investing in Illiquid and Restricted 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.
Investing in Securities of Other Investment Companies
The Fund will limit its investment in other investment companies to no more than
3% of the total outstanding voting stock of any investment company, will invest
no more than 5% of total assets in any one investment company, and will invest
no more than 10% of its total assets in investment companies in general, unless
permitted to exceed these limits by an exemptive order of the SEC. The Fund will
purchase securities of closed-end investment companies only in open market
transactions involving only customary broker's commissions. However, these
limitations are not applicable if the securities are acquired in a merger,
consolidation, reorganization, or acquisition of assets.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Fund's portfolio 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 a national securities exchange or the
over-the-counter 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 for short-term obligations, according to the mean between bid and asked prices
as furnished by an independent pricing service, except that short-term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as determined
in good faith by the Board; and
o for all other securities, at fair value as determined in good faith by
the Board.
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, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker-dealers or
other financial institutions that trade the securities.
Trading in Foreign Securities. Trading in foreign securities may be completed at
times which vary from the closing of the New York Stock Exchange (NYSE). In
computing its NAV, the Fund values foreign securities at the latest closing
price on the exchange on which they are traded immediately prior to the closing
of the NYSE. Certain foreign currency exchange rates may also be determined at
the latest rate prior to the closing of the NYSE. Foreign securities quoted in
foreign currencies are translated into U.S. dollars at current rates.
Occasionally, events that affect these values and exchange rates may occur
between the times at which they are determined and the closing of the NYSE. If
such events materially affect the value of portfolio securities, these
securities may be valued at their fair value as determined in good faith by the
Fund's Board, although the actual calculation may be done by others. WHAT DO
SHARES COST?
The Fund's net asset value (NAV) per share fluctuates and is based on the market
value of all securities and other assets of the Fund.
Reducing or Eliminating the Front-End Sales Charge. You can reduce or eliminate
the applicable front-end sales charge, as follows:
Quantity Discounts. Larger purchases reduce the sales charge you pay. You can
combine purchases of shares made on the same day by you, your spouse, and your
children under age 21. In addition, purchases made at one time by a trustee or
fiduciary for a single trust estate or a single fiduciary account can be
combined.
Accumulated Purchases. If you make an additional purchase of shares, you can
count previous share purchases still invested in the Fund in calculating the
applicable sales charge on the additional purchase.
Concurrent Purchases. You can combine concurrent purchases of two or more WCT
Funds, when and if created, or two or more Federated Funds (as defined in the
prospectus) in calculating the applicable sales charge.
Letter of Intent. You can sign a letter of intent committing to purchase a
certain amount of shares within a 13 month period in order to combine such
purchases in calculating the applicable sales charge. The Fund's custodian will
hold shares in escrow equal to the maximum applicable sales charge. If you
complete your commitment, the escrowed shares will be released to your account.
If you do not complete your commitment within 13 months, the custodian will
redeem an appropriate number of escrowed shares to pay for the applicable sales
charge.
Reinvestment Privilege. You may reinvest, within 30 days, your share redemption
proceeds at the next determined NAV, without any sales charge. This sales charge
elimination is offered because a sales charge was previously assessed.
Purchases with Proceeds from Redemptions of Unaffiliated Mutual Fund Shares. You
may purchase shares of the Fund at net asset value 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 you in writing, or by your financial
institution, at the time the purchase is made. To provide adequate proof, you
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.
Purchases by Affiliates of the Fund. Shares of the Fund may be purchased at net
asset value 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. 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.
HOW IS THE FUND SOLD?
Under the distributor's contract with the Fund, the Distributor (Edgewood
Services, Inc.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers shares on a continuous, best-efforts basis.
FRONT-END SALES CHARGE REALLOWANCES
The Distributor receives a front-end sales charge on certain share sales. The
Distributor generally pays up to 85% of this charge to investment professionals
for sales and/or administrative services. Any payments to investment
professionals in excess of 85% of the front-end sales charge are considered
supplemental payments. The Distributor retains any portion not paid to a
financial intermediary.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services, a subsidiary of Federated, for
providing shareholder services and maintaining shareholder accounts. Federated
Shareholder Services may select others to perform these services for their
customers and may pay them fees.
RULE 12B-1 PLAN
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of bank, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professional) to promote
sales of shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and share redemptions. Also, the
Fund's service providers that receive asset-based fees also benefit from stable
or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services may be reimbursed by the
Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid 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. These payments will be based upon the amount of Shares the
investment professional sells or may sell and/or upon the type and nature of
sales or marketing support furnished by the financial intermediary.
HOW TO BUY SHARES
SUBACCOUNTING SERVICES
Investment professionals are encouraged to open single master accounts. However,
certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding shares in a fiduciary, agency,
custodial, or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services they provide that may be related to the ownership
of shares. This information should, therefore, be read together with any
agreement between the customer and the financial intermediary with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.
ACCOUNT AND SHARE INFORMATION
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of the Trust have
equal voting rights, except that in matters affecting only a particular fund or
class, only shares of that fund or class are entitled to vote.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Trustees upon the
written request of shareholders who own at least 10% of the Trust's outstanding
shares of all series entitled to vote.
As of ___________________, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares:
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 income tax because it expects to meet requirements
of Subchapter M of the Internal Revenue Code (Code) applicable to regulated
investment companies and to receive the special tax treatment afforded such
companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
FOREIGN INVESTMENTS
If the Fund purchases foreign securities, their investment income may be subject
to foreign withholding or other taxes that could reduce the return on these
securities. Tax treaties between the United States and foreign countries,
however, may reduce or eliminate the amount of foreign taxes to which the Fund
would be subject. The effective rate of foreign tax cannot be predicted since
the amount of Fund assets to be invested within various countries is uncertain.
However, the Fund intends to operate so as to qualify for treaty-reduced tax
rates when applicable.
Distributions from the Fund may be based on estimates of book income for the
year. Book income generally consists solely of the coupon income generated by
the portfolio, whereas tax basis income includes gains or losses attributable to
currency fluctuation. Due to differences in the book and tax treatment of fixed
income securities denominated in foreign currencies, it is difficult to project
currency effects on an interim basis. Therefore, to the extent that currency
fluctuations cannot be anticipated, a portion of distributions to shareholders
could later be designated as a return of capital, rather than income, for income
tax purposes, which may be of particular concern to simple trusts.
If the Fund invests in the stock of certain foreign corporations, they may
constitute Passive Foreign Investment Companies (PFIC), and the Fund may be
subject to federal income taxes upon disposition of PFIC investments.
WHO MANAGES AND PROVIDES SERVICES TO THE FUND?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes the following
data: name, address, birthdate, present position(s) held with the Trust,
principal occupations for the past five years and total compensation received as
a Trustee from the Trust for its most recent fiscal year. The Trust is comprised
of one fund. As of ____________________, the Fund's Board and Officers as a
group owned less than 1% of the Fund's outstanding shares.
An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.
John F. Donahue*#
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA
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 Federated Fund Complex.
Mr. Donahue is the father of J. Christopher Donahue, Executive Vice President of
the Trust.
Compensation from Trust $0
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
Federated Fund Complex.
Compensation from Trust $______
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
Federated Fund Complex.
Compensation from Trust $______
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 Federated Fund Complex.
Compensation from Trust $___
James E. Dowd
571 Hayward Mill Road, Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director or Trustee
of the Federated Fund Complex.
Compensation from Trust $______
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 Federated Fund
Complex.
Compensation from Trust $______
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 Federated Fund Complex.
Compensation from Trust $______
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 Federated Fund Complex.
Compensation from Trust $______
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 &
Murray; Director or Trustee of the Federated Fund Complex.
Compensation from Trust $______
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 Federated
Fund Complex.
Compensation from Trust $______
Marjorie P. Smuts
4905 Bayard Street, Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public Relations/Marketing/Conference Planning; Director or Trustee of the
Federated Fund Complex.
Compensation from Trust $______
J. Christopher Donahue
Federated Investors Tower, 1001 Liberty Avenue, 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 Federated Fund Complex; Director or Trustee of some of the
Funds in the Federated Fund Complex. Mr. Donahue is the son of John F. Donahue,
Chairman and Trustee of the Trust.
Compensation from Trust $0
Edward C. Gonzales *
Federated Investors Tower, 1001 Liberty Avenue, 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 in the
Federated Fund Complex; President, Executive Vice President and Treasurer of
some of the Funds in the Federated Fund Complex.
Compensation from Trust $0
John W. McGonigle
Federated Investors Tower, 1001 Liberty Avenue, 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 Federated Fund Complex;
Treasurer of some of the Funds in the Federated Fund Complex.
Compensation from Trust $0
Richard B. Fisher *
Federated Investors Tower, 1001 Liberty Avenue, 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 in the Federated Fund Complex; Director or Trustee of some of the Funds in
the Federated Fund Complex.
Compensation from Trust $0
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.
Compensation from Trust $0
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.
The Adviser and the Sub-Adviser shall not be liable to the Trust, the Fund, or
any Fund shareholder for any losses that may be sustained in the purchase,
holding, 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 Trust.
Advisory Fees. Gross income includes, in general, discount earned on U.S.
Treasury bills and agency discount notes, interest earned on all
interest-bearing obligations, and dividend income recorded on the ex-dividend
date but does not include capital gains or losses or reduction for expenses.
The Adviser must waive the portion of its advisory fee that increases the Fund's
aggregate annual operating expenses above .75% of its average daily net assets.
The Fund's operating expenses include the advisory fee but exclude interest,
taxes, brokerage commissions, expenses of registering the Fund and its shares
under federal and state laws, expenses of withholding taxes, and extraordinary
expenses. Because of internal controls maintained by West Coast Trust Company,
Inc. and Becker Capital Management, Inc. to restrict the flow of non-public
information, Fund investments are typically made without any knowledge of West
Coast Trust or Becker Management Capital, Inc.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The 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 Adviser may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling shares of the Fund
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Fund's Board.
Research Services. Research services 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 may be used by the Adviser or by the Sub-Adviser in
advising other accounts. To the extent that receipt of these services may
replace services for which the Adviser or Sub-Adviser might otherwise have paid,
it would tend to reduce their expenses. The Adviser and Sub-Adviser exercise
reasonable business judgment in selecting those 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.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser and Sub-Adviser. When the Fund and one or more
of those accounts invests in, or disposes of, the same security, available
investments or opportunities for sales will be allocated among the Fund and the
account(s) in a manner believed by the Adviser and Sub-Adviser to be equitable.
While the coordination and ability to participate in volume transactions may
benefit the Fund, it is possible that this procedure could adversely impact the
price paid or received and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated Investors, Inc., provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate the Fund. Federated Services Company
provides these at the following annual rate as specified below:
Maximum Average Aggregate Daily Net
Administrative Fee Assets of the Trust
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000. Federated Services Company may voluntarily waive a portion of its fee
and may reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets, plus out-of-pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Funds pays the transfer agent a fee based on the size, type, and
number of accounts and transactions made by shareholders.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP is the independent public accountant for the Fund.
<PAGE>
FEES PAID BY THE FUND FOR SERVICES
For the period from November 17, 1997 (start of business) to October 31, 1998
Advisory Fee...................$
Sub-Advisory Fee...............$
Brokerage Commissions..........$
Administrative Fee.............$
12b-1 Fee......................$
Shareholder Services Fee.......$
If the Fund's expenses are capped at a particular level, the cap does not
include reimbursement to the Fund of any expenses incurred by shareholders who
use the transfer agent's subaccounting facilities.
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund may advertise share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
Unless otherwise stated, any quoted share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings and
offering price per share fluctuate daily. Both net earnings and offering price
per share are factors in the computation of yield and total return.
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for shares 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 NAV 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, less any applicable sales charge, adjusted over the
period by any additional shares, assuming the annual reinvestment of all
dividends and distributions.
When shares of a fund are in existence for less than a year, the fund may
advertise cumulative total return for that specific period of time, rather than
annualizing the total return.
YIELD
The yield of shares is calculated by dividing: (i) the net investment income per
share earned by the shares over a thirty-day period; by (ii) the maximum
offering price per share on the last day of the period. This number is then
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 shares because of certain
adjustments required by the SEC and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.
To the extent investment professional and broker/dealers charge fees in
connection with services provided in conjunction with an investment in shares,
the share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
o references to ratings, rankings, and financial publications and/or performance
comparisons of shares to certain indices;
o charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
o discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
o information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the 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:
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.
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.
FINANCIAL INFORMATION
The Financial Statements for the Fund for the fiscal year ended October 31, 1998
are incorporated herein by reference to the Annual Report to Shareholders of WCT
Equity Fund dated October 31, 1998.
<PAGE>
ADDRESSES
WCT Equity Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
Distributor
Edgewood Services, Inc. Clearing Operations
P.O. Box 897,
Pittsburgh, Pennsylvania 15230-0897
Investment Adviser
West Coast Trust Company, Inc. 1000 Broadway, Suite 1100
Portland, Oregon 97205
Sub-Investment Adviser
Becker Capital Management, Inc. 1211 SW Fifth Avenue, Suite 2185
Portland, Oregon 97205
Custodian
State Street Bank and Trust Company P.O. Box 1713
Boston, Massachusetts 02266-1713
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
PART C. OTHER INFORMATION.
Item 23. Financial Statements and Exhibits:
(a) Financial Statements (To be filed by amendment).
(b) Exhibits:
(1) Conformed copy of Declaration of Trust of the
Registrant;(1) (2) Copy of By-Laws of the Registrant;(1)
(i) Copy of Amendment No. 1 to the Bylaws;+
(ii) Copy of Amendment No. 2 to the Bylaws;+
(iii)Copy of Amendment No. 3 to the Bylaws;+
(3) Not applicable;
(4) Not applicable;
(5) (i) Conformed copy of Investment Advisory Contract of
the Registrant;(3) (ii) Conformed copy of Sub-Advisory
Agreement of the Registrant;(3)
(6) (i) Conformed copy of Distributor's Contract of the
Registrant;(3) (ii) Conformed copy of Administrative
Services Agreement of the Registrant;(3)
(iii) Conformed copy of Sales Agreement of the
Registrant;(3) (7) Not applicable; (8) Conformed copy of
Custodian Agreement of the Registrant;(3) (9) (i) Conformed
copy of Transfer Agency and Service Agreement of the
Registrant;(3)
(ii) Conformed copy of Shareholder Services Agreement
of the Registrant;(3) (iii) Conformed copy of
Shareholder Services Plan of the Registrant;(3) (iv)
Conformed copy of Electronic Communications and
Recordkeeping Agreement;+
(10) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered;(3) (11) (i) Conformed
copy of Consent of Independent Public Accountants;(3)
(ii) Not applicable;
(12) Not applicable;
(13) Conformed copy of Initial Capital Understanding;(3) (14)
Not applicable; (15) (i) Conformed copy of Distribution
Plan;(3)
(ii) Conformed copy of 12b-1 Agreement;(3)
(16) Schedule for Computation of Fund Performance Data;
(to be filed by amendment)
- -----------------
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed September 17, 1997. (File Nos. 333-35785 and
811-08335).
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 2 Registration Statement on Form N-1A filed October 2, 1997.
(File Nos. 333-35785 and 811-08335).
3. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 3 Registration Statement on Form N-1A filed November 25,
1997. (File Nos. 333-35785 and 811-08335).
(17) Financial Data Schedule; (18) Not applicable; (19) Power
of Attorney.(2)
Item 24. Persons Controlled by or Under Common Control with Registrant:
No persons are controlled by the Registrant.
Item 25. Indemnification:
Indemnification is provided to Officers and Trustees of the
Registrant pursuant to (Section 4 of Article XI of Registrant's
Declaration of Trust. The Investment Advisory Contract between the
Registrant and West Coast Trust Company, Inc. ("Adviser") provides
that, in the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties under
the Investment Advisory Contract on the part of Adviser, Adviser
shall not be liable to the Registrant or to any shareholder for any
act or omission in the course of or connected in any way with
rendering services or for any losses that may be sustained in the
purchase, holding, or sale of any security. Registrant's Trustees
and Officers are covered by an Investment Trust Errors and Omissions
Policy.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, Officers, and
controlling persons of the Registrant by the Registrant pursuant to
the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by Trustees, Officers,
or controlling persons of the Registrant in connection with the
successful defense of any act, suit, or proceeding) is asserted by
such Trustees, Officers, or controlling persons in connection with
the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final
adjudication of such issues.
Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940 for Trustees,
Officers, and controlling persons of the Registrant by the
Registrant pursuant to the Declaration of Trust or otherwise, the
Registrant is aware of the position of the Securities and Exchange
Commission as set forth in Investment Company Act Release No.
IC-11330. Therefore, the Registrant undertakes that in addition to
complying with the applicable provisions of the Declaration of Trust
or otherwise, in the absence of a final decision on the merits by a
court or other body before which the proceeding was brought, that an
indemnification payment will not be made unless in the absence of
such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of non-party
Trustees who are not interested persons of the Registrant or (ii) by
independent legal counsel in a written opinion that the indemnitee
was not liable for an act of willful misfeasance, bad faith, gross
negligence, or reckless disregard of duties. The Registrant further
undertakes that advancement of expenses incurred in the defense of a
proceeding (upon undertaking for repayment unless it is ultimately
determined that indemnification is appropriate) against an Officer,
Trustee, or controlling person of the Registrant will not be made
absent the fulfillment of at least one of the following conditions:
(i) the indemnitee provides security for his undertaking; (ii) the
Registrant is insured against losses arising by reason of any lawful
advances; or (iii) a majority of a quorum of disinterested non-party
Trustees or independent legal counsel in a written opinion makes a
factual determination that there is reason to believe the indemnitee
will be entitled to indemnification.
Item 26. Business and Other Connections of Investment Adviser:
(a) West Coast Trust Company, Inc. ("West Coast Trust") is a
registered investment adviser providing investment management
services to individuals and institutional clients. West Coast
Trust is a wholly-owned subsidiary of West Coast Bancorp
("Bancorp"). Organized in 1981, Bancorp is the second largest
bank holding company based in Oregon. through its subsidiaries
and affiliates, Bancorp offers a full range of commercial
banking services, including trust services to individuals,
partnerships, corporations, and institutions and acts as
fiduciary of estates and conservatorships, and as a trustee
under various wills, trusts and pension and profit-sharing
plans. In addition, Bancorp and its subsidiaries offer
tax-deferred annuities, single-premium whole life insurance,
other insurance investment products and securities products.
West Coast Trust has common and collective funds with assets
totaling approximately $712.3 million as December 31, 1997.
West Coast Trust has managed the WCT Funds since its inception
in October 1997.
The principal executive officers and Directors of West Coast
Trust are set forth in the following table. Unless otherwise
noted, the position listed under Other Substantial Business,
Profession, Vocation or Employment is with West Coast Trust.
Other Substantial
Position With Business,Profession,
Name the Adviser Vocation or Employment
Andrew J. Gerlicher President/Director
Marvin C. Abeene Senior Vice President/
Trust Branch Manager
Cheryl Pfenning Assistant Vice President/
Operations Manager and
Compliance Officer
Fred Springsteen Vice President/Newport
Trust Manager
James B. Titus Vice President/Employee
Sales & Administration
<PAGE>
Rick Trout Vice President - Portland/
Vancouver Trust Manager
Dennis B. Munsey Sales Manager
Michael J. Bragg Chairman of the Board/ Attorney-at-law,
Director Grenley, Rotenberg,
Evans, Bragg &
Bodie, PC
David C. Grove, Sr. Vice Chairman of the President, Grove
Board/Director Securities, Inc.
J. F. Ouderkirk Director Attorney-at-law,
Richardson,
Ouderkirk & Hollen
Rodney B. Tibbatts Director Executive Vice
President/Director of Corporate
Development, West Coast Bancorp
Forrest A. Weil Director Personal Investment
Gary D. Putnam Director Executive Vice
President & CFO
Brentwood, Inc.
(b) Becker Capital Management, Inc. ("Becker") is a registered
investment advisory firm founded in 1976 as P.E. Becker, Inc.
Becker manages assets totaling approximately $2.0 billion for
individuals, corporate pensions, and profit sharing trusts,
multi-employer trusts and endowment funds.
Becker is managed by Patrick E. Becker, Chairman and Chief
Investment Officer; Gerald N. Brown, Equity Trader; Warren
Hastings III C.F.A., Vice President, Fixed Income Portfolio
Manager; Stephen D. Laveson, Vice President, Director of
Fundamental Analysis; Michael C. Malone, Vice President,
Investments; Janeen S. McAninch, President and Chief Operations
Officer; Michael F. McCoy Ph.D., Vice President, Director of
Quantitative Analysis; Michael A. McGarr C.F.A., Senior Research
Analyst; Robert N. Schaeffer, Vice President, Equity Portfolio
Manager; and Donald L. Wolcott C.F.A., Vice President, Portfolio
Manager.
Item 27. Principal Underwriters:
(a) Edgewood Services, Inc. the Distributor for shares of the
Registrant, acts as principal underwriter for the following
open-end investment companies, including the Registrant: BT
Advisor Funds, BT Pyramid Mutual Funds, BT Investment Funds, BT
Institutional Funds, Excelsior Institutional Trust (formerly,
UST Master Funds, Inc.), Excelsior Tax-Exempt Funds, Inc.
(formerly, UST Master Tax-Exempt Funds, Inc.), Excelsior
Institutional Trust, FTI Funds, FundManager Portfolios,
Marketvest Funds, Marketvest Funds, Inc.
and Old Westbury Funds, Inc.
<PAGE>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Lawrence Caracciolo Director, President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Arthur L. Cherry Director, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
J. Christopher Donahue Director, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas P. Sholes Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Ronald M. Petnuch Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas P. Schmitt Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Assistant Secretary
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas J. Ward Assistant Secretary, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Kenneth W. Pegher, Jr. Treasurer, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Item 28. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:
WCT Funds Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Shareholder Services Company P.O. Box 8600
Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and Shareholder
Servicing Agent
Federated Services Company Federated Investors Tower
Administrator Pittsburgh, PA 15222-3779
West Coast Trust Company, Inc. 1000 Broadway, Suite 1100
Adviser Portland, OR 97205
Becker Capital Management, Inc. 1211 SW Fifth Avenue,
Sub-Adviser Ste. 2185
Portland, OR 97204
State Street Bank and Trust Company P.O. Box 8600
Custodian Boston, MA 02266-8600
Arthur Andersen LLP 2100 One PPG Place
Independent Public Accountants Pittsburgh, PA 15222
Item 29. Management Services: Not applicable.
Item 30. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, WCT FUNDS, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on
the 30th day of October, 1998.
WCT FUNDS
BY: /s/C. Todd Gibson,
C. todd Gibson, Assistant Secretary
Attorney in Fact for John F. Donahue
October 30, 1998
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
NAME TITLE DATE
By: /s/C. Todd Gibson
C. Todd Gibson Attorney In Fact October 30,1998
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Treasurer and Trustee
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 2(i) under Form N-1A
Exhibit 3(b) under Item 601/Reg.S-K
WCT Funds
Amendment #1
to the By-Laws
(effective February 23, 1998)
Delete Sections 1, 2 and 3 of Article I, OFFICERS AND THEIR ELECTION, and
replace with:
Section 1. Officers. The Officers of the Trust shall be a President, one
or more Vice Presidents, a Treasurer, and a Secretary. The Board of
Trustees, in its discretion, may also elect or appoint a Chairman of the
Board of Trustees (who must be a Trustee) and other Officers or agents,
including one or more Assistant Vice Presidents, one or more Assistant
Secretaries, and one or more Assistant Treasurers. A Vice President, the
Secretary or the Treasurer may appoint an Assistant Vice President, an
Assistant Secretary or an Assistant Treasurer, respectively, to serve
until the next election of Officers. Two or more offices may be held by a
single person except the offices of President and Vice President may not
be held by the same person concurrently. It shall not be necessary for any
Trustee or any Officer to be a holder of shares in any Series or Class of
the Trust.
Section 2. Election of Officers. The Officers shall be elected annually by
the Trustees. Each Officer shall hold office for one year and until the
election and qualification of his successor, or until earlier resignation
or removal. The Chairman of the Board of Trustees, if there is one, shall
be elected annually by and from the Trustees, and serve until a successor
is so elected and qualified, or until earlier resignation or removal.
Section 3. Resignations and Removals and Vacancies. Any Officer of the
Trust may resign at any time by filing a written resignation with the
Board of Trustees (or Chairman of the Trustees, if there is one), with the
President, or with the Secretary. Any such resignation shall take effect
at the time specified therein or, if no time is specified, at the time of
receipt. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. Any Officer
elected by the Board of Trustees or whose appointment has been ratified by
the Board of Trustees may be removed with or without cause at any time by
a majority vote of all of the Trustees. Any other employee of the Trust
may be removed or dismissed at any time by the President. Any vacancy in
any of the offices, whether by resignation, removal or otherwise, may be
filled for the unexpired portion of the term by the President. A vacancy
in the office of Assistant Vice President may be filled by a Vice
President; in the office of Assistant Secretary by the Secretary; or in
the office of Assistant Treasurer by the Treasurer. Any appointment to
fill any vacancy shall serve subject to ratification by the Board of
Trustees at its next regular meeting.
Exhibit 2(ii) under Form N-1A
Exhibit 3(b) under Item 601/Reg.S-K
WCT Funds
Amendment #2
to the By-Laws
(effective February 27, 1998)
Delete Section 5 Proxies of Article IV Shareholders' Meetings, and replace with
the following:
Section 5. Proxies. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person, by telephone, by electronic means
including facsimile, or by proxy, but no proxy which is dated more than
six months before the meeting named therein shall be accepted unless
otherwise provided in the proxy. Every proxy shall be in writing,
subscribed by the shareholder or his duly authorized agent or be in such
other form as may be permitted by law, including documents conveyed by
electronic transmission. Every proxy shall be dated, but need not be
sealed, witnessed or acknowledged. The placing of a shareholder's name on
a proxy or authorizing another to act as the shareholder's agent, pursuant
to telephone or electronically transmitted instructions obtained in
accordance with procedures reasonably designed to verify that such
instructions have been authorized by such shareholder, shall constitute
execution of a proxy by or on behalf of such shareholder. Where Shares are
held of record by more than one person, any co-owner or co-fiduciary may
execute the proxy or give authority to an agent, unless the Secretary of
the Trust is notified in writing by any co-owner or co-fiduciary that the
joinder of more than one is to be required. All proxies shall be filed
with and verified by the Secretary or an Assistant Secretary of the Trust,
or the person acting as Secretary of the Meeting. Unless otherwise
specifically limited by their term, all proxies shall entitle the holders
thereof to vote at any adjournment of such meeting but shall not be valid
after the final adjournment of such meeting.
Exhibit 2(iii) under Form N-1A
Exhibit 3(b) under Item 601/Reg.S-K
WCT Funds
Amendment #3
to the By-Laws
(effective May 12, 1998)
Strike Section 3 - Place of Meeting of Article IV - Shareholders' Meetings and
replace it with the following:
Section 3. Place of Meeting. Meetings of the shareholders of the Trust or
a particular Series or Class shall be held at such place within or without
The Commonwealth of Massachusetts as may be fixed from time to time by
resolution of the Trustees.
Strike Section 6 - Place of Meeting of Article V - Trustees' Meetings and
replace it with the following:
Section 6. Place of Meeting. Meetings of the Trustees shall be held at
such place within or without The Commonwealth of Massachusetts as fixed
from time to time by resolution of the Trustees, or as the person or
persons requesting said meeting to be called may designate, but any
meeting may adjourn to any other place.
Exhibit 9(iv) under Form N-1A
Exhibit 10 under Item 601/Reg.S-K
ELECTRONIC COMMUNICATIONS AND RECORDKEEPING
AGREEMENT
between
FEDERATED SHAREHOLDER SERVICES COMPANY
and
WEST COAST TRUST COMPANY, INC.
AGREEMENT, made this 1st day of December, 1997, between FEDERATED
SHAREHOLDER SERVICES COMPANY on behalf of itself and its affiliates
("Federated"), with offices at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, and WEST COAST TRUST COMPANY, INC., on behalf of itself
and its affiliates and subsidiaries (the "Institution"), with offices at Salem,
Oregon.
WHEREAS, Institution desires to perform certain services on behalf of its
customers who are or may become Shareholders of mutual funds for which Federated
provides transfer agency services; and
WHEREAS, performance of such services may require access to Federated's
electronic communication and recordkeeping systems or may require Federated or
the Funds to act upon information about Shareholders (as hereafter defined) or
their Accounts (as hereafter defined) supplied by Institution;
WHEREAS, Federated is willing to provide such access or rely upon such
information as hereinafter provided, subject to the agreement of Institution to
provide indemnification to Federated;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for good and valuable consideration, receipt of which is hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:
SECTION 1
CERTAIN DEFINITIONS
Section 1.1 Account. "Account" shall mean any shareholder account in any
Fund for which Institution provides services on behalf of its customers who are
or may become shareholders of the Funds.
Section 1.2 Authorized Person. "Authorized Person" shall mean each agent
or employee of Institution who is duly authorized to give Instructions (as such
term is defined below at Section 1.3) pursuant to this Agreement.
Section 1.3 Instruction(s). "Instruction(s)" shall mean any instruction or
communication including, but not limited to, an oral or written instruction or
communication, and any such instruction or communication originated by facsimile
indicating that such transmission originated from Institution, and instructions
or communications received electronically. Instructions may include, but are not
limited to, the following:
<PAGE>
(a) communicating account openings through computer terminals located on
the Institution's premises (the "computer terminals"), through a
toll-free telephone number or otherwise;
(b) communicating account closings via the computer terminals, through a
toll-free telephone number or otherwise;
(c) entering purchase transactions through the computer terminals, through
a toll-free telephone number or otherwise;
(d) entering redemption transactions through the computer terminals,
through a toll-free telephone number or otherwise;
(e) electronically transferring and receiving funds for purchasing and
redeeming shares of a Fund, and confirming and reconciling all such
transactions; and
(f) account maintenance activity in Fund accounts.
Section 1.4 Shareholder. "Shareholder" shall mean the shareholder of record
of any Account.
SECTION 2
OBLIGATIONS OF INSTITUTION
Section 2.1 Authorization by Institution; Confirmation of Oral
Instructions. Institution hereby authorizes Federated to accept, rely upon and
act upon all Instructions received by Federated from or reasonably believed to
be from Institution, all without the delivery by Institution of written
authorization of the Shareholder. Institution authorizes Federated to accept,
rely upon and act upon oral Instructions by any person identifying himself as an
Authorized Person and to tape record such Instructions. Institution shall
confirm all oral Instructions on the same day as given by facsimile, however,
Federated may rely on the oral Instructions regardless of whether such facsimile
is received.
Section 2.2 Duties, Functions and Responsibilities. Institution shall
undertake the duties, functions and responsibilities contemplated hereby in a
businesslike and competent manner. Institution shall conduct its activities
under this Agreement in accordance with (a) all applicable laws, rules and
regulations; (b) the then-current registration statements of the Funds; and (c)
industry standards.
Section 2.3 Information about Shareholders. Institution shall provide to
Federated, with respect to each Account, the following information, and any
subsequent changes to such information, which Institution hereby certifies, to
the extent of its knowledge, information and belief, is, and shall remain, true
and correct: (a) the full and complete name of the Shareholder for Internal
Revenue Service information reporting; (b) the Shareholder's address; (c) the
Shareholder's Taxpayer Identification Number or notice of foreign status and
applicable backup or penalty withholding status; and (d) the state or country
code of tax residence of the Shareholder (if different from address).
Institution shall provide Federated with such information in writing or by
electronic transmission and any other medium that Federated reasonably requests.
Section 2.4 Reconciling to Fund Records. The book entry records of the
shareholder recordkeeping agent for each Fund shall be determinative with
respect to each Account. In the event Institution maintains records, e.g. for
omnibus accounts, Institution will notify Federated in writing of any
discrepancy between its records and the records of Federated and the Fund within
a reasonable period of time after it becomes aware of such discrepancy.
Notwithstanding anything to the contrary, Institution solely shall be
responsible and liable for any discrepancies between its records and the records
of Federated and the Funds, provided that such discrepancy is not solely a
result of the negligence of Federated or the Funds.
Section 2.5 Retirement Accounts To the extent Institution provides any
processing required in connection with acceptance of retirement plan accounts,
including Individual Retirement Accounts ("IRA's") as defined under section 408
of the Internal Revenue Code, as amended, Institution agrees to be responsible
for all required documentation in connection with such accounts, specifically
including acceptance on behalf of the retirement plan custodian. Federated
hereby authorizes Institution to provide such authorization in the name of such
custodian or trustee.
ARTICLE 3
OBLIGATIONS OF FEDERATED
Section 3.1 Acceptance of Instructions. Federated may, for all Accounts,
accept, rely upon and act upon all Instructions received by Federated from or
reasonably believed to be from Institution, all without the delivery by
Institution of written Instructions executed by a Shareholder.
Section 3.2 Reliance by Federated. Federated may conclusively rely upon
any Instructions received by it by any person whom Federated reasonably believes
to be an Authorized Person.
Section 3.3 Incomplete or Unclear Instructions. Federated shall not be
required to act on any Instructions that, in its sole determination, are
incomplete or unclear, and may defer action on such Instructions until Federated
has resolved any question to its reasonable satisfaction. Federated shall notify
Institution, by telephone or by facsimile, within one business day after it
fails to act on any Instructions that it has determined are incomplete or
unclear.
Section 3.4 Limitation of Access to Federated's Electronic Communication
and Recordkeeping Systems. Federated may limit access to its electronic
communication and recordkeeping systems. Notwithstanding any such limitation,
Federated may act and rely upon all Instructions in any form received by
Federated from or reasonably believed to be from an Authorized Person.
Section 3.5 Processing Instructions and Communications. Federated shall
correctly process any Instructions from Institution and execute the
Institution's Instructions within a reasonable period of time of receipt,
subject to any conditions or restrictions in the currently effective
registration statement of each Fund or other applicable restrictions.
Section 3.6 Performance as Transfer Agent. Federated shall perform all of
its obligations properly assigned to it under the Agreement for Fund Accounting,
Shareholder Recordkeeping, and Custody Services Procurement dated as of January
1, 1996.
<PAGE>
ARTICLE 4
WARRANTIES AND REPRESENTATIONS OF INSTITUTION
Section 4.1 Organization and Authority. Institution warrants and
represents that it is a Bank and Trust company duly organized in the
Commonwealth of pennsylvania and has the power and authority to conduct its
business. The execution, delivery and performance by Institution of this
Agreement has been duly authorized by all necessary corporate action of
Institution. This Agreement, when executed and delivered, will constitute the
legal, valid and binding obligation of Institution, enforceable against it in
accordance with its terms.
Section 4.2 Adequate Facilities. Institution warrants and represents that
it has adequate facilities, equipment, procedures, controls and skilled
personnel to responsibly perform its duties and obligations hereunder.
Section 4.3 Authorization from Shareholders; and Notification to
Shareholders. Institution warrants and represents that:
4.3.1 each Shareholder has authorized Institution to act as
Shareholder's agent and to take any actions contemplated in this
Agreement with respect to each Account of each Shareholder;
4.3.2 Institution shall refrain from issuing Instructions with
respect to a Shareholder's Account immediately upon receipt of
notice that the Shareholder has revoked authorization to give such
Instructions;
4.3.3 all Instructions, including, but not limited to, changes in
registration, transfers, exchanges and liquidations, will be duly
authorized by the Shareholder of such Account and shall be lawful
and not submitted for any improper, inappropriate or illegal
purpose; and
4.3.4 Federated is properly authorized to effect changes in its or
the Funds records upon receipt of Instructions.
Section 4.4 Insurance. Institution warrants and represents that
Institution maintains adequate fidelity insurance, errors and omissions
insurance and other insurance coverage appropriate for the Institution's duties
and obligations under this Agreement. Upon written request, Institution will
provide evidence of such insurance coverage and on each such policy or bond.
Section 4.5 Taxpayer Identification. Institution warrants and represents
that each Taxpayer Identification Number or certificate of foreign status
provided by Institution to the Funds and Federated has been certified, under
penalties of perjury, by the Shareholder on the appropriate Internal Revenue
Service form or an acceptable substitute. Institution agrees that it shall
promptly advise the Funds or Federated of any other matter that may affect the
responsibilities of the Funds or Federated to Shareholders pursuant to the
Internal Revenue Code of 1986, as amended. Institution further agrees that it
shall maintain adequate documentation to verify the foregoing for each Account.
<PAGE>
Section 4.6 Authority of Authorized Persons. Institution warrants and
represents that:
4.6.1 each Authorized Person set forth on the Certificate has been
duly authorized by a duly elected officer of Institution to provide
Instructions pursuant to this Agreement;
4.6.2 Institution shall adopt, implement and maintain procedures
reasonably designed to ensure the accuracy and integrity of all
Instructions, including, but not limited to, procedures (i)
requiring all Instructions on behalf of Institution to originate
from a specific office (or offices) designated by Institution; and
(ii) limiting the use of each computer terminal used for
transmitting Instructions to Federated's electronic communication
and recordkeeping systems to Authorized Persons with adequate
training and supervision. Upon Federated's request, Institution
shall provide Federated with copies of its security procedures with
respect to the foregoing and shall use and safeguard any access
passwords, codes, manuals or other information it obtains with
respect to Federated's electronic communication and recordkeeping
systems and the data thereon in a manner consonant with the
protection of its own proprietary business records.
Section 4.7 Institution's Financial Condition. Institution represents and
warrants that it shall deliver to Federated its audited annual report, its
quarterly financial reports and such other financial statements as Federated
shall reasonably request which indicate the Institution's financial condition
and, if applicable, net capital ratio. Institution further represents and
warrants that such statements fairly represent its financial condition and/or
net capital ratio on the date of such statements and that there has been no
material adverse change in its financial condition and/or net capital ratio
since that date.
Section 4.8 Confidentiality. Institution shall treat as confidential all
data it receives through Federated's electronic communication and recordkeeping
systems, except to the extent required by applicable law, rule or regulation.
ARTICLE 5
WARRANTIES AND REPRESENTATIONS OF FEDERATED
Section 5.1 Organization and Authority. Federated warrants and represents
that it is a business trust duly organized in the State of Delaware and has the
power and authority to conduct its business. The execution, delivery and
performance by Federated of this Agreement has been duly authorized by all
necessary corporate action of Federated. This Agreement, when executed and
delivered, will constitute the legal, valid and binding obligation of Federated,
enforceable against it in accordance with its terms.
Section 5.2 Proper Registration. Federated warrants that it has duly
registered as transfer agent pursuant to the Securities Exchange Act of 1934,
that its registration remains in full force and effect, and that it will take
all action required to maintain such registration as a transfer agent,
including, without limitation, making all required filings to the Securities and
Exchange Commission and complying with all rules of the Securities and Exchange
Commission applicable to transfer agents.
Section 5.3 Adequate Facilities. Federated warrant and represent that they
have adequate facilities, equipment, procedures, controls and skilled personnel
to perform their duties and obligations hereunder.
Section 5.4 Confidentiality. Federated shall treat as confidential all
data they receive from Institution through Federated's electronic communication
and recordkeeping systems, except to the extent required by applicable law, rule
or regulation.
ARTICLE 6
INDEMNIFICATION
Section 6.1 Indemnification by Institution. Institution shall indemnify
and hold harmless the Funds, the Funds' custodian, the Funds' transfer agent,
the Funds' underwriter, the Funds' investment adviser, Federated, each of their
affiliated companies, and all of the divisions, subsidiaries, directors,
trustees, officers, agents, subcontractors, employees and assigns of each of the
foregoing (collectively, "Indemnified Fund Parties"), against and from any and
all demands, damages, liabilities, and losses, or any threatened, pending or
completed actions, claims, suits, complaints, proceedings, or investigations
(including reasonable attorneys' fees and other costs, including all expenses of
litigation or arbitration, judgments, fines or amounts paid in settlement), to
which any of them may be or become subject as a result or arising out of: (a)
any action reasonably taken by Federated in reliance upon the Institution's
Instructions; (b) any act or omission by Institution or its agents which
constitutes negligence, gross negligence, or willful misconduct; (c) any breach
of the Institution's representations or warranties contained in this Agreement;
(d) the Institution's failure to comply with any of the terms of this Agreement;
(e) the failure by Institution to obtain authorization from a Shareholder to
facilitate any transaction through Federated's electronic communication and
recordkeeping systems; and (f) Federated's reasonable acceptance of and reliance
on any Instruction, in accordance with Article 3 of this Agreement without
supporting documentation. An Indemnified Fund Party may make demand for
indemnification for any payment, including any partial payment, made by the
Indemnified Fund Party in respect of any and all demands, damages, liabilities,
and losses, or any threatened, pending or completed actions, claims, suits,
complaints, proceedings, or investigations (including reasonable attorneys fees
and other costs, including all expenses of litigation or arbitration, judgments,
fines or amounts paid in settlement), to which any of them may be or become
subject which give rise to indemnification by Institution under this Agreement.
At the request of any of the Indemnified Fund Parties, Institution shall provide
for an appropriate defense against any circumstances which may give rise to
indemnification by Institution under this Agreement. In no event shall
Institution be liable for demands, damages, liabilities and losses arising out
of failure of its equipment or force majeure. Institution represents and
warrants that at all times it has sufficient financial resources, whether
through a fidelity bond or otherwise, to meet all of its indemnification
obligations arising under this Agreement.
Section 6.2 Indemnification by Federated. Federated shall indemnify and
hold harmless Institution, each of the Institution's affiliated companies, and
all of the divisions, subsidiaries, directors, officers, agents, subcontractors,
employees and assigns of each of the foregoing (collectively, "Indemnified
Institution Parties"), against and from any and all demands, damages,
liabilities, and losses, or any threatened, pending or completed actions,
claims, suits, complaints, proceedings, or investigations (including reasonable
attorneys fees and other costs, including all expenses of litigation or
arbitration, judgments, fines or amounts paid
<PAGE>
in settlement) to which any of them may be or become subject as a result or
arising out of: (a) any act or omission by Federated or its agents which
constitutes negligence, gross negligence or willful misconduct; (b) any breach
of Federated's representations or warranties contained in this Agreement; or (c)
Federated's failure to obtain proper Instructions from Institution; or (d)
Federated's failure to comply with any of the terms of this Agreement. An
Indemnified Institution Party may make demand for indemnification for any
payment, including any partial payment, made by the Indemnified Institution
Party in respect of any and all demands, damages, liabilities, and losses, or
any threatened, pending or completed actions, claims, suits, complaints,
proceedings, or investigations (including reasonable attorneys fees and other
costs, including all expenses of litigation or arbitration, judgments, fines or
amounts paid in settlement), to which any of them may be or become subject which
give rise to indemnification by Institution under this Agreement. At the request
of any of the Indemnified Institution Parties, Federated shall provide for an
appropriate defense against any circumstances which which give rise to
indemnification by Institution under this Agreement. In no event shall Federated
be liable for demands, damages, liabilities and losses arising out of failure of
its equipment or force majeure. Federated represents and warrants that at all
times it has sufficient financial resources, whether through a fidelity bond or
otherwise, to meet all of its indemnification obligations arising under this
Agreement.
Section 6.3 Contribution, Cooperation, Good Faith. The parties recognize
that certain circumstances will arise a loss may not be clearly attributable to
one party or the other. The parties agree to cooperate with each other and to
act in good faith in examining the facts of such situations, and understand that
in certain of such situations it will be appropriate for both the Fund
Indemnified Parties and the Indemnified Institution Parties to contribute to
effect a resolution of the matter.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Termination. Either party may terminate this Agreement upon 30
days' written notice to the other party. The obligations of Article 6 shall
survive the termination of this Agreement.
Section 7.2 Force Majeure. Neither Federated nor Institution shall have no
liability for cessation of services hereunder or any damages resulting therefrom
to Institution as a result of work stoppage, power or other mechanical failure,
natural disaster, governmental action, communication disruption or other
impossibility of performance.
Section 7.3 Choice of Law and Venue. This Agreement shall be governed by,
and construed in accordance with, the laws of The Commonwealth of Pennsylvania,
without regard to conflict of law. The venue shall be The Western District of
Pennsylvania.
Section 7.4 Assignment. This Agreement may not be transferred or assigned
by either party without the prior written consent of the other party (other than
pursuant to a consolidation, merger, transfer of all or substantially all the
assets or other business combination transaction) and any purported transfer or
assignment without such consent will be void.
<PAGE>
Section 7.5 Notice. Whenever notice is required under this Agreement, it
shall be given in writing by first class mail, return receipt requested, to
Federated at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779,
attention: Vice President, Transfer Agency Services, Federated Services Company,
attention: Tom Schmitt; and to West Coast Trust Company, Inc. at Salem, Oregon,
attention: Manager- Trust and Financial Services.
Section 7.6 Integrity of Data. Institution shall take all reasonable steps
to protect and insure the integrity of the data it transmits into Federated's
electronic communication and recordkeeping systems and to prevent the damage of
records maintained by others, including the Funds or Federated.
Section 7.7 Entire Agreement. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and supersedes all oral communications and prior writings with respect thereto,
and neither of the parties shall be bound by any conditions, warranties, or
representations with respect to such subject matter other than as expressly
provided herein, or as duly set forth on or subsequent to the effective date
hereof in writing and signed by a proper and duly authorized representative of
the party to be bound thereby.
Section 7.8 Attorneys' Fees. If any dispute arising out of this Agreement
is litigated between the parties hereto, the prevailing party shall be entitled
to recover its reasonable attorneys' fees in addition to any other relief to
which it may be entitled.
Section 7.9 Waiver of Remedies. A waiver of a breach or a default under
this Agreement shall not be a waiver of any subsequent default. Failure of
either party to enforce compliance with any term or condition of this Agreement
shall not constitute a waiver of such term or condition.
Section 7.10 Captions. Captions contained in this Agreement are for
reference purposes only and are not part of this Agreement. --------
Section 7.11 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an ------------
original.
Section 7.12 Severability. If any provision of this Agreement is held to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
<PAGE>
Section 7.13 Amendment. No amendment, modification or waiver in respect of
this Agreement will be effective unless in writing and executed by each of the
parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written by their respective officers hereunto duly
authorized.
FEDERATED SHAREHOLDER SERVICES COMPANY
By:/s/ Karen Tracey
Name: Karen J. Tracey
Title: Senior Vice President
WEST COAST TRUST COMPANY, INC.
By:/s/ Andrew J. Gerlicher
Name: Andrew J. Gerlicher
Title: President
<PAGE>
SCHEDULE A
CERTIFICATE OF AUTHORIZED INDIVIDUALS
(date)
NAME, TITLE SIGNATURE, FACSIMILE SIGNATURE
Marvin Abeene, Senior Vice President /s/ Marvin Abeene
Cheryl Pfenning, Asst. Vice President /s/ Cheryl Pfenning
Carol Schulte, Securities Specialist /s/ Carol Schulte
Diane Bougher, Trust Operations Asst. /s/ Diane Bougher
The undersigned hereby attest that they are officers of West Coast Trust
Company, Inc. and are duly authorized to, and do so designate the aforelisted
individuals as Authorized Persons under the Electronic Communications and
Recordkeeping Agreement between West Coast Trust Company, Inc. and Federated
Shaeholder Services Company this designation to be effective as of December 1,
1997.
WEST COAST TRUST COMPANY
By:/s/ Andrew J. Gerlicher
Name: Andrew J. Gerlicher
Title: President
FEDERATED SHAREHOLDER SERVICES COMPANY
By:/s/ Karen Tracey
Name: Karen J. Tracey
Title: Senior Vice President
