SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 22
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22
CASH INCOME TRUST
(Exact name of Registrant)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (203) 277-0111
ERNEST J. WRIGHT
Secretary to the Board of Trustees
Cash Income Trust
One Tower Square
Hartford, Connecticut 06183
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: _____________________
It is proposed that this filing will become effective (check appropriate box):
_____ immediately upon filing pursuant to paragraph (b)
X on May 1, 1995 pursuant to paragraph (b)
_____
_____ 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.
The Registrant has filed a Declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940. Pursuant to paragraph 24f-2(b)(2), a Rule
24f-2 Notice need not be filed for the fiscal year ended December 31, 1994
because the Registrant did not sell any securities pursuant to its 24f-2
Declaration during the fiscal year.
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CASH INCOME TRUST
Cross-Reference Sheet pursuant to Rule 495 under the Securities Act of 1933
ITEM
NO. CAPTION IN PROSPECTUS
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1. Cover Page Cover Page
2. Synopsis Not Applicable
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Cover Page; Fund Description;
Investment Objective and Policies
5. Management of the Fund Fund Management and Expenses;
Additional Information
6. Capital Stock and Other Securities Fund Description; Dividends and
Tax Status; Fund Shares; Pricing
Shares
7. Purchase of Securities Being Offered How to Buy Shares
8. Redemption or Repurchase How to Redeem Shares
9. Legal Proceedings Legal Proceedings
CAPTION IN STATEMENT OF ADDITIONAL
INFORMATION
----------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Not Applicable
13. Investment Objectives and Policies Investment Objectives and Policies;
Investment Restrictions; Appendix
14. Management of the Registrant Trustees and Officers
15. Control Persons and Principal Additional Information
Holders of Securities
16. Investment Advisory and Investment Adviser; Additional
Other Services Information
17. Brokerage Allocation Brokerage
18. Capital Stock and Other Securities Declaration of Trust
19. Purchase, Redemption and Pricing Valuation of Securities
of Securities Being Offered
20. Tax Status Distributions
21. Underwriters Not Applicable
22. Calculation of Performance Data Not Applicable
23. Financial Statements Financial Statements
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
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CASH INCOME TRUST
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ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
TELEPHONE 1-800-842-0125
Cash Income Trust (the "Fund") is a diversified open-end management
investment company (mutual fund) which seeks high current income from
short-term money market instruments while preserving capital and maintaining
a high degree of liquidity.
Shares of the Fund are currently offered without a sales charge only to The
Travelers Fund UL for Variable Life Insurance ("Fund UL"), a separate account
of The Travelers Insurance Company (the "Company" or "Travelers Insurance").
The Fund serves as one of the investment vehicles for variable life insurance
contracts issued by the Company. Fund UL invests in shares of the Fund in
accordance with allocation instructions received from owners of the variable
life insurance contracts. Such allocation rights are described further in the
accompanying prospectus for Fund UL. The rights of Fund UL as a shareholder
should be distinguished from the rights of an owner of a variable life
insurance contract. The term "shareholder" as used herein refers to Fund UL or
to any other insurance company separate account that may use shares of the Fund
as an investment vehicle in the future.
This Prospectus concisely sets forth the information about the Fund that you
should know before investing. Please read it and retain it for future
reference. Additional information about the Fund is contained in a Statement of
Additional Information dated May 1, 1995 which has been filed with the
Securities and Exchange Commission and is incorporated by reference into this
Prospectus. A copy may be obtained, without charge, by writing to Travelers
Insurance, Life Services 7 NB, One Tower Square, Hartford, Connecticut
06183-5030, or by calling 1-800-334-4298.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS
FOR VARIABLE LIFE INSURANCE CONTRACTS ISSUED BY TRAVELERS
INSURANCE AND ITS SEPARATE ACCOUNT. BOTH THIS PROSPECTUS AND
THE CONTRACT PROSPECTUS SHOULD BE READ CAREFULLY AND RETAINED
FOR FUTURE REFERENCE.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
UNITED STATES GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1995.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
FINANCIAL HIGHLIGHTS ................................ 3
FUND DESCRIPTION .................................... 4
INVESTMENT OBJECTIVE AND POLICIES ................... 4
INVESTMENT RESTRICTIONS ............................. 4
INVESTOR CONSIDERATIONS AND RISK FACTORS ............ 5
FUND MANAGEMENT AND EXPENSES ........................ 5
Board of Trustees ............................... 5
Investment Adviser .............................. 5
Advisory Fees ................................... 5
Portfolio Manager ............................... 5
Securities Transactions ......................... 6
Portfolio Turnover .............................. 6
Fund Expenses ................................... 6
Transfer Agent .................................. 6
FUND SHARES ......................................... 6
HOW TO BUY SHARES ................................... 6
PRICING SHARES ...................................... 7
HOW TO REDEEM SHARES ................................ 7
DIVIDENDS AND TAX STATUS ............................ 7
LEGAL PROCEEDINGS ................................... 7
ADDITIONAL INFORMATION .............................. 7
EXHIBIT A ........................................... 8
</TABLE>
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FINANCIAL HIGHLIGHTS
CASH INCOME TRUST
PER SHARE DATA FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR
The following information on per share data for the five years ended December
31, 1994, has been audited by Coopers & Lybrand L.L.P., Independent Accountants.
All other periods presented have been audited by the Fund's prior auditors.
Coopers & Lybrand L.L.P.'s report on the per share data for each of the five
years in the period ended December 31, 1994 is contained in the December 31,
1994 Annual Report to Shareholders. The Annual Report is incorporated by
reference into the Statement of Additional Information. A copy of the Annual
Report can be obtained without charge by writing to or calling the Company at
the address and telephone number listed on the cover of this Prospectus. The
following information should be read in conjunction with the financial
statements contained in the 1994 Annual Report.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value,
beginning of year. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from
operations ........ 0.0278 0.0214 0.0322 0.0650 0.0744 0.0753 0.0690 0.0606 0.0616 0.0749
Less distributions
from net investment
income ............ (0.0278) (0.0214) (0.0322) (0.0650) (0.0744) (0.0753) (0.0690) (0.0606) (0.0616) (0.0749)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of year
(unchanged
during the year)...$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURN* 2.78% 2.14% 3.22% 6.50% 7.44% 7.57% 6.82% 6.09% 6.13% 7.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
year (thousands)...$ 1,203 $ 647 $ 697 $ 690 $ 619 $ 656 $107,850 $116,849 $ 80,456 $ 78,686
Ratio of expenses
to average net
assets ........... 1.25%** 0.94%** 0.38%** 0.38%** 0.08%** 1.00%+ 0.67% 0.65% 0.65% 0.68%
<FN>
* Total return is determined after reflecting the reinvestment of dividends
declared during the year, by dividing net investment income by average
net assets. Shares in Fund Cl are only sold to Travelers Insurance separate
accounts in connection with the issuance of variable life insurance
contracts. The above total return does not reflect the deduction of any
contract charges or fees assessed by Travelers Insurance separate accounts.
** The ratios of expenses to average net assets for 1990 and later years
reflect an expense reimbursement by Travelers Insurance in connection with
voluntary expense limitations. Without the expense reimbursement, the
ratio of expenses to average net assets would have been 6.40%, 8.47%,
7.70%, 11.61% and 20.99% for the years ended December 31, 1994, 1993,
1992, 1991 and 1990, respectively.
+ The amount represented reflects an expense reimbursement by Keystone
Custodian Funds, Inc. (the prior investment adviser) in connection with a
voluntary expense limitation. Before the expense reimbursement, the "Ratio
of expenses to average net assets" would have been 8.95%.
</TABLE>
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FUND DESCRIPTION
Cash Income Trust (the "Fund") is registered with the Securities and Exchange
Commission as a diversified open-end management investment company, commonly
known as a mutual fund. The Fund was created under Massachusetts law as a
Massachusetts business trust on October 1, 1981.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to provide shareholders with high current
income from short-term money market instruments while emphasizing preservation
of capital and maintaining a high degree of liquidity. The Fund pursues this
objective by investing in securities maturing in one year or less as follows:
(1) obligations issued or guaranteed by the United States government or by any
agency or instrumentality of the United States; (2) certificates of deposit and
bankers' acceptances of banks which are members of the Federal Deposit
Insurance Corporation and which have total assets of at least $1 billion,
including U.S. branches of foreign banks and foreign branches of U.S. banks;
(3) prime commercial paper, including master demand notes; and (4) repurchase
agreements secured by United States government securities. Securities issued or
guaranteed by the United States government include a variety of Treasury
securities that differ only in their interest rates, maturities and dates of
issuance. Treasury Bills have maturities of one year or less, Treasury Notes
have maturities of one to ten years, and Treasury Bonds generally have
maturities of greater than ten years at the date of issuance.
Securities issued or guaranteed by the United States government or its
agencies or instrumentalities include direct obligations of the United States
Treasury and securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, Government National Mortgage
Association, General Services Administration, Central Bank for Cooperatives,
Federal Home Loan Banks, Federal Loan Mortgage Corporation, Federal
Intermediate Credit Banks, Federal Land Banks, Maritime Administration, The
Tennessee Valley Authority, District of Columbia Armory Board and Federal
National Mortgage Association. Some obligations of United States government
agencies and instrumentalities, such as Treasury Bills and Government National
Mortgage Association pass-through certificates, are supported by the full faith
and credit of the United States; others, such as securities of Federal Home
Loan Banks, are supported by the right of the issuer to borrow from the
Treasury; still others, such as bonds issued by the Federal National Mortgage
Association, a private corporation, are supported only by the credit of the
instrumentality. Because the United States government is not obligated by law
to provide support to an instrumentality it sponsors, the Fund will invest in
the securities issued by such an instrumentality only when the investment
adviser determines that the credit risk with respect to the instrumentality
does not make its securities unsuitable investments for the Fund. United States
government securities do not include international agencies or
instrumentalities in which the United States government, its agencies or
instrumentalities participate, such as the World Bank, the Asian Development
Bank or issues insured by the Federal Deposit Insurance Corporation. The Fund
offers a convenient alternative to investing directly in money market
instruments by eliminating the mechanical problems normally associated with
direct investments while, most importantly, providing the opportunity to obtain
the higher yields often available from money market investments made in large
denominations.
For further information about the types of investments and investment
techniques available to the Fund, including the associated investment risks,
see Exhibit A to this Prospectus.
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment restrictions which
may not be changed without a vote of a majority of the outstanding voting
securities of the Fund, as defined in the Investment Company Act of 1940, as
amended. These restrictions and certain other fundamental restrictions are set
forth in the Statement of Additional Information. Unless otherwise stated, all
references to the Fund's assets are in terms of current market value.
The Fund's fundamental policies permit it to invest up to 100% of its assets
in securities issued or guaranteed by the United States government, its agencies
or instrumentalities. The Fund will not: (1) invest more than 5% of its assets
in the securities of other single issuers; (2) borrow money, except that the
Fund may borrow money from banks for temporary or emergency purposes in amounts
of up to one-third of its assets, including the amount borrowed, and such
borrowings will be repaid before additional investments are made; (3) pledge
more than 15% of its assets to secure borrowings; and (4) invest more than 10%
of its assets in repurchase agreements maturing in more than seven days and
securities for which market quotations are not readily available.
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The Fund has undertaken to a state insurance authority that so long as the
state authority requires and shares of the Fund are offered for sale to fund
variable life insurance policies in that state, the Fund will limit borrowings
for general purposes to not more than 10% of its net assets and for temporary
purposes to not more than 25% of its net assets; and, if relevant, comply with
certain foreign security diversification guidelines. These guidelines provide
that (1) as the percentage of the Fund's net asset value invested in foreign
securities increases, a corresponding increase will be made in the number of
countries in whose securities the Fund invests; and (2) the Fund will invest no
more than 20% of its net asset value in the securities of issuers located in
any one country (other than the United States). Notwithstanding the above, the
guidelines permit the Fund to invest any amount in the securities of issuers
located in the United States, and to invest an additional 15% of its net asset
value in the securities of issuers located in Australia, Canada, France, Japan,
the United Kingdom or Germany. The guidelines also require that American
Depository Receipts be treated as if they were foreign securities. This
undertaking is not a fundamental investment restriction or policy and may be
changed without a vote of shareholders.
INVESTOR CONSIDERATIONS AND RISK FACTORS
Investors should consider that because interest rates on money market
instruments fluctuate in response to economic factors, the rates on short-term
investments made by the Fund and the daily dividend paid to shareholders will
vary, rising or falling with short-term rates generally, and that yields from
short-term securities may be lower than yields from longer-term securities.
Also, the value of the Fund's securities will fluctuate inversely with interest
rates, the amount of outstanding debt and other factors. In addition, the
Fund's investments in certificates of deposit issued by U.S. branches of
foreign banks and foreign branches of U.S. banks involve somewhat more risk,
but also more potential reward, than investments in comparable domestic
obligations.
There can, of course, be no assurance that the Fund will achieve its
investment objective since there is uncertainty in every investment.
FUND MANAGEMENT AND EXPENSES
BOARD OF TRUSTEES
Under Massachusetts law, the Fund's Board of Trustees has absolute and
exclusive control over the management and disposition of all assets of the
Fund. Subject to the provisions of the Declaration of Trust, the business and
affairs of the Fund shall be managed by the Trustees of other parties so
designated by the Trustees. Information relating to the Board of Trustees,
including its members and their compensation, is contained in the Statement of
Additional Information.
INVESTMENT ADVISER
As described above, the Board of Trustees monitor the activities of those
entities which provide investment advisory services to the Fund. Travelers
Asset Management International Corporation (TAMIC) provides investment advice
and, in general, supervises the management and investment program of the Fund.
TAMIC is a registered investment adviser which has provided investment
advisory services since its incorporation in 1978. TAMIC is an indirect wholly
owned subsidiary of Travelers Group Inc., and its principal offices are located
at One Tower Square, Hartford, Connecticut 06183. In addition to providing
investment advice to the Fund, TAMIC also acts as investment adviser for other
investment companies which fund variable contracts issued by the Company,
including The Travelers Timed Bond Account for Variable Annuities, The
Travelers Money Market Account for Variable Annuities, The Travelers Quality
Bond Account for Variable Annuities, High Yield Bond Trust, Managed Assets
Trust and the U.S. Government Securities Portfolio of The Travelers Series
Trust. TAMIC also provides investment advice to individual and pooled pension
and profit-sharing accounts, and for domestic and offshore insurance companies
affiliated with The Travelers Insurance Company.
ADVISORY FEES
Under its Advisory Agreement with the Fund, TAMIC is paid an amount
equivalent on an annual basis to 0.3233% of the average daily net assets of the
Fund. The fee is computed daily and paid weekly.
PORTFOLIO MANAGER
The U.S. Government Securities Portfolio has been managed by Emil J.
Molinaro, Jr. since March 1995. Mr. Molinaro joined an affiliate of the Company
in 1980 and is a Vice President of the Company's Securities Department. For the
past six years he has managed short term investment portfolios backing various
insurance company products and is currently responsible for managing the
Travelers Money Market Pool.
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<PAGE>
SECURITIES TRANSACTIONS
Under policies established by the Board of Trustees, TAMIC selects
broker-dealers to execute transactions for the Fund subject to the receipt of
best execution. When selecting broker-dealers to execute portfolio transactions
for the Fund, TAMIC may follow a policy of considering as a factor the number
of shares of the Fund sold by such broker-dealers. In addition, broker-dealers
may from time to time be affiliated with the Fund, TAMIC or their affiliates.
PORTFOLIO TURNOVER
The Fund will not trade in securities for short-term profits but, when
circumstances warrant, securities may be sold without regard to the length of
time held.
FUND EXPENSES
In addition to the investment advisory fees discussed above, the other
principal expenses of the Fund include the charges and expenses of the transfer
agent, the custodian, the independent auditors, and any outside legal counsel
employed by either the Fund or the Board of Trustees; the compensation for the
disinterested members of the Board of Trustees; the costs of printing and
mailing the Fund's prospectuses, proxy solicitation materials, and annual,
semi-annual and periodic reports; brokerage commissions, interest charges and
taxes; and any registration, filing and other fees payable to government
agencies in connection with the registration of the Fund and its shares under
federal and state securities laws.
Pursuant to a Management Agreement dated May 1, 1993 between the Fund and the
Company, the Company has agreed to reimburse the Fund for the amount by which
the Fund's aggregate annual expenses, including investment advisory fees but
excluding brokerage commissions, interest charges and taxes, exceed 1.25% of
the Fund's average net assets for any fiscal year.
For the fiscal year ended December 31, 1994, the Fund paid 1.25% of its
average net assets in expenses. These expenses would have been 6.40% of the
Fund's average net assets if the Company had not paid for any of the Fund's
expenses.
TRANSFER AGENT
Travelers Insurance, One Tower Square, Hartford, Connecticut 06183, serves
as the Fund's transfer agent and dividend disbursing agent.
FUND SHARES
The Fund currently issues one class of shares which participate equally in
dividends and distributions and have equal voting, liquidation and other
rights. When issued and paid for, the shares will be fully paid and
nonassessable by the Fund and will have no preference, conversion, exchange or
preemptive rights.
Shareholders are entitled to one vote for each full share owned and
fractional votes for fractional shares. Shares are redeemable, transferable and
freely assignable as collateral. There are no sinking fund provisions. (See the
accompanying separate account prospectus for a discussion of voting rights
applicable to purchasers of variable life insurance contracts.)
Under Massachusetts law it is possible that a Fund shareholder may be held
personally liable for the Fund's obligations. However, the Fund's Declaration
of Trust provides that shareholders shall not be subject to any personal
liability for the Fund's obligations and provides indemnification from Fund
assets for any shareholder held personally liable for the Fund's obligations.
Disclaimers of such liability are included in each Fund agreement.
HOW TO BUY SHARES
Shares of the Fund are currently sold only to The Travelers Fund UL for
Variable Life Insurance in connection with variable life insurance contracts
issued by the Company. However, shares of the Fund may be offered in the future
to other separate accounts of the Company or its affiliates to serve as the
underlying investment vehicle for both variable annuity and variable life
insurance contracts. Shares are not sold to the general public. Fund shares are
sold on a continuing basis, without a sales charge, at the net asset value next
computed after payment is made by the insurance company to the Fund's
custodian. However, separate accounts to which shares are sold may impose sales
and other charges, as described in the appropriate contract prospectus.
In the event that the Fund serves as an investment vehicle for both variable
annuity and variable life insurance contracts, an irreconcilable material
conflict may conceivably arise between contract owners of different separate
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<PAGE>
accounts investing in the Fund due to differences in tax treatment, management
of the Fund's investments, or other considerations. The Fund's Board of
Trustees will monitor events in order to identify any material conflicts
between variable annuity contract owners and variable life insurance policy
owners, and will determine what action, if any, should be taken in the event of
such a conflict.
PRICING SHARES
The net asset value of a Fund share, which is expected to remain constant at
$1.00, is computed as of the close of trading on each day on which the New York
Stock Exchange is open, except on days when changes in the value of the Fund's
securities do not affect the current net asset value of its shares. The New
York Stock Exchange is currently closed on weekends, New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share is arrived at
by determining the value of the Fund's assets, subtracting its liabilities, and
dividing the result by the number of shares outstanding.
The Fund values short-term money market instruments with maturities of sixty
days or less at amortized cost (original purchase cost as adjusted for
amortization of premium or accretion of discount) which when combined with
accrued interest approximates market. All other investments are valued at
market value or, where market quotations are not readily available, at fair
value as determined in good faith by the Fund's Board of Trustees.
HOW TO REDEEM SHARES
Shareholders may redeem Fund shares at the net asset value per share,
normally $1.00, next determined after receipt by the Fund of a proper
redemption request. The Fund computes the net asset value at the close of the
New York Stock Exchange at the end of the day on which it has received all
documentation from the shareholder. Redemption proceeds are normally wired or
mailed either the same or the next business day, but in no event later than
seven days thereafter.
The Fund may temporarily suspend the right to redeem its shares when: (1) the
New York Stock Exchange is closed, other than customary weekend and holiday
closings; (2) trading on the Exchange is restricted; (3) an emergency exists as
determined by the Securities and Exchange Commission so that disposal of the
Fund's investments or determination of its net asset value is not reasonably
practicable; or (4) the Securities and Exchange Commission, for the protection
of shareholders, so orders.
DIVIDENDS AND TAX STATUS
The Fund has qualified and intends to qualify in the future as a regulated
investment company under Subchapter M of the Internal Revenue Code. The Fund
qualifies if, among other things, it distributes to its shareholders at least
90% of its net investment income for each fiscal year.
Capital gains and dividends are distributed in cash or reinvested in
additional shares of the Fund, without a sales charge. Although purchasers of
variable insurance contracts are not subject to federal income taxes on
distributions by the Fund they may be subject to state and local taxes and
should review the accompanying contract prospectus for a discussion of the tax
treatment applicable to purchasers of variable life insurance contracts.
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Fund.
ADDITIONAL INFORMATION
Except as otherwise stated in this Prospectus or as required by law, the Fund
reserves the right to change the terms of the offer stated in this Prospectus
without shareholder approval, including the right to impose or change fees for
services provided.
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EXHIBIT A
DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS
AND INVESTMENT TECHNIQUES AVAILABLE TO THE FUND
UNITED STATES GOVERNMENT SECURITIES
Securities issued or guaranteed by the United States Government include a
variety of Treasury securities that differ only in their interest rates,
maturities and dates of issuance. Treasury bills have maturities of one year or
less; Treasury notes have maturities of one to ten years; and Treasury bonds
generally have maturities of greater than ten years at the date of issuance.
Securities issued or guaranteed by the United States Government or its
agencies or instrumentalities include direct obligations of the United States
Treasury and securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, Government National Mortgage
Association, General Services Administration, Central Bank for Cooperatives,
Federal Home Loan Banks, Federal Loan Mortgage Corporation, Federal
Intermediate Credit Banks, Federal Land Banks, Maritime Administration, The
Tennessee Valley Authority, District of Columbia Armory Board and Federal
National Mortgage Association.
Some obligations of United States Government agencies and instrumentalities,
such as Treasury bills and Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
United States; others, such as securities of Federal Home Loan Banks, are
supported by the right of the issuer to borrow from the Treasury; still others,
such as bonds issued by the Federal National Mortgage Association, a private
corporation, are supported only by the credit of the instrumentality. Because
the United States Government is not obligated by law to provide support to an
instrumentality it sponsors, the Fund will invest in the securities issued by
such an instrumentality only when TAMIC determines that the credit risk with
respect to the instrumentality does not make its securities unsuitable
investments. United States Government securities will not include international
agencies or instrumentalities in which the United States Government, its
agencies or instrumentalities participate, such as the World Bank, the Asian
Development Bank or the Inter-American Development Bank, or issues insured by
the Federal Deposit Insurance Corporation.
CERTIFICATES OF DEPOSIT
Certificates of deposit are receipts issued by a bank in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited plus interest
to the bearer of the receipt on the date specified on the certificate. The
certificate usually can be traded in the secondary market prior to maturity.
Certificates of deposit will be limited to U.S. dollar-denominated
certificates of United States banks which have at least $1 billion in deposits
as of the date of their most recently published financial statements (including
foreign branches of U.S. banks, U.S. branches of foreign banks which are
members of the Federal Reserve System or the Federal Deposit Insurance
Corporation, and savings and loan associations which are insured by the Federal
Deposit Insurance Corporation).
The Fund will not acquire time deposits or obligations issued by the
International Bank for Reconstruction and Development, the Asian Development
Bank or the Inter-American Development Bank. Additionally, the Fund does not
currently intend to purchase such foreign securities (except to the extent that
certificates of deposit of foreign branches of U.S. banks may be deemed foreign
securities) or purchase certificates of deposit, bankers' acceptances or other
similar obligations issued by foreign banks.
OBLIGATIONS OF FOREIGN BRANCHES OF UNITED STATES BANKS
The obligations of foreign branches of United States banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by government regulation.
Payment of interest and principal upon these obligations may also be affected
by governmental action in the country of domicile of the branch (generally
referred to as sovereign risk). In addition, evidences of ownership of such
securities may be held outside the United States and the Fund may be subject to
the risks associated with the holding of such property overseas. Various
provisions of federal law governing domestic branches do not apply to foreign
branches of domestic banks.
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OBLIGATIONS OF UNITED STATES BRANCHES OF FOREIGN BANKS
Obligations of United States branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation as well as by governmental action in the country in which the
foreign bank has its head office. In addition, there may be less publicly
available information about a United States branch of a foreign bank than about
a domestic bank.
COMMERCIAL PAPER
The Fund's investments in commercial paper are limited to those rated A-1 by
Standard & Poor's Corporation (S&P) or Prime-1 by Moody's Investors Service,
Inc. (Moody's). Commercial paper rated A-1 by Standard & Poor's has the
following characteristics: liquidity ratios are adequate to meet cash
requirements. The issuer's long-term senior debt is rated "A" or better,
although in some cases "BBB" credits may be allowed. The issuer has access to
at least two additional channels of borrowing. Basic earnings and cash flow
have an upward trend with allowance made for unusual circumstances. Typically,
the issuer's industry is well established and the issuer has a strong position
within the industry.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings
over a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public preparations to meet such obligations. Relative strength or weakness of
the above factors determines how the issuer's commercial paper is rated within
various categories.
MASTER DEMAND NOTES
Master demand notes are unsecured obligations that permit the investment of
fluctuating amounts by the Fund at varying rates of interest pursuant to direct
arrangements between the Fund as lender and the issuer as borrower. The Fund
has the right to increase the amount under the note at any time up to the full
amount provided by the note agreement, or to decrease the amount, and the
borrower may repay up to the full amount of the note without penalty. Notes
purchased by the Fund permit the Fund to demand payment of principal and
accrued interest at any time (on not more than seven days notice). Notes
acquired by the Fund may have maturities of more than one year, provided that
(i) the Fund is entitled to payment of principal and accrued interest upon not
more than seven days notice, and (ii) the rate of interest on such notes is
adjusted automatically at periodic intervals which normally will not exceed 31
days but may extend up to one year. The notes will be deemed to have a maturity
equal to the longer of the period remaining to the next interest rate
adjustment or the demand notice period. Because these types of notes are direct
lending arrangements between the lender and the borrower, such instruments are
not normally traded and there is no secondary market for these notes, although
they are redeemable and thus repayable by the borrower at face value plus
accrued interest at any time. Accordingly, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. In connection with master demand notes, TAMIC considers, under
standards established by the Board of Trustees, earning power, cash flow and
other liquidity ratios of the borrower and will monitor the ability of the
borrower to pay principal and interest on demand. These notes are not typically
rated by credit rating agencies. Unless rated, the Fund will invest in them
only if the issuer meets the criteria established for commercial paper.
REPURCHASE AGREEMENTS
Interim cash balances may be invested from time to time in repurchase
agreements with approved counterparties. Approved counterparties are limited to
national banks or reporting broker-dealers meeting the investment adviser's
credit quality standards as presenting minimal risk of default. All repurchase
transactions must be collateralized by U.S. Government securities with market
value no less than 102% of the amount of the transaction, including accrued
interest. Repurchase transactions generally mature the next business day but,
in the event of a transaction of longer maturity, collateral will be marked to
market daily and, when required, additional cash or qualifying collateral will
be required from the counterparty.
In executing a repurchase agreement, the Fund purchases eligible securities
subject to the seller's simultaneous agreement to repurchase them on a mutually
agreed upon date and at a mutually agreed upon price. The purchase and resale
prices are negotiated with the counterparty on the basis of current short-term
interest rates, which may be more or less than the rate on the securities
collateralizing the transaction. Physical delivery or, in the case of
"book-entry" securities, segregation in the counterparty's account at the
Federal Reserve for the benefit of the Fund is required to
CIT-9
<PAGE>
establish a perfected claim to the collateral for the term of the agreement in
the event the counterparty fails to fulfill its obligation.
As the securities collateralizing a repurchase transaction are generally of
longer maturity than the term of the transaction, in the event of default by
the counterparty on its obligation, the Fund would bear the risks of delay,
adverse market fluctuation and transaction costs in disposing of the
collateral.
BANKERS' ACCEPTANCES
Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then "accepted" by the bank which, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.
Bankers' acceptances acquired by the Fund must have been accepted by U.S.
commercial banks, including foreign branches of U.S. commercial banks, having
total deposits at the time of purchase in excess of $1 billion, and must be
payable in U.S. dollars.
CIT-10
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
CIT-11
<PAGE>
CASH INCOME TRUST
PROSPECTUS
TIC Ed. 5-95
L-11170 Printed in U.S.A.
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CASH INCOME TRUST
May 1, 1995
This Statement of Additional Information is not a prospectus but relates to,
and should be read in conjunction with, the Fund's prospectus dated May 1,
1995. A copy of the prospectus is available from The Travelers Insurance
Company, Life Services 4 SHS, One Tower Square, Hartford, Connecticut
06183-5030.
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
INVESTMENT OBJECTIVE AND POLICIES.................................1
INVESTMENT RESTRICTIONS...........................................1
VALUATION OF SECURITIES...........................................2
DISTRIBUTIONS.....................................................2
TRUSTEES AND OFFICERS.............................................3
DECLARATION OF TRUST..............................................4
INVESTMENT ADVISER................................................4
Advisory Fees.............................................5
REDEMPTIONS IN KIND...............................................5
BROKERAGE.........................................................5
ADDITIONAL INFORMATION............................................5
FINANCIAL STATEMENTS..............................................6
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Cash Income Trust (the "Fund") is to provide
shareholders with the highest possible current income from short-term money
market instruments while emphasizing preservation of capital and maintaining a
high degree of liquidity. The Fund pursues this objective by investing in
short-term money market securities maturing in one year or less which are
deemed to present minimal credit risks.
INVESTMENT RESTRICTIONS
None of the restrictions enumerated in this paragraph may be changed without
a vote of the holders of a majority of the Fund's outstanding shares, as
defined in the Investment Company Act of 1940 (the "1940 Act"). The Fund will
not:
(1) purchase any security which has a maturity date more than one year from
the date of the Fund's purchase;
(2) invest more than 25% of its assets in the securities of issuers in any
single industry, exclusive of securities issued by banks or securities issued
or guaranteed by the United States Government, its agencies or
instrumentalities;
(3) invest more than 5% of its assets in the securities of any one issuer,
including repurchase agreements with any one bank or dealer, exclusive of
securities issued or guaranteed by the United States Government, its agencies
or instrumentalities; however, in accordance with Rule 2a-7 of the 1940 Act, to
which the Fund is subject, agencies of the U.S. Government are not excluded
from this 5% limitation;
(4) invest in more than 10% of the outstanding securities of any one
issuer, exclusive of securities issued or guaranteed by the United States
Government, its agencies or instrumentalities;
(5) borrow money except from banks on a temporary basis in an aggregate
amount not to exceed one-third of the Fund's assets, including the amount
borrowed, and to be used exclusively to facilitate the orderly maturation and
sale of portfolio securities during any periods of abnormally heavy redemption
requests, if they should occur; such borrowings may not be used to purchase
investments and the Fund will not purchase any investments while any such
borrowings exist;
(6) pledge, hypothecate or in any manner transfer, as security for
indebtedness, any securities owned or held by the Fund except as may be
necessary in connection with any borrowing mentioned above and in an aggregate
amount not to exceed 15% of the Fund's assets;
(7) make loans, provided that the Fund may purchase money market securities
or enter into repurchase agreements;
(8) enter into repurchase agreements if, as a result thereof, more than 10%
of the Fund's assets would be subject to repurchase agreements maturing in more
than seven days;
(9) make investments for the purpose of exercising control;
(10) purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization;
(11) invest in real estate, other than money market securities secured by
real estate or interests therein, or money market securities issued by
companies which invest in real estate or interests therein, commodities or
commodity contracts, interests in oil, gas or other mineral exploration or
development programs;
(12) purchase any securities on margin;
(13) make short sales of securities or maintain a short position or write,
purchase or sell puts, calls, straddles, spreads or combinations thereof;
(14) invest in securities of issuers, other than agencies and
instrumentalities of the United States Government, having a record, together
with predecessors, of less than three years of continuous operation if more
than 5% of the Fund's assets would be invested in such securities;
(15) purchase or retain securities of any issuer if those officers, Trustees
or Directors of the Fund or TAMIC who own individually more than 0.5% of the
outstanding securities of such issuer together own more than 5% of the
securities of such issuer; or
(16) act as an underwriter of securities.
-1-
<PAGE>
The Fund has undertaken to a state insurance authority that, so long as the
state authority requires and shares of the Fund are offered for sale to fund
variable life insurance policies in that state, the Fund will limit borrowings
for general purposes to not more that 10% of its net assets and for temporary
purposes to not more than 25% of its net assets; and, if relevant, comply with
certain foreign security diversification guidelines. These guidelines provide
that (1) as the percentage of the Fund's net asset value invested in foreign
securities increases, a corresponding increase will be made in the number of
countries in whose securities the Fund invests; and (2) the Fund will invest no
more than 20% of its net asset value in the securities of issuers located in
any one country (other than the United States). Notwithstanding the above,
these guidelines permit the Fund to invest any amount in the securities of
issuers located in the United States and to invest an additional 15% of its net
asset value in the securities of issuers located in Australia, Canada, France,
Japan, the United Kingdom or Germany. These guidelines require that American
Depository Receipts be treated as if they were foreign securities. This
undertaking is not a fundamental investment restriction or policy and may be
changed without a vote of shareholders.
VALUATION OF SECURITIES
Current value for the Fund's portfolio securities is determined as follows:
Short-term investments maturing in 60 days or less are valued at amortized cost
(original purchase cost as adjusted for amortization of premium or accretion of
discount which, when combined with accrued interest, approximates market);
should this valuation of a security not approximate market, Travelers Asset
Management International Corporation (TAMIC) will value the security at a price
deemed in good faith to be fair by the Board of Trustees. Securities with
remaining maturities of more than 60 days, for which market quotations are
readily available, are valued at market. The money market securities in which
the Fund invests are traded primarily in the over-the-counter market and are
valued at the mean between most recent bid and asked prices or yield equivalent
as obtained from dealers that make markets in such securities. Investments for
which market quotations are not readily available or for which the markets
establishing the most recent bid and asked prices are closed or inactive are
valued at fair value as determined pursuant to procedures established, in good
faith, by the Board of Trustees.
DISTRIBUTIONS
All net income of the Fund is determined as of the close of trading on the
New York Stock Exchange, currently 4:00 p.m., on each day that the Exchange is
open for trading, and at such other times as the Trustees may determine, and
credited immediately thereafter to each shareholder's account. Net income will
consist of (1) all accrued interest income on Fund portfolio assets, (2) plus
or minus all realized and unrealized gains or losses on Fund portfolio assets,
and (3) less the Fund's estimated expenses, including accrued expenses and fees
payable to TAMIC applicable to that dividend period. Net income is distributed
as dividends as of the close of business each calendar month either in cash or
in the form of additional shares. Dividends are reinvested in full and
fractional shares at the rate of one share for each one dollar distributed.
Since the net income of the Fund is declared as a dividend each time net
income is determined, the net asset value per share remains at $1.00 per share
immediately after each dividend declaration. The Fund expects to have net
income at the time of each dividend determination. If for any reason there is a
net loss, the Fund will first offset such amount pro rata against dividends
accrued during the month in each shareholder account. To the extent that such a
net loss would exceed such accrued dividends, the Fund will reduce the number
of its outstanding shares by having each shareholder contribute to the Fund's
capital the pro rata portion of the total number of shares required to be
cancelled in order to maintain a net asset value per share of the Fund at a
constant value of $1.00. Each shareholder will be deemed to have agreed to such
a contribution under these circumstances by investment in the Fund.
As of December 31, 1994, the Fund had a capital loss carryover of
approximately $1,981 which expires in 1995-2002. The Fund intends not to
distribute realized gains until the carryover is exhausted. The Fund may not
realize gains sufficient to use the carryover before it expires with the
passage of time.
-2-
<PAGE>
TRUSTEES AND OFFICERS
Name Present Position and Principal Occupation During Last Five Years
- ------ ----------------------------------------------------------------
*Heath B. McLendon
Chairman and Member
388 Greenwich Street
New York, N.Y.
Age 61
Managing Director (1993-present), Smith Barney Inc. ("Smith Barney");
Chairman (1993-present), Smith Barney Strategy Advisors, Inc.; President
(1994-present), Smith Barney Mutual Funds Management Inc.; Chairman and/or
Director and President of thirty investment companies associated with Smith
Barney; Chairman, Board of Trustees, Drew University; Trustees, The East New
York Savings Bank; Advisory Director, First Empire State Corporation; Chairman,
Board of Managers, seven Variable Annuity Separate Accounts of The Travelers
Insurance Company+; Chairman, Board of Trustees, five Mutual Funds sponsored by
The Travelers Insurance Company.++
Knight Edwards
Member
2700 Hospital Trust Tower
Providence, Rhode Island
Age 71
Of Counsel (1988-present), Partner (1956-1988), Edwards & Angell, Attorneys;
Member, Advisory Board, (1973-1994) thirty-one mutual funds sponsored by
Keystone Group, Inc.; Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company.++
Robert E. McGill, III
Member
One Elm Street
Windsor Locks, Connecticut
Age 63
Director (1983-present), Executive Vice President (1989-1994), Senior Vice
President, Finance and Administration (1983-1989), The Dexter Corporation
(manufacturer of specialty chemicals and materials); Vice Chairman (1990-1992),
Director (1983-present), Life Technologies, Inc. (life science/present
products); Director (1993-present), Analytical Technology, Inc. (manufacturer
of measurement instruments); Director (1994-present), The Connecticut Surety
Corporation (insurance); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company.++
Lewis Mandell
Member
368 Fairfield Road, U41F
Storrs, Connecticut
Age 52
Professor of Finance (1980-present) and Associate Dean (1993-present), School
of Business Administration, and Director, Center for Research and Development
in Financial Services (1980-present), University of Connecticut; Director
(1992-present), GZA Geoenvironmental Tech, Inc. (engineering services); Member,
Board of Managers, seven Variable Annuity Separate Accounts of The Travelers
Insurance Company+; Trustee, five Mutual Funds sponsored by The Travelers
Insurance Company.++
Frances M. Hawk
Member
222 Berkeley Street
Boston, Massachusetts
Age 47
Portfolio Manager (1992-present), HLM Management Company, Inc. (investment
management); Assistant Treasurer, Pensions and Benefits Management (1989-1992),
United Technologies Corporation (broad-based designer and manufacturer of high
technology products); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company.++
Ernest J. Wright
Secretary to the Board
One Tower Square
Hartford, Connecticut
Age 54
Assistant Secretary (1994-present), Counsel (1987-present), The Travelers
Insurance Company; Secretary, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Secretary, Board of
Trustees, five Mutual Funds sponsored by The Travelers Insurance Company.++
Ian R. Stuart
Treasurer
One Tower Square
Hartford, Connecticut
Age 38
Vice President and Financial Officer, Financial Services Department
(1994-present), Second Vice President and Financial Officer, Financial Services
Department (1991-1994), The Travelers Insurance Company; Senior Manager
(1986-1991), Price Waterhouse; Treasurer, Board of Trustees, five Mutual Funds
sponsored by The Travelers Insurance Company.++
+ These seven Variable Annuity Separate Accounts are: The Travelers
Growth and Income Stock Account for Variable Annuities, The Travelers Quality
Bond Account for Variable Annuities, The Travelers Money Market Account for
Variable Annuities, The Travelers Timed Growth and Income Stock Account for
Variable Annuities, The Travelers Timed short-term Bond Account for Variable
Annuities, The Travelers Timed Aggressive Stock Account for Variable Annuities
and The Travelers Timed Bond Account for Variable Annuities.
-3-
<PAGE>
++ These five Mutual Funds are: Capital Appreciation Fund, Cash Income
Trust, High Yield Bond Trust, Managed Assets Trust and The Travelers Series
Trust.
* Mr. McLendon is an "interested person" within the meaning of the 1940
Act by virtue of his position as Managing Director of Smith Barney Inc., an
indirect wholly owned subsidiary of Travelers Group Inc. Mr. McLendon also owns
shares and options to purchase shares of Travelers Group Inc., the indirect
parent of The Travelers Insurance Company.
The Dexter Corporation, of which Mr. McGill is a director, entered into
contracts with The Travelers Insurance Company to provide short-term disability
and life insurance benefits to employees of The Dexter Corporation, and to
administer the health and dental benefits programs for employees of The Dexter
Corporation.
Members of the Board of Trustees who are also officers or employees of
Travelers Group Inc. or its subsidiaries are not entitled to any fee. Members
of the Board of Trustees who are not affiliated as employees of Travelers Group
Inc. or its subsidiaries receive an aggregate annual retainer of $10,000 for
service on the Boards of the five Mutual Funds sponsored by The Travelers
Insurance Company and the seven Variable Annuity Separate Accounts established
by The Travelers Insurance Company. They also receive an aggregate fee of
$1,800 for each meeting of such Boards attended.
DECLARATION OF TRUST
The Fund is organized as a Massachusetts business trust. Pursuant to certain
decisions of the Supreme Judicial Court of Massachusetts, shareholders of such
a trust may, under certain circumstances, be held personally liable as partners
for the obligations of the trust. However, even if the Fund were held to be a
partnership, the possibility of its shareholders incurring financial loss for
that reason appears remote because the Fund's Declaration of Trust contains an
express disclaimer of shareholder liability for obligations of the Fund and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Fund or the Trustees, and because
the Declaration of Trust provides for indemnification out of Fund property for
any shareholder held personally liable for the obligations of the Fund.
The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, a Trustee
shall not be liable for the neglect or wrongdoing of any such person; provided,
however, that nothing in the Declaration of Trust shall protect a Trustee
against any liability for his willful misfeasance, bad faith, gross negligence
or the reckless disregard of his duties.
Shareholders first elected Trustees at a meeting held on April 30, 1985, and
most recently elected Trustees on April 23, 1993. No further meetings of
shareholders for the purpose of electing Trustees will be held, unless required
by law, and unless and until such time as less than a majority of the Trustees
holding office have been elected by shareholders, at which time the Trustees
then in office will call a shareholders' meeting for the election of Trustees.
Except as set forth above, the Trustees shall continue to hold office, unless
required by law, and may appoint successor Trustees. Trustees may voluntarily
resign from office, or a Trustee may be removed from office (1) at any time by
two-thirds vote of the Trustees; (2) by a majority vote of Trustees where any
Trustee becomes mentally or physically incapacitated; and (3) either by
declaration in writing or at a meeting called for such purpose by the holders
of not less than two-thirds of the outstanding shares or other voting interests
of the Fund. The Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as trustee, if requested in writing
to do so by the holders of not less than 10% of the outstanding shares or other
voting interests of the Fund. The Fund is required to assist in Shareholders'
communications. In accordance with current laws, insurance companies using the
Fund as an underlying investment option within their variable contract will
request voting instructions from contract owners participating in such
contracts, and will vote shares of the Fund in the same proportion as the
voting instructions received.
Voting rights are not cumulative; therefore, the holders of more than 50% of
the shares voting on the election of Trustees can, if they choose to do so,
elect all of the Trustees of the Fund, in which event the holders of the
remaining shares will be unable to elect any person as a Trustee.
No amendment may be made to the Declaration of Trust without a "vote of a
majority of the outstanding voting securities" of the Fund (as defined in the
1940 Act).
INVESTMENT ADVISER
Travelers Asset Management International Corporation (TAMIC), an indirect
wholly owned subsidiary of Travelers Group Inc., furnishes investment
management and advisory services to the Fund in accordance with the terms of an
Investment Advisory Agreement which was approved by shareholders on April 23,
1993.
-4-
<PAGE>
As required by the 1940 Act, the Advisory Agreement will continue in effect
for a period more than two years from the date of its execution only so long as
its continuance is specifically approved at least annually (i) by a vote of a
majority of the Board of Trustees, or (ii) by a vote of a majority of the
outstanding voting securities of the Fund. In addition, and in either event,
the terms of the Advisory Agreement must be approved annually by a vote of a
majority of the Board of Trustees who are not parties to, or interested persons
of any party to, the Advisory Agreement, cast in person at a meeting called for
the purpose of voting on such approval and at which the Board of Trustees is
furnished such information as may be reasonably necessary to evaluate the terms
of the Advisory Agreement. The Advisory Agreement further provides that it will
terminate automatically upon assignment; may be amended only with prior
approval of a majority of the outstanding voting securities of the Fund; may be
terminated without the payment of any penalty at any time upon sixty days'
notice by the Board of Trustees or by a vote of a majority of the outstanding
voting securities of the Fund; and may not be terminated by TAMIC without prior
approval of a new investment advisory agreement by a vote of a majority of the
outstanding voting securities of the Fund.
Under the terms of the Advisory Agreement, TAMIC shall:
(1) obtain and evaluate pertinent economic, statistical and
financial data and other information relevant to the investment policy of the
Fund, affecting the economy generally and individual companies or industries,
the securities of which are included in the Fund's portfolio or are under
consideration for inclusion therein;
(2) be authorized to purchase supplemental research and other
services from brokers at an additional cost to the Fund;
(3) regularly furnish recommendations to the Board of Trustees
with respect to an investment program for approval, modification or rejection
by the Board of Trustees;<odq>
(4) take such steps as are necessary to implement the investment
program approved by the Board of Trustees; and
(5) regularly report to the Board of Trustees with respect to
implementation of the approved investment program and any other activities in
connection with the administration of the assets of the Fund.
ADVISORY FEES
For furnishing investment management and advisory services to the Fund, TAMIC
is paid an amount equivalent on an annual basis to 0.3233% of the average daily
net assets of the Fund. The fee is computed daily and paid weekly. For the
three years ended December 31, 1992, 1993, and 1994 the advisory fees were
$2,131, $2,137 and $3,325, respectively.
REDEMPTIONS IN KIND
If conditions arise that would make it undesirable for the Fund to pay for
all redemptions in cash, the Fund may authorize payment to be made in portfolio
securities or other property.
However, the Fund has obligated itself under the 1940 Act to redeem for cash
all shares presented for redemption by any one shareholder up to $250,000, or
1% of the Fund's net assets if that is less, in any 90-day period. Securities
delivered in payment of redemptions would be valued at the same value assigned
to them in computing the net asset value per share. Shareholders receiving such
securities would incur brokerage costs when these securities are sold.
BROKERAGE
Subject to the general supervision of the Board of Trustees, TAMIC shall be
responsible for the investment decisions and the placement of orders for
portfolio transactions of the Fund. The Fund's portfolio transactions occur
primarily with issuers, underwriters or major dealers in money market
instruments acting as principals. Such transactions will normally be on a net
basis which will not involve payment of brokerage commissions. The cost of
securities purchased from an underwriter usually will include a commission paid
by the issuer to the underwriter; transactions with dealers normally will
reflect the spread between the bid and asked prices.
TAMIC will seek to obtain the best net price and most favorable execution of
orders for the purchase and sale of portfolio securities.
ADDITIONAL INFORMATION
The Travelers Insurance Company (the "Company") acts as transfer and dividend
disbursing agent for the Fund. The Company is a stock insurance company
chartered in 1864 in Connecticut and continuously engaged in the insurance
business since that time. The Company is a wholly owned subsidiary of The
Travelers Insurance Group Inc., which is indirectly owned,
-5-
<PAGE>
through a wholly
owned subsidiary, by Travelers Group Inc. On April 1, 1995, the Company owned
100% of the Fund's outstanding shares. The Company's Home Office is located at
One Tower Square, Hartford, Connecticut 06183, telephone (203) 277-0111.
Chase Manhattan Bank, N.A., Chase MetroTech Center, Brooklyn, New York 11245,
is custodian of all securities and cash of the Fund.
Coopers & Lybrand L.L.P., Independent Accountants, 100 Pearl Street,
Hartford, Connecticut, are the independent auditors for the Fund. The services
provided to the Fund include primarily the examination of the Fund's financial
statements. The financial statements included or incorporated by reference in
the Prospectus, Statement of Additional Information and Registration Statement
have been audited by Coopers & Lybrand L.L.P., as indicated in their report
thereon, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in accounting and auditing.
Except as otherwise stated in its prospectus or as required by law, the Fund
reserves the right to change the terms of the offer stated in its prospectus
without shareholder approval, including the right to impose or change fees for
services provided.
No dealer, salesman or other person is authorized to give any information or
to make any representation not contained in the Fund's prospectus, this
Statement of Additional Information or any supplemental sales literature issued
by the Fund, and no person is entitled to rely on any information or
representation not contained therein.
The Fund's prospectus and this Statement of Additional Information omit
certain information contained in the Fund's registration statement filed with
the Securities and Exchange Commission which may be obtained from the
Commission's principal office in Washington, D.C. upon payment of the fee
prescribed by the Rules and Regulations promulgated by the Commission.
FINANCIAL STATEMENTS
The financial statements contained in the Fund's December 31, 1994 Annual
Report to Shareholders are incorporated herein by reference. A copy may be
obtained by writing to The Travelers Insurance Company, Life Services -- 4 SHS,
One Tower Square, Hartford, Connecticut 06183-5030, or by calling
1-800-344-4298.
-6-
CASH INCOME TRUST
STATEMENT OF ADDITIONAL INFORMATION
L-11170S TIC Ed. 5-95
Printed in U.S.A.
<PAGE>
COPY OF ANNUAL REPORT DATED DECEMBER 31, 1994 TO WHICH THE REGISTRANT'S
FINANCIAL STATEMENTS ARE INCORPORATED IN THE PROSPECTUS/STATEMENT OF
ADDITIONAL INFORMATION BY REFERENCE TO THIS FILING.
</PAGE>
THE TRAVELERS VARIABLE PRODUCTS MUTUAL FUNDS
ANNUAL REPORT
CASH INCOME TRUST
DECEMBER 31, 1994
THETRAVELERS (logo with umbrella)
THE TRAVELERS INSURANCE COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
<PAGE>
TIMCO (logo with globe)
A COMPANY OF THETRAVELERS (logo with umbrella)
The Travelers Investment Management Company ("TIMCO")
provides equity management and advisory services for the following
Travelers Variable Product Mutual Funds contained in this report:
The Capital Appreciation Fund and the Social Awareness Stock
Portfolio. Additionally, TIMCO is the sub-adviser for Managed
Assets Trust.
TAMIC (logo with globe and lines)
TRAVELERS ASSET MANAGEMENT
INTERNATIONAL CORPORATION
Travelers Asset Management International Corporation
("TAMIC") provides fixed income management and advisory services
for the following Travelers Variable Product Mutual Funds contained
in this report: U.S. Government Securities Portfolio, High Yield
Bond Trust , Managed Assets Trust and Cash Income Trust.
JANUS CAPITAL
CORPORATION (logo with two faces)
Janus Capital Corporation ("Janus") is the sub-adviser for Capital
Appreciation Fund. As sub-adviser, Janus is responsible for the
daily management of Capital Appreciation Fund.
SMITH BARNEY (logo)
An asset management group of Smith Barney, Greenwich Street
Advisors provides management services for the Utilities Portfolio.
<PAGE>
THETRAVELERS (logo with umbrella)
THE TRAVELERS VARIABLE PRODUCTS MUTUAL FUNDS
INVESTMENT ADVISORY COMMENTARY AS OF DECEMBER 31, 1994
ECONOMIC REVIEW AND OUTLOOK
Economic growth kicked into high gear in 1994, and the economy used
up any excess capacity in product and labor markets. The fitful
recovery of the previous three years was replaced by a broad-based
expansion. Unemployment fell to 5.4% at year-end, from 7.0% at the
end of 1993. This robust economic activity was accompanied by few
signs of higher inflation. The Consumer Price Index rose just 2.7%
during 1994, the same as during the prior year. However, certain
commodity prices showed large gains, and there was evidence by
year-end of a modest acceleration in wage gains.
The Federal Reserve ("Fed") started a tightening policy in
February, while there still appeared to be slack in the economy.
Fed actions served to push 3-month T-bill rates up from 3.1% at the
start of the year to 5.7% at year-end. The yield curve rose and
flattened significantly during the year. Yields on one-year
Treasury bills rose by over 350 basis points, while yields on the
30-year bond were up over 150 basis points. At year-end, there
was little evidence that Fed tightening had started to slow growth.
In the fourth quarter, the economy grew at an annual rate of 4.5%,
well above the 2.0-2.5% pace that many economists think is
compatible with price stability.
There is normally a lag of 6-12 months between Federal Reserve
actions and the resulting impact on the economy. Coming into 1994,
Fed policy was very accommodative of economic growth, with real
money market interest rates (adjusted for inflation) close to zero.
Monetary policy became truly restrictive only with the last 2 or 3
rates hikes. With unemployment at levels that many economists view
as inflationary, we expect the Fed to push money market interest
rates somewhat higher in 1995. We think that the Federal Reserve
will succeed in slowing economic growth, and that inflation will
stay below 4% during 1995 and into 1996. However, convincing
evidence of the slowdown may take a while longer to emerge.
FIXED-INCOME MARKET COMMENTARY
Like a neutron bomb, which kills people but leaves buildings
intact, rising interest rates in 1994 decimated complicated
strategies much more than it hurt broad market averages. During
the fourth quarter, Orange County and emerging markets investors
were added to the casualty list, joining the hedge funds and
various corporate users of derivatives that were hurt earlier in
the year. While derivatives and mortgage backed securities have
taken much of the blame for these incidents, the rise in short-term
interest rates hurt any strategy that was based on leverage or
benefited from the prior three years of low short-term rates.
For the year, cash was the best performing asset, while stocks
treaded water and bonds had their worst year in recent history.
The Lehman Long Treasuries index showed a negative return of 7.6%
for the full year 1994. The long end of the yield curve stabilized
late in the year, allowing long Treasuries to outperform cash
during the fourth quarter. For the year as a whole, mortgage
backed securities and corporates outperformed similar duration
Treasuries. Late in the year, corporate spreads widened modestly
with growing concerns over the 1995 economic outlook; as a result,
long corporates underperformed similar duration Treasuries in the
fourth quarter.
<PAGE>
We have been concerned by tight spreads on corporate issues
throughout 1994. We expect issuance of new corporates to be light
in the first half of 1995; this will help to support prices of
corporate issues. Corporates are still likely to underperform
Treasuries if a significant economic slowdown develops. We think
inflation will stay below 4% in 1995. We also expect stable to
modestly lower yields on Treasuries with maturities of 5 years or
longer. If we are correct, bond investors will enjoy real returns,
after inflation, of 4-7% in 1995. If the Federal Reserve is
successful in containing economic growth and inflation, lower
interest rates (stronger bond prices) are likely in 1996.
EQUITY MARKET COMMENTARY
Despite increased pressure by the Federal Reserve Board and a
string of potentially dangerous financial crises, the U.S. stock
market managed to achieve a broad-based gain in the second half of
1994. Surprisingly strong corporate earnings offset the negative
effect of higher interest rates on equity valuations. During the
final six months of 1994, the S&P 500 Stock Index provided a total
return of 4.9%, including dividends. The stocks of small and
medium sized companies provided comparable returns over that
period, but with considerably higher volatility.
Technology stocks led the market during the second half. The
office and business equipment group was up over 25%, owing to
continued booming sales of personal computers and a sharp rebound
in networking stocks. Semi conductor stocks advanced in concert,
reflecting strong demand for memory chips and microprocessors.
Investors also returned to many defensive and recently out-of-favor
"growth" groups in the second half. In the consumer staples
sector, for example, beverage stocks rose 24% on earnings
surprising and improving international growth prospects. In the
health care sector, drug and medical product stocks rebounded over
20%.
On the negative side, rising interest rates and fears of an
impending economic slowdown hurt many interest sensitive and early
cycle groups. Airline, trucking and railroad stocks were down over
10%. Auto stocks were off 8%. Regional banks declined 12%. In the
energy sector, independent producers and drilling companies were
down 12%, due to weaker oil and gas prices and the poor outlook for
new production.
We remain constructive, but cautious, in our outlook for stocks in
1995. With the S&P 500 Stock Index trading at only 14.5 times
operating earnings, the equity market starts the year with
reasonable valuation support. A more stable interest rate
environment could even help to reverse the broad-based market price
to earnings ratio contraction that has occurred over the past year.
Where we think the stock market is most likely to run into problems
is on the earnings front. Corporate earnings are expected to grow
8-10% in 1995, but most of that growth is expected to occur in the
first half of the year. By the third quarter, we expect a
noticeable deceleration in earnings growth. With equity indices
near their all-time highs, the stock market is probably more
vulnerable than the bond market to negative surprises, given the
relative performance of the two asset classes over the past year.
TIMCO (logo of globe) TAMIC (logo globe with lines)
A COMPANY OF THETRAVELERS(logo TRAVELERS ASSET MANAGEMENT
with umbrella) INTERNATIONAL CORPORATION
<PAGE>
CASH INCOME TRUST
As has been its history, the account experienced little change
during the year. Although Cash Income Trust's asset size grew
somewhat during the year, the safety and liquidity of U.S. Treasury
Bills continues to be its most beneficial investment. Therefore,
the entire account's holdings are found in Treasury Bills.
The growth of the account is constantly monitored. Any
opportunities for diversification in holdings resulting from a
drastic increase in asset size will be captured as deemed
appropriate.
<PAGE>
<TABLE>
CASH INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $1,197,828) $ 1,199,633
Cash 10,852
Receivables:
Interest 1,868
Receivable from Travelers Insurance 52,435
---------
Total Assets 1,264,788
---------
LIABILITIES:
Payables:
Investment management and advisory fees 47
Dividends 6,120
Accrued expenses:
Reimbursable expenses 52,435
Other expenses 3,493
---------
Total Liabilities 62,095
---------
NET ASSETS
(Applicable to 1,202,693 shares outstanding at $1.00 per share) $ 1,202,693
------------
------------
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
CASH INCOME TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 42,643
EXPENSES:
Investment management and advisory fees $ 3,325
Accounting and audit fees 51,856
Custodian fees 3,231
Printing and postage 826
Trustees' fees 5,733
Registration fees 397
--------
Total expenses before reimbursement from Travelers Insurance 65,368
Less: Reimbursement from Travelers Insurance (52,435)
--------
Net expenses 12,933
--------
Net investment income 29,710
--------
Net increase in net assets resulting from operations $ 29,710
--------
--------
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
CASH INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993
--------- ---------
<S> <C> <C>
OPERATIONS:
Net investment income $ 29,710 $ 14,000
--------- --------
Net increase in net assets resulting from operations 29,710 14,000
--------- --------
DISTRIBUTION TO SHAREHOLDERS FROM NET INVESTMENT INCOME (29,710) (14,000)
--------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 3,009,583 230,962
Dividend reinvestment 24,539 15,987
Payments for shares redeemed (2,478,281) (297,508)
--------- --------
Net increase (decrease) in net assets resulting from capital
share transactions 555,841 (50,559)
--------- --------
Net increase (decrease) in net assets 555,841 (50,559)
NET ASSETS:
Beginning of year 646,852 697,411
--------- --------
End of year $ 1,202,693 $ 646,852
--------- --------
--------- --------
</TABLE>
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Cash Income Trust ("Fund CI") is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end management investment company. Shares of
Fund CI are currently offered, without a sales charge, to separate
accounts of The Travelers Insurance Company ("Travelers
Insurance"), an indirect wholly owned subsidiary of The Travelers
Inc., in connection with the issuance of certain variable life
insurance contracts.
The following is a summary of significant accounting policies
consistently followed by Fund CI in the preparation of its
financial statements.
SECURITY VALUATION.
Short-term investments for which a quoted market price is available
are valued at market. Short-term investments for which there is no
reliable quoted market price are valued by computing a market value
based upon quotations from dealers or issuers for securities of a
similar type, quality and maturity.
REPURCHASE AGREEMENTS.
When Fund CI enters into a repurchase agreement (a purchase of
securities whereby the seller agrees to repurchase the securities
at a mutually agreed upon date and price), the repurchase price of
the securities will generally equal the amount paid by Fund CI plus
a negotiated interest amount. The seller under the repurchase
agreement will be required to provide to Fund CI securities
(collateral) whose market value, including accrued interest, will
be at least equal to 102% of the repurchase price. Fund CI
monitors the value of collateral on a daily basis. Repurchase
agreements will be limited to transactions with national banks and
reporting broker dealers believed to present minimal credit risks.
Fund CI's custodian will take actual or constructive receipt of all
securities underlying repurchase agreements until such agreements
expire.
TAXES.
Fund CI has qualified, and intends to continue to qualify each
year, as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended. As a regulated
investment company, Fund CI is relieved of any federal income tax
liability by distributing all of its net taxable investment income
and net taxable capital gains, if any, to its shareholder. Fund CI
further intends to avoid excise tax liability by distributing
substantially all of its investment income. Therefore, no federal
income tax provision has been made by Fund CI in its financial
statements. As of December 31, 1994, Fund CI had capital loss
carryovers totalling $1,981, which may be available to offset any
future realized taxable gains, to the extent provided by
regulations. These amounts expire during the period 1995-2002.
DIVIDENDS.
Fund CI declares dividends daily, pays dividends monthly, and
automatically reinvests such dividends in additional shares at net
asset value. Dividends are declared from the total of net
investment income.
OTHER.
Security transactions are accounted for on the trade date.
Interest income is recorded on the accrual basis.
2. INVESTMENTS
Realized gains and losses from security transactions are reported
on an identified-cost basis.
3. FUND CHARGES
Investment management and advisory fees are calculated daily at an
annual rate of 0.3233% of Fund CI's average net asset value. These
fees are paid to Travelers Asset Management International
Corporation, an indirect wholly owned subsidiary of The Travelers
Inc.
Travelers Insurance has agreed to reimburse Fund CI for the amount
by which all of Fund CI's aggregate annualized operating expenses,
excluding brokerage commissions and any interest charges and taxes,
exceed 1.25% of Fund CI's average net assets. Trustees and
officers of Fund CI who are also officers or employees of The
Travelers Inc., or its subsidiaries, receive no compensation
directly from Fund CI.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
4. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust authorizes the issuance of an unlimited
number of shares of beneficial interest with a par value of $0.10
per share. Transactions in shares of Fund CI were as follows:
<TABLE>
<CAPTION> FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
<S> <C> <C>
1994 1993
------ -----
Shares sold 3,009,583 230,962
Shares redeemed (2,478,281) (297,508)
Shares issued in reinvestment
of distributions 24,539 15,987
------- -------
Net 555,841 (50,559)
------- -------
------- -------
</TABLE>
As of December 31, 1994, all outstanding shares of beneficial
interest were owned by The Travelers Fund UL for Variable Life
Insurance, a separate account of Travelers Insurance.
<PAGE>
<TABLE>
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
5. FINANCIAL HIGHLIGHTS*
(Per share data for a share outstanding
throughout each year)
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
1994 1993
--------- ---------
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $1.00 $1.00
Income from operations 0.0278 0.0214
Less distributions from net investment income (0.0278) (0.0214)
--------- ---------
Net asset value, end of year (unchanged during the year) $1.00 $1.00
--------- ---------
--------- ---------
TOTAL RETURN*** 2.78% 2.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (thousands) $1,203 $647
Ratio of expenses to average net assets 1.25%** 0.94%**
</TABLE>
<TABLE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
1992 1991 1990
--------- --------- ---------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $1.00 $1.00 $1.00
Income from operations 0.0322 0.0650 0.0744
Less distributions from net investment income (0.0322) (0.0650) (0.0744)
--------- --------- ---------
Net asset value, end of year (unchanged during the year) $1.00 $1.00 $1.00
--------- --------- ---------
--------- --------- ---------
TOTAL RETURN*** 3.22% 6.50% 7.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (thousands) $697 $690 $619
Ratio of expenses to average net assets 0.38%** 0.38%** 0.08%**
*The information set forth in Note 5 replaces the data
presented in prior years as supplementary information.
**The ratio of expenses to average net assets for 1990
and later years reflects an expense reimbursement by
Travelers Insurance in connection with voluntary expense
limitations, including those described in Note 3. Without
the expense reimbursement, the ratios of expenses to
average net assets would have been 6.40%, 8.47%, 7.70%,
11.61% and 20.99% for the years ended December 31,
1994, 1993, 1992, 1991 and 1990, respectively.
***Total return is determined after reflecting the
reinvestment of dividends declared during the year, by
dividing net investment income by average net assets. As
described in Note 1, shares in Fund CI are only sold to
Travelers Insurance separate accounts in connection with
the issuance of variable life insurance contracts. The total
return does not reflect the deduction of any contract charges
or fees assessed by Travelers Insurance separate accounts.
Prior year amounts have been reclassified to conform to
the current year's presentation.
</TABLE>
<PAGE>
<TABLE>
CASH INCOME TRUST
STATEMENT OF INVESTMENTS
DECEMBER 31, 1994
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ---------
<S> <C> <C>
SHORT-TERM INVESTMENTS (100%)
U.S. GOVERNMENT SECURITIES (100%)
United States of America Treasury,
5.01% due January 26, 1995 $ 20,000 $ 19,760
United States of America Treasury,
5.29% due February 16, 1995 55,000 54,575
United States of America Treasury,
5.34% due February 16, 1995 108,000 106,783
United States of America Treasury,
5.41% due February 16, 1995 140,000 138,309
United States of America Treasury,
5.44% due March 23, 1995 890,000 880,206
---------
TOTAL INVESTMENTS (100%)
(COST $1,197,828) (A) $ 1,199,633
----------
----------
NOTES
(A) The cost of investments for federal income tax purposes
is identical.
See Notes to Financial Statements
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholder of Cash Income Trust:
We have audited the accompanying statement of assets and
liabilities of
CASH INCOME TRUST
including the statement of investments, as of December 31, 1994,
and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities
owned as of December 31, 1994, by correspondence with the
custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Cash Income Trust as of December 31, 1994,
the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in
the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
February 15, 1995
<PAGE>
This page intentionally left blank.
<PAGE>
Investment Advisers
------------------------
(CAPITAL APPRECIATION FUND AND
SOCIAL AWARENESS STOCK PORTFOLIO)
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
Hartford, Connecticut
(MANAGED ASSETS TRUST, HIGH YIELD
BOND TRUST, CASH INCOME
TRUST AND U.S. GOVERNMENT SECURITIES PORTFOLIO)
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION
Hartford, Connecticut
(UTILITIES PORTFOLIO)
GREENWICH STREET ADVISORS
New York, New York
Independent Accountants
------------------------
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
Custodian
------------------------
SHAWMUT BANK CONNECTICUT, N.A.
Hartford, Connecticut
This report is prepared for the general information
of contract owners and is not an offer of shares of Managed Assets
Trust, High Yield Bond Trust, Capital Appreciation Fund, Cash
Income Trust, U.S. Government Securities Portfolio, Social
Awareness Stock Portfolio or Utilities Portfolio. It should not be
used in connection with any offer except in conjunction with the
Prospectuses for the Variable Annuity and Variable Universal Life
Insurance products offered by The Travelers Insurance Company and
the Prospectuses of the underlying mutual funds, which collectively
contain all pertinent information, including the applicable selling
commissions.
VG-181 (Annual) (12-94) Printed in U.S.A.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The financial statements of the Registrant and the Report of Independent
Accountants are contained in the December 31, 1994 Annual Report to
Shareholders and are incorporated by reference in the Statement of
Additional Information. The Registrant's financial statements include:
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the year ended December 31, 1994
Statement of Changes in Net Assets for the years ended December 31,
1994 and 1993
Statement of Investments as of December 31, 1994
Notes to Financial Statements
(b) Exhibits
*1. Declaration of Trust. (Incorporated herein by reference to
Exhibit 1(b)(1) to the Registration Statement on Form N-1 filed on
October 1, 1981.)
*2. By-Laws of Cash Income Trust. (Incorporated herein by reference to
Exhibit 1(b)(2) to the Registration Statement on Form N-1 filed on
October 1, 1981.) Amendments to the Fund's By-Laws are also incorporated
herein by reference to Exhibits 24(b)(2) to Post-Effective Amendments
No. 8 and 17 to the Registration Statement on Form N-1A.
*5. Investment Advisory Agreement between the Registrant and Travelers Asset
Management International Corporation. (Incorporated herein by reference
to Exhibit 24(b)(5) to Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A filed on February 17, 1993.)
8. Custody Agreement dated February 1, 1995 between the Registrant and Chase
Manhattan Bank, N.A., Brooklyn, New York.
*9. Transfer and Recordkeeping Agreement between the Registrant and The
Travelers Insurance Company. (Incorporated herein by reference to
Exhibit 24(b)(9) to Post-Effective Amendment No. 18 to the Registration
Statement on Form N-1A filed on April 14, 1992.)
10. An opinion and consent of counsel as to the legality of the securities
registered by the Fund.
11(A).Consent of Coopers & Lybrand L.L.P., Independent Accountants, to the use
of their name and opinion in Part A and Part B of this Form N-1A and to
the incorporation by reference of their report.
11(B).Powers of Attorney authorizing Ernest J. Wright as signatory for Heath B.
McLendon, Knight Edwards, Robert E. McGill, III, Lewis Mandell, Frances
M. Hawk and Ian R. Stuart.
27. Financial Data Schedule
* Previously filed and incorporated herein by reference.
<PAGE>
Item 25. Persons Controlled By or Under Common Control With the Registrant
Not Applicable.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of February 17, 1995
Shares of beneficial
interest, without par value Two (2)
Item 27. Indemnification
Provisions for the indemnification of the Fund's Trustees and officers
are contained in the Fund's Declaration of Trust which was filed with the
Fund's Registration Statement as Exhibit 1(b)(1) and is incorporated by
reference herein.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Officers and Directors of Travelers Asset Management International
Corporation (TAMIC), the Fund's Investment Adviser, are set forth in the
following table:
Name Position with TAMIC Other Business
Marc P. Weill Director, Chairman and Senior Vice President **
President
David A. Tyson Director and Senior Vice Senior Vice President *
President
David Amaral Vice President Fixed Income Trader**
John R. Calcagni Vice President Second Vice President*
Gene Collins Vice President Investment Officer**
Eric Dobbin Vice President Investment Officer**
Phillip A. Duncan Vice President Investment Officer**
Emil Molinaro Vice President Vice President**
F. Denney Voss Vice President Senior Vice President**
William H. White Treasurer Vice President and
Treasurer *
Charles B. Chamberlain Assistant Treasurer Assistant Treasurer *
George C. Quaggin Assistant Treasurer Assistant Treasurer *
John R. Britt Secretary Assistant Secretary *
Marla A. Berman Assistant Secretary Assistant General
Counsel**
Paul M. Danie Compliance Officer Assistant Director*
Frank J. Fazzina Controller Director *
* Positions are held with The Travelers Insurance Company, One Tower Square,
Hartford, Connecticut 06183.
** Positions held with Travelers Group Inc., 388 Greenwich Street, New York,
New York.
<PAGE>
Item 29. Principal Underwriter
Not Applicable.
Item 30. Location of Accounts and Records
(1) The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
(2) Chase Manhattan Bank, N. A.
Chase MetroTech Center
Brooklyn, New York
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
The undersigned Registrant hereby undertakes to provide to each person to
whom a prospectus is delivered 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, Cash Income Trust, certifies that it meets
all of the requirements for effectiveness of this post-effective amendment to
this Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and that it has duly caused this amendment to this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Hartford, State of Connecticut, on April 25, 1995.
CASH INCOME TRUST
(Registrant)
By: *HEATH B. McLENDON
__________________________
Heath B. McLendon
Chairman, Board of Trustees
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated on April 25, 1995.
*HEATH B. McLENDON Chairman of the Board
- ------------------
(Heath B. McLendon)
*KNIGHT EDWARDS Trustee
- ---------------
(Knight Edwards)
*ROBERT E. McGILL, III Trustee
- ----------------------
(Robert E. McGill, III)
*LEWIS MANDELL Trustee
- --------------
(Lewis Mandell)
*FRANCES M. HAWK Trustee
- ----------------
(Frances M. Hawk)
*IAN R. STUART Treasurer and Chief Accounting Officer
- --------------
(Ian R. Stuart)
*By: /s/ Ernest J. Wright
----------------------------------
Ernest J. Wright, Attorney-in-Fact
Secretary, Board of Trustees
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Method of Filing
1. Declaration of Trust. (Incorporated herein by
reference to Exhibit 1(b)(1) to the Registration
Statement on Form N-1 filed on October 1, 1981.)
2. By-Laws of Cash Income Trust. (Incorporated herein
by reference to Exhibit 1(b)(2) to the Registration
Statement on Form N-1 filed on October 1, 1981.)
Amendments to the Fund's By-Laws are also
incorporated herein by reference to Exhibits 24(b)(2)
to Post- Effective Amendments No. 8 and 17 to the
Registration Statement on Form N-1A.
5. Investment Advisory Agreement between the
Registrant and Travelers Asset Management
International Corporation. (Incorporated herein by
reference to Exhibit 24(b)(5) to Post-Effective
Amendment No. 19 to the Registration Statement on
Form N-1A filed on February 17, 1993.)
8. Custody Agreement dated February 1, 1995 between Electronically
the Registrant and Chase Manhattan Bank, N.A.,
Brooklyn, New York.
9. Transfer and Recordkeeping Agreement between the
Registrant and The Travelers Insurance Company.
(Incorporated herein by reference to
Exhibit 24(b)(9) to Post-Effective Amendment No. 18
to the Registration Statement on Form N-1A filed on
April 14, 1992.)
10. An opinion and consent of counsel as to the legality Electronically
of the securities registered by the Fund.
11(A). Consent of Coopers & Lybrand L.L.P., Independent Electronically
Accountants, to the use of their name and opinion in
Part A and Part B of this Form N-1A and to the
incorporation by reference of their report.
11(B). Powers of Attorney authorizing Ernest J. Wright as Electronically
signatory for Heath B. McLendon, Knight Edwards,
Robert E. McGill, III, Lewis Mandell, Frances M. Hawk
and Ian R. Stuart.
27. Financial Data Schedule Electronically
<PAGE>
Exhibit 8
CUSTODY AGREEMENT
Agreement made as of the 1st day of February, 1995 between each of the
registered management investment companies of The Travelers Insurance
Company listed below, and such others as may be added from time to time on
Schedule A attached hereto (each individually hereinafter called the
"Customer"), and The Chase Manhattan Bank, N.A., (hereinafter called the
"Bank"), whereby the Customer appoints the Bank, and the Bank hereby agrees
to act, as Custodian of the cash and securities ("Assets") of the Customer,
subject to the terms of this Agreement.
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or
other obligations for the payment of money, bullion, coin and any
certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same or evidencing
or representing any other rights or interests therein and other
similar property whether certificated or uncertificated as may be
received by the Bank for the account of the Customer ("Securities");
and
(b) A deposit account in the name of the Customer ("Deposit Account")
for any and all cash in any currency received by the Bank for the
account of the Customer, which cash shall not be subject to withdrawal
by draft or check. The Customer warrants its authority to: 1) deposit
the cash and Securities (Assets) received in the Accounts and 2) give
instructions (as defined in Section 9) concerning the Accounts. Upon
written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional
Accounts under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK.
Unless instructions (as defined in Section 9) specifically require another
location acceptable to the Bank:
(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where
such Securities are to be presented for payment or where such
Securities are acquired; and
(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or it is
the legal currency for the payment of public or private debts.
Cash may be held pursuant to Instructions (as defined in Section 9) in
either interest or non-interest bearing accounts as may be available for the
particular currency. To the extent Instructions are issued and the Bank can
comply with such Instructions, the Bank is authorized to maintain cash
balances on deposit for the Customer with itself or one of its affiliates
at such reasonable rates of interest as may from time to time be paid on such
accounts, or in non-interest bearing accounts as the Customer may direct,
if acceptable to the Bank.
<PAGE>
3. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank will make payments from the Deposit Account upon receipt of
Instructions which include all information required by the Bank.
(b) In the event that any payment to be made under this Section 3 exceeds
the funds available in the Deposit Account, the Bank, in its
discretion, may advance the Customer such excess amount which shall
be deemed a loan payable on demand, bearing interest at the rate
customarily charged by the Bank on similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit
Account, with interest, dividends, redemptions or any other amount
due, the Customer will promptly return any such amount upon oral or
written notification: (i) that such amount has not been received
in the ordinary course of business or (ii) that such amount was
incorrectly credited. If the Customer does not promptly return any
amount upon such notification, the Bank shall be entitled, upon oral
or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited.
The Bank shall have no duty or obligation to institute legal
proceedings, file a claim or a proof of claim in any insolvency
proceeding or take any other action with respect to the collection
of such amount, but may act for the Customer upon Instructions after
consultation with the Customer.
4. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank
upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for
Securities received for, and delivery of Securities out of, the
Custody Account may be made in accordance with the customary or
established securities trading or securities processing practices
and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the
expectation of receiving later payment and free delivery. Delivery
of Securities out of the Custody Account may also be made in any
manner specifically required by Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect
to any sale, exchange or purchase of Securities. Otherwise, such
transactions will be credited or debited to the Accounts on the
date cash or Securities are actually received by the Bank and
reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts
in its discretion if the related transaction fails to settle
within a reasonable period, determined by the Bank in its
discretion, after the contractual settlement date for the
related transaction.
(ii) If any Securities delivered pursuant to this Section 4 are
returned by the recipient thereof, the Bank may reverse the
credits and debits of the particular transaction at any time.
<PAGE>
5. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the
Bank will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other
income items which call for payment upon presentation, to the extent
that the Bank is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of
Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of
the Assets. Unless the Customer sends the Bank a written exception or
objection to any Bank statement within sixty (60) days of receipt, the
Customer shall be deemed to have approved such statement. In such event,
or where the Customer has otherwise approved any such statement, the Bank
shall, to the extent permitted by law, be released, relieved and discharged
with respect to all matters set forth in such statement or reasonably implied
therefrom as though it had been settled by the decree of a court of competent
jurisdiction in an action where the Customer and all persons having or claiming
an interest in the Customer or the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank of any payment, redemption or other transaction
regarding Securities in the Custody Account in respect of which the Bank has
agreed to take any action under this Agreement.
6. CORPORATE ACTIONS; PROXIES.
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase
plans and rights offerings, or legal notices or other material intended to
be transmitted to securities holders ("Corporate Actions"), the Bank will
give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a
Corporate Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person, but if Instructions
are not received in time for the Bank to take timely action, or actual notice
of such Corporate Action was received too late to seek Instructions, the Bank
is authorized to sell such rights entitlement or fractional interest and to
credit the Deposit Account with the proceeds or take any other action it
deems in good faith, to be appropriate in which case it shall be held
harmless for any such action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing.
Such proxies shall be executed in the
<PAGE>
appropriate nominee name relating to Securities in the Custody Account
registered in the name of such nominee but without indicating the manner
in which such proxies are to be voted; and where bearer Securities are
involved, proxies will be delivered in accordance with Instructions.
7. NOMINIEES.
Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank or securities depository, as the case may be.
The Bank may without notice to the Customer cause any such Securities to
cease to be registered in the name of any such nominee and to be registered
in the name of the Customer. In the event that any Securities registered in
a nominee name are called for partial redemption by the issuer, the Bank may
allot the called portion to the respective beneficial holders of such class
of security in any manner the Bank deems to be fair and equitable. The
Customer agrees to hold the Bank and their respective nominees harmless from
any liability arising directly or indirectly from their status as a mere
record holder of Securities in the Custody Account.
All securities accepted by the Bank on behalf of the Customer under the
terms of this Agreement shall be in "street name" or other good delivery from.
8. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons shall continue to be Authorized
Persons until such time as the Bank receives Instructions from the Customer
or its designated agent that any such employee or agent is no longer an
Authorized Person.
9. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, tested telex, TWX, facsimile
transmission, bank wire or other teleprocess or electronic instruction
or trade information system acceptable to the Bank which the Bank believes
in good faith to have been given by Authorized Persons or which are
transmitted with proper testing pursuant to terms and conditions which the
Bank may specify. Unless otherwise expressly provided, all Instructions
shall continue in full force and effect until canceled or superseded.
Any instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which
confirmation may bear the facsimile signature of such Person), but the
Customer will hold the Bank harmless for the failure of an Authorized
Person to send such confirmation in writing, the failure of such confirmation
to conform to the telephone instructions received or the Bank's failure
to produce such confirmation at any subsequent time. The Bank may
electronically record any Instructions given by telephone, and any other
telephone discussions with respect to the Custody Account or transactions
pursuant to the Agreement. The Customer shall be responsible from
safeguarding any testkeys, identification codes or other security devices
which the Bank shall make available to the Customer or its Authorized Persons.
The Bank agrees to safeguard and maintain the confidentiality of all
passwords or numbers and to limit access to this information for the purpose
of acting pursuant to this agreement.
<PAGE>
10. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in
Instructions which are consistent with the provisions of this
Agreement as follows:
(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of
Assets. In the event of any loss to the Customer by reason
of the failure of the Bank to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of
the Customer's direct damages, to be determined based on the
market value of the property which is the subject of the loss
at the date of discovery of such loss and without reference
to any special conditions or circumstances.
(ii) The Bank will not be responsible for any act, omission,
default or for the solvency of any broker or agent which
it appoints unless such appointment was made negligently
or in bad faith.
(iii) The bank shall be indemnified by, and without liability
to the Customer for any action taken or omitted by the Bank
whether pursuant to Instructions or otherwise within the
scope of this Agreement if such act or omission was in
good faith, without negligence. In performing its
obligations under this Agreement, the Bank may rely on the
genuineness of any document which it believes in good faith
to have been validly executed.
(iv) The Customer agrees to pay for and hold the Bank harmless
from any liability or loss resulting from the imposition or
assessment of any taxes or other governmental charges, and
any related expenses with respect to income from or Assets
in the Accounts.
(v) The Bank will use its best efforts to maintain, during the
term of this Agreement, insurance coverage comparable to
the types, amounts and limits set forth below:
<TABLE>
<CAPTION>
Standard Limit Per
Form No. 24 Loss Aggregate
___________ _________ _________
<S> <C> <C>
* Insuring Agreements $75,000,000 $75,000,000
ABC-Basic Coverages
* Insuring Agreement 75,000,000 75,000,000
D-Forgery or Alteration
* Insuring Agreement 75,000,000 75,000,000
E-Securities (1)
* Extortion Coverage (2)
A. Threat to Persons 20,000,000 20,000,000
B. Threat to Property 20,000,000 20,000,000
* Computer Systems 75,000,000 75,000,000
Coverage (3)
* Deductible Amount 2,500,000
Notes:
_____
(1) An additional $125,000,000 insurance coverage for
securities located at custodian's head office or at
The Chase Manhattan Bank, N.A.,
<PAGE>
Chase MetroTech Center, Brooklyn, New York 11245,
Attention: Global Custody Division.
(2) No deductible (separate policy).
(3) This coverage is for electronic funds transfer systems.
There is additional coverage for all EDP equipment and
Media under Commercial Property Insurance. The limits
of this coverage are $583,000,000.
(vi) Without limiting the foregoing, the Bank shall not be liable
for any loss which results from: 1) the general risk of
investing, or 2) investing or holding Assets in a particular
country including, but not limited to, losses resulting from
nationalization, expropriation or other governmental actions;
regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market
conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(vii) Neither party shall be liable to the other for any loss due
to forces beyond their control including, but not limited
to strikes or work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear fusion, fission or
radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 10, it is specifically acknowledged that the Bank shall
have no duty or responsibility to:
(i) question Instructions or make any suggestions to the Customer
or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments
or the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding any
default in the payment of principal or income of any security
other than as provided in Section 3(c) of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or
other party to which Securities are delivered or payments
are made pursuant to this Agreement:
(v) review or reconcile trade confirmations received from brokers.
The Customer or its Authorized Persons (as defined in
Section 8) issuing Instructions shall bear any responsibility
to review such confirmations against Instructions issued to
and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or
affiliates may have a material interest in a transaction,
or circumstances are such that the Bank may have a potential
conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to
other customers, act as financial advisor to the issuer of
Securities, act as a lender to the issuer of Securities, act
in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn
profits from any of the activities listed herein.
11. FEES AND EXPENSES.
<PAGE>
The Customer agrees to pay to the Bank for its services under this
Agreement such amount as may be agreed upon in writing, together with the
Bank's reasonable out-of-pocket expenses.
12. MISCELLANEOUS.
(a) Certification of Residency, etc. The Customer certifies that it is
a resident of the United States with its principal place of business
in the State of Connecticut and agrees to notify the Bank of any
changes in residency. The Bank may rely upon this certification or
the certification of such other facts as may be required to administer
the Bank's obligations under this Agreement. The Customer will
indemnify the Bank against all losses, liability, claims or demands
arising directly or indirectly from any such certifications.
(b) Access to Records. The Bank shall allow the Customer's independent
public accountant reasonable access to the records of the Bank
relating to the Assets as is required in connection with their
examination of books and records pertaining to the Customer's affairs.
(c) Periodic Statements, Books and Records. The Bank shall notify the
Customer of each transaction involving securities in the Account and
will render a statement of transactions with respect to the Account
on a regular basis. Periodic statements shall be rendered as the
Customer may reasonably require, but not less frequently than monthly.
The Bank shall at all times maintain proper books and records that
shall separately identify the securities. Books and records of the
Bank (and of any agent or depository) relating to the Account shall
at all times during regular business hours of the Bank (or of any
agent or depository) be available for inspection by duly authorized
officers, employees or agents of Customer, or by legally authorized
regulatory officers who are then in the process of reviewing the
Customer's financial affairs upon adequate proof to the Bank of
such official status. The Bank agrees to maintain such records as
may be sufficient to determine and verify information concerning the
custodied securities which must be included in the Annual and
Semi-Annual Reports of the Customer, or any other report required by
applicable law.
(d) Books and Records Are Property of Customer. The Bank hereby
acknowledges that all books and records relating to the services
provided to Customer hereunder are the property of the Customer
and subject to its control; provided, however, that during the
term of the Agreement, the Customer shall not exercise such
control so as to interfere with the performance of the Bank's
duties hereunder.
(e) Governing Law; Successors and Assigns. This Agreement shall
be governed by the laws of the State of New York.
(f) Entire Agreement; Applicable Riders. Customer represents
that the Assets deposited in the Accounts are (Check one):
___ Employee Benefit Plan or other assets subject to the
Employee Retirement Income Security Act of 1974,
as amended ("ERISA");
_X_ Investment company assets subject to certain Securities and
Exchange Commission ("SEC") rules and regulations;
___ Neither of the above.
This Agreement consists exclusively of this document together with
Schedule A and Exhibit 1.
<PAGE>
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between
the parties. Any amendment to this Agreement must be in writing,
executed by both parties.
(g) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or enforceable in any respect
on the basis of any particular circumstances or in any jurisdiction,
the validity, legality and enforceability of such provision or
provisions under other circumstances or in other jurisdictions and
of the remaining provisions will not in any way be affected or
impaired.
(h) Waiver. Except as otherwise provided in this Agreement, no failure
or delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or
partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right. No waiver by a
party of any provision of this Agreement, or waiver of any breach or
default, is effective unless in writing and signed by the party
against whom the waiver is to be enforced.
(i) Notices. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be
required under this Agreement are to be sent to the parties at the
following addresses or such other addresses as may subsequently be
given to the other party in writing:
Bank: The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division
Customer: The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Securities Department, Cashier Division
13. CONFIDENTIALITY OF RECORDS.
The Bank agrees to treat all records and other information relating to
the Customer or the Custody Account as confidential, except that it
may disclose such information after prior notification to and prior
approval of the Customer, which will not be unreasonably withheld.
Nothing in this paragraph shall prevent the Bank from divulging
information to civil, criminal, bank, or securities regulatory
authorities or where the Bank may be exposed to civil or criminal
proceedings or penalties for failure to comply.
14. RELIANCE UPON DATA.
The Bank may rely on the accuracy of all data received by it through
electronic means and initiated by any person authorized by the Customer.
Every person who uses the correct passwords to obtain information by
electronic means or to make permissible transactions shall be presumed
to have the Customer's authority unless the Customer can prove that:
(a) a person using a correct password was not authorized to have access
to this information;
(b) the person using the password obtained it through or as a result of
the Bank's disclosure (whether direct or indirect); and
<PAGE>
(c) the disclosure by the Bank was not authorized by the Customer prior
to its unauthorized use.
15. OPTION GUARANTEE LETTERS OR ESCROW RECEIPTS.
The Customer covenants and agrees that in the event that the Bank shall
at any time at the Customer's request enter into an "Option Guarantee
Letter" or execute an "SD Option Clearing Corporation Escrow Receipt"
at the request of the Customer covering securities deposited with the
Bank pursuant to the Agreement, the Customer will hold the Bank harmless
from any and all loss, cost, or damage which the Bank may suffer by reason
of being requested to deliver securities or other property under such
Option Guarantee Letters or Escrow Receipts which securities and/or other
property were not in fact delivered to the Bank or to the Bank's agent for
transmittal to the Bank.
16. SUBROGATION OF RIGHTS.
At the election of the Customer, the Customer shall be entitled to be
subrogated to the rights of the Bank, with respect to any claim against
any other person or institution which the Bank may have, as a consequence
of any loss or damage to custodied securities. In such event, the Customer
shall consult with the Bank concerning selection of counsel and management
of any litigation to cover for such loss.
17. RESOLUTION OF DISPUTES.
In the event of any loss of or damage to custodied securities or dispute
between the Bank and the Customer concerning the Account, the Bank and
the Customer agree to attempt to resolve the dispute through negotiation
or a method of alternative dispute resolution. No litigation shall be
commenced without a certification by an authorized officer, employee,
or agent of either party that the dispute cannot be resolved by negotiation
or alternative dispute resolution provided in writing at least 10 days
before commencing legal action.
18. TRUSTEES AND SHAREHOLDERS OF MUTUAL FUNDS NOT PERSONALLY LIABLE.
To the extent this Agreement is made on behalf of the mutual funds
(the "Funds"), it shall be made by an officer of the Fund, not
individually, but solely as an officer or Trustee of the Fund under
its Declaration of Trust, and the obligations under this Agreement are
not binding upon, nor shall any resort be had to the private property
of, any of the Trustees, shareholders, officers, employees or agents
of the Funds personally, but shall bind only the Funds' property.
19. INFORMATION TO CALIFORNIA COMMISSIONER OF INSURANCE.
The Bank agrees that it shall furnish to the California Commissioner
of Insurance, at the Customer's expense, any information or reports
concerning the funds as the Commissioner, in the performance of his
or her duties, may request.
<PAGE>
20. DEPOSIT OF SECURITIES IN SECURITIES SYSTEM.
If the Customer wishes to deposit securities with the Bank to be held
in the Bank's account with one or more depositories or clearinghouses
or in the book-entry system authorized by the U.S. Department of the
Treasury or other federal agency (collectively referred to as
"Securities Systems") pursuant to an arrangement which is approved
by the Customer, then the Bank will do the following:
(a) The Bank's official records shall separately identify the securities
owned by the customer which are held in the account and indicate the
location of the securities.
(b) All registered securities held by the Bank pursuant to the agreement
shall be registered in the name of the Customer or its nominee, the
Bank or its nominee, or a Securities System or its nominee.
(c) The Bank will send to the Customer a confirmation of the transfer of
securities held for the Customer and furnish regular reports of
holdings of securities in the account.
(d) Upon written instructions from an authorized officer of the Customer,
any representative of the Connecticut Insurance Department shall be
entitled to examine, on the Bank's premises, the Bank's records
relating to the securities held in the account.
(e) The Bank shall maintain records sufficient to determine and verify
information relating to securities held in the account that may be
reported in the Annual and Semi-Annual Reports of the Customer, as
filed with regulatory authorities.
(f) The Bank shall be responsible for any loss of the securities held in
the account caused by the negligence of the Bank or its agents.
(g) In the event of loss of any of the securities held in the account,
the Bank shall promptly replace the securities or the value
thereof and the value of any loss of rights or privileges resulting
from said loss or securities.
(h) The Bank will hold the securities in the account subject to the
instructions of the Customer and will permit withdrawal thereof upon
the demand of the Customer.
(i) The Bank shall send to the Customer all (i) reports which it receives
from the Securities System on its systems of internal accounting control
and (ii) reports prepared by outside auditors with respect to the
Bank's systems of internal accounting control pertaining to custodian
recordkeeping, promptly upon the Bank's receipt of such reports.
(j) Securities in the account may be held only in Connecticut or in
reciprocal states under the Insurers Supervision, Rehabilitation and
Liquidation Model Act or a similar act (the Model Act).
(k) If a reciprocal state under the Model Act repeals or modifies the
Model Act so as to impair the Connecticut Insurance Commissioner's
authority over the assets of an insolvent insurer, any securities
held in the account and located in that state will be relocated to
another reciprocal state or Connecticut prior to the effective date
of said repeal or modification, unless the Connecticut Insurance
Commissioner deems the repeal or modification acceptable.
(l) The Bank may only deposit the securities in a nonproprietary account
with the Securities System that includes only assets held for the
Bank's customers.
<PAGE>
(m) Should a Securities System cease to act on behalf of the Bank, then
the securities in the account shall be promptly transferred to the
Bank or another Securities System approved by the Customer.
21. EFFECTIVE PERIOD, TERMINATION, ASSIGNMENT AND AMENDMENT.
This Agreement shall become effective as of the effective date named
herein, shall continue in full force and effect until terminated as
hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto, and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than thirty (30) days
after the date of such delivery or mailing; provided, however, that the
Bank shall not act under paragraph 20 hereof in the absence of receipt
of an initial certificate of the Secretary that the board of the
Customer has approved the initial use of a particular Securities System
and the receipt of an annual certificate of the Secretary that the Board
has reviewed the use by the Customer of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company Act
of 1940, as amended, and provided further, however, that the Customer
shall not amend or terminate this Agreement in contravention of any
applicable federal or state regulations, or any provision of its Rules
and Regulations or by-laws and further provided, that the Customer may
at any time by action of its Board (a) substitute another bank or trust
company for the Bank by giving notice as described above to the Bank,
or (b) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Bank by the Comptroller
of the Currency or upon the happening of a like event at the direction
of an appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Agreement, the Customer shall pay the Bank such
compensation as may be due as of the date of such termination and shall
likewise reimburse the Bank for its costs, expenses and disbursements.
This Agreement may not be assigned by the Bank without the consent of
the Customer, authorized or approved by a resolution of its Board
(The Board of Managers of the Variable Annuity Accounts or the Board
of Trustees of the Mutual Funds).
Additional Investment Company Separate Accounts or mutual funds may be
added to this Agreement upon the execution by the Bank and any additional
party of an amended "Schedule A" to be attached to this Agreement,
which shall list such additional Separate Accounts or mutual funds.
22. INDEMNIFICATION AND HOLD HARMLESS.
The Customer agrees to indemnify and hold harmless the Bank and its
nominees from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it
or its nominees in Connecticut with the performance of this Agreement
in good faith, except such as may arise from the Bank's or its
nominee's own negligent action, negligent failure to act or willful
misconduct.
<PAGE>
IN WITNESS WHEREOF, the Customer and the Bank have each executed
this Custody Agreement as of the 1st day of February, 1995, by their
duly authorized representatives.
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE
ANNUITIES
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES
By: /s/Heath B. McLendon
____________________
Chairman
Board of Managers
CAPITAL APPRECIATION FUND
CASH INCOME TRUST
HIGH YIELD BOND TRUST
MANAGED ASSETS TRUST
THE TRAVELERS SERIES TRUST
U.S. GOVERNMENT SECURITIES PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
UTILITIES PORTFOLIO
By: /s/Heath B. McLendon
____________________
Chairman
Board of Trustees
THE CHASE MANHATTAN BANK, N.A.
By: /s/George S. Snyder
Title: Vice President
<PAGE>
EXHIBIT I
_________
MUTUAL FUND RIDER TO GLOBAL CUSTODY AGREEMENT
BETWEEN THE TRAVELERS INSURANCE COMPANY AND
THE CHASE MANHATTAN BANK N.A.
EFFECTIVE FEBRUARY 1, 1995
Customer represents that the Assets being placed in the Bank's custody
are subject to the Investment Company Act of 1940 (the "1940 Act"), as the
same may be amended from time to time.
Except to the extent that the Bank has specifically agreed to comply
with a condition of a rule, regulation, interpretation promulgated by or
under the authority of the Securities and Exchange Commission ("SEC") or
the Exemptive Order applicable to accounts of this nature issued to the
Bank (Investment Company Act of 1940, Release No. 12053, November 20, 1981),
as amended, or unless the Bank has otherwise specifically agreed, the
Customer shall be solely responsible to assure that the maintenance of
Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority
of the SEC.
The following modifications are made to the Agreement:
Section 9. Instructions.
Add the following language to the end of Section 9:
Deposit Account Payments and Custody Account Transactions made pursuant
to Section 3 and 4 of this Agreement may be made only for the purposes
listed below. Instructions must specify the purpose for which any
transaction is to be made and Customer shall be solely responsible to
assure that Instructions are in accord with any limitations or restrictions
applicable to the Customer by law or as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
<PAGE>
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of
the Bank or the Customer's transfer agent, such shares to be
purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank or the Customer's transfer agent of such
shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement
among the Customer, the Bank and a broker-dealer registered under
the Securities Exchange Act of 1934 and a member of The National
Association of Securities Dealers, Inc., relating to compliance
with the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released
only upon payment to the Bank of monies for the premium due and a
receipt for the Securities which are to be held in escrow. Upon
exercise of the option, or at expiration, the Bank will received from
brokers the Securities previously deposited. The Bank will act
strictly in accordance with Instructions in the delivery of
Securities to be held in escrow and will have no responsibility
or liability for any such Securities which are not returned promptly
when due other than to make proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions
issued by an officer of the Customer which shall include a statement
of the purpose for which the delivery or payment is to be made,
the amount of the payment or specific Securities to be delivered,
the name of the person or persons to whom delivery or payment is to
be made, and a certification that the purpose is a proper purpose
under the instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in Section 21.
Section 10. Standard of Care; Liabilities.
Add the following subsection (c) to Section 10:
(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of
its branches, each branch of a qualified U.S. bank, holding the
Customer's Securities, pursuant to this Agreement afford protection
for such Securities at least equal to that afforded by the Bank's
established procedures with respect to similar securities held by
the Bank and its securities depositories in New York.
Section 12. Access to Records.
Add the following language to the end of Section 12(b):
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal account controls applicable to the Bank's duties under this
Agreement.
<PAGE>
SCHEDULE A
__________
</TABLE>
<TABLE>
<CAPTION>
Short Name Long Name
__________ _________
<S> <C>
VTM The Travelers Timed Short-Term Bond Account for Variable Annuities
VTA The Travelers Timed Growth and Income Stock Account for Variable Annuities
VA1 The Travelers Quality Bond Account for Variable Annuities
VAA The Travelers Growth and Income Stock Account for Variable Annuities
VM The Travelers Money Market Account for Variable Annuities
MAT Managed Assets Trust
AST Capital Appreciation Fund
HYBT High Yield Bond Trust
CIT Cash Income Trust
USGF US Government Securities Portfolio
SOAP Social Awareness Stock Portfolio
VTAS The Travelers Timed Aggressive Stock Account for Variable Annuities
VTB The Travelers Timed Bond Account for Variable Annuities
GRUF Utilities Portfolio
</TABLE>
<PAGE>
Exhibit 10
OPINION OF COUNSEL
Re: Cash Income Trust; File No. 2-74285
With regard to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-1A filed by the Cash Income
Trust covering variable annuity and variable life insurance
contracts, I have examined such documents and such law as I have
considered necessary and appropriate, and on the basis of such
examination, it is my opinion that:
1. The Travelers Insurance Company is duly organized and
existing under the laws of the State of Connecticut and
has been duly authorized to do business and to issue
variable annuity and variable life insurance contracts
by the Insurance Commissioner of the State of
Connecticut.
2. The Cash Income Trust is a duly authorized and validly
existing mutual fund established pursuant to Section
38a-433 of the Connecticut General Statutes.
3. The variable annuity and variable life insurance
contracts issued are valid, legal and binding
obligations of The Travelers Insurance Company.
4. Assets of the Cash Income Trust are not chargeable with
liabilities arising out of any other business which The
Travelers Insurance Company may conduct.
/s/Kathleen A. McGah
Kathleen A. McGah
Counsel
The Travelers Insurance Company
Dated: April 21, 1995
<PAGE>
Coopers Coopers & Lybrand L.L.P.
& Lybrand
a professional
services firm
EXHIBIT 11(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 22 of this Registration Statement on Form N-1A of our
report dated February 15, 1995, on our audits of the financial
statements and financial highlights of Cash Income Trust. We also
consent to the reference to our Firm as experts under the caption
"Additional Information".
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
April 18, 1995
<PAGE>
Exhibit 11(B)
CASH INCOME TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Heath B. McLendon of Summit, New Jersey,
Chairman of the Board of Trustees of Cash Income Trust, do
hereby make, constitute and appoint ERNEST J. WRIGHT, Secretary
of said Trust, and KATHLEEN A. McGAH, Assistant Secretary of
said Trust, either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to
sign registration statements of said Trust on Form N1-1A or
other applicable form under the Securities Act of 1933 for the
registration of shares of Beneficial Interest of Cash Income
Trust and to sign any and all amendments, including post-effec-
tive amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this
28th day of February, 1995.
/s/Heath B. McLendon
Chairman of the Board of Trustees
Cash Income Trust
<PAGE>
CASH INCOME TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Knight Edwards of Providence, Rhode Island, a
member of the Board of Trustees of Cash Income Trust, do hereby
make, constitute and appoint ERNEST J. WRIGHT, Secretary of said
Trust, and SARA CHAMBERLAIN, Assistant Secretary of said Trust,
either one of them acting alone, my true and lawful attorney-
- -in-fact, for me, and in my name, place and stead, to sign
registration statements of said Trust on Form N1-1A or other
applicable form under the Securities Act of 1933 for the regis-
tration of shares of Beneficial Interest of Cash Income Trust
and to sign any and all amendments, including post-effective
amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this
21st day of October, 1994.
/s/Knight Edwards
Member of the Board of Trustees
Cash Income Trust
<PAGE>
CASH INCOME TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Robert E. McGill, III of Williamstown, Massa-
chusetts, a member of the Board of Trustees of Cash Income
Trust, do hereby make, constitute and appoint ERNEST J. WRIGHT,
Secretary of said Trust, and SARA CHAMBERLAIN, Assistant Secre-
tary of said Trust, either one of them acting alone, my true and
lawful attorney-in-fact, for me, and in my name, place and
stead, to sign registration statements of said Trust on Form
N1-1A or other applicable form under the Securities Act of 1933
for the registration of shares of Beneficial Interest of Cash
Income Trust and to sign any and all amendments, including
post-effective amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this
21st day of October, 1994.
/s/Robert E. McGill, III
Member of the Board of Trustees
Cash Income Trust
<PAGE>
CASH INCOME TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Lewis Mandell of Storrs, Connecticut, a member
of the Board of Trustees of Cash Income Trust, do hereby make,
constitute and appoint ERNEST J. WRIGHT, Secretary of said
Trust, and SARA CHAMBERLAIN, Assistant Secretary of said Trust,
either one of them acting alone, my true and lawful attorney-
- -in-fact, for me, and in my name, place and stead, to sign
registration statements of said Trust on Form N1-1A or other
applicable form under the Securities Act of 1933 for the regis-
tration of shares of Beneficial Interest of Cash Income Trust
and to sign any and all amendments, including post-effective
amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this
21st day of October, 1994.
/s/Lewis Mandell
Member of the Board of Trustees
Cash Income Trust
<PAGE>
CASH INCOME TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Frances M. Hawk of Sherborn, Massachusetts, a
member of the Board of Trustees of Cash Income Trust, do hereby
make, constitute and appoint ERNEST J. WRIGHT, Secretary of said
Trust, and SARA CHAMBERLAIN, Assistant Secretary of said Trust,
either one of them acting alone, my true and lawful attorney-
- -in-fact, for me, and in my name, place and stead, to sign
registration statements of said Trust on Form N1-1A or other
applicable form under the Securities Act of 1933 for the regis-
tration of shares of Beneficial Interest of Cash Income Trust
and to sign any and all amendments, including post-effective
amendments thereto, that may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this
21st day of October, 1994.
/s/Frances M. Hawk
Member of the Board of Trustees
Cash Income Trust
<PAGE>
CASH INCOME TRUST
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Ian R. Stuart of East Hampton, Connecticut,
Treasurer of Cash Income Trust, do hereby make, constitute and
appoint ERNEST J. WRIGHT, Secretary of said Trust, and SARA
CHAMBERLAIN, Assistant Secretary of said Trust, either one of
them acting alone, my true and lawful attorney-in-fact, for me,
and in my name, place and stead, to sign registration statements
of said Trust on Form N1-1A or other applicable form under the
Securities Act of 1933 for the registration of shares of Bene-
ficial Interest of Cash Income Trust and to sign any and all
amendments, including post-effective amendments thereto, that
may be filed.
IN WITNESS WHEREOF I have hereunto set my hand this
21st day of October, 1994.
/s/Ian R. Stuart
Treasurer, Cash Income Trust
<TABLE> <S> <C>
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<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,197,828
<INVESTMENTS-AT-VALUE> 1,199,633
<RECEIVABLES> 54,303
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 10,852
<TOTAL-ASSETS> 1,264,788
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62,095
<TOTAL-LIABILITIES> 62,095
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,202,693
<SHARES-COMMON-PRIOR> 646,852
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,202,693
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 42,643
<OTHER-INCOME> 0
<EXPENSES-NET> 12,933
<NET-INVESTMENT-INCOME> 29,710
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 29,710
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 29,710
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,009,583
<NUMBER-OF-SHARES-REDEEMED> (2,478,281)
<SHARES-REINVESTED> 24,539
<NET-CHANGE-IN-ASSETS> 555,841
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,325
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<GROSS-EXPENSE> 65,368
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.03)
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<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
