SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-77169)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 30 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No.
The North Carolina Capital Management Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 617-570-7000
Arthur S. Loring, Secretary, 82 Devonshire St., Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On ( ) pursuant to paragraph (b) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a) of Rule 485
[x] On November 1, 1995 pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the notice required by such Rule
on August 23, 1995.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
CASH PORTFOLIO
TERM PORTFOLIO
SUPPLEMENT TO THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
DATED NOVEMBER 1, 1995
Until such time as shareholders of the funds approve amendments to the fee
schedules for each fund's Distribution and Service Plan, the second
sentence of the second paragraph under the heading "Other Expenses" on page
P-15 of the Prospectus is replaced by the following:
FMR currently pays Sterling, through FDC, monthly on behalf of each fund
according to the following schedule: 0.14% of average net assets through
$100 million; 0.15% of average net assets in excess of $100 million through
$200 million; 0.16% of average net assets in excess of $200 million through
$800 million; 0.17% of average net assets in excess of $800 million.
Until such time as shareholders of the funds approve amendments to the fee
schedules for each fund's Distribution and Service Plan, the first and
second sentences of the second paragraph under the heading "Distribution
and Service Plan" on page S-21 of the Statement of Additional Information
are replaced by the following:
Pursuant to the Plans, from its management fees, past profits, or other
source, FMR pays Sterling, through FDC, a distribution fee according to the
following schedule: 0.14% of average net assets through $100 million; 0.15%
of average net assets in excess of $100 million through $200 million; 0.16%
of average net assets in excess of $200 million through $800 million; and
0.17% of average net assets in excess of $800 million, determined as of the
close of business on each day throughout the month.
The disclosure that exists on pages P-15 and S-21 of the Prospectus and the
Statement of Additional Information, respectively, will become effective on
________, pending approval of the proposed change in each fund's 12b-1 fee
to a flat rate of 0.20% of each fund's average net assets by a majority
vote of each fund's shareholders.
North Carolina Capital Management Trust:
Cash Portfolio and Term Portfolio
Cross Reference Sheet
Form N-1A Item Number
Part A Prospectus Caption
1 a,b Cover Page
2 a Expenses
b,c Contents; Who May Want to Invest
3 a **
b *
c Performance
d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Securities and Investment
Practices; Fundamental Investment Policies and Restrictions
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and its Affiliates
b(ii) FMR and Its Affiliates; Breakdown of
Expenses
b(iii) Expenses; Breakdown of Expenses
c FMR and Its Affiliates
d Cover Page; Charter; Breakdown of Expenses; FMR and Its Affiliates
e FMR and Its Affiliates, Breakdown of Expenses
f Expenses
g Expenses; FMR and Its Affiliates, Breakdown of Expenses
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii) *
b *
c How to Buy Shares; Exchange Restrictions
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details
f,g Dividends, Capital Gains, and Taxes
7 a Cover page; FMR and its Affiliates
b How to Buy Shares; Transaction Details
c How to Buy Shares; Transaction Details
d How to Buy Shares
e Breakdown of Expenses
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
* Not applicable
** To be filed by subsequent amendment
THE
NORTH CAROLINA CAPITAL
MANAGEMENT TRUST:
CASH PORTFOLIO AND TERM PORTFOLIO
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about Cash Portfolio and Term Portfolio (each a "fund" or
collectively the "funds") and their investments, you can
obtain a copy of the funds' most recent financial report and
portfolio listing or read the Statement of Additional Information
(SAI) dated November 1 , 1995 attached to this prospectus . The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, or for information or assistance in
opening an account, please call Sterling Capital Distributors, Inc.
(Sterling) in Charlotte, North Carolina:
(medium solid bullet) Toll-free 1- 800-222-3232
(medium solid bullet) or locally 1- 704-372-8798
INVESTMENTS IN CASH PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT CASH PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
CASH PORTFOLIO seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity, and to maintain
a constant net asset value per share of $1.00, through investment in
high-grade money market instruments, including obligations of the U.S.
Government and the State of North Carolina, and in bonds and notes of any
North Carolina local government or public authority.
TERM PORTFOLIO seeks to obtain as high a level of current income as is
consistent with the preservation of capital by investing in obligations of
the U.S. Government and agencies and instrumentalities of the U.S.
Government, obligations of the State of North Carolina, bonds and notes of
any North Carolina local government or public authority, and in high-grade
money market instruments.
PROSPECTUS
DATED NOVEMBER 1 , 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
THE
N
C
ORTH
AROLINA
CAPITAL MANAGEMENT TRUST
LIKE ALL MUTUAL FUNDS, 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.
NC -pro-1195
CONTENTS
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<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly operating expenses.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT P-15 HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Shares of Cash Portfolio and Term Portfolio are offered exclusively to
local governments and public authorities of the State of North Carolina,
school administrative units, local ABC boards, community colleges or public
hospitals ("eligible investors"), as those terms are defined in 20
NCAC 3.0702(3). Each fund offers an economical and convenient vehicle for
investment of available cash by eligible investors.
Cash Portfolio may be appropriate for those investors who would like to
earn income at current money market rates while preserving the value and
liquidity of their investments. Cash Portfolio is managed to keep its share
price stable at $1.00 and because it emphasizes stability, it could be
well-suited for a portion of your investment. Cash Portfolio offers free
checkwriting to give you a convenient way to manage your assets.
Term Portfolio may be appropriate for those investors who would like to
earn a high level of current income while preserving the value of their
investments . Term Portfolio is designed for those investors who
intend to remain invested for longer periods than Cash Portfolio and who
seek the higher yields that normally are available from instruments
with longer maturities. Accordingly, Term Portfolio may not be an
appropriate investment for those investors who require daily liquidity in
order to meet current obligations. When you sell your Term Portfolio
shares, they may be worth more or less than what you paid for them.
The value of the funds' investments and the income they generate vary from
day to day, and generally reflect changes in interest rates, market
conditions, and other economic and political news.
Each fund is not in itself a balanced investment plan. You should consider
your investment objective and tolerance for risk when making an investment
decision.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund.
Cash Term
Portfoli Portfo
o lio
Maximum sales charge on None None
purchases and
reinvested distributions
Maximum deferred sales None None
charge
Redemption fee None None
Exchange fee None None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). FMR
is responsible for the payment of all other expenses for each fund with
certain limited exceptions.
12b-1 fees are paid by FMR from its management fee, p ast
profits , or other source to Sterling Capital Distributors, Inc.
("Sterling"), through Fidelity Distributors Corporation ("FDC"), in
connection with the distribution of fund shares.
Each fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of each fund,
and are calculated as a percentage of average net assets of each fund.
Cash Term
Portfo Portfo
lio lio
Management fee* % %
12b-1 fee (Distribution Fee) % %
Other expenses % %
Total operating expenses % %
* The rate for management fees represents the net rate retained by FMR
after payment s made to the distributor. The management fee s
before payments made to the distributor by FMR are ___ % and ___%
for Cash Portfolio and Term Portfolio, respectively.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment assuming a 5% annual return and full redemption, at the end of
each time period:
1 3 5 10
Year Years Years Years
Cash Portfolio
Term Portfolio
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
PERFORMANCE
Performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields for
Term Portfolio are calculated according to a standard that is required for
all stock and bond funds. Because this differs from other accounting
methods, the quoted yield for Term Portfolio may not equal the income
actually paid to shareholders.
When a yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
SEVEN-DAY YIELD illustrates the income earned by an investment in
Cash Portfolio over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance , call Sterling toll-free at
1-800- 222 - 3232 or locally at 1-704-372-8798 .
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
The North Carolina Capital Management Trust, an open-end management
investment company organized as a Massachusetts business trust on April 26,
1982.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity or Sterling .
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent, will mail proxy materials in advance, including a
voting card and information about the proposals to be voted on. You are
entitled to one vote for each share you own.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
Each fund is managed by FMR, which handles their business affairs and
chooses Term Portfolio's investments. FMR Texas Inc. (FMR Texas) ,
located in Irving, Texas has primary responsibility for providing
investment management services to Cash Portfolio.
As of _________ , 1995, FMR advised funds having approximately
__million shareholder accounts with a total value of more than $__ billion.
Burnell Stehman is vice president and manager of The North Carolina
Capital Management Trust: Cash Portfolio, which he has managed since 1989.
He also manages Daily Income Trust, Money Market Trust - Domestic and
Institutional Cash Portfolio - Domestic. Mr. Stehman joined Fidelity in
1979.
[Information regarding Term Portfolio's portfolio manager will be filed by
subsequent amendment.]
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services. FDC
has entered into a Distribution and Service Agent Agreement with Sterling
pursuant to which Sterling acts as distribution agent of shares of Cash
Portfolio and Term Portfolio. Fidelity Investments Institutional
Operations Company (FIIOC) performs transfer agent servicing functions for
each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members
of the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
CASH PORTFOLIO invests only in those high-grade money market instruments
which are authorized for investment by units of local government as
specified in North Carolina G.S. 159-30 (c) (the Statute), as amended
from time to time, and in 20 NCAC 3.0730 (the Code).
Cash Portfolio may invest more than 25% of its total assets in
obligations of banks. Cash Portfolio's investments in domestic bank
obligations are limited to those banks having total assets in excess of one
billion dollars and subject to regulation by the U.S. Government. Cash
Portfolio may also invest in certificates of deposit issued by banks
insured by the Federal Deposit Insurance Corporation (FDIC) having total
assets of less than one billion dollars, provided that the portfolio will
at no time own more than an aggregate of $100,000 in principal and interest
obligations (or any higher principal amount or principal and interest which
in the future may be fully covered by FDIC insurance) of any one such
issuer. Cash Portfolio will use its best efforts to maintain a constant NAV
of $1.00.
Cash Portfolio follows industry-standard guidelines on the quality and
maturity of its investments, which are designed to help maintain a stable
$1.00 share price. Cash Portfolio will purchase only high-quality
securities that FMR believes present minimal credit risks and will observe
maturity restrictions on securities it buys. In general, securities with
longer maturities are more vulnerable to price changes, although they may
provide higher yields. It is possible that a major change in interest rates
or a default on Cash Portfolio's investments could cause its share price
(and the value of your investment) to change. It is important to note that
Cash Portfolio is not guaranteed by the U.S. Government.
Cash Portfolio stresses income, preservation of capital, and liquidity. It
does not seek the higher yields or capital appreciation that more
aggressive investments may provide. Cash Portfolio's yield will vary from
day to day, generally reflecting current short-term interest rates and
other market conditions.
TERM PORTFOLIO invests in obligations of the U.S. Government, its agencies
or instrumentalities, obligations fully guaranteed by the U.S.
Government , or obligations of the State of North Carolina and bonds and
notes of any North Carolina local government or public authority, as
permitted pursuant to the Statute and the Code. Under the current Code,
Term Portfolio may invest in securities with maturities of seven years or
less. Term Portfolio may, under normal circumstances, invest up to 25% of
its total assets in the finance industry.
Term Portfolio's yield and share price change daily and are based on
changes in interest rates, market conditions, other economic and political
news, and on the quality and maturity of its investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. FMR may use various
investment techniques to hedge Term Portfolio's risks, but there is no
guarantee that these strategies will work as intended.
FMR normally invests Term Portfolio's assets according to its investment
strategy. Term Portfolio also reserves the right to invest without
limitation in investment-grade money market or short-term debt instruments
for temporary, defensive purposes.
Each fund's investments in instruments other than the direct obligations of
the U.S. Government are subject to the ability of the issuer to make
payment at maturity. Investments in obligations of the State of North
Carolina or municipalities within the State are subject to political or
economic conditions of the State or municipality.
THE STATUTE AND THE CODE. The following investment policies are
non-fundamental, which means that if the Statute or the Code, or any
legislation or regulations relating to those parameters change in the
future, the Trustees may authorize corresponding changes in the instruments
in which the funds may invest without first obtaining shareholder
approval. Currently, the rulings, regulations and interpretations to which
the funds adhere allow the funds to invest only in the following
instruments:
(i) Obligations of the United States or obligations fully guaranteed both
as to principal and interest by the United States;
(ii) Obligations of the State of North Carolina and bonds and notes of any
North Carolina local government or public authority rated
investment - grade or better;
(iii) Obligations of the Federal Financing Bank, the Federal Farm Credit
Bank, the Bank for Cooperatives, the Federal Intermediate Credit Bank, the
Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Housing
Administration, the Farmers Home Administration, and the United States
Postal Service;
(iv) Savings certificates issued by any savings and loan association
organized under the laws of the State of North Carolina or by any federal
savings and loan association having its principal office in North Carolina;
provided that any principal amount of such certificate in excess of the
amount insured by the federal government or any agency thereof, or by a
mutual deposit guaranty association authorized by the Administrator of the
Savings Institutions Division of the Department of Economic and Community
Development of the State of North Carolina, be fully collateralized;
(v) Evidences of ownership of, or fractional undivided interests in, future
interest and principal payments on either direct obligations of the United
States government or obligations the principal of and the interest on which
are guaranteed by the United States, which obligations are held by a bank
or trust company organized and existing under the laws of the United States
or any state in the capacity of custodian;
(vi) Commercial paper bearing the highest rating of at least one nationally
recognized rating service and not bearing a rating below the highest by any
nationally recognized rating service which rates the particular obligation;
(vii) Bills of exchange or time drafts drawn on and accepted by a
commercial bank (commonly referred to as "bankers' acceptances") and
eligible for use as collateral by member banks in borrowing from a federal
reserve bank, provided that the accepting bank or its holding company is
either (a) incorporated in the State of North Carolina or (b) has
outstanding publicly held obligations bearing the highest rating of at
least one nationally recognized rating service and not bearing a
rating below the highest by any nationally recognized rating service which
rates the particular obligations; or
(viii) Repurchase agreements with respect to either direct obligations of
the United States or obligations the principal of and the interest on which
are guaranteed by the United States if entered into with a broker or dealer
which is a dealer recognized as a primary dealer by the Federal Reserve
Bank, or any commercial bank, trust company or national banking
association, the deposits of which are insured by the FDIC or any successor
thereof.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective , and a summary of related
risks . Any restrictions listed supplement those discussed
earlier in this section . A complete listing of each fund's limitations
and more detailed information about each fund's investments are
contained in the fund s' SAI , which is attached to this
Prospectus . Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fun d achieve its
goal. Current holdings and recent investment strategies are described in
the funds' financial reports , which are sent to shareholders twice a
year. For a free SAI or financial report, call Sterling toll-free at
1- 800-222-3232 or locally at 1-704-372-8798 .
MONEY MARKET SECURITIES are high-quality, short-term obligations that
present minimal credit risk. They may be issued by the U.S. Government,
the State of North Carolina, corporations, financial institutions,
and other entities. These obligations may carry fixed, variable, or
floating interest rates. A security's credit may be enhanced by a bank,
insurance company, or other entity. Some money market securities employ a
trust or other similar structure to modify the maturity, price
characteristics, or quality of financial assets so that they are eligible
investments for money market funds. If the structure does not perform as
intended, adverse tax or investment consequences may result.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. Government. Not all U.S. Government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
RESTRICTIONS: Purchase of a debt security is consistent with a fund's debt
quality policy if it is rated at or above the stated level by Moody's
Investors Service, Inc., or rated in the equivalent categories by
S tandard & Poor's Corporation , or is unrated but judged to be of
equivalent quality by FMR. Term Portfolio currently intends to limit its
investments in debt securities to those rated A-quality and above.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
purposes, including general financing for state and local governments, or
financing for specific projects or public facilities. They may be issued in
anticipation of future revenues, and may be backed by the full taxing power
of a municipality, the revenues from a specific project, or the credit of a
private organization. A security's credit may be enhanced by a bank,
insurance company, or other entity. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other money market
securities, although they may be more volatile.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid , and some other securities, may be subject
to legal restrictions. Difficulty in selling securities may result in a
loss or may be costly to a fund.
RESTRICTIONS. A fund may not purchase a security if, as a result, more than
10% of its net assets would be invested in illiquid and restricted
securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS. Cash Portfolio does not currently intend to purchase a
security (other than a security issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities) if, as a result, more than 5%
of its total assets would be invested in the securities of a single issuer;
provided that, with respect to certificates of deposit and bankers'
acceptances, the fund may invest up to 10% of its total assets in the first
tier securities of a single issuer for up to three business days.
With respect to 75% of its total assets, Term Portfolio may not purchase a
security if, as a result, (a) more than 5% would be invested in the
securities of any issuer, or (b) it would hold more than 10% of the voting
securities of any issuer. These limitations do not apply to U.S. Government
securities.
BORROWING. A fund may borrow from banks. If Term Portfolio borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If Term Portfolio makes additional investments while
borrowings are outstanding, this may be considered a form of leverage.
RESTRICTIONS. Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 33% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Cash Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity, and to maintain
a constant net asset value per share of $1.00, through investment in
high-grade money market instruments, including obligations of the U.S.
Government and the State of North Carolina, and in bonds and notes of any
North Carolina local government or public authority.
Cash Portfolio invests only in those high-grade money market instruments
which are authorized for investment by units of local government as
specified in North Carolina G.S. 159-30 (c) (the Statute), as amended
from time to time, and in 20 NCAC 3.0730 (the Code). Cash Portfolio
may invest more than 25% of its total assets in obligations of banks. Cash
Portfolio will use its best efforts to maintain a constant NAV of $1.00.
Term Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital by investing in obligations of
the U.S. Government and agencies and instrumentalities of the U.S.
Government, obligations of the State of North Carolina, bonds and notes of
any North Carolina local government or public authority, and in high-grade
money market instruments.
Term Portfolio invests i n obligations of the U.S. Government, its
agencies or instrumentalities, o bligations fully guaranteed by the
U.S. Government, or obligations of T he State of North
Carolina and bonds and notes of any north Carolina local government or
public authority, as permitted pursuant to the Statute and the Code. Under
the current Code, Term Portfolio may invest in securities with maturities
of seven years or less. Term Portfolio may, under normal circumstances,
invest up to 25% of its total assets in the finance industry.
With respect to 75% of its total assets, Term Portfolio may not purchase a
security if, as a result, (a) more than 5% would be invested in the
securities of any issuer, or (b) it would hold more than 10% of the voting
securities of any issuer. These limitations do not apply to U.S. Government
securities.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each fund's assets are reflected in that
fund's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
FMR may, from time to time, agree to reimburse each fund for management
fees above a specified limit. Reimbursement arrangements, which may be
terminated at any time without notice, can decrease each fund's expenses
and boost its performance.
MANAGEMENT FEE
Each fund's management fee is calculated and paid to FMR every month. FMR
pays all of the expenses of each fund with limited exceptions. Each fund
pays an annual management fee according to the following schedule: 0.41%
of average net assets through $100 million; 0.40% of average net assets in
excess of $100 million through $200 million; 0.39% of average net assets in
excess of $200 million through $800 million; and 0.38% of average net
assets in excess of $800 million.
FMR HAS A SUB-ADVISORY AGREEMENT with FMR Texas, which has primary
responsibility for providing investment management for Cash Portfolio,
while FMR retains responsibility for providing Cash Portfolio with other
management services. For these services FMR pays FMR Texas 50% of its
management fee (before expense reimbursements, but after payments made by
FMR pursuant to Cash Portfolio's Distribution and Service Plan). FMR paid
FMR Texas 0.11 % of Cash Portfolio's average net assets for fiscal
1995.
OTHER EXPENSES
F IIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for each fund. Fidelity Service Co. (FSC) calculates
the net asset value per share ( NAV ) and dividends for each
fund, maintains the general accounting records, and administers the
securities lending program for each fund. These expenses are paid by FMR
pursuant to its management contract.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Under the Plans, FMR
is required to pay FDC a monthly distribution fee, all of which FDC pays
Sterling, as compensation for Sterling's services and expenses in
connection with the distribution of shares of each fund and providing
certain shareholder servicing functions, which include the processing of
shareholder inquiries, account maintenance, and processing purchases,
redemptions, transfers, and exchanges. FMR currently pays Sterling,
through FDC , monthly at an annual rate of 0.20% of each
fund's average net assets. Average net assets is determined at the
close of business on each day throughout the month.
Each fund also pays other expenses, such as brokerage fees and commissions,
interest on borrowings, taxes, and the compensation of trustees who are not
affiliated with Fidelity or Sterling .
The portfolio turnover rate for Term Portfolio for fiscal 1995 was
___ %. This rate varies from year to year. High turnover rates
for Term Portfolio increase transaction costs and may increase
taxable capital gains. FMR considers these effects when evaluating the
anticipated benefits of short-term investing .
YOUR ACCOUNT
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called NAV, is calculated every business day. Cash
Portfolio is managed to keep its share price stable at $1.00. Each fund's
shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. Cash Portfolio's NAV is
normally calculated at 12:00 p.m. and 4:00 p.m. Eastern time. Term
Portfolio's NAV is normally calculated at 4:00 p.m. Eastern time. For
details on dividends, see "Dividends, Capital Gains, and Taxes" and
"Transaction Details" on page .
Share certificates are not available for Cash Portfolio or Term Portfolio
shares.
IF YOU ARE NEW TO THE FUNDS, you must complete and sign an account
application prior to making an initial investment.
Term Portfolio shares are available only to investors with a new or
existing account in Cash Portfolio.
Once you have opened an account, you may purchase shares of each fund
according to the methods described in the charts on pages and . If there
is no account application accompanying this prospectus, call Sterling
toll-free at 1- 800-222-3232 or locally at 1- 704-372-8798.
SECURITIES EXCHANGE. Shares of Term Portfolio may be purchased in exchange
for securities you hold which meet Term Portfolio's investment objective,
policies, and limitations. FDC reserves the right to refuse a securities
exchange for any reason. You may realize a gain or loss for federal income
tax purposes upon a securities exchange. For further information, including
specific details about the securities exchange program and instructions on
submission of a letter of intention to Sterling, call Sterling toll-free at
1- 800-222-3232 or locally at 1- 704-372-8798. PLEASE DO NOT
SEND SECURITIES TO THE FUND, TO FDC, OR TO STERLING.
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CASH PORTFOLIO TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Mail (mail_graphic) (small solid bullet) Send a completed, signed (small solid bullet) Make your check
payable to "NCCMT:
application to the following address: Cash Portfolio." Indicate your account
The North Carolina Capital number and mail your check and a
Management Trust precoded fund investment slip, which will
c/o Sterling Capital Distributors, be supplied when you open your
Inc. account, to the following address:
One First Union Center The North Carolina Capital
301 S. College Street, Suite 3200 Management Trust
Charlotte, NC 28202-6005 c/o Sterling Capital
Distributors, Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Not available. (small solid bullet) Exchange from a
Term Portfolio account
with the same registration, including
name, and address .
(small solid bullet) Call Sterling
toll-free at 1- 800-222-3232
or locally at 1- 704-372-8798
before 4:00
p.m. Eastern time.
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In Person (hand_graphic) (small solid bullet) Not available. (small solid bullet) Bring your check and a precoded fund
investment slip, which will be supplied
when you open your account, to any
branch of First Union before the close of
business of the branch if you want your
investment to be made that same day.
Wire (wire_graphic) (small solid bullet) Not available. (small solid bullet) You may obtain wire instructions by
calling Sterling toll-free at
1- 800-222-3232 or locally at
1- 704-372-8798.
(small solid bullet) Call Sterling before 12:00 p.m. Eastern
time on the day of the wire.
(small solid bullet) Federal funds and certain federal or
state transfer payments will be accepted
by wire.
(small solid bullet) If Sterling is not advised of the order
prior to 12:00 p.m. Eastern time on the
day of the wire, or if federal funds are
not received the same day the order is
placed, the order will be accepted on the
following business day.
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TERM PORTFOLIO TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Mail (mail_graphic) (small solid bullet) Send a completed, signed (small solid bullet) Not available.
application to the following address:
The North Carolina Capital
Management Trust
c/o Sterling Capital Distributors,
Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
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<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Not available. (small solid bullet) Exchange from a Cash Portfolio
account
with the same registration, including
name, and address .
(small solid bullet) Call Sterling toll-free at
1- 800-222-3232
or locally at 1- 704-372-8798 before 4:00
p.m. Eastern time.
In Person (hand_graphic) (small solid bullet) Not available. (small solid bullet) Not available.
Wire (wire_graphic) (small solid bullet) Not available. (small solid bullet) You may obtain wire
instructions by
calling Sterling toll-free at
1- 800-222-3232 or locally at
1- 704-372-8798.
(small solid bullet) Call Sterling before
4:00 p.m. Eastern
time on the business day prior to the
wiring of funds.
(small solid bullet) Only federal funds will be
accepted by
wire.
(small solid bullet) If Sterling is not advised of
the order
prior to 4:00 p.m. Eastern time on the
business day on which your order is
received or if the federal funds are not
received the next business day, your
order may be canceled, and you could
be held liable for resulting fees and
losses.
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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. Cash Portfolio's NAV is normally calculated at 12:00 p.m.
Eastern time and 4:00 p.m. Eastern time. Term Portfolio's NAV is normally
calculated at 4:00 p.m. Eastern time. For details on dividends, see
"Dividends, Capital Gains, and Taxes" and "Transaction Details" on page
.
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described
on pages and .
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
(small solid bullet) Any other applicable requirements listed in the chart
on page .
Mail your letter to the following address:
The North Carolina Capital Management Trust
c/o Sterling Capital Distributors, Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
Unless otherwise instructed, the transfer agent will send a check to the
record address.
If you elected to do so on your account application, you may instruct that
redemption proceeds in any amount be wired directly to your existing
account in any North Carolina bank as designated on the application. You
should determine that such designated institutions satisfy any legal
requirements under North Carolina law prior to completing the application.
You may change the designated bank account, or add additional accounts
without limitation, by sending a letter of instruction to Sterling
at the address shown above prior to requesting a redemption.
There is no fee imposed by the funds for wiring of redemption proceeds.
Redemption proceeds will be wired via the Federal Reserve Wire System to
the bank account of record. For details on how to redeem by wire, refer
to the chart on page .
CHECKWRITING
If you have a checkbook for your account in Cash Portfolio, you may write
an unlimited number of checks. Do not, however, try to close out your
account by check. You are advised to determine whether use of the
checkwriting feature may be limited by North Carolina G.S. 159-28, as
amended from time to time.
ACCOUNT TYPE SPECIAL REQUIREMENTS
PHONE All account types (small solid bullet) You may exchange to Cash
Portfolio from Term Portfolio, and
vice versa, if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(small solid bullet) Call Sterling toll-free at
1- 800-222-3232 or locally at
1- 704-372-8798 before 4:00 p.m.
Eastern time.
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Mail or in Person (mail_graphic)(hand_graphic) All account types
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. To verify that
it is in place, call Sterling toll-free at
1- 800-222-3232 or locally at
1- 704-372-8798.
(small solid bullet) Your wire redemption request must
be received by Sterling before 12:00
p.m. Eastern time for Cash Portfolio
for money to be wired on the same
business day, or before 4:00 p.m.
Eastern time for Cash Portfolio or
Term Portfolio for money to be
wired on the next business day.
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Check (check_graphic) Cash Portfolio accounts (small solid bullet) All account owners must sign a
signature card to receive a
checkbook.
</TABLE>
INVESTOR SERVICES
Fidelity and Sterling provide a variety of services to help
you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Sterling
toll-free at 1-800-222-3232 or locally at 1-704-372-8798 if you need
additional copies of financial reports or historical account information.
S PECIAL SERVICES. Special processing has been arranged with FIIOC
for institutions that wish to open multiple accounts. You may be required
to enter into a separate agreement with FIIOC. Charges for these services,
if any, will be determined based on the level of services to be rendered.
ARBITRAGE REPORTING SERVICES. Special reporting is available for state and
local entities that require rebate calculations for the invested proceeds
of their issued tax-exempt obligations pursuant to the Tax Reform Act of
1986. Sterling, FMR, their affiliates and the funds do not assume
responsibility for the accuracy of the services provided. Please call
Sterling toll-free at 1-800-222-3232 or locally at 1-704-372-8798
for more information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your shares of Cash Portfolio and buy
shares of Term Portfolio, and vice versa, by telephone or in writing.
Note that exchanges out of a fund may have tax consequences for you. For
details on policies and restrictions governing exchanges, including
circumstances under which a shareholder's exchange privilege may be
suspended or revoked, see "Exchange Restrictions," page .
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains earned by Term Portfolio are
normally distributed in January and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at each fund's NAV on the first business day
of the following month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution. The
mailing of distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. Your distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, the transfer agent will send you a
confirmation statement showing how many shares you sold and at what price.
You will also receive a transaction statement monthly. However, it is up to
you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. BE SURE TO KEEP YOUR
REGULAR ACCOUNT STATEMENTS; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a capital
gain distribution or dividend distribution, as applicable, from its NAV,
you will pay the full price for the shares and then receive a portion of
the price back in the form of a taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
It is anticipated that most investors in the funds will be "political
subdivisions" of the State of North Carolina. Section 115(1) of the
Internal Revenue Code, as amended (Internal Revenue Code), provides in part
that gross income does not include income derived from the exercise of any
essential governmental function and accruing to a state or any political
subdivision thereof. The receipt of revenue from each fund for the benefit
of a political subdivision investing in a fund may constitute an exercise
of an essential governmental function. A portion of the earnings derived
from funds which are subject to the arbitrage limitations or rebate
requirements of the Internal Revenue Code may be required to be paid to the
U.S. Treasury as computed in accordance with such requirements.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is calculated each day that both
the Federal Reserve Bank of Richmond (Richmond Fed) and First Union
National Bank of North Carolina (First Union), the funds' custodian, are
open.
The following holiday closings have been scheduled for 1995: New Year's Day
(observed), Dr. Martin Luther King Jr. Day (observed), President's Day
(observed), Good Friday, Memorial Day (observed), Independence Day, Labor
Day, Columbus Day (observed), Thanksgiving Day and Christmas Day. Although
FMR expects the same holiday schedule to be observed in the future, the
Richmond Fed or First Union may modify its holiday schedule at any time. On
any day that the Richmond Fed or First Union closes early, or as
permitted by the SEC, the right is reserved to advance the time on that day
by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Richmond Fed or First Union is closed, each fund's NAV may be
affected on days when investors do not have access to the fund to purchase
or redeem shares.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding. Cash Portfolio values its portfolio securities on the
basis of amortized cost. This method minimizes the effect of changes in a
security's market value and helps Cash Portfolio maintain a stable $1.00
share price.
Term Portfolio's assets are valued primarily on the basis of market
quotations. If quotations are not readily available, assets are valued by a
method that the Board of Trustees believes accurately reflects fair value.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of each fund are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and Sterling may
only be liable for losses resulting from unauthorized transactions if they
do not follow reasonable procedures designed to verify the identity of the
caller. Fidelity and Sterling will request personalized security codes or
other information, and may also record calls. You should verify the
accuracy of the confirmation statements immediately after receipt. If you
do not want the ability to redeem and exchange by telephone, call Sterling
for instructions. Additional documentation may be required from
corporations, associations and certain fiduciaries.
IF YOU ARE UNABLE TO REACH STERLING BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Sterling
in advance of transactions in excess of $5 million.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) The funds do not accept cash.
(small solid bullet) Cash Portfolio reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees Cash Portfolio or
the transfer agent has incurred.
(small solid bullet) For Cash Portfolio investors, purchases processed at
12:00 p.m. Eastern time will earn the dividend declared for that day;
purchases processed at 4:00 p.m. Eastern time will begin to earn dividends
the following business day.
(small solid bullet) You begin to earn dividends on your shares of Term
Portfolio as of the first business day following the day of your purchase.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) If you have requested redemption by mail,
n ormally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect a
fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Cash Portfolio may hold payment on redemptions until
it is reasonably satisfied that investments made by check have been
collected, which can take up to seven business days.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments made in clearinghouse funds have been
collected.
(small solid bullet) If you sell shares of Cash Portfolio by writing a
check and the amount of the check is greater than the value of your
account, your check will be returned to you and you may be subject to
additional charges.
When the New York Stock Exchange is closed (or when trading is
restricted) for any reason other than its customary weekend or holiday
closings, or under any emergency circumstances as determined by the SEC to
merit such action, a fund may suspend redemption or postpone payment dates.
In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of Cash
Portfolio for shares of Term Portfolio, and vice versa.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Sterling toll-free at 1- 800-222-3232 or locally
at 1- 704-372-8798 before 4:00 p.m. Eastern time.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, shares of Term Portfolio will
be redeemed at the NAV next determined on the business day on which your
order is received, to pay for the purchase of Cash Portfolio shares based
on the NAV next determined. Shares of Cash Portfolio will be redeemed at
the NAV next determined to pay for the purchase of Term Portfolio shares on
the day your exchange request is accepted at the NAV next determined. You
should note that, under certain circumstances, a fund may take up to seven
days to make redemption proceeds available for the exchange purchase of
shares of another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) You may only exchange between accounts that are
registered in the same name and address .
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You begin to earn dividends in the acquired fund on
the following business day.
(small solid bullet) Exchanges from Term Portfolio to Cash Portfolio made
on Friday or the day before a fund holiday will not receive dividends from
Cash Portfolio until the next business day. However, you will continue
receiving dividends from Term Portfolio until the next business day.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege of any investor.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the attached SAI, in connection
with the offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds, FDC, or Sterling. This Prospectus and the
attached SAI do not constitute an offer by the funds, FDC, or by
Sterling to sell or to buy shares of the fund to any person to whom it is
unlawful to make such offer.
North Carolina Capital Management Trust:
Cash Portfolio and Term Portfolio
Cross Reference Sheet
Form N-1A Item Number
Part B Statement of Additional Information Caption
10a,b Cover Page
11 Cover Page
12 *
13a,b,c Investment Policies and Limitations
d Portfolio Transactions
14a,b Trustees and Officers
c Trustees and Officers
15a Description of the Trust
b Description of the Trust
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c Management Contract
d *
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17a Portfolio Transactions
b Portfolio Transactions
c Portfolio Transactions
d *
e *
18a Description of the Trust
b *
19a Additional Purchase, Exchange and Redemption Information
b Valuation
c *
20 Distributions and Taxes
21a(i,ii) Contracts with FMR Affiliates
a(iii),b,c *
22a Performance
b Performance
23 **
* Not applicable
** To be filed by subsequent amendment
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST:
CASH PORTFOLIO
TERM PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1 , 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
November 1 , 1995). Please retain this document for future reference.
The funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended June 30, 1995, are incorporated
herein by reference. To obtain an additional copy of the Prospectus
or Annual Report, or this SAI, please call Sterling Capital
Distributors, Inc. in Charlotte, North Carolina at the appropriate number
listed below:
(medium solid bullet)<UNDEF>Toll-free 1- 800-222-3232
(medium solid bullet)<UNDEF>or locally 1- 704-372-8798
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVIS E R
FMR Texas, Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
DISTRIBUTION AND SERVICE AGENT
Sterling Capital Distributors, Inc. (Sterling)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
First Union National Bank of North Carolina (First Union)
NC- ptb - 11 95
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset , or sets forth a policy
regarding quality standards, such standard or percentage limitation will be
determined immediately after and as a result of a fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with a fund's investment policies and
limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940 (1940 Act)) of a fund.
However, except for the fundamental investment limitations set forth below,
the investment policies and limitations described in this SAI are not
fundamental and may be changed without shareholder approval.
CASH PORTFOLIO
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities), if, as a result, more than 5%
of the fund's total assets would be invested in the securities of such
issuer, provided, however, that in the case of certificates of deposit and
bankers' acceptances up to 25% of the fund's total assets may be invested
without regard to such 5% limitation, but shall instead be subject to a 10%
limitation;
(2) pledge assets except that the fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings made in
accordance with paragraph (5) below;
(3) make short sales of securities;
(4) purchase securities on margin (but the fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities);
(5) borrow money, except from a bank for temporary or emergency purposes
(not for leveraging or investment) in an amount not to exceed one-third of
the current value of the total assets of the fund (including the amount
borrowed) less its liabilities (not including the amount borrowed) at the
time the borrowing is made. (If at any time the fund's borrowings exceed
this limitation due to a decline in net assets, such borrowings will be
promptly (within three days) reduced to the extent necessary to comply with
the limitation. The fund will borrow only to facilitate redemptions
requested by shareholders which might otherwise require untimely
disposition of portfolio securities and will not purchase securities while
borrowings are outstanding);
(6) act as an underwriter (except as it may be deemed such in a sale of
restricted securities);
(7) knowingly purchase a security which is subject to legal or contractual
restrictions on resale or for which there is no readily available market
quotation or engage in a "qualified repurchase agreement" maturing in more
than seven days with respect to any security if, as a result, more than 10%
of the fund's total assets (taken at current value) would be invested in
such securities (investments in instruments of smaller banks which are not
readily marketable will be considered to be within this 10% limitation);
(8) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 25%
of the fund's total a ssets would be invested in the securities of
one or more issuers having their principal business activities in the same
industry, provided, however, that it may invest more than 25% of its total
assets in the obligations of banks. Neither finance companies as a group
nor utility companies as a group are considered a single industry for
purposes of this policy;
(9) buy or sell real estate;
(10) buy or sell commodities, or commodity (futures) contracts;
(11) make loans to other persons, except (i) by the purchase of debt
obligations in which the fund is authorized to invest in accordance with
its investment objective, and (ii) by engaging in "qualified repurchase
agreements". In addition, the fund may lend its portfolio securities to
broker-dealers or other institutional investors, provided that the borrower
delivers cash or cash equivalent collateral to the fund and agrees to
maintain such collateral so that it equals at least 100% of the value of
the securities loaned. Any such securities loan may not be made if, as a
result thereof, the aggregate value of all securities loaned exceeds 33
1/3% of the total assets of the fund;
(12) purchase the securities of other investment companies or investment
trusts;
(13) purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the fund's total assets
would be invested in securities of companies, which, including
predecessors, have a record of less than three years' continuous operation;
(14) invest in oil, gas, or other mineral exploration or development
programs;
(15) purchase or retain the securities of any issuer any of whose officers,
directors, or security holders is a Trustee, director, or officer of the
fund or of its investment adviser, if or so long as the Trustees,
directors, and officers of the fund and of its investment adviser together
own beneficially more than 5% of any class of securities of such issuer;
(16) write or purchase any put or call option; or
(17) invest in companies for the purpose of exercising control or
management.
Investment limitation (5) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(I) The fund does not currently intend to purchase a security (other than
a security issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that, with respect to certificates of deposit and bankers' acceptances, the
fund may invest up to 10% of its total assets in the first tier securities
of a single issuer for up to three business days.
(II) The fund does not currently intend to engage in securities lending
and will do so only when the Trustees determine that it is advisable and
appropriate.
For the fund's policies on quality and maturity, see the section entitled
" Quality and Maturity" on page .
TERM PORTFOLIO
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (except the United States
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
(a) more than 5% of its total assets would be invested in the securities of
such issuer, provided, however, that up to 25% of its total assets may be
invested without regard to such 5% limitation; or (b) the fund would hold
more than 10% of the voting securities of any issuer;
(2) make short sales of securities;
(3) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions, or write or purchase
any put or call options or any combinations thereof;
(4) borrow money, except from a bank for temporary or emergency purposes
and not for investment purposes, and then in an amount not exceeding 33
1/3% of the value of the fund's total assets at the time of borrowing; if
at any time the fund's borrowings exceed this limitation due to a decline
in net assets, such borrowings will be promptly (within three days) reduced
to the extent necessary to comply with the limitation (the fund will not
purchase securities for investment while borrowings equaling 5% or more of
its total assets are outstanding);
(5) underwrite any issue of securities, except to the extent that the
purchase of bonds in accordance with the fund's investment objective,
policies, and limitations, either directly from the issuer, or from an
underwriter for an issuer, may be deemed to be underwriting;
(6) knowingly purchase or otherwise acquire any securities which are
subject to legal or contractual restrictions on resale or for which there
is no readily available market or engage in any repurchase agreements which
mature in more than seven days if, as a result, more than 10% of the value
of its net assets would be invested in all such securities;
(7) purchase the securities of any issuer (except the United States
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
more than 25% of total fund assets would be invested in any one industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in bonds or other obligations secured by real estate or interests
therein;
(9) purchase or sell commodities or commodity contracts;
(10) make loans, except (i) by the purchase of a portion of an issue of
debt securities in accordance with its investment objective, policies, and
limitations, and (ii) by engaging in repurchase agreements and loan
transactions with respect to such debt obligations if, as a result thereof,
not more than 33 1/3% of the fund's total assets (taken at current value)
would be subject to loan transactions;
(11) purchase the securities of other investment companies or investment
trusts;
(12) invest in oil, gas or other mineral exploration or development
programs; or
(13) pledge, mortgage, or hypothecate its assets, except that, to secure
borrowings permitted by (4) above, it may pledge securities having a market
value at the time of pledge not exceeding 33 1/3% of the value of the
fund's total assets.
Investment limitation (4) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(I) The fund does not currently intend to engage in securities lending and
will do so only when the Trustees determine that it is advisable and
appropriate.
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission (SEC), the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price o r yield, with payment and delivery taking place
after the customary settlement period for that type of security. Typically,
no interest accrues to the purchaser until the security is delivered. Term
Portfolio m ay receive fees for entering into delayed-delivery
transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund r emains substantially
fully invested at a time when delayed-delivery purchases are outstanding,
the delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some
government-stripped fixed-rate mortgage-backed securities, restricted
securities and time deposits to be illiquid.
In the absence of market quotations, illiquid investments are valued for
Cash Portfolio for purposes of monitoring amortized cost valuation at
fair value and priced for Term Portfolio at fair value as determined in
good faith by a committee appointed by the Board of Trustees. If through a
change in values, net assets, or other circumstances, a fund were in a
position where more than 10% of its net assets was invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MORTGAGE-BACKED SECURITIES. Each fund may purchase mortgage-backed
securities issued by government entities. A mortgage-backed security may be
an obligation of the issuer backed by a mortgage or pool of mortgages or a
direct interest in an underlying pool of mortgages. Some mortgage-backed
securities , such as collateralized mortgage obligations or CMOs,
make payments of both principal and interest at a variety of intervals;
others make semi-annual interest payments at a predetermined rate and repay
principal at maturity (like a typical bond). Mortgage-backed securities are
based on different types of mortgages including those on commercial real
estate or residential properties. Other types of mortgage-backed securities
will likely be developed in the future, and the fund may invest in them if
FMR determines they are consistent with a fund's investment objective and
policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Mortgage-backed
securities are subject to prepayment risk. Prepayment, which occurs when
unscheduled or early payments are made on the underlying mortgages, may
shorten the effective maturities of these securities and may lower their
total returns.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY (CASH PORTFOLIO ONLY). Pursuant to procedures
adopted by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be considered
high quality, a security must be rated in accordance with applicable rules
in one of the two highest categories for short-term securities by at least
two nationally recognized rating services (or by one, if only one rating
service has rated the security); or, if unrated, judged to be of equivalent
quality by FMR.
High-quality securities are divided into " first tier" and
" second tier" securities. First tier securities are those deemed to
be in the highest rating category (e.g. , Standard & Poor's A-1), and
second tier securities are those deemed to be in the second highest rating
category (e.g., Standard & Poor's A-2). Split-rated securities may be
determined to be either first tier or second tier based on applicable
regulations.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its
obligation, the securities are held i n an account of the fund at a
bank, marked-to-market daily, and maintained at a value at least equal to
the sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is each fund's current
policy, as set forth in North Carolina General Statute 159-30(c), to
engage in repurchase agreement transactions with a broker or dealer which
is a dealer recognized as a primary dealer by the Federal Reserve Bank, or
any commercial bank, trust company or national banking association, the
deposits of which are insured by the Federal Deposit Insurance
Co rporation (FDIC) or any successor thereof.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, Cash Portfolio anticipates holding
restricted securities to maturity or selling them in an exempt transaction.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by the government
agencies also may be stripped in this fashion.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S.
Government agency or a financial institution separates the interest
and principal components of a mortgage-backed security and sells them as
individual securities. The holder of the "principal-only" security (PO)
receives the principal payments made by the underlying mortgage-backed
security, while the holder of the "interest-only" security (IO) receives
interest payments from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest rates
change. In calculating its dividends, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value. Original issue zeros are zero coupon securities originally
issued by the U.S. Government or a government agency in zero coupon form.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
ma nagement contract. FMR has grant ed investment
management authority to the sub-adviser (see the section entitled
"Management Contracts"), and the sub-adviser is authorized to
place orders for the purchase and sale of portfolio securities, and will do
so in accordance with the policies described below. FMR is also responsible
for the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by Cash Portfolio generally will be traded on
a net basis (i.e., without commission). In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing , or selling securities; and the
availability of securities or the purchasers or sellers of securities. In
addition, such broker-dealers may furnish analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and performance of accounts; effect securities
transactions , and perform functions incidental thereto (such as
clearance and settlement). FMR maintains a listing of broker-dealers who
provide such services on a regular basis. However, as many transactions on
behalf of Cash Portfolio are placed with broker-dealers (including
broker-dealers on the list) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such
transactions directed to such broker-dealers solely because such services
were provided. The selection of such broker-dealers generally is made by
FMR (to the extent possible consistent with execution considerations) based
upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under
the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned
subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d
is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and various
trusts for the benefit of the Johnson family own, directly or indirectly,
more than 25% of the voting common stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal periods ended June 30, 1995 and 1994, Term Portfolio's
turnover rates were ___% and 494%, respectively. Because a high
turnover rate increases transaction costs and may increase taxable
gains, FMR carefully weighs the anticipated benefits of short-term
investing against these consequences. An increased turnover rate is due to
a greater volume of shareholder purchase orders, short-term interest rate
volatility and other special market conditions.
For fiscal 1 995, 1994, and 1993, Term Portfolio paid no brokerage
commissions.
During fiscal 1995, the funds paid no fees to brokerage firms that provided
research services.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Investment decisions for each fund are made independently from those of
other funds managed by FMR or accounts managed by FMR affiliates. It
sometimes happens that the same security is held in the portfolio of more
than one of these funds or accounts. Simultaneous transactions are
inevitable when several funds and accounts are managed by the same
investment adviser, particularly when the same security is suitable for the
investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
FSC normally determines Cash Portfolio's net asset value per share
( NAV ) at 12:00 p.m. and 4:00 p.m. Eastern time and Term
Portfolio's NAV at 4:00 p.m. Eastern time. The valuation of portfolio
securities is determined as of th ese time s for the purpose of
computing each fund's NAV.
For CASH PORTFOLIO , portfolio securities and other assets are
valued on the basis of amortized cost. This technique involves initially
valuing an instrument at its cost as adjusted for amortization of
premium or accretion of discount rather than its current market
value . The amortized cost value of an instrument may be higher or
lower than the price the fund would receive if it sold the instrument.
During periods of declining interest rates, Cash Portfolio's yield based
on amortized cost valuation may be higher than would result if the fund
used market valuations to determine its NAV. The converse would apply
during periods of rising interest rates.
Valuing Cash Portfolio's investments on the basis of amortized cost
and use of the term "money market fund" are permitted pursuant to
Rule 2a-7 under the 1940 Act. Cash Portfolio must adhere to certain
conditions under Rule 2a-7 , as summarized in the section entitled
"Quality and Maturity" on page S-6.
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 , and ha s established procedures designed to stabilize
Cash Portfolio's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from Cash Portfolio's amortized cost per share may
result in material dilution or other unfair results to shareholders, the
Trustees have agreed to take such corrective action, if any, as they deem
appropriate to eliminate or reduce, to the extent reasonably practicable,
the dilution or unfair results. Such corrective action could include
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; establishing NAV by using available market
quotations; and such other measures as the Trustees may deem
appropriate.
During periods of declining interest rates, Cash Portfolio's yield
based on amortized cost may be higher than the yield based on market
valuations. Under these circumstances, a shareholder in Cash Portfolio
would be able to obtain a somewhat higher yield than would result if
Cash Portfolio utilized market valuations to determine its NAV. The
converse would apply in a period of rising interest rates.
For TERM PORTFOLI O, portfolio securities are valued by
various methods depending on the primary market or exchange on which they
trade. Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets.
Fixed-income securities may also be valued on the basis of information
furnished by a pricing service that uses a valuation matrix which
incorporates both dealer-supplied valuations and electronic data processing
techniques. Use of pricing services has been approved by the Board of
Trustees. A number of pricing services are available, and the Trustees, on
the basis of an evaluation of these services, may use various pricing
services or discontinue the use of any pricing service.
Short-term securities are valued either at amortized cost or at original
cost plus accrued interest, both of which approximate current value.
Securities and other assets for which there is no readily available market
value are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more accurately
reflect the fair market value of such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. T erm Portfolio's share price,
and each fund's yield and total return fluctuate in response to
market conditions and other factors, and the value of Term Portfolio's
shares when redeemed may be more or less than their original cost.
YIELD CALCULATIONS. To compute Cash Portfolio's yield for a period,
the net change in value of a hypothetical account containing one share
reflects the value of additional shares purchased with dividends from the
one original share and dividends declared on both the original share and
any additional shares. The net change is then divided by the value of the
account at the beginning of the period to obtain a base period return. This
base period return is annualized to obtain a current annualized yield. Cash
Portfolio also may calculate a compound effective yield by compounding the
base period return over a one-year period. In addition to the current
yield, Cash Portfolio may quote yields in advertising based on any
historical seven-day period. Yields for Cash Portfolio are calculated on
the same basis as other money market funds, as required by regulation.
For Term Portfolio, yields are computed by dividing Term Portfolio's
i nterest income for a given 30-day or one-month period, net of
expenses, by the average number of shares entitled to receive dividends
during the period, dividing this figure by Term Portfolio's NAV at
the end of the period, and annualizing the result (assuming compounding of
income) in order to arrive at an annual percentage rate. Income is
calculated for purposes of Term Portfolio's yield quotations in accordance
with standardized methods applicable to all stock and bond funds. In
general, interest income is reduced with respect to bonds trading at a
premium over their par value by subtracting a portion of the premium from
income on a daily basis, and is increased with respect to bonds trading at
a discount by adding a portion of the discount to daily income. Capital
gains and losses generally are excluded from the calculation.
Term Portfolio also may quote its distribution rate, which expresses the
historical amount of income dividends paid by Term Portfolio as a
percentage of Term Portfolio's share price. The distribution rate is
calculated by dividing Term Portfolio's daily dividend per share by
its share price for each day in the 30-day period, averaging the resulting
percentages, and then expressing the average rate in annualized terms.
Income calculated for the purposes of determining Term Portfolio's yield
differs from income as determined for other accounting purposes. Because of
the different accounting methods used, and because of the compounding of
income assumed in yield calculations, Term Portfolio's yield may not equal
its distribution rate, the income paid to your account, or the income
reported in Term Portfolio's financial statements.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend
to be somewhat lower. Also, when interest rates are falling, the inflow of
net new money to a fund from the continuous sale of its shares will likely
be invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of a fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph , or
similar illustration.
NET ASSET VALUE. Charts and graphs using Term Portfolio's net asset
values , adjusted net asset values, and benchmark indices may be used to
exhibit performance. An adjusted NAV includes any distributions paid by
Term Portfolio and reflects all elements of its return. Unless
otherwise indicated, Term Portfolio's adjusted NAVs are not adjusted for
sales charges, if any.
HISTORICAL FUND RESULTS. The following table shows Cash Portfolio's current
yield and effective yield for the seven-day period ended June 30, 1995 and
total returns for periods ended June 30, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Current Effective One Five Ten One Five Ten
7-day 7-day Year Years * Years * Year Years * Years *
Yield Yield
Cash Portfolio
</TABLE>
* Note: If FMR had not reimbursed certain fund expenses during these
periods, Cash Portfolio's total returns would have been lower.
HISTORICAL FUND RESULTS. The following table shows Term Portfolio's 30-day
yield, 30-day distribution rate, and total returns for periods ended June
30, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-day 30-day One Five Life of One Five Life of
Y ield Distribution Year Years * Fund +* Year Years * Fund+ *
Rate
Term Portfolio
</TABLE>
+ From March 19, 1987 (commencement of operations).
* Note: If FMR had not reimbursed certain fund expenses during these
periods, Term Portfolio's total returns would have been lower.
The following table s show the income and capital elements of each
fund's cumulative total return. The table s compare each fund's
return to the record of the cost of living (measured by the Consumer Price
Index, or CPI) over the same period. The CPI information is as of the month
end closest to the initial investment date for each fund.
During the period from June 30, 198 5 to June 30, 1995 (for Cash
Portfolio), and from March 19, 1987 (commencement of operations) to June
30, 1995 (for Term Portfolio), a hypothetical $10,000 investment in Cash
Portfolio and Term Portfolio would have grown to $ _____ and
$ _____ , respectively, assuming all distributions were reinvested.
Th is w as a period of fluctuating interest rates and
bond prices and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
CASH PORTFOLIO INDEX
Period Value of Value of Total CPI
Ended Initial Reinvested Value
$10,000 Dividend
Investment Distributions
6/30/8 $ $ $ $
6
6/30/8 $ $ $ $
7
6/30/8 $ $ $ $
8
6/30/8 $ $ $ $
9
6/30/9 $ $ $ $
0
6/30/9 $ $ $ $
1
6/30/9 $ $ $ $
2
6/30/9 $ $ $ $
3
6/30/9 $ $ $ $
4
6/30/9 $ $ $ $
5
Explanatory Notes: With an initial investment of $10,000 made on June 30,
1985, the net amount invested in fund shares was $10,000. The cost of the
initial investment ($10,000) , together with the aggregate cost of
reinvested dividends for the period covered (their cash value at the time
they were reinvested), amounted to $ _______ . If distributions had
not been reinvested, the amount of distributions earned from Cash
Portfolio over time would have been smaller, and cash payments
(dividends) for the period would have amounted to $ _______. Cash
Portfolio did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TERM PORTFOLIO INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Value of Value of Value of Total CPI **
Period Initial Reinvested Reinvested Value
Ended $10,000 Dividend Capital
Investment Distributions Gain
Distributions
6/30/87* $ 9,910 $ 186 $ 0 $ 10,096 $ 10,125
6/30/88 $ 9,820 $ 985 $ 0 $ 10,805 $ 10,526
6/30/89 $ 9,780 $ 1,937 $ 0 $ 11,717 $ 11,070
6/30/90 $ 9,730 $ 2,941 $ 0 $ 12,671 $ 11,588
6/30/91 $ 9,820 $ 3,970 $ 0 $ 13,790 $ 12,132
6/30/92 $ 9,910 $ 4,826 $ 0 $ 14,736 $ 12,507
6/30/93 $ 9,940 $ 5,353 $ 0 $ 15,293 $ 12,881
6/30/94 $ 9,850 $ 5,789 $ 31 $ 15,670 $ 13,203
6/30/95 $______ $______ $______ $______ $______
</TABLE>
* From March 19, 1987 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on March 19,
1987 , the net amount invested in fund shares was $10,000. The cost
of the initial investment ($10,000) , together with the aggregate
cost of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$ ______ . If distributions had not been reinvested, the amount of
distributions earned from Term Portfolio over time would have been
smaller, and cash payments for the period would have amounted to
$ ______ for dividends and $ ____ for capital gains
distributions. Tax consequences of different investments have not been
factored into the above figures.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, a fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed
rates of inflation and hypothetical rates of return; and action plans
offering investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/Taxable
Money Market Funds, which is reported in the MONEY FUND REPORT(registered
trademark), covers over ________ taxable money market funds. The BOND FUND
REPORT AVERAGES(trademark)/ T axable B ond F unds, which
is reported in the BOND FUND REPORT(registered trademark), covers over
________ taxable bond funds. When evaluating comparisons to money market
funds, investors should consider the relevant differences in investment
objectives and policies. Specifically, money market funds invest in
short-term, high quality instruments and seek to maintain a stable $1.00
share price. A bond fund , however, invests in longer-term
instruments and its share price changes daily in response to a variety of
factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations ;
saving for college or other goals; charitable giving; and the Fidelity
credit card. In addition, Fidelity may quote or reprint financial or
business publications and periodicals as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. Term Portfolio may quote various measures of volatility and
benchmark correlation in advertising. In addition, Term Portfolio may
compare these measures to those of other funds. Measures of volatility seek
to compare Term Portfolio's historical share price fluctuations or
total returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, Term Portfolio may also discuss or illustrate
examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
Term Portfolio may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
As of __________, 1995, FMR advised over $___ billion in tax-free
fund assets, $___ billion in money market fund assets, $____ billion in
equity fund assets, $___ billion in international fund assets, and $___
billion in Spartan fund assets. The funds may reference the growth and
variety of money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management figure
represents the largest amount of equity fund assets under management by a
mutual fund investment adviser in the United States, making FMR America's
leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may
be waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) the fund suspends
the redemption of the shares to be exchanged as permitted under the 1940
Act or the rules and regulations thereunder, or the fund to be acquired
suspends the sale of its shares because it is unable to invest amounts
effectively in accordance with its investment objective and policies.
In the prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from each fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends received deduction. A portion of each fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation. Each fund will send each shareholder a
notice in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Cash Portfolio may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its NAV at $1.00 per share. Cash Portfolio does not anticipate
earning long-term capital gains on securities held by Cash
Portfolio .
Long-term capital gains earned by Term Portfolio on the sale of securities
and distributed to shareholders are federally taxable as long-term capital
gains, regardless of the length of time shareholders have held their
shares. If a shareholder receives a long-term capital gain distribution on
shares of Term Portfolio , and such shares are held six months or
less and are sold at a loss, the portion of the loss equal to the amount of
the long-term capital gain distribution will be considered a long-term loss
for tax purposes. Short-term capital gains distributed by Term
Portfolio are taxable to shareholders as dividends, not as capital
gains. As of June 30, 1995, Term Portfolio hereby designates approximately
$______ as a capital gain dividend for the purpose of the dividend-paid
deduction.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other fund of The North
Carolina Capital Management Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the federal tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may
be subject to state and local taxes on fund distributions. Investors
should consult their tax advis e rs to determine whether a fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. T he business address of
each Trustee and officer who is an "interested person" (as defined in
the 1940 Act) is 82 Devonshire Street, Boston, M assachusetts
02109 , which is also the address of FMR. The business address of
all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Th ose Trustees who are "interested
persons" by virtue of their affiliation with either the trust, FMR or
Sterling are indicated by an asterisk (*).
*WILLIAM L. BYRNES ( 73 ), PRESIDENT AND TRUSTEE (1990) is a Director
of Fidelity International Limited and Vice Chairman, a Director and
Managing Director of FMR Corp.
JOHN DAVID "J.D." FOUST ( 67 ), TRUSTEE (1990) is a financial
consultant (Donaldson, Lufkin & Jenrette Securities Corporation, 1990).
Prior to 1990, he served as Deputy State Treasurer and Secretary of the
Local Government Commission (1977-1989).
*W. OLIN NISBET III ( 55 ), TRUSTEE (1990) and Vice President, is
Chairman an d Director of Sterling Capital and Chairman and
Director of Sterling. Mr. Nisbet is a rotating director of
United Asset Management Corporation (1988 and 1994 ) and serves as
Governor of the Investment Counsel Association of America ( since
1988), an Advisor of the Kitty Hawk Capital-Venture Capital Partnership
(1988 ) , and a Trustee of Davidson College (1987).
HELEN A. POWERS ( 70 ), TRUSTEE (1990). Prior to Ms. Powers'
retirement in April 1990, she served as Secretary of the North Carolina
Department of Revenue (1985-1990). Prior to 1985 she was Senior Vice
President of North Carolina National Bank and served as a member of the
North Carolina Banking Commission. In April 1995, Ms. Powers was
reappointed to serve as a member of the North Carolina Banking
Commission. Ms. Powers is a trustee of Warren Wilson College (1992), a
director of Memorial Mission Medical Center (1991) and the Memorial Mission
Foundation (1993), for which the New Women's Health Center has been
designated the HELEN POWERS WOMEN'S HEALTH CENTER.
BERTRAM H. WITHAM ( 76 ), TRUSTEE and CHAIRMAN OF THE BOARD, is a
consultant (Treasurer until his retirement in 1978) to IBM Corp. Chairman
and Director of Villager Companies (property management), Director and
member of Executive Committee of Bill Glass Ministries. Trustee of other
funds advised by FMR.
J. GARY BURKHEAD ( 54 ), SENIOR VICE PRESIDENT, is President of FMR;
and President and a Director of FMR Texas (1989), Fidelity
Management & Research (U.K.) Inc. , and Fidelity Management &
Research (Far East) Inc. He is a Trustee of other funds managed by
FMR.
J. CALVIN RIVERS , JR. ( 49 ), VICE PRESIDENT (1992), is
Director and Executive Vice President of Sterling Capital and
President of Sterling.
FRED L. HENNING, JR. ( 56 ), VICE PRESIDENT , is Vice President of
Fidelity's money market (1994) and fixed-income (1995) funds and Senior
Vice President of FMR Texas, Inc.
[Information regarding Term Portfolio's portfolio manager will be filed by
subsequent amendment.]
BURNELL R. STEHMAN (63), VICE PRESIDENT of Cash Portfolio (1991), Vice
President of FMR Texas (1989) and of other funds advised by FMR.
ARTHUR S. LORING (47), SECRETARY, is Senior Vice President (1993)
and General Counsel of FMR, Vice President - Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER ( 48 ), TREASURER (199 5 ) is
Treasurer of the Fidelity funds, and is an employee of FMR
(1995) . Before joining FMR, Mr. Rathgeber was a Vice President of
Goldman Sachs & Co. (1978-1995), where he served in various positions,
including Vice President of Proprietary Accounting (1988-1992), Global
Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs
(Asia) LLC (1994-1995).
THOMAS D. MAHER ( 50 ), ASSISTANT VICE PRESIDENT of Cash Portfolio
(1990), is Assistant Vice President of Fidelity's money market funds and
Vice President and Associate General Counsel of FMR Texas (1990). Prior to
1990, Mr. Maher was an employee of FMR.
MICHAEL D. CONWAY ( 41 ) , ASSISTANT TREASURER of Cash
Portfolio of (1995), is Assistant Treasurer of Fidelity's money market
funds and is an employee of FMR (1995). Before joining FMR, Mr. Conway was
an employee of Waddell & Reed Inc. (investment advisor , 1986-1994),
where he served as Assistant Treasurer of Waddell & Reed's mutual funds
(1986-1992) and as Assistant Vice President and Director of Operations
of Waddell & Reed Asset Management Company (1992-1994) .
JOHN H. COSTELLO ( 48 ), ASSISTANT TREASURER (1995) and an
employee of FMR.
LEONARD M. RUSH (49), ASSISTANT TREASURER (1994) is an employee of
FMR. Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush
was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
DAVID H. POTEL ( 38 ), ASSISTANT SECRETARY (1988) and an employee of
FMR Corp.
The following table sets forth information describing the compensation of
each current Trustee of each fund for his or her services as trustee
for the fiscal year ended June 30, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Trustees Aggregate Aggregate Pension or Estimated Total
Compensation Compensation Retirement Annual Compensation
from Cash from Benefits Benefits from from the Fund
Portfolio* Term Portfolio* Accrued as the Fund Complex**
Part of Fund Complex upon
Expenses from Retirement**
the Fund
Complex**
William L. Byrnes+ 0 0 0 0 0
John David Foust $21,595 $3,905 0 0 $31,250
W. Olin Nisbet III+ -0- 0 0 0 0
Helen A. Powers $27,765 $1,232 0 0 $27,184
Bertram H. $27,703 $1,229 0 0 $47,727
Witham
</TABLE>
* Includes compensation paid to the Trustees by each fund. The total amount
of deferred compensation (including interest) payable to or accrued for Mr.
Foust was $0 , Ms. Powers was $ 28,997 , and Mr. Witham was
$ 28,932 . Each fund's trustees do not receive any pension or
retirement benefits from the funds as compensation for their services as
trustees of the funds.
** Information is as of December 31, 1994 for 210 funds in the Fund
Complex. Mr. Witham is a Director or Trustee of four investment companies
in the Fund Complex, including Cash Portfolio and Term Portfolio. Under a
retirement program adopted in July 1988 by the other open-end investment
companies in the Fund Complex (the " other Open-End Funds"), Mr.
Witham, upon reaching age 72, became eligible to participate in a
retirement program under which he receives payments during his lifetime
from a fund based upon his basic trustee fees and length of service as
trustee for the other Open-End Funds. During the year ended June 30, 1995,
he received $ 50,000 in payments under that retirement program. The
obligation of the other Open-End Funds to make such payments is not secured
or funded.
+ Messrs. Byrnes and Nisbet, who are " interested persons" of Cash
Portfolio and Term Portfolio, do not receive any compensation from Cash
Portfolio or Term Portfolio or other investment companies in the Fund
Complex for their services as Trustees, and are compensated by FMR.
On _______________ , 1995, the Trustees and officers of each fund
owned, in the aggregate, less than 1% of each fund's total outstanding
shares.
As of _______________ , 1995, the following owned of record or
benefically 5% or more of outstanding shares of the funds: [to be filed by
subsequent amendment.]
[IF FUND HAS A SHAREHOLDER WHO OWNS 25% OR MORE: A shareholder owning of
record or beneficially more than 25% of a fund's outstanding shares may be
considered a controlling person. That shareholder's vote could have a more
significant effect on matters presented at a shareholders' meeting than
votes of other shareholders.]
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of
the Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include providing
facilities for maintaining each fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants, underwriters,
and other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
F MR is responsible for the payment of all expenses of each fund with
certain exceptions. Specific expenses payable by FMR include, without
limitation, expenses for typesetting, printing, and mailing proxy materials
to shareholders; legal expenses, and the fees of the custodian, and
auditor; costs of typesetting, printing, and mailing prospectuses and
statements of additional information, notices and reports to shareholders;
each fund's proportionate share of insurance premiums and Investment
Company Institute dues. FMR also provides for transfer agent and dividend
disbursing services through FIIOC and portfolio and general accounting
record maintenance through FSC.
FMR pays all other expenses of each fund with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the t rust or FMR (the non-interested Trustees); interest
on borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of any litigation to which a fund
may be a party, and any obligation it may have to indemnify the officers
and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated December
13, 1990, which were approved by shareholders on December 12, 1990. The
management fee paid to FMR is reduced by an amount equal to the fees and
expenses of the non-interested Trustees.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at the annual rate of 0.41% of average net assets through
$100 million; 0.40% of average net assets in excess of $100 million through
$200 million; 0.39% of average net assets in excess of $200 million through
$800 million; 0.38% of average net assets in excess of $800 million
throughout the month. Fees received by FMR, after reduction of fees and
expenses of the non-interested Trustees, for the last three fiscal years
are shown in the table below.
Fiscal Year Ended Management Fees Paid to FMR
Cash Portfolio 1995
1994
1993
Term Portfolio 1995
1994
1993
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
SUB-ADVISER. On behalf of Cash Portfolio, FMR has entered into a
sub-advisory agreement with FMR Texas , Inc. (FMR Texas) pursuant to
which FMR Texas has primary responsibility for providing portfolio
investment management services to Cash Portfolio .
Under the sub-advisory agreement dated January 1, 1991, which was approved
by shareholders on December 12, 1990, FMR pays FMR Texas fees equal to 50%
of the management fee payable to FMR under its management contract with
Cash Portfolio , after payments by FMR pursuant to Cash
Portfolio' s 12b-1 Plan, if any. The fees paid to FMR Texas are not
reduced by any voluntary or mandatory expense reimbursements that may be in
effect from time to time. On behalf of Cash Portfolio , for fiscal
1995, 1994, and 1993, FMR paid FMR Texas fees of $________, $1,574,452, and
$1,692,977, respectively.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing , and shareholders' servicing
agent for the funds. The costs of these services are borne by FMR pursuant
to its management contract with the funds. FSC performs the calculations
necessary to determine the funds' NAVs and dividends , maintains each
fund's general accounting records , and administers each fund's
securities lending program . The cost of these services are also borne
by FMR pursuant to its management contract with the funds.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund , which are continuously
offered at net asset value . Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR. FDC has
entered into a Distribution and Service Agent Agreement with Sterling, a
wholly-owned subsidiary of Sterling Capital Management Company (Sterling
Capital), headquartered in Charlotte , which is an affiliate of United
Asset Management Corporation, Boston, MA, to act as distribution agent of
shares of each fund. Under the Distribution and Service Agent Agreement,
Sterling has assumed from FDC primary responsibility with respect to the
distribution of each fund's shares.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) pursuant to Rule 12b-1 under the 1940 Act (the Rule). The
Rule provides in substance that a mutual fund may not engage directly or
indirectly in financing any activity that is primarily intended to result
in the sale of shares of a fund except pursuant to a plan approved on
behalf of the fund under the Rule. The Plans, as approved by the Trustees,
allow the funds and FMR to incur certain expenses that might be considered
to constitute direct or indirect payment by the funds of distribution
expenses.
Pursuant to the Plans, from its management fees, past profits, or other
source, FMR pays Sterling, through FDC, a distribution fee at an annual
rate of 0.20% of each fund's average net assets. Average net assets is
determined as of the close of business on each day throughout the month.
No separate payments are authorized to be made by the funds under the
Plans.
For the fiscal year ended June 30, 1995, FMR paid Sterling through FDC
$______ on behalf of Cash Portfolio and $______ on behalf of Term
Portfolio.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
each fund and its shareholders. T o the extent that each Plan gives
FMR and FDC greater flexibility in connection with the distribution of
shares of each fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plans by local entities with whom shareholders have
other relationships.
The Plans were approved by shareholders of each fund on December 12, 1990.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulator agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Cash Portfolio and Term Portfolio are funds of The
North Carolina Capital Management Trust, an open-end management investment
company organized as a Massachusetts business trust pursuant to a
Declaration of Trust, dated April 26, 1982, and amended and restated on
November 1, 1987. Currently, Cash Portfolio and Term Portfolio are the only
funds of the t rust. The Declaration of Trust permits the Trustees to
create additional funds.
In the event that FMR ceases to be the investment adviser to the trust
or a fund, the right of the t rust or fund to use the identifying
name "Fidelity" may be withdrawn . There is a remote possibility that one
fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the t rust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the t rust. Expenses with respect to the
t rust are to be allocated in proportion to the asset value of the
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the t rust, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds. In the event of the dissolution or liquidation of the
t rust, shareholders of each fund are entitled to receive as a class
the underlying assets of such fund available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The t rust is an entity of the
type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
The Declaration of Trust provides that the t rust shall not have any
claim against shareholders except for the payment of the purchase price of
shares and requires that each agreement, obligation, or instrument entered
into or executed by the trust or the Trustees shall include a
provision limiting the obligations created thereby to the t rust and
its assets. The Declaration of Trust provides for indemnification out of
each fund's property of any shareholders held personally liable for the
obligations of the fund. The Declaration of Trust also provides that each
fund shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which the
fund itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the t rust or a fund
may, as set forth in the Declaration of T rust, call meetings of the
t rust or a fund for any purpose related to the t rust or fund,
as the case may be, including, in the case of a meeting of the entire
t rust, the purpose of voting on removal of one or more Trustees. The
tr ust or any fund may be terminated upon the sale of its assets to
another open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the outstanding shares of the t rust or the fund. If not
so terminated, the tr ust and the funds will continue indefinitely.
CUSTODIAN. First Union National Bank of North Carolina, Two First Union
Center, Charlotte, North Carolina, 28288, is custodian of the assets of the
funds. The custodian is responsible for the safekeeping of the funds'
assets and the appointment of the subcustodian banks and clearing agencies.
The custodian takes no part in determining the investment policies of the
funds or in deciding which securities are purchased or sold by the funds.
However, the funds may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian. Morgan
Guaranty Trust Company of New York, The Bank of New York, and Chemical
Bank, each headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with pooled repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time , conduct transactions with various
banks, including banks serving as custodians for certain funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. _______________, serve s as the t rust's
independent accountant . The auditor examines f inancial
statements for the funds and provides other audit, tax, and related
services.
FINANCIAL STATEMENTS
The funds' financial statements and financial highlights for the fiscal
year ended June 30, 1995 are included in the funds' Annual Report, which is
a separate report . The funds' financial statements and financial
highlights [will be filed by subsequent amendment.]
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG-3/VMIG-3 - This designation denotes favorable quality . All
security elements are accounted for, but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well
established.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Strong capa city to pay principal and interest. An
issue determined to possess a very strong capacity to pay debt
service is given a plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interes t, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
SP-3 - Speculative capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICES, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edge d ." Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
AA - Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk s appear
somewhat larger than the Aaa securities.
A -Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future.
There are nine basic rating categories for long-term obligations. They
range from Aaa (highest quality) to C (lowest quality). Those bonds within
the Aa, A, Baa, Ba and B categories that Moody's believes possess the
strongest credit attributes within those categories are designated by the
symbols Aa1, A1, Baa1, Ba1 and B1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND RATINGS:
AAA -Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation . Capacity to pay interest and repay
principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher
rated categories.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
Well established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earning trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers rated PRIME-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the requirement for
relatively high financial leverage. Adequate alternate liquidity is
maintained.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS:
A - Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with
the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
A-3 - This designation indicates that the capacity for timely payment is
satisfactory. These issues are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights for Cash Portfolio and
for Term Portfolio for the fiscal year ended June 30, 1995 will be filed by
subsequent amendment.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust dated November 1, 1987, was
electronically filed and is incorporated herein by reference as Exhibit 1
to Post-Effective Amendment No. 28.
(a) Supplement to the Declaration of Trust, dated October 18, 1993, was
electronically filed and is incorporated herein by reference as Exhibit
1(a) to Post-Effective Amendment No. 28.
(2) By-Laws of the Trust were electronically filed and are incorporated
herein by reference as Exhibit 2 to Post-Effective Amendment No. 28.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between The North Carolina Cash Management
Trust: Term Portfolio and Fidelity Management & Research Company dated
December 13, 1990 was electronically filed and is incorporated herein by
reference as Exhibit 5(a) to Post-Effective Amendment No. 28.
(b) Management Contract between The North Carolina Cash Management
Trust: Cash Portfolio and Fidelity Management & Research Company dated
December 13, 1990 was electronically filed and is incorporated herein by
reference as Exhibit 5(b) to Post-Effective Amendment No. 28.
(c) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company on behalf of Cash Portfolio dated January 1,
1991 was electronically filed and is incorporated herein by reference as
Exhibit 5(c) to Post-Effective Amendment No. 28.
(6) (a) General Distribution Agreement between The North Carolina Cash
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 was electronically filed and is incorporated herein by
reference as Exhibit 6(a) to Post-Effective Amendment No. 28.
(b) General Distribution Agreement between The North Carolina Cash
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 was electronically filed and is incorporated herein by
reference as Exhibit 6(b) to Post-Effective Amendment No. 28.
(c) Amendment to the General Distribution Agreement dated January 1,
1988 for Cash Portfolio and Term Portfolio was electronically filed and is
incorporated herein by reference as Exhibit 6(c) to Post-Effective
Amendment No. 28.
(7) Not applicable.
(8) (a) Custodian Agreement between Registrant and First Union National
Bank of North Carolina dated December 6, 1991 is electronically filed
herein as Exhibit 8(a).
(b) Subcustodian Agreement between First Union National Bank of North
Carolina and Shawmut Bank, N.A. dated November 1, 1990 was electronically
filed and is incorporated herein by reference as Exhibit 8(b) to
Post-Effective Amendment No. 28.
(c) Subcustodian Agreement between First Union National Bank of North
Carolina and Morgan Guaranty Trust Company of New York dated March 18, 1991
was electronically filed and is incorporated herein by reference as Exhibit
8(c) to Post-Effective Amendment No. 28.
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) (a) Distribution and Service Plan between The North Carolina Cash
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated December 13, 1990 was electronically filed and is incorporated herein
by reference as Exhibit 15(a) to Post-Effective Amendment No. 28.
(b) Distribution and Service Plan between The North Carolina Cash
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated December 13, 1990 was electronically filed and is incorporated herein
by reference as Exhibit 15(b) to Post-Effective Amendment No. 28.
(c) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., dated
December 13, 1990 on behalf of Term Portfolio, was electronically filed and
is incorporated herein by reference as Exhibit 15(c) to Post-Effective
Amendment No. 28.
(d) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., dated
December 13, 1990 on behalf of Cash Portfolio, was electronically filed and
is incorporated herein by reference as Exhibit 15(d) to Post-Effective
Amendment No. 28.
(16) (a) Schedule and data points for 7-day yield for Cash Portfolio will
be filed by subsequent amendment.
(b) Schedule and data points for 30-day yield for Term Portfolio are
electronically filed herein as Exhibit 16(b).
(c) Schedule and data points for total return for Term Portfolio are
electronically filed herein as Exhibit 16(c).
(d) Schedule and data points for adjusted NAV for Term Portfolio are
electronically filed herein as Exhibit 16(d).
(17) (a) Financial Data Schedule for Cash Portfolio will be filed by
subsequent amendment.
(b) Financial Data Schedule for Term Portfolio will be filed by subsequent
amendment.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is a separate entity from the Board of
other funds advised by FMR, each of which has Fidelity Management &
Research Company as its investment adviser. The officers of these funds are
elected separately and are substantially different. The Registrant takes
the position that it is not under common control with these other funds
since the power residing in the respective boards and officers arises as
the result of an official position with the respective funds.
Item 26. Number of Holders of Securities
August 1, 1995
Title of Class Number of Record Holders
Cash Portfolio 541
Term Portfolio 115
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him or her in connection with any claim, action,
suit or proceeding in which he or she is involved by virtue of his or her
service as a trustee, an officer, or both. Additionally, amounts paid or
incurred in settlement of such matters are covered by this indemnification.
Indemnification will not be provided in certain circumstances, however.
These include instances of willful misfeasance, bad faith, gross
negligence, and reckless disregard of the duties involved in the conduct of
the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; Director of Technical Research.
Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); High Income
Division Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR;
Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel
of FMR; Vice President, Legal of FMR Corp.; Secretary of
funds advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., Fidelity
Management & Research (Far East) Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a
Director of Fidelity Management & Research (Far East)
Inc. and Fidelity Management & Research (U.K.) Inc.;
Senior Vice President and Trustee of funds advised by
FMR.
Fred L. Henning, Jr. Senior Vice President of FMR Texas; Fixed-Income
Division Leader (1995).
Robert Auld Vice President of FMR Texas (1993).
Leland Barron Vice President of FMR Texas and of funds advised by
FMR.
Robert Litterst Vice President of FMR Texas and of funds advised by
FMR (1993).
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of funds advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds advised by
FMR.
John J. Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas; Money Market Division
Leader (1995).
Stephen P. Jonas Treasurer of FMR Texas Inc. (1993), Fidelity
Management & Research (U.K.) Inc. (1993), and Fidelity
Mangement & Research (Far East) Inc. (1993); Treasurer
and Vice President of FMR (1993).
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity Management &
Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
STERLING CAPITAL DISTRIBUTORS, INC.
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter With Registrant
W. Olin Nisbet III President, Director Vice President
Robert Livingston Avinger Vice President, Director None
Tanya Lee Mitchell Secretary, Treasurer None
* 1770 Independence Center, Charlotte, NC
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the Portfolios' custodian,
First Union National Bank, Charlotte, North Carolina.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Cash Portfolio and Term Portfolio, undertakes
to deliver to each person who has received the prospectus or annual or
semiannual financial report for a fund in an electronic format, upon his or
her request and without charge, a paper copy of the prospectus or annual or
semiannual report for the fund.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 30 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 30 day of August, 1995.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
By /s/ William L. Byrnes+
William L. Byrnes, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/ Kenneth A. Rathgeber Treasurer August 30, 1995
Kenneth A. Rathgeber
/s/ William L. Byrnes* Trustee August 30, 1995
William L. Byrnes
/s/ John David Foust* Trustee August 30, 1995
John David Foust
/s/ W. Olin Nisbet III* Trustee August 30, 1995
W. Olin Nisbet III
/s/ Helen A. Powers** Trustee August 30, 1995
Helen A. Powers
/s/ Bertram H. Witham* Trustee August 30, 1995
Bertram H. Witham
+ Signature affixed by Arthur S. Loring pursuant to a power of attorney
dated July 17, 1991 and filed herewith.
* Signatures affixed by Robert C. Hacker pursuant to a power of attorney
dated April 17, 1991 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated July 17, 1991 and filed herewith.
POWER OF ATTORNEY
I, the undersigned Trustee of The North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur J. Brown, Robert C. Hacker, Richard M. Phillips, Dana L.
Platt and Arthur C. Delibert, each of them singly, my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and in my name in the appropriate capacities,
all Pre-Effective Amendments to any Registration Statements of the Trust,
any and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on this 17th day of July 1991
/s/Helen A. Powers
__________________
Helen A. Powers
POWER OF ATTORNEY
We, the undersigned Trustees of The North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur J. Brown, Robert C. Hacker, Richard M. Phillips, Dana L.
Platt and Arthur C. Delibert, each of them singly, our true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them, to sign for us and in our name in the appropriate capacities,
all Pre-Effective Amendments to any Registration Statements of the Trust,
any and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in our names and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this 17th day of April 1991
/s/William L. Byrnes
________________________
William L. Byrnes
/s/John David Foust
________________________
John David Foust
/s/W. Olin Nisbet III
________________________
W. Olin Nisbet III
________________________
Helen A. Powers
/s/Bertram H. Witham
________________________
Bertram H. Witham
POWER OF ATTORNEY
I, the undersigned President of the North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur S. Loring my true and lawful attorney-in-fact, with full
power of substitution, and with full power to sign for me and in my name in
the appropriate capacity, all Pre-Effective Amendments to any Registration
Statements of the Trust, any and all subsequent Post-Effective Amendments
to said Registration Statements, any Registration Statements on Form N-14,
and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorney-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue
hereof.
WITNESS my hand on this 17th day of July 1991
/s/ William L. Byrnes
William L. Byrnes
CUSTODIAN AGREEMENT
Dated as of: December 6, 1991
Between
NORTH CAROLINA CASH MANAGEMENT TRUST
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 1
2.03 Security Purchases 2
2.04 Exchanges of Securities 2
2.05 Sales of Securities 2
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 3
2.08 Stock Dividends, Rights, Etc. 3
2.09 Options 3
2.10 Futures Contracts 4
2.11 Borrowing 4
2.12 Interest Bearing Deposits 4
2.13 Foreign Exchange Transactions 5
2.14 Securities Loans 5
2.15 Collections 5
2.16 Dividends, Distributions and Redemptions 6
2.17 Proceeds from Shares Sold 6
2.18 Proxies, Notices, Etc. 6
2.19 Bills and Other Disbursements 6
2.20 Nondiscretionary Functions 6
2.21 Bank Accounts 7
2.22 Deposit of Fund Assets in Securities Systems 7
2.23 Other Transfers 8
2.24 Establishment of Segregated Account 8
2.25 Custodian's Books and Records . 8
2.26 Opinion of Fund's Independent Certified Public
Accountants 9
2.27 Reports of Independent Certified Public Accountants 9
2.28 Overdraft Facility 9
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 10
3.01 Proper Instructions and Special Instructions 10
3.02 Authorized Persons 10
3.03 Persons Having Access to Assets of the Portfolios 11
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 11
IV. SUBCUSTODIANS 11
4.01 Domestic Subcustodians 11
4.02 Foreign Subcustodians and Interim Subcustodians 11
4.03 Special Subcustodians 12
4.04 Termination of a Subcustodian 13
4.05 Certification Regarding Foreign Subcustodians 13
V. STANDARD OF CARE; INDEMNIFICATION 13
5.01 Standard of Care 13
5.02 Liability of Custodian for Actions of Other Persons 14
5.03 Indemnification 15
5.04 Investment Limitations 15
5.05 Fund's Right to Proceed 16
VI. COMPENSATION 16
VII. TERMINATION 16
7.01 Termination of Agreement in Full 16
7.02 Termination as to One or More Portfolios 17
VIII. DEFINED TERMS 17
IX. MISCELLANEOUS 18
9.01 Execution of Documents, Etc 18
9.02 Representative Capacity; Nonrecourse Obligations 18
9.03 Several Obligations of the Portfolios 18
9.04 Representations and Warranties 18
9.05 Entire Agreement 19
9.06 Waivers and Amendments 19
9.07 Interpretation 19
9.08 Captions 20
9.09 Governing Law 20
9.10 Notices 20
9.11 Assignment 20
9.12 Counterparts 20
9.13 Confidentiality; Survival of Obligations 20
APPENDICES
Appendix "A" - List of Portfolios
Appendix "B" - List of Foreign Subcustodians
and Special Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest
CUSTODIAN AGREEMENT
AGREEMENT made as of the 6th day of December, 1991 between North Carolina
Cash Management Trust (the "Fund") and First Union National Bank of North
Carolina (the "Custodian").
W I T N E S S E T H
WHEREAS, the Fund may, from time to time organize one or more series of
shares, in addition to the series set forth in Appendix "A" attached
hereto, each of which shall represent an interest in a separate portfolio
of cash, securities and other assets (all such existing and additional
series now or hereafter listed on Appendix "A" being hereinafter referred
to individually, as a "Portfolio," and collectively, as the "Portfolios");
and
WHEREAS, the Fund desires to appoint the Custodian as custodian on behalf
of the Portfolios in accordance with the provisions of the Investment
Company Act of 1940 (the "1940 Act") and the rules and regulations
thereunder, under the terms and conditions set forth in this Agreement, and
the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of the Portfolios, the Fund hereby employs and appoints the
Custodian as a custodian, subject to the terms and provisions of this
Agreement. The Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by the
Portfolios from time to time during the term of this Agreement and shall
specify the Portfolio to which such cash, securities and other assets are
to be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article
IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of the Portfolios delivered to the Custodian
and, on behalf of the Portfolios, the Custodian shall, from time to time,
accept delivery of cash, securities and other assets for safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of the Portfolios
either: (i) by physical possession of the share certificates or other
instruments representing such securities in registered or bearer form; or
(ii) in book-entry form by a Securities System (as hereinafter defined) in
accordance with the provisions of Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of
either of them, unless specifically directed by Proper Instructions to hold
such registered securities in so-called street name; provided that, in any
event, all such securities and other assets shall be held in an account of
the Custodian containing only assets of a Portfolio, or only assets held by
Custodian as a fiduciary or custodian for customers, and provided further,
that the records of the Custodian shall indicate at all times the Portfolio
or other customer for which such securities and other assets are held in
such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions
(as hereinafter defined), the Custodian shall pay for and receive
securities purchased for the account of a Portfolio, provided that payment
shall be made by Custodian only upon receipt of the securities: (a) by the
Custodian; (b) by a clearing corporation of a national securities exchange
of which the Custodian is a member; or (c) by a Securities System.
Notwithstanding the foregoing, upon receipt of Proper Instructions: (i) in
the case of a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the securities underlying such repurchase agreement have been
transferred by book-entry into the Account (as hereinafter defined)
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities system require that the
Securities System may make payment of such funds to the other party to the
repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of
time deposits, call account deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts or options,
pursuant to Sections 2.09, 2.10, 2.12 and 2.13 hereof, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; and (iii) in the
case of the purchase of securities, the settlement of which occurs outside
of the United States of America, the Custodian may make payment therefor
and receive delivery of such securities in accordance with local custom and
practice generally accepted by Institutional Clients (as hereinafter
defined) in the country in which the settlement occurs, but in all events
subject to the standard of care set forth in Article V hereof. For purposes
of this Agreement, an "Institutional Client" shall mean a major commercial
bank, corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or sells
securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities in temporary
form for definitive securities; surrender securities for transfer into the
name of the Custodian, a Portfolio or a nominee of either of them, as
permitted by Section 2.02(b); and surrender securities for a different
number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the
securities to be issued will be delivered to the Custodian or a nominee of
the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for
the account of a Portfolio, but only against payment therefor in the form
of: (a) cash, certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the custodian with a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities,
the settlement of which occurs outside of the United States of America,
such securities shall be delivered and paid for in accordance with local
custom and practice generally accepted by Institutional Clients in the
country in which the settlement occurs, but in all events subject to the
standard of care set forth in Article V hereof; and (ii) in the case of
securities held in physical form, such securities shall be delivered and
paid for in accordance with "street delivery custom" to a broker or its
clearing agent, against delivery to the Custodian of a receipt for such
securities, provided that the Custodian shall have taken reasonable steps
to ensure prompt collection of the payment for, or the return of, such
securities by the broker or its clearing agent, and provided further that
the Custodian shall not be responsible for the selection of or the failure
or inability to perform of such broker or its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"),
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
securities in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time to
time designate. Upon receipt of Proper Instructions, the Custodian shall
surrender ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof, or to the
agent of such issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall promptly notify the Fund of such action in
writing by facsimile transmission or in such other manner as the Fund and
Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and,
upon receipt of Proper Instructions, take action with respect to the same
as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund relating to compliance
with the rules of the Options Clearing Corporation or of any registered
national securities exchange or similar organization(s), the Custodian
shall: (a) receive and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a security or securities
index by a Portfolio; (b) deposit and maintain in a segregated account,
securities (either physically or by book-entry in a Securities System),
cash or other assets; and (c) pay, release and/or transfer such securities,
cash or other assets in accordance with notices or other communications
evidencing the expiration, termination or exercise of such options
furnished by the Options Clearing Corporation, the securities or options
exchange on which such options are traded, or such other organization as
may be responsible for handling such option transactions. The Fund and the
broker-dealer shall be responsible for the sufficiency of assets held in
any segregated account established in compliance with applicable margin
maintenance requirements and the performance of other terms of any option
contract.
Section 2.10. Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among
the Fund, on behalf of any Portfolio, the Custodian and any futures
commission merchant (a "Procedural Agreement"), the Custodian shall: (a)
receive and retain confirmations, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract by a Portfolio;
(b) deposit and maintain in a segregated account, cash, securities and
other assets designated as initial, maintenance or variation "margin"
deposits intended to secure the Portfolio's performance of its obligations
under any futures contracts purchased or sold or any options on futures
contracts written by the Portfolio, in accordance with the provisions of
any Procedural Agreement designed to comply with the rules of the Commodity
Futures Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s),
regarding such margin deposits; and (c) release assets from and/or transfer
assets into such margin accounts only in accordance with any such
Procedural Agreements. The Fund and such futures commission merchant shall
be responsible for the sufficiency of assets held in the segregated account
in compliance with applicable margin maintenance requirements and the
performance of any futures contract or option on a futures contract in
accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by the
Fund and the Custodian, as collateral for borrowings effected by the Fund
on behalf of a Portfolio, provided that such borrowed money is payable by
the lender (a) to or upon the Custodian's order, as Custodian for such
Portfolio, and (b) concurrently with delivery of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to
collectively, as "Interest Bearing Deposits") for the account of a
Portfolio, the Custodian shall purchase such Interest Bearing Deposits in
the name of a Portfolio with such banks or trust companies (including the
Custodian, any Subcustodian or any subsidiary or affiliate of the
Custodian) (hereinafter referred to as "Banking Institutions") and in such
amounts as the Fund may direct pursuant to Proper Instructions. Such
Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the Fund may determine and direct pursuant to Proper
Instructions. The Custodian shall include in its records with respect to
the assets of each Portfolio appropriate notation as to the amount and
currency of each such Interest Bearing Bank Deposit, the accepting Banking
Institution and all other appropriate details, and shall retain such forms
of advice or receipt evidencing such account, if any, as may be forwarded
to the Custodian by the Banking Institution. The responsibilities of the
Custodian to the Fund for Interest Bearing Deposits accepted on the
Custodian's books in the United States shall be that of a U.S. bank for a
similar deposit. With respect to Interest Bearing Deposits other than
those accepted on the Custodian's books, (a) the Custodian shall be
responsible for the collection of income as set forth in Section 2.15 and
the transmission of cash and instructions to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or, so long as the Custodian acts in accordance with
Proper Instructions, for the failure of such Banking Institution to pay
upon demand. Upon receipt of Proper Instructions, the Custodian shall take
such reasonable actions as the Fund deems necessary or appropriate to cause
each such Interest Bearing Deposit Account to be insured to the maximum
extent possible by all applicable deposit insurers including, without
limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other than as Principal. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the Fund may determine and
direct pursuant to Proper Instructions. The Custodian shall be responsible
for the transmission of cash and instructions to and from the currency
broker or Banking Institution with which the contract or option is made,
the safekeeping of all certificates and other documents and agreements
evidencing or relating to such foreign exchange transactions and the
maintenance of proper records as set forth in Section 2.25. The Custodian
shall have no duty with respect to the selection of the currency brokers or
Banking Institutions with which the Fund deals or, so long as the Custodian
acts in accordance with Proper Instructions, for the failure of such
brokers or Banking Institutions to comply with the terms of any contract or
option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to the Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of a Portfolio with the Custodian
as principal. The Custodian shall be responsible for the selection of the
currency brokers or Banking Institutions and the failure of such currency
brokers or Banking Institutions to comply with the terms of any contract or
option.
(c) Payments. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio,
deliver securities of such Portfolio to the borrower thereof prior to
receipt of the collateral, if any, for such borrowing; provided that, in
cases of loans of securities secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the Securities
System deliver the securities of the Portfolio to the borrower thereof only
upon receipt of the collateral for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to the Fund with
respect to portfolio securities and other assets of each Portfolio; (b)
promptly credit to the account of each Portfolio all income and other
payments relating to portfolio securities and other assets held by the
Custodian hereunder upon Custodian's receipt of such income or payments or
as otherwise agreed in writing by the Custodian and the Fund; (c) promptly
endorse and deliver any instruments required to effect such collections;
and (d) promptly execute ownership and other certificates and affidavits
for all federal, state and foreign tax purposes in connection with receipt
of income or other payments with respect to portfolio securities and other
assets of each Portfolio, or in connection with the transfer of such
securities or other assets; provided, however, that with respect to
portfolio securities registered in so-called street name, the Custodian
shall use its best efforts to collect amounts due and payable to the Fund.
The Custodian shall promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian may agree in
writing if any amount payable with respect to portfolio securities or other
assets of the Portfolios is not received by the Custodian when due. The
Custodian shall not be responsible for the collection of amounts due and
payable with respect to portfolio securities or other assets that are in
default.
Section 2.16. Dividends, Distributions and Redemptions. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the Fund
in such Proper Instructions; or (b) upon receipt of Special Instructions,
as otherwise directed by the Fund, for the purpose of the payment of
dividends or other distributions to shareholders of the Portfolios, and
payment to shareholders who have requested repurchase or redemption of
their shares of the Portfolio(s) (collectively, the "Shares"). For
purposes of this Agreement, a "Distribution Account" shall mean an account
established at a Banking Institution designated by the Fund in Special
Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Fund, and shall promptly credit such funds to the
account(s) of the applicable Portfolio(s). The Custodian shall promptly
notify the Fund of Custodian's receipt of cash in payment for Shares issued
by the Fund by facsimile transmission or in such other manner as the Fund
and Custodian may agree in writing. Upon receipt of Proper Instructions,
the Custodian shall: (a) deliver all federal funds received by the
Custodian in payment for Shares in payment for such investments as may be
set forth in such Proper Instructions and at a time agreed upon between the
Custodian and the Fund; and (b) make federal funds available to the Fund as
of specified times agreed upon from time to time by the Fund and the
Custodian, in the amount of checks received in payment for Shares which are
deposited to the accounts of the Portfolios.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to the
Fund, in the most expeditious manner practicable, all forms of proxies, all
notices of meetings, and any other notices or announcements affecting or
relating to securities owned by the Portfolios that are received by the
Custodian, any Subcustodian, or any nominee of either of them, and, upon
receipt of Proper Instructions, the Custodian shall execute and deliver, or
cause such Subcustodian or nominee to execute and deliver, such proxies or
other authorizations as may be required. Except as directed pursuant to
Proper Instructions, neither the Custodian nor any Subcustodian or nominee
shall vote upon any such securities, or execute any proxy to vote thereon,
or give any consent or take any other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of the Portfolios.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of the Portfolios held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian shall
open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio,
and shall be subject only to the draft or order of the Custodian; provided
however, that such Bank Accounts in countries other than the United States
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
The responsibilities of the Custodian to the Fund for deposits accepted on
the Custodian's books in the United States shall be that of a U.S. bank for
a similar deposit. The responsibilities of the Custodian to the Fund for
deposits accepted on any Subcustodian's books shall be governed by the
provisions of Section 5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution other
than the Custodian or any Subcustodian, provided that such account(s) shall
be in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or order of
the Custodian; provided however, that such Bank Accounts may be held in an
account of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the Fund deems necessary or
appropriate to cause each deposit account established by the Custodian
pursuant to this Section 2.21 to be insured to the maximum extent possible
by all applicable deposit insurers including, without limitation, the
Federal Deposit Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by the
Portfolios in: (a) The Depository Trust Company; (b) the Participants
Trust Company; (c) any book-entry system as provided in (i) Subpart O of
Treasury Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury
Circular Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the
book-entry regulations of federal agencies substantially in the form of 31
CFR 306.115; or (d) any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which the
Fund has previously approved by Special Instructions (as hereinafter
defined) (each of the foregoing being referred to in this Agreement as a
"Securities System"). Use of a Securities System shall be in accordance
with applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held hereunder
in a Securities System, provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which Account
shall not contain any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers.
(B) The books and records of the Custodian shall at all times identify
those securities belonging to each Portfolio which are maintained in a
Securities System.
(C) The Custodian shall pay for securities purchased for the account of a
Portfolio only upon (w) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(x) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Portfolio. The Custodian
shall transfer securities sold for the account of a Portfolio only upon (y)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio, shall be
maintained for the Portfolio by the Custodian. The Custodian shall deliver
to the Fund on the next succeeding business day daily transaction reports
which shall include each day's transactions in the Securities System for
the account of each Portfolio. Such transaction reports shall be delivered
to the Fund or any agent designated by the Fund pursuant to Proper
Instructions, by computer or in such other manner as the Fund and Custodian
may agree in writing.
(D) The Custodian shall, if requested by the Fund pursuant to Proper
Instructions, provide the Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(E) Upon receipt of Special Instructions, the Custodian shall terminate
the use of any Securities System (except the federal book-entry system) on
behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of the
Portfolios maintained with such Securities System.
Section 2.23. Other Transfers. Upon receipt of Special Instructions, the
Custodian shall make such other dispositions of securities, funds or other
property of the Portfolios in a manner or for purposes other than as
expressly set forth in this Agreement, provided that the Special
Instructions relating to such disposition shall include a statement of the
purpose for which the delivery is to be made, the amount of funds and/or
securities to be delivered, and the name of the person or persons to whom
delivery is to be made, and shall otherwise comply with the provisions of
Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a Portfolio,
into which account or accounts may be transferred cash and/or securities or
other assets of such Portfolio, including securities maintained by the
Custodian in a Securities System pursuant to Section 2.22 hereof, said
account or accounts to be maintained: (a) for the purposes set forth in
Sections 2.09, 2.10 and 2.11 hereof; (b) for the purposes of compliance by
the Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the SEC relating to the
maintenance of segregated accounts by registered investment companies; or
(c) for such other purposes as set forth, from time to time, in Special
Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by the Fund in the preparation of
reports to Fund shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other assets held for
the accounts of the Portfolios as required by the rules and regulations of
the SEC applicable to investment companies registered under the 1940 Act,
including: (a) journals or other records of original entry containing a
detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification numbers,
if any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in physical
possession, (iii) securities borrowed, loaned or collateralizing
obligations of the Portfolios, (iv) monies borrowed and monies loaned
(together with a record of the collateral therefor and substitutions of
such collateral), and (v) dividends and interest received; and (c)
cancelled checks and bank records related thereto. The Custodian shall
keep such other books and records of the Fund as the Fund shall reasonably
request. All such books and records maintained by the Custodian shall be
maintained in a form acceptable to the Fund and in compliance with the
rules and regulations of the SEC, including, but not limited to, books and
records required to be maintained by Section 31(a) of the 1940 Act and the
rules and regulations from time to time adopted thereunder. All books and
records maintained by the Custodian pursuant to this Agreement shall at all
times be the property of the Fund and shall be available during normal
business hours for inspection and use by the Fund and its agents,
including, without limitation, its independent certified public
accountants. Notwithstanding the preceding sentence, the Funds shall not
take any actions or cause the Custodian to take any actions which would
cause, either directly or indirectly, the Custodian to violate any
applicable laws, regulations or orders.
Section 2.26. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as the Fund may request to
obtain from year to year favorable opinions from the Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1A and
the Fund's Form N-SAR or other periodic reports to the SEC and with respect
to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants. At
the request of the Fund, the Custodian shall deliver to the Fund a written
report prepared by the Custodian's independent certified public accountants
with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of a Portfolio for which there would be, at the close of business on
the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Portfolio, the Custodian may, in its
discretion, provide an overdraft (an "Overdraft") to the Fund on behalf of
such Portfolio, in an amount sufficient to allow the completion of such
payment. Any Overdraft provided hereunder: (a) shall be payable on the
next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest from the date of the Overdraft to the date of
payment in full by the Fund on behalf of the applicable Portfolio at a rate
agreed upon in writing, from time to time, by the Custodian and the Fund.
The Custodian and the Fund acknowledge that the purpose of such Overdrafts
is to temporarily finance the purchase or sale of securities for prompt
delivery in accordance with the terms hereof, or to meet emergency expenses
not reasonably foreseeable by the Fund. The Custodian shall promptly
notify the Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing. At the request of the Custodian, the Fund,
on behalf of a Portfolio, shall pledge, assign and grant to the Custodian a
security interest in certain specified securities of the Portfolio, as
security for Overdrafts provided to such Portfolio, under the terms and
conditions set forth in Appendix "C" attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the Fund by one or more Authorized
Persons (as hereinafter defined); (ii) a telephonic or other oral
communication by one or more Authorized Persons; or (iii) a communication
effected directly between an electro-mechanical or electronic device or
system (including, without limitation, computers) by or on behalf of the
Fund by one or more Authorized Persons; provided, however, that
communications of the types described in clauses (ii) and (iii) above
purporting to be given by an Authorized Person shall be considered Proper
Instructions only if the Custodian reasonably believes such communications
to have been given by an Authorized Person with respect to the transaction
involved. Proper Instructions in the form of oral communications shall be
confirmed by the Fund by tested telex or in writing in the manner set forth
in clause (i) above, but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral
instructions prior to the Custodian's receipt of such confirmation. The
Fund and the Custodian are hereby authorized to record any and all
telephonic or other oral instructions communicated to the Custodian.
Proper Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the Fund or any other person
designated by the Treasurer of the Fund in writing, which countersignature
or confirmation shall be (i)included on the same instrument containing the
Proper Instructions or on a separate instrument relating thereto, and (ii)
delivered by hand, by facsimile transmission, or in such other manner as
the Fund and the Custodian agree in writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, the Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of the Fund, a certificate setting forth:
(a) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of the Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes the name(s) of a person previously
authorized to give Proper Instructions or to issue Special Instructions,
such persons shall no longer be considered an Authorized Person or
authorized to issue Special Instructions.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of the Fund shall
have physical access to the assets of any Portfolio held by the Custodian
nor shall the Custodian deliver any assets of a Portfolio for delivery to
an account of such person; provided, however, that nothing in this Section
3.03 shall prohibit (a) any Authorized Person from giving Proper
Instructions, or any person authorized to issue Special Instructions from
issuing Special Instructions, so long as such action does not result in
delivery of or access to assets of any Portfolio prohibited by this Section
3.03; or (b) the Fund's independent certified public accountants from
examining or reviewing the assets of the Portfolios held by the Custodian.
The Fund shall deliver to the Custodian a written certificate identifying
such Authorized Persons, Trustees, officers, employees and agents of the
Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to
act on behalf of a Portfolio. (For purposes of this Agreement, all duly
appointed Domestic Subcustodians, Foreign Subcustodians, Interim
Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of one
or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"); provided, that, the Custodian shall notify the Fund in
writing of the identity and qualifications of any proposed Domestic
Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and the Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of the
appointment of such Domestic Subcustodian. If following notice by the
Custodian to the Fund regarding appointment of a Domestic Subcustodian and
the expiration of thirty (30) days after the date of such notice, the Fund
shall have failed to notify the Custodian of its disapproval thereof, the
Custodian may, in its discretion, appoint such proposed Domestic
Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from time
to time, appoint: (i) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of one or more Portfolios as a subcustodian for
purposes of holding cash, securities and other assets of such Portfolios
and performing other functions of the Custodian in countries other than the
United States of America (a "Foreign Subcustodian"); provided, that, prior
to the appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees or
other governing body or entity of the Fund on behalf of the applicable
Portfolio(s) (which approval may be withheld in the sole discretion of such
Board of Trustees or other governing body or entity) with respect to (i)
the identity and qualifications of any proposed Foreign Subcustodian, (ii)
the country or countries in which, and the securities depositories or
clearing agencies, if any, through which, any proposed Foreign Subcustodian
is authorized to hold securities and other assets of the Portfolio(s), and
(iii) the form and terms of the subcustodian agreement to be entered into
between such proposed Foreign Subcustodian and the Custodian. Each such
duly approved Foreign Subcustodian and the countries where and the
securities depositories and clearing agencies through which they may hold
securities and other assets of the Funds shall be listed on Appendix "B"
attached hereto, as it may be amended, from time to time, in accordance
with the provisions of Section 9.05(c) hereof. The Fund shall be
responsible for informing the Custodian sufficiently in advance of a
proposed investment which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian, including obtaining approval as provided in
this Section 4.02(a). The Custodian shall not amend any subcustodian
agreement entered into with a Foreign Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
which materially affect the Fund's rights or the Foreign Subcustodian's
obligations or duties to the Fund under such agreement, except upon prior
approval pursuant to Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the Fund in writing by facsimile
transmission or in such other manner as the Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person designated by the Fund in such Special
Instructions to hold such security or other asset. (Any Person appointed
as a subcustodian pursuant to this Section 4.02(b) is hereinafter referred
to as an "Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of the Fund for one or more
Portfolios, appoint one or more banks, trust companies or other entities
designated in such Special Instructions to act as a subcustodian for
purposes of: (i) effecting third-party repurchase transactions with banks,
brokers, dealers or other entities through the use of a common custodian or
subcustodian; (ii) establishing a joint trading account for the Portfolios
and other registered open-end management investment companies for which
Fidelity Management & Research Company serves as investment adviser,
through which the Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to certain
variable rate demand note securities; and (iv) effecting any other
transactions designated by the Fund in Special Instructions. (Each such
designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix "B" attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by the Fund, provided that such agreement shall
in all events comply with the provisions of the 1940 Act and the rules and
regulations thereunder and the terms and provisions of this Agreement. The
Custodian shall not amend any subcustodian agreement entered into with a
Special Subcustodian, or agree to change or permit any changes thereunder,
or waive any rights under such agreement, except upon prior approval
pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use
its best efforts to cause each Interim Subcustodian and Special
Subcustodian to, perform all of its obligations in accordance with the
terms and conditions of the subcustodian agreement between the Custodian
and such Subcustodian. In the event that the Custodian is unable to cause
such Subcustodian to fully perform its obligations thereunder, the
Custodian shall forthwith, upon the receipt of Special Instructions,
terminate such Subcustodian with respect to the Fund and, if necessary or
desirable, appoint a replacement Subcustodian in accordance with the
provisions of Section 4.01 or Section 4.02, as the case may be. In
addition to the foregoing, the Custodian (A) may, at any time in its
discretion, upon written notification to the Fund, terminate any Domestic
Subcustodian, Foreign Subcustodian or Interim Subcustodian, and (B) shall,
upon receipt of Special Instructions, terminate any Subcustodian with
respect to the Fund, in accordance with the termination provisions under
the applicable subcustodian agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of the Fund, the Custodian shall deliver to the Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian; (ii) the countries in which and the securities
depositories and clearing agents through which each such Foreign
Subcustodian is then holding cash, securities and other assets of any
Portfolio; and (iii) such other information as may be requested by the Fund
to ensure compliance with Rule 17(f)-5 under the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to the Fund for all loss, damage and
expense suffered or incurred by the Fund or the Portfolios resulting from
the failure of the Custodian to exercise such reasonable care and
diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, securities depository or securities
system utilized by any such Subcustodian, or any nominee of the Custodian
or any Subcustodian (individually, a "Person") is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason
of: (i) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or of any foreign
country, or political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian, unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the applicable Person, or (B) a malfunction or failure of equipment
operated or utilized by the applicable Person other than a malfunction or
failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Fund or any
Portfolio, (i) the Custodian shall, (ii) the Custodian shall cause any
applicable Domestic Subcustodian or Foreign Subcustodian to, and (iii) the
Custodian shall use its best efforts to cause any applicable Interim
Subcustodian or Special Subcustodian to, use all commercially reasonable
efforts and take all reasonable steps under the circumstances to mitigate
the effects of such event and to avoid continuing harm to the Fund and the
Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive and act
upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant
to the advice of (i) counsel for the Fund, or (ii) at the expense of the
Custodian, such other counsel as the Fund and the Custodian may agree upon;
provided, however, with respect to the performance of any action or
omission of any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth in Section 5.01(a).
(e) Expenses of the Fund. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to the Fund for all
reasonable costs and expenses incurred by the Fund in connection with any
claim by the Fund against the Custodian arising from the obligations of the
Custodian hereunder including, without limitation, all reasonable
attorneys' fees and expenses incurred by the Fund in asserting any such
claim, and all expenses incurred by the Fund in connection with any
investigations, lawsuits or proceedings relating to such claim; provided,
that the Fund has recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by the Fund, insofar as
such loss, damage or expense arises from the performance of the Custodian's
duties hereunder by reason of the Custodian's reliance upon records that
were maintained for the Fund by entities other than the Custodian prior to
the Custodian's employment hereunder.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian shall
be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by the Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Subcustodian
for which the Custodian would otherwise be liable, the Custodian shall
promptly reimburse the Fund in the amount of any such loss, damage or
expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary, the Custodian shall not be liable to the Fund for any
loss, damage or expense suffered or incurred by the Fund or any Portfolio
resulting from the actions or omissions of an Interim Subcustodian unless
such loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, in the event
of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against such Interim
Subcustodian to protect the interests of the Fund and the Portfolios.
(c) Special Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary and except as otherwise provided in any subcustodian
agreement to which the Custodian, the Fund and any Special Subcustodian are
parties, the Custodian shall not be liable to the Fund for any loss, damage
or expense suffered or incurred by the Fund or any Portfolio resulting from
the actions or omissions of a Special Subcustodian, unless such loss,
damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against any Special
Subcustodian to protect the interests of the Fund and the Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section 5.01 to
the contrary, the Custodian shall not be liable to the Fund for any loss,
damage or expense suffered or incurred by the Fund or any Portfolio
resulting from the use by the Custodian of a Securities System, unless such
loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Fund and the Portfolios.
(e) Reimbursement of Expenses. The Fund agrees to reimburse the Custodian
for all reasonable out-of-pocket expenses incurred by the Custodian in
connection with the fulfillment of its obligations under this Section 5.02;
provided, however, that such reimbursement shall not apply to expenses
occasioned by or resulting from the negligence, misfeasance or misconduct
of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Fund agrees to indemnify and hold harmless the
Custodian and its nominees from all loss, damage and expense (including
reasonable attorneys' fees) suffered or incurred by the Custodian or its
nominee caused by or arising from actions taken by the Custodian in the
performance of its duties and obligations under this Agreement; provided,
however, that such indemnity shall not apply to loss, damage and expense
occasioned by or resulting from the negligence, misfeasance or misconduct
of the Custodian or its nominee. In addition, the Fund agrees to indemnify
any Person against any liability incurred by reason of taxes assessed to
such Person, or other loss, damage or expenses incurred by such Person,
resulting from the fact that securities and other property of the
Portfolios are registered in the name of such Person; provided, however,
that in no event shall such indemnification be applicable to income,
franchise or similar taxes which may be imposed or assessed against any
Person.
(b) Notice of Litigation, Right to Prosecute, Etc. The Fund shall not be
liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified the Fund in writing of the commencement of any
litigation or proceeding brought against such Person in respect of which
indemnity may be sought under this Section 5.03. With respect to claims in
such litigation or proceedings for which indemnity by the Fund may be
sought and subject to applicable law and the ruling of any court of
competent jurisdiction, the Fund shall be entitled to participate in any
such litigation or proceeding and, after written notice from the Fund to
any Person, the Fund may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which the Fund may be subject to an
indemnification obligation; provided, however, a Person shall be entitled
to participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if the Fund has not
acknowledged in writing its obligation to indemnify the Person with respect
to such litigation or proceeding. If the Fund is not permitted to
participate or control such litigation or proceeding under applicable law
or by a ruling of a court of competent jurisdiction, such Person shall
reasonably prosecute such litigation or proceeding. A Person shall not
consent to the entry of any judgment or enter into any settlement in any
such litigation or proceeding without providing the Fund with adequate
notice of any such settlement or judgment, and without the Fund's prior
written consent. All Persons shall submit written evidence to the Fund
with respect to any cost or expense for which they are seeking
indemnification in such form and detail as the Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase,
sale or exchange of securities made by or for a Portfolio, the Custodian
shall not be liable to the Fund and the Fund agrees to indemnify the
Custodian and its nominees, for any loss, damage or expense suffered or
incurred by the Custodian and its nominees arising out of any violation of
any investment or other limitation to which the Fund is subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System, or other Person for
loss, damage or expense caused the Fund by such Subcustodian, Securities
System, or other Person, and shall be entitled to enforce the rights of the
Custodian with respect to any claim against such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that the Fund has
not been made whole for any such loss or damage. If the Custodian makes
the Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon the Fund's election to enforce any
rights of the Custodian under this Section 5.05, the Fund shall reasonably
prosecute all actions and proceedings directly relating to the rights of
the Custodian in respect of the loss, damage or expense incurred by the
Fund; provided that, so long as the Fund has acknowledged in writing its
obligation to indemnify the Custodian under Section 5.03 hereof with
respect to such claim, the Fund shall retain the right to settle,
compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by the Fund without the Custodian's
consent and provided further, that if the Fund has not made an
acknowledgement of its obligation to indemnify, the Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with the Fund and take all
actions reasonably requested by the Fund in connection with the Fund's
enforcement of any rights of the Custodian. The Fund agrees to reimburse
the Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian in connection with the fulfillment of its obligations under this
Section 5.05; provided, however, that such reimbursement shall not apply to
expenses occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each Portfolio, the Fund shall compensate the Custodian in an
amount, and at such times, as may be agreed upon in writing, from time to
time, by the Custodian and the Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement in Full. This Agreement shall
continue in full force and effect until the first to occur of: (a)
termination by the Custodian by an instrument in writing delivered or
mailed to the Fund, such termination to take effect not sooner than ninety
(90) days after the date of such delivery; (b) termination by the Fund by
an instrument in writing delivered or mailed to the Custodian, such
termination to take effect not sooner than thirty (30) days after the date
of such delivery; or (c) termination by the Fund by written notice
delivered to the Custodian, based upon the Fund's determination that there
is a reasonable basis to conclude that the Custodian is insolvent or that
the financial condition of the Custodian is deteriorating in any material
respect, in which case termination shall take effect upon the Custodian's
receipt of such notice or at such later time as the Fund shall designate.
In the event of termination pursuant to this Section 7.01, the Fund shall
make payment of all accrued fees and unreimbursed expenses within a
reasonable time following termination and delivery of a statement to the
Fund setting forth such fees and expenses. The Fund shall identify in any
notice of termination a successor custodian to which the cash, securities
and other assets of the Portfolios shall, upon termination of this
Agreement, be delivered. In the event that no written notice designating a
successor custodian shall have been delivered to the Custodian on or before
the date when termination of this Agreement shall become effective, the
Custodian may deliver to a bank or trust company doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not less
than $25,000,000, all securities and other assets held by the Custodian and
all instruments held by the Custodian relative thereto and all other
property held by it under this Agreement. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Agreement. In
the event that securities and other assets remain in the possession of the
Custodian after the date of termination hereof owing to failure of the Fund
to appoint a successor custodian, the Custodian shall be entitled to
compensation for its services in accordance with the fee schedule most
recently in effect, for such period as the Custodian retains possession of
such securities and other assets, and the provisions of this Agreement
relating to the duties and obligations of the Custodian and the Fund shall
remain in full force and effect. In the event of the appointment of a
successor custodian, it is agreed that the cash, securities and other
property owned by the Fund and held by the Custodian, any Subcustodian or
nominee shall be delivered to the successor custodian; and the Custodian
agrees to cooperate with the Fund in the execution of documents and
performance of other actions necessary or desirable in order to substitute
the successor custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. This Agreement
may be terminated as to one or more Portfolios (but less than all of the
Portfolios) by delivery of an amended Appendix "A" deleting such Portfolios
pursuant to Section 9.05(b) hereof, in which case termination as to such
deleted Portfolios shall take effect thirty (30) days after the date of
such delivery. The execution and delivery of an amended Appendix "A" which
deletes one or more Portfolios shall constitute a termination of this
Agreement only with respect to such deleted Portfolio(s), shall be governed
by the preceding provisions of Section 7.01 as to the identification of a
successor custodian and the delivery of cash, securities and other assets
of the Portfolio(s) so deleted, and shall not affect the obligations of the
Custodian and the Fund hereunder with respect to the other Portfolios set
forth in Appendix "A," as amended from time to time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by the Fund. Upon request, the Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement, provided that the exercise by the Custodian or any Subcustodian
of any such rights shall in all events be in compliance with the terms of
this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to the Fund or to such other parties as
the Fund may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable and necessary or desirable
in order to effectuate any of the transactions contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY
OF THE DECLARATION OF TRUST OF THE FUND IS ON FILE WITH THE SECRETARY OF
THE STATE OF THE FUND'S FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS
AGREEMENT IS NOT EXECUTED ON BEHALF OF THE TRUSTEES OF THE FUND AS
INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY
OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF THE FUND
INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF THE
PORTFOLIOS. THE CUSTODIAN AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR
PARTNER OF THE FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY
OBLIGATIONS OF THE FUND ARISING OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Portfolios. WITH RESPECT TO ANY
OBLIGATIONS OF THE FUND ON BEHALF OF THE PORTFOLIOS ARISING OUT OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS ARISING UNDER
SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF, THE CUSTODIAN SHALL LOOK
FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS AND
PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH THE
FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN
INSTRUMENT WITH RESPECT TO EACH PORTFOLIO.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of the Fund. The Fund hereby
represents and warrants that each of the following shall be true, correct
and complete at all times during the term of this Agreement: (i) the Fund
is duly organized under the laws of its jurisdiction of organization and is
registered as an open-end management investment company under the 1940 Act;
and (ii) the execution, delivery and performance by the Fund of this
Agreement are (w) within its power, (x) have been duly authorized by all
necessary action, and (y) will not (A) contribute to or result in a breach
of or default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B)
violate any provision of the Fund's corporate charter, Declaration of Trust
or other organizational document, or bylaws, or any amendment thereof or
any provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants that each of the following shall be true,
correct and complete at all times during the term of this Agreement: (i)
the Custodian is duly organized under the laws of its jurisdiction of
organization and qualifies to act as a custodian to open-end management
investment companies under the provisions of the 1940 Act; and (ii) the
execution, delivery and performance by the Custodian of this Agreement are
(w) within its power, (x) have been duly authorized by all necessary
action, and (y) will not (A) contribute to or result in a breach of or
default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B)
violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
subject matter hereof and accordingly, supersedes as of the effective date
of this Agreement any custodian agreement heretofore in effect between the
Fund and the Custodian.
Section 9.06. Waivers and Amendments. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by
the party against which enforcement of such waiver, amendment or
termination is sought; provided, however: (a) Appendix "A" listing the
Portfolios for which the Custodian serves as custodian may be amended from
time to time to add one or more Portfolios, by the Fund's execution and
delivery to the Custodian of an amended Appendix "A", and the execution of
such amended Appendix by the Custodian, in which case such amendment shall
take effect immediately upon execution by the Custodian; (b) Appendix "A"
may be amended from time to time to delete one or more Portfolios (but less
than all of the Portfolios), by the Fund's execution and delivery to the
Custodian of an amended Appendix A", in which case such amendment shall
take effect thirty (30) days after such delivery, unless otherwise agreed
by the Custodian and the Fund in writing; (c) Appendix "B" listing Foreign
Subcustodians and Special Subcustodians approved by the Fund may be amended
from time to time to add or delete one or more Foreign Subcustodians or
Special Subcustodians by the Fund's execution and delivery to the Custodian
of an amended Appendix "B", in which case such amendment shall take effect
immediately upon execution by the Custodian; and (d) Appendix "C" setting
forth the procedures relating to the Custodian's security interest may be
amended only by an instrument in writing executed by the Fund and the
Custodian.
Section 9.07. Interpretation. In connection with the operation of this
Agreement, the Custodian and the Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be
an amendment of this Agreement.
Section 9.08. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant
to an agreement with a Foreign Subcustodian that is governed by the laws of
the State of New York, the provisions of this Agreement shall be construed
in accordance with and governed by the laws of the State of New York,
provided that in all other instances this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, in each case without giving effect to principles of
conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid to the parties at the following addresses:
(a) If to the Fund:
North Carolina Cash Management Trust
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Treasurer
Telephone: (617) 570-6556
Telefax: (617) 742-1231
(b) If to the Custodian:
First Union National Bank of North Carolina
Trust Operations
Two First Union Center
Charlotte, North Carolina 28288-1151
Attention: Nancy Stoker
Telephone: (704) 374-6157
Telefax: (704) 374-3211
or to such other address as either party may have designated in writing to
the other party hereto.
Section 9.11. Assignment. This Agreement shall be binding on and shall
inure to the benefit of the Fund and the Custodian and their respective
successors and assigns, provided that, subject to the provisions of Section
7.01 hereof, neither party hereto may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the
other party.
Section 9.12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by each of the parties.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation. The provisions of this Section
9.13 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this Agreement shall survive any termination of this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
NORTH CAROLINA CASH MANAGEMENT FIRST UNION NATIONAL BANK OF
TRUST NORTH CAROLINA
By: /s/Gary French By: /s/Patricia Balentine
Name: Gary French Name: Patricia Balentine
Title: Treasurer Title: Vice President and
Trust Officer
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
NORTH CAORLINA CASH MANAGEMENT TRUST and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Dated as of December 6, 1991
The following is a list of Portfolios for which the Custodian shall serve
under a Custodian Agreement dated as of December 6, 1991:
Portfolio Name Effective as of:
Cash Portfolio December 6, 1991
Term Portfolio December 6, 1991
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
NORTH CAROLINA CASH MANAGEMENT FIRST UNION NATIONAL BANK OF
TRUST NORTH CAROLINA
By: /s/Gary French By: /s/Patricia Balentine
Name: Gary French Name: Patricia Balentine
Title: Treasurer Title: Vice President and
Trust Officer
APPENDIX "B"
TO
CUSTODIAN AGREEMENT
BETWEEN
NORTH CAROLINA CASH MANAGEMENT TRUST
and FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Dated as of December 6, 1991
The following is a list of Foreign Subcustodians and Special Subcustodians
under the Custodian Agreement dated as of December 6, 1991:
A. Special Subcustodians:
The Bank of New York
Morgan Guaranty Trust Company of New York
B. Foreign Subcustodians:
Country Subcustodian Depository
None
NORTH CAROLINA CASH
MANAGEMENT TRUST
By: /s/Gary French
Name: Gary French
Title: Treasurer
APPENDIX "C" TO THE
CUSTODIAN AGREEMENT BETWEEN
NORTH CAROLINA CASH MANAGEMENT TRUST and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Dated as of December 6, 1991
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian Agreement) of
any Portfolio, the Fund, on behalf of such Portfolio, shall pledge, assign
and grant to the Custodian a security interest in Collateral (as
hereinafter defined), under the terms, circumstances and conditions set
forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, the securities
having a fair market value (as determined in accordance with the procedures
set forth in the prospectus for the Portfolio) equal to the aggregate of
all Overdraft Obligations of such Portfolio: (i) identified in any Pledge
Certificate executed on behalf of such Portfolio; or (ii) designated by the
Custodian for such Portfolio pursuant to Section 3 of this Appendix C.
Such securities shall consist of marketable securities held by the
Custodian on behalf of such Portfolio or, if no such marketable securities
are held by the Custodian on behalf of such Portfolio, such other
securities designated by the Fund in the applicable Pledge Certificate or
by the Custodian pursuant to Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio, the
amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly authorized
officer of the Fund and delivered by the Fund to the Custodian by facsimile
transmission or in such other manner as the Fund and the Custodian may
agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "C" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the Fund by
facsimile transmission or in such other manner as the Fund and the
Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the Fund and the
Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of any Portfolio are not satisfied within one (1) Business Day
after receipt by the Fund of a Written Notice requesting security for such
Overdraft Obligation and stating the amount of such Overdraft Obligation,
the Fund, on behalf of such Portfolio, shall pledge, assign and grant to
the Custodian a first priority security interest, by delivering to the
Custodian, a Pledge Certificate executed by the Fund on behalf of such
Portfolio describing the applicable Collateral. Such Written Notice may,
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the Fund
shall fail: (a) to pay, on behalf of the applicable Portfolio, the
Overdraft Obligation described in such Written Notice; (b) to deliver to
the Custodian a Pledge Certificate pursuant to Section 2; or (c) to
identify substitute securities pursuant to Section 6 upon the sale or
maturity of any securities identified as Collateral, the Custodian may, by
Written Notice to the Fund specify Collateral which shall secure the
applicable Overdraft Obligation. The Fund, on behalf of any applicable
Portfolio, hereby pledges, assigns and grants to the Custodian a first
priority security interest in any and all Collateral specified in such
Written Notice; provided that such pledge, assignment and grant of security
shall be deemed to be effective only upon receipt by the Fund of such
Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify the Fund by Written Notice that the fair market
value of the Collateral securing any Overdraft Obligation is less than the
amount of such Overdraft Obligation, the Fund, on behalf of the applicable
Portfolio, shall deliver to the Custodian, within one (1) Business Day
following the Fund's receipt of such Written Notice, an additional Pledge
Certificate describing additional Collateral. If the Fund shall fail to
deliver such additional Pledge Certificate, the Custodian may specify
Collateral which shall secure the unsecured amount of the applicable
Overdraft Obligation in accordance with Section 3 of this Appendix C.
Section 5. Release of Collateral. Upon payment by the Fund of any
Overdraft Obligation secured by the pledge of Collateral, the Custodian
shall promptly deliver to the Fund a Release Certificate pursuant to which
the Custodian shall release Collateral from the lien under the applicable
Pledge Certificate or Written Notice pursuant to Section 3 having a fair
market value equal to the amount paid by the Fund on account of such
Overdraft Obligation. In addition, if at any time the Fund shall notify
the Custodian by Written Notice that the Fund desires that specified
Collateral be released and: (a) that the fair market value of the
Collateral securing any Overdraft Obligation shall exceed the amount of
such Overdraft Obligation; or (b) that the Fund has delivered a Pledge
Certificate substituting Collateral for such Overdraft Obligation, the
Custodian shall deliver to the Fund, within one (1) Business Day following
the Custodian's receipt of such Written Notice, a Release Certificate
relating to the Collateral specified in such Written Notice.
Section 6. Substitution of Collateral. The Fund may substitute
securities for any securities identified as Collateral by delivery to the
Custodian of a Pledge Certificate executed by the Fund on behalf of the
applicable Portfolio, indicating the securities pledged as Collateral.
Section 7. Security for Individual Portfolios' Overdraft Obligations.
The pledge of Collateral by the Fund on behalf of any individual Portfolio
shall secure only the Overdraft Obligations of such Portfolio. In no event
shall the pledge of Collateral by one Portfolio be deemed or considered to
be security for the Overdraft Obligations of any other Portfolio.
Section 8. Custodian's Remedies. Upon (a) the Fund's failure to pay any
Overdraft Obligation of a Portfolio within thirty (30) days after receipt
by the Fund of a Written Notice demanding security therefore, and (b) one
(1) Business Day's prior Written Notice to the Fund, the Custodian may
elect to enforce its security interest in the Collateral securing such
Overdraft Obligation, by taking title to (at the then prevailing fair
market value), or selling in a commercially reasonable manner, so much of
the Collateral as shall be required to pay such Overdraft Obligation in
full. Notwithstanding the provisions of any applicable law, including,
without limitation, the Uniform Commercial Code, the remedy set forth in
the preceding sentence shall be the only right or remedy to which the
Custodian is entitled with respect to the pledge and security interest
granted pursuant to any Pledge Certificate or Section 3, without limiting
the foregoing, the Custodian hereby waives and relinquishes all contractual
and common law rights of set off to which it may now or hereafter be or
become entitled with respect to any obligations of the Fund to the
Custodian arising under this Appendix C to the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
NORTH CAROLINA CASH MANAGEMENT FIRST UNION NATIONAL BANK OF
TRUST NORTH CAROLINA
By: /s/Gary French By: /s/Patricia Balentine
Name: Gary French Name: Patricia Balentine
Title: Treasurer Title: Vice President and
Trust Officer
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between North Carolina Cash
Management Trust (the "Fund") and First Union National Bank of North
Carolina (the "Custodian"). Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the
Agreement. Pursuant to [Section 2 or Section 4] of Appendix "C" attached
to the Agreement, the Fund, on behalf of [ ] (the "Portfolio"),
hereby pledges, assigns and grants to the Custodian a first priority
security interest in the securities listed on Exhibit "A" attached to this
Pledge Certificate (collectively, the "Pledged Securities"). Upon delivery
of this Pledge Certificate, the Pledged Securities shall constitute
Collateral, and shall secure all Overdraft Obligations of the Portfolio
described in that certain Written Notice dated , 19 , delivered
by the Custodian to the Fund. The pledge, assignment and grant of security
in the Pledged Securities hereunder shall be subject in all respect to the
terms and conditions of the Agreement, including, without limitation,
Sections 7 and 8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of 19 .
NORTH CAROLINA CASH
MANAGEMENT TRUST
By: ___________________
Name: ___________________
Title: ___________________
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between North Carolina Cash
Management Trust (the "Fund") and [ ] (the "Custodian").
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in the Agreement. Pursuant to Section 5 of
Appendix "C" attached to the Agreement, the Custodian hereby releases the
securities listed on Exhibit "A" attached to this Release Certificate from
the lien under the [Pledge Certificate dated __________, 19__ or the
Written Notice delivered pursuant to Section 3 of Appendix "C" dated
__________, 19__ ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this day of 19 .
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By: _____________________
Name: _____________________
Title: _____________________
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
30-DAY YIELD CALCULATIONS FOR NCCMT: TERM PORTFOLIO
Exhibit 16b
The 30-DAY YIELD is calculated according to the methods prescribed in Form
N-1A Item 22(b)(ii).
30-Day Total Net Income
30-Day Yield = 2<UNDEF>(--------------------------------------------------)
+ 1)6 - 1<UNDEF>
(30-Day Average Shares Outstanding)(Prior Day Price)
91 Exhibit 16b
<TABLE>
<CAPTION>
<S> <C>
1 FIDELITY FUNDS 1 620-1 NORTH CAROLINA TERM SC17252 Page 1
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 07/13/95 TIME: 16:02
From 19950603 To 19950703
INCOME W/
SHARES GROSS WRITE BREAKAGE &
DATE OUTSTANDING INCOME EXPENSES NET INCOME ADJUSTMENTS OFF BREAKAGE WRITE OFF
_________________________________________________________________________________________________________________________
3 7,068,445.565 11,654.49 797.88 10,856.61 0.00 0.00 1.84- 10,855.29
4 7,068,445.565 11,654.49 797.88 10,856.61 0.00 0.00 2.36- 10,854.77
5 7,068,445.565 11,646.68 798.59 10,848.09 0.00 0.00 2.73 10,845.73
6 7,065,925.404 11,656.29 798.21 10,858.08 0.00 0.00 0.48 10,860.81
7 7,065,925.404 11,652.37 798.14 10,854.23 0.00 0.00 1.45 10,854.71
8 7,065,925.404 11,660.84 797.20 10,863.64 0.00 0.00 2.30- 10,865.09
9 7,078,538.926 11,476.84 797.09 10,679.75 0.00 0.00 3.01 10,677.45
10 7,078,538.926 11,476.84 797.09 10,679.75 0.00 0.00 1.24 10,682.76
11 7,078,538.926 11,476.84 797.09 10,679.75 0.00 0.00 0.53- 10,680.99
12 7,078,538.926 11,536.90 798.12 10,738.78 0.00 0.00 0.11 10,738.25
13 7,078,538.926 11,496.73 798.21 10,698.52 0.00 0.00 2.96 10,698.63
14 7,078,538.926 11,494.36 799.39 10,694.97 0.00 0.00 2.26 10,697.93
15 7,078,538.926 11,494.40 799.19 10,695.21 0.00 0.00 1.80 10,697.47
16 7,078,538.926 11,506.05 798.98 10,707.07 0.00 0.00 0.96- 10,708.87
17 7,078,538.926 11,506.05 798.98 10,707.07 0.00 0.00 3.36 10,706.11
18 7,078,538.926 11,506.05 798.98 10,707.07 0.00 0.00 0.60 10,710.43
19 7,078,538.926 11,476.15 799.14 10,677.01 0.00 0.00 3.17 10,677.61
20 7,078,538.926 11,498.53 799.17 10,699.36 0.00 0.00 0.22- 10,702.53
21 7,078,538.926 11,498.53 799.01 10,699.52 0.00 0.00 3.45- 10,699.30
22 7,078,538.926 11,503.51 799.06 10,704.45 0.00 0.00 1.75- 10,701.00
23 7,078,538.926 11,496.34 799.26 10,697.08 0.00 0.00 0.34- 10,695.33
24 7,078,538.926 11,496.34 799.26 10,697.08 0.00 0.00 1.07 10,696.74
25 7,078,538.926 11,496.34 799.26 10,697.08 0.00 0.00 2.48 10,698.15
26 7,079,588.288 11,475.42 799.52 10,675.90 0.00 0.00 2.36 10,678.38
27 7,079,588.288 11,496.64 799.08 10,697.56 0.00 0.00 2.66 10,699.92
28 7,078,841.567 11,491.24 798.92 10,692.32 0.00 0.00 1.15- 10,694.98
29 7,074,805.240 11,489.04 799.12 10,689.92 0.00 0.00 1.26- 10,688.77
30 7,074,805.240 11,486.21 797.94 10,688.27 0.00 0.00 3.02- 10,687.01
1 7,074,805.240 11,486.21 797.94 10,688.27 0.00 0.00 2.29 10,685.25
2 7,074,805.240 11,486.21 797.94 10,688.27 0.00 0.00 0.53 10,690.56
3 7,098,159.117 11,548.25 721.39 10,826.86 0.00 0.00 2.70 10,827.39
_______________
0.00
1 FIDELITY FUNDS 1 620-1 NORTH CAROLINA TERM SC17252 Page 2
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 07/13/95 TIME: 16:02
From 19950603 To 19950703
MTD DAILY DIST DIVIDEND -------- SHARES OUTSTANDING -------- DAILY
DATE MIL RATE MIL RATE YIELD PAID | 30-DAY TOTAL 30-DAY AVERAGE | YTM INCOME
__________________________________________________________________________________________________________________________
3 0.001536000 0.004613000 5.65 10,857.13 211,784,894.997 7,059,496.500 10,948.24
4 0.001536000 0.006149000 5.65 10,857.13 211,747,700.355 7,058,256.679 10,948.24
5 0.001534000 0.007683000 5.64 10,843.00 211,710,505.713 7,057,016.857 10,948.24
6 0.001537000 0.009220000 5.66 10,860.33 211,670,790.910 7,055,693.030 11,051.91
7 0.001536000 0.010756000 5.65 10,853.26 211,631,076.107 7,054,369.204 10,991.30
8 0.001538000 0.012294000 5.66 10,867.39 211,641,866.355 7,054,728.879 11,130.32
9 0.001508000 0.013802000 5.55 10,674.44 211,665,270.125 7,055,509.004 11,190.15
10 0.001509000 0.015311000 5.56 10,681.52 211,688,673.895 7,056,289.130 11,316.47
11 0.001509000 0.016820000 5.56 10,681.52 211,712,077.665 7,057,069.256 11,316.47
12 0.001517000 0.018337000 5.59 10,738.14 211,735,481.435 7,057,849.381 11,316.47
13 0.001511000 0.019848000 5.57 10,695.67 211,758,885.205 7,058,629.507 11,289.39
14 0.001511000 0.021359000 5.56 10,695.67 211,782,288.975 7,059,409.633 10,957.52
15 0.001511000 0.022870000 5.57 10,695.67 211,805,692.745 7,060,189.758 11,009.93
16 0.001513000 0.024383000 5.57 10,709.83 211,829,096.515 7,060,969.884 11,079.28
17 0.001512000 0.025895000 5.57 10,702.75 211,852,500.285 7,061,750.010 11,026.26
18 0.001513000 0.027408000 5.57 10,709.83 211,875,904.055 7,062,530.135 11,026.26
19 0.001508000 0.028916000 5.55 10,674.44 211,899,307.825 7,063,310.261 11,026.26
20 0.001512000 0.030428000 5.56 10,702.75 211,922,711.595 7,064,090.387 11,017.23
21 0.001512000 0.031940000 5.57 10,702.75 211,957,226.476 7,065,240.883 11,055.10
22 0.001512000 0.033452000 5.57 10,702.75 211,991,741.357 7,066,391.379 11,043.76
23 0.001511000 0.034963000 5.56 10,695.67 212,026,256.238 7,067,541.875 10,978.41
24 0.001511000 0.036474000 5.56 10,695.67 212,060,771.119 7,068,692.371 10,932.51
25 0.001511000 0.037985000 5.56 10,695.67 212,095,286.000 7,069,842.867 10,932.51
26 0.001508000 0.039493000 5.55 10,676.02 212,130,850.243 7,071,028.341 10,932.51
27 0.001511000 0.041004000 5.56 10,697.26 212,166,414.486 7,072,213.816 11,059.04
28 0.001511000 0.042515000 5.57 10,696.13 212,201,232.008 7,073,374.400 11,099.53
29 0.001511000 0.044026000 5.57 10,690.03 212,232,013.203 7,074,400.440 11,011.28
30 0.001511000 0.045537000 5.57 10,690.03 212,262,794.398 7,075,426.480 11,052.21
1 0.001510000 0.001510000 5.56 10,682.96 212,269,154.073 7,075,638.469 11,052.21
2 0.001511000 0.003021000 5.57 10,690.03 212,275,513.748 7,075,850.458 11,052.21
3 0.001525000 0.004546000 5.62 10,824.69 212,305,227.300 7,076,840.910 11,052.21
_______________
332,640.13
1 FIDELITY FUNDS 1 620-1 NORTH CAROLINA TERM SC17252 Page 3
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 07/13/95 TIME: 16:02
From 19950603 To 19950703
DAILY YTM NET DAILY YTM PAYDOWN ADJ TO 30-DAY YTM 30-DAY 30-DAY 30-DAY DAILY SEC
PRIOR
DATE INCOME ADJ NET INCOME GAIN/LOSS INCOME NET INCOME MIL RATE YIELD YIELD DAY
NAV
__________________________________________________________________________________________________________________________
3 0.00 10,150.36 0.00 0.00 320,814.82 0.045436000 5.56 5.28 9.92
4 0.00 10,150.36 0.00 0.00 320,161.31 0.045352000 5.55 5.28 9.92
5 0.00 10,149.65 0.00 0.00 319,799.27 0.045309000 5.54 5.28 9.92
6 0.00 10,253.70 0.00 0.00 319,541.28 0.045280000 5.54 5.34 9.92
7 0.00 10,193.16 0.00 0.00 319,223.55 0.045243000 5.54 5.31 9.92
8 0.00 10,333.12 0.00 0.00 318,643.84 0.045170000 5.53 5.39 9.91
9 0.00 10,393.06 0.00 0.00 318,232.26 0.045109000 5.52 5.42 9.91
10 0.00 10,519.38 0.00 0.00 317,921.89 0.045060000 5.52 5.48 9.90
11 0.00 10,519.38 0.00 0.00 317,619.19 0.045012000 5.52 5.48 9.90
12 0.00 10,518.35 0.00 0.00 317,347.36 0.044969000 5.51 5.48 9.90
13 0.00 10,491.18 0.00 0.00 317,048.36 0.044921000 5.50 5.46 9.91
14 0.00 10,158.13 0.00 0.00 316,416.38 0.044827000 5.48 5.28 9.92
15 0.00 10,210.74 0.00 0.00 315,614.75 0.044708000 5.48 5.31 9.91
16 0.00 10,280.30 0.00 0.00 315,013.36 0.044618000 5.46 5.35 9.91
17 0.00 10,227.28 0.00 0.00 314,429.42 0.044531000 5.45 5.32 9.91
18 0.00 10,227.28 0.00 0.00 313,835.99 0.044442000 5.44 5.32 9.91
19 0.00 10,227.12 0.00 0.00 313,312.09 0.044363000 5.43 5.32 9.91
20 0.00 10,218.06 0.00 0.00 312,779.13 0.044282000 5.42 5.31 9.92
21 0.00 10,256.09 0.00 0.00 312,284.31 0.044207000 5.41 5.34 9.91
22 0.00 10,244.70 0.00 0.00 311,651.95 0.044111000 5.40 5.33 9.91
23 0.00 10,179.15 0.00 0.00 311,024.67 0.044015000 5.38 5.29 9.92
24 0.00 10,133.25 0.00 0.00 310,379.07 0.043916000 5.37 5.27 9.92
25 0.00 10,133.25 0.00 0.00 309,864.73 0.043836000 5.36 5.27 9.92
26 0.00 10,132.99 0.00 0.00 309,435.23 0.043768000 5.35 5.27 9.92
27 0.00 10,259.96 0.00 0.00 309,132.70 0.043718000 5.35 5.33 9.92
28 0.00 10,300.61 0.00 0.00 308,870.82 0.043674000 5.35 5.36 9.91
29 0.00 10,212.16 0.00 0.00 308,520.71 0.043617000 5.34 5.31 9.91
30 0.00 10,254.27 0.00 0.00 308,214.77 0.043568000 5.33 5.34 9.91
1 0.00 10,254.27 0.00 0.00 307,878.19 0.043514000 5.33 5.34 9.91
2 0.00 10,254.27 0.00 0.00 307,835.58 0.043506000 5.33 5.34 9.91
3 0.00 10,330.82 0.00 0.00 308,016.04 0.043531000 5.33 5.38 9.91
avg: 9.91
</TABLE>
TOTAL RETURN CALCULATIONS FOR NCCMT: TERM PORTFOLIO
Exhibit 16c
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
<TABLE>
<CAPTION>
<S> <C>
Exhibit 16c
Name: NCCMT-Term Portfolio (620A. Pay Date E. Original SharesI. CG Short M. Cap Gain Shares Q. Cap Gains rec'd
in Cash
Notes: B. X-Date F. Total Value J. NAV N. Cap Gain Value R. Cost of
reinvest'd
Distributions
Load: C. Reinvest NAV G. Dividends K. Div Shares O. Total Value
Redempt D. Monthend H. CG Long L. Dividend VaP. Divs rec'd in Cash
FiscYea30-Jun
A B C D E F G H I J K L M N O P Q R
1.00 19-Mar-87 1000.000 10000.00 10.00
1.00 Mar-87 1000.000 10000.00 0.020931 10.00 2 21 0 0 10021 21 0 21
1.00 Apr-87 1000.000 9900.00 0.052135 9.90 7 73 0 0 9973 73 0 73
1.00 May-87 1000.000 9880.00 0.054795 9.88 13 128 0 0 10008 128 0 128
1.00 Jun-87 1000.000 9910.00 0.057054 9.91 19 186 0 0 10096 185 0 186
1.00 Jul-87 1000.000 9890.00 0.061410 9.89 25 248 0 0 10138 246 0 249
1.00 Aug-87 1000.000 9860.00 0.062136 9.86 32 311 0 0 10171 308 0 312
1.00 Sep-87 1000.000 9820.00 0.062275 9.82 38 374 0 0 10194 371 0 377
1.00 Oct-87 1000.000 9890.00 0.065956 9.89 45 445 0 0 10335 437 0 445
1.00 Nov-87 1000.000 9860.00 0.064955 9.86 52 512 0 0 10372 502 0 513
1.00 Dec-87 1000.000 9870.00 0.067536 9.87 59 584 0 0 10454 569 0 584
1.00 Jan-88 1000.000 9900.00 0.066798 9.90 66 656 0 0 10556 636 0 655
1.00 Feb-88 1000.000 9900.00 0.060743 9.90 73 721 0 0 10621 697 0 720
1.00 Mar-88 1000.000 9870.00 0.063170 9.87 80 786 0 0 10656 760 0 787
1.00 Apr-88 1000.000 9850.00 0.061666 9.85 86 851 0 0 10701 822 0 854
1.00 May-88 1000.000 9810.00 0.063570 9.81 93 917 0 0 10727 885 0 923
1.00 Jun-88 1000.000 9820.00 0.061397 9.82 100 985 0 0 10805 947 0 990
1.00 Jul-88 1000.000 9790.00 0.066547 9.79 108 1055 0 0 10845 1013 0 1063
1.00 Aug-88 1000.000 9770.00 0.067405 9.77 115 1128 0 0 10898 1080 0 1138
1.00 Sep-88 1000.000 9780.00 0.066191 9.78 123 1203 0 0 10983 1147 0 1212
1.00 Oct-88 1000.000 9790.00 0.067627 9.79 131 1280 0 0 11070 1214 0 1288
1.00 Nov-88 1000.000 9740.00 0.066460 9.74 138 1349 0 0 11089 1281 0 1363
1.00 Dec-88 1000.000 9730.00 0.069725 9.73 147 1427 0 0 11157 1350 0 1442
1.00 Jan-89 1000.000 9730.00 0.069849 9.73 155 1507 0 0 11237 1420 0 1522
1.00 Feb-89 1000.000 9710.00 0.066558 9.71 163 1580 0 0 11290 1487 0 1599
1.00 Mar-89 1000.000 9690.00 0.073879 9.69 172 1663 0 0 11353 1561 0 1685
1.00 Apr-89 1000.000 9720.00 0.072164 9.72 180 1753 0 0 11473 1633 0 1770
1.00 May-89 1000.000 9740.00 0.073862 9.74 189 1844 0 0 11584 1707 0 1857
1.00 Jun-89 1000.000 9780.00 0.071983 9.78 198 1937 0 0 11717 1779 0 1943
1.00 Jul-89 1000.000 9810.00 0.072276 9.81 207 2029 0 0 11839 1851 0 2029
1.00 Aug-89 1000.000 9760.00 0.070842 9.76 216 2104 0 0 11864 1922 0 2115
1.00 Sep-89 1000.000 9750.00 0.069837 9.75 224 2187 0 0 11937 1992 0 2200
1.00 Oct-89 1000.000 9780.00 0.071560 9.78 233 2282 0 0 12062 2063 0 2287
1.00 Nov-89 1000.000 9780.00 0.068686 9.78 242 2366 0 0 12146 2132 0 2372
1.00 Dec-89 1000.000 9770.00 0.069659 9.77 251 2450 0 0 12220 2202 0 2458
1.00 Jan-90 1000.000 9740.00 0.069468 9.74 260 2530 0 0 12270 2271 0 2545
1.00 Feb-90 1000.000 9730.00 0.062117 9.73 268 2605 0 0 12335 2333 0 2623
1.00 Mar-90 1000.000 9720.00 0.066978 9.72 276 2688 0 0 12408 2400 0 2708
1.00 Apr-90 1000.000 9700.00 0.064285 9.70 285 2764 0 0 12464 2464 0 2790
1.00 May-90 1000.000 9730.00 0.066379 9.73 294 2858 0 0 12588 2531 0 2876
1.00 Jun-90 1000.000 9730.00 0.064395 9.73 302 2941 0 0 12671 2595 0 2959
1.00 Jul-90 1000.000 9760.00 0.066566 9.76 311 3037 0 0 12797 2662 0 3046
1.00 Aug-90 1000.000 9740.00 0.066240 9.74 320 3118 0 0 12858 2728 0 3133
1.00 Sep-90 1000.000 9740.00 0.063745 9.74 329 3202 0 0 12942 2792 0 3217
1.00 Oct-90 1000.000 9760.00 0.065479 9.76 338 3295 0 0 13055 2857 0 3304
1.00 Nov-90 1000.000 9780.00 0.062419 9.78 346 3386 0 0 13166 2920 0 3387
1.00 Dec-90 1000.000 9810.00 0.064590 9.81 355 3483 0 0 13293 2984 0 3474
1.00 Jan-91 1000.000 9820.00 0.064473 9.82 364 3574 0 0 13394 3049 0 3562
1.00 Feb-91 1000.000 9830.00 0.057899 9.83 372 3656 0 0 13486 3107 0 3641
1.00 Mar-91 1000.000 9820.00 0.060075 9.82 380 3735 0 0 13555 3167 0 3723
1.00 Apr-91 1000.000 9840.00 0.056342 9.84 388 3821 0 0 13661 3223 0 3801
1.00 May-91 1000.000 9830.00 0.057326 9.83 396 3896 0 0 13726 3280 0 3880
1.00 Jun-91 1000.000 9820.00 0.055882 9.82 404 3970 0 0 13790 3336 0 3958
1.00 Jul-91 1000.000 9820.00 0.057111 9.82 412 4051 0 0 13871 3393 0 4039
1.00 Aug-91 1000.000 9850.00 0.055818 9.85 420 4142 0 0 13992 3449 0 4117
1.00 Sep-91 1000.000 9860.00 0.052726 9.86 428 4221 0 0 14081 3502 0 4192
1.00 Oct-91 1000.000 9870.00 0.052611 9.87 436 4300 0 0 14170 3555 0 4267
1.00 Nov-91 1000.000 9890.00 0.050599 9.89 443 4382 0 0 14272 3605 0 4340
1.00 Dec-91 1000.000 9940.00 0.050943 9.94 450 4477 0 0 14417 3656 0 4414
1.00 Jan-92 1000.000 9920.00 0.044945 9.92 457 4533 0 0 14453 3701 0 4479
1.00 Feb-92 1000.000 9910.00 0.040122 9.91 463 4587 0 0 14497 3741 0 4537
1.00 Mar-92 1000.000 9870.00 0.043589 9.87 469 4633 0 0 14503 3785 0 4601
1.00 Apr-92 1000.000 9900.00 0.042999 9.90 476 4710 0 0 14610 3828 0 4664
1.00 May-92 1000.000 9910.00 0.040546 9.91 482 4774 0 0 14684 3868 0 4724
1.00 Jun-92 1000.000 9910.00 0.034646 9.91 487 4826 0 0 14736 3903 0 4775
1.00 Jul-92 1000.000 9910.00 0.029727 9.91 491 4870 0 0 14780 3933 0 4820
1.00 Aug-92 1000.000 9940.00 0.029161 9.94 496 4928 0 0 14868 3962 0 4863
1.00 Sep-92 1000.000 9970.00 0.028304 9.97 500 4985 0 0 14955 3990 0 4905
1.00 Oct-92 1000.000 9870.00 0.031269 9.87 505 4982 0 0 14852 4021 0 4952
1.00 Nov-92 1000.000 9810.00 0.030371 9.81 509 4998 0 0 14808 4052 0 4998
1.00 Dec-92 1000.000 9860.00 0.031171 9.86 514 5070 0 0 14930 4083 0 5045
1.00 Jan-93 1000.000 9930.00 0.031465 9.93 519 5154 0 0 15084 4114 0 5093
1.00 Feb-93 1000.000 9940.00 0.027437 9.94 523 5201 0 0 15141 4142 0 5134
1.00 Mar-93 1000.000 9940.00 0.026746 9.94 527 5242 0 0 15182 4169 0 5175
1.00 Apr-93 1000.000 9950.00 0.024820 9.95 531 5285 0 0 15235 4193 0 5213
1.00 May-93 1000.000 9930.00 0.024399 9.93 535 5311 0 0 15241 4218 0 5250
1.00 Jun-93 1000.000 9940.00 0.023399 9.94 539 5353 0 0 15293 4241 0 5286
1.00 Jul-93 1000.000 9940.00 0.028757 9.94 543 5397 0 0 15337 4270 0 5331
1.00 Aug-93 1000.000 9950.00 0.026360 9.95 547 5443 0 0 15393 4296 0 5371
1.00 Sep-93 1000.000 9950.00 0.024790 9.95 551 5481 0 0 15431 4321 0 5410
1.00 Oct-93 1000.000 9950.00 0.026550 9.95 555 5523 0 0 15473 4348 0 5451
1.00 Nov-93 1000.000 9940.00 0.025760 9.94 559 5557 0 0 15497 4373 0 5491
20-Dec 17-Dec 9.93 Dec-93 1000.000 9920.00 0.025632 0.02 9.92 563 5586 3 31 15537 4399 20 5562
1.00 Jan-94 1000.000 9930.00 0.025666 9.93 567 5632 3 31 15593 4425 20 5602
1.00 Feb-94 1000.000 9890.00 0.023641 9.89 571 5646 3 31 15567 4448 20 5639
1.00 Mar-94 1000.000 9870.00 0.026666 9.87 575 5677 3 31 15578 4475 20 5681
1.00 Apr-94 1000.000 9840.00 0.025735 9.84 579 5700 3 31 15571 4501 20 5722
1.00 May-94 1000.000 9840.00 0.026649 9.84 584 5742 3 31 15613 4527 20 5764
1.00 Jun-94 1000.000 9850.00 0.026007 9.85 588 5789 3 31 15670 4553 20 5805
1.00 Jul-94 1000.000 9870.00 0.026312 9.87 592 5843 3 31 15744 4580 20 5847
1.00 Aug-94 1000.000 9870.00 0.028245 9.87 597 5888 3 31 15789 4608 20 5892
1.00 Sep-94 1000.000 9870.00 0.031348 9.87 602 5938 3 31 15839 4639 20 5942
1.00 Oct-94 1000.000 9860.00 0.042808 9.86 609 6001 3 31 15892 4682 20 6011
1.00 Nov-94 1000.000 9820.00 0.044364 9.82 616 6048 3 31 15899 4727 20 6083
1.00 Dec-94 1000.000 9810.00 0.048047 9.81 624 6120 3 31 15960 4775 20 6160
1.00 Jan-95 1000.000 9850.00 0.049121 9.85 632 6225 3 31 16105 4824 20 6240
1.00 Feb-95 1000.000 9860.00 0.043076 9.86 639 6301 3 31 16192 4867 20 6311
1.00 Mar-95 1000.000 9870.00 0.049514 9.87 647 6389 3 31 16290 4916 20 6392
1.00 Apr-95 1000.000 9880.00 0.046514 9.88 655 6472 3 31 16383 4963 20 6469
1.00 May-95 1000.000 9900.00 0.049090 9.90 663 6567 3 31 16498 5012 20 6550
1.00 Jun-95 1000.000 9910.00 0.045537 9.91 671 6649 3 31 16590 5057 20 6626
</TABLE>
EXHIBIT 16D
SCHEDULE FOR COMPUTATION OF ADJUSTED NAVS FOR NCCMT: TERM PORTFOLIO
Adjusted NAVs are derived by dividing the fund's actual NAV by a "factor"
that adjusts the NAV for any reinvestment of dividends and capital gains,
if any, that occurred during the period. The factor typically starts at "1"
beginning at the end of the period and, going backward, increases each time
a distribution is paid. (The end of the period adjusted NAV should equal
the fund's actual NAV, barring any month-end distributions.)
ADJUSTED NET ASSET VALUE:
Following Day Dividend + Following Day Capital Gains
Current Day Factor = <UNDEF>----------------------------------------------
+ 1<UNDEF> (Following Day Factor)
Following Day NAV
Where:
Following Day Factor = 1.0 until the day preceding the first distribution.
Current Day NAV
Adjusted NAV = ---------------
Current Day Factor
Exhibit 16d
NCCMT-Term Portfolio
07-Oct-94 1.043198 9.46
10-Oct-94 1.043198 9.46
11-Oct-94 1.043198 9.46
12-Oct-94 1.043198 9.46
13-Oct-94 1.043198 9.46
14-Oct-94 1.043198 9.47
17-Oct-94 1.043198 9.46
18-Oct-94 1.043198 9.46
19-Oct-94 1.043198 9.46
20-Oct-94 1.043198 9.45
21-Oct-94 1.043198 9.45
24-Oct-94 1.043198 9.45
25-Oct-94 1.043198 9.45
26-Oct-94 1.043198 9.45
27-Oct-94 1.043198 9.45
28-Oct-94 1.043198 9.45
31-Oct-94 1.038689 9.49
01-Nov-94 1.038689 9.48
02-Nov-94 1.038689 9.48
03-Nov-94 1.038689 9.48
04-Nov-94 1.038689 9.48
07-Nov-94 1.038689 9.47
08-Nov-94 1.038689 9.47
09-Nov-94 1.038689 9.48
10-Nov-94 1.038689 9.48
11-Nov-94 1.038689 9.47
14-Nov-94 1.038689 9.47
15-Nov-94 1.038689 9.47
16-Nov-94 1.038689 9.47
17-Nov-94 1.038689 9.46
18-Nov-94 1.038689 9.46
21-Nov-94 1.038689 9.46
22-Nov-94 1.038689 9.46
23-Nov-94 1.038689 9.47
24-Nov-94 1.038689 NA
25-Nov-94 1.038689 9.47
28-Nov-94 1.038689 9.46
29-Nov-94 1.038689 9.45
30-Nov-94 1.034017 9.50
01-Dec-94 1.034017 9.50
02-Dec-94 1.034017 9.50
05-Dec-94 1.034017 9.48
06-Dec-94 1.034017 9.49
07-Dec-94 1.034017 9.49
08-Dec-94 1.034017 9.49
09-Dec-94 1.034017 9.49
12-Dec-94 1.034017 9.48
13-Dec-94 1.034017 9.47
14-Dec-94 1.034017 9.48
15-Dec-94 1.034017 9.49
16-Dec-94 1.034017 9.49
19-Dec-94 1.034017 9.49
20-Dec-94 1.034017 9.49
21-Dec-94 1.034017 9.49
22-Dec-94 1.034017 9.48
23-Dec-94 1.034017 9.49
26-Dec-94 1.034017 NA
27-Dec-94 1.034017 9.49
28-Dec-94 1.034017 9.48
29-Dec-94 1.034017 9.49
30-Dec-94 1.028977 9.53
02-Jan-95 1.028977 NA
03-Jan-95 1.028977 9.52
04-Jan-95 1.028977 9.53
05-Jan-95 1.028977 9.53
06-Jan-95 1.028977 9.53
09-Jan-95 1.028977 9.53
10-Jan-95 1.028977 9.53
11-Jan-95 1.028977 9.54
12-Jan-95 1.028977 9.54
13-Jan-95 1.028977 9.56
16-Jan-95 1.028977 9.56
17-Jan-95 1.028977 9.56
18-Jan-95 1.028977 9.56
19-Jan-95 1.028977 9.55
20-Jan-95 1.028977 9.56
23-Jan-95 1.028977 9.55
24-Jan-95 1.028977 9.55
25-Jan-95 1.028977 9.56
26-Jan-95 1.028977 9.56
27-Jan-95 1.028977 9.57
30-Jan-95 1.028977 9.57
31-Jan-95 1.023872 9.62
01-Feb-95 1.023872 9.62
02-Feb-95 1.023872 9.61
03-Feb-95 1.023872 9.62
06-Feb-95 1.023872 9.62
07-Feb-95 1.023872 9.62
08-Feb-95 1.023872 9.62
09-Feb-95 1.023872 9.62
10-Feb-95 1.023872 9.62
13-Feb-95 1.023872 9.61
14-Feb-95 1.023872 9.62
15-Feb-95 1.023872 9.62
16-Feb-95 1.023872 9.62
17-Feb-95 1.023872 9.62
20-Feb-95 1.023872 NA
21-Feb-95 1.023872 9.62
22-Feb-95 1.023872 9.63
23-Feb-95 1.023872 9.63
24-Feb-95 1.023872 9.63
27-Feb-95 1.023872 9.63
28-Feb-95 1.019418 9.67
01-Mar-95 1.019418 9.67
02-Mar-95 1.019418 9.67
03-Mar-95 1.019418 9.67
06-Mar-95 1.019418 9.67
07-Mar-95 1.019418 9.66
08-Mar-95 1.019418 9.67
09-Mar-95 1.019418 9.67
10-Mar-95 1.019418 9.67
13-Mar-95 1.019418 9.67
14-Mar-95 1.019418 9.68
15-Mar-95 1.019418 9.68
16-Mar-95 1.019418 9.68
17-Mar-95 1.019418 9.68
20-Mar-95 1.019418 9.68
21-Mar-95 1.019418 9.68
22-Mar-95 1.019418 9.68
23-Mar-95 1.019418 9.68
24-Mar-95 1.019418 9.69
27-Mar-95 1.019418 9.69
28-Mar-95 1.019418 9.69
29-Mar-95 1.019418 9.69
30-Mar-95 1.019418 9.68
31-Mar-95 1.014329 9.73
03-Apr-95 1.014329 9.73
04-Apr-95 1.014329 9.73
05-Apr-95 1.014329 9.73
06-Apr-95 1.014329 9.73
07-Apr-95 1.014329 9.74
10-Apr-95 1.014329 9.73
11-Apr-95 1.014329 9.74
12-Apr-95 1.014329 9.74
13-Apr-95 1.014329 9.74
14-Apr-95 1.014329 NA
17-Apr-95 1.014329 9.74
18-Apr-95 1.014329 9.74
19-Apr-95 1.014329 9.74
20-Apr-95 1.014329 9.74
21-Apr-95 1.014329 9.74
24-Apr-95 1.014329 9.74
25-Apr-95 1.014329 9.74
26-Apr-95 1.014329 9.74
27-Apr-95 1.014329 9.74
28-Apr-95 1.009576 9.79
01-May-95 1.009576 9.79
02-May-95 1.009576 9.79
03-May-95 1.009576 9.80
04-May-95 1.009576 9.80
05-May-95 1.009576 9.81
08-May-95 1.009576 9.81
09-May-95 1.009576 9.81
10-May-95 1.009576 9.81
11-May-95 1.009576 9.81
12-May-95 1.009576 9.81
15-May-95 1.009576 9.81
16-May-95 1.009576 9.81
17-May-95 1.009576 9.81
18-May-95 1.009576 9.81
19-May-95 1.009576 9.81
22-May-95 1.009576 9.80
23-May-95 1.009576 9.80
24-May-95 1.009576 9.81
25-May-95 1.009576 9.81
26-May-95 1.009576 9.81
29-May-95 1.009576 NA
30-May-95 1.009576 9.81
31-May-95 1.004595 9.85
01-Jun-95 1.004595 9.86
02-Jun-95 1.004595 9.87
05-Jun-95 1.004595 9.87
06-Jun-95 1.004595 9.87
07-Jun-95 1.004595 9.86
08-Jun-95 1.004595 9.86
09-Jun-95 1.004595 9.85
12-Jun-95 1.004595 9.85
13-Jun-95 1.004595 9.87
14-Jun-95 1.004595 9.86
15-Jun-95 1.004595 9.86
16-Jun-95 1.004595 9.86
19-Jun-95 1.004595 9.86
20-Jun-95 1.004595 9.86
21-Jun-95 1.004595 9.86
22-Jun-95 1.004595 9.86
23-Jun-95 1.004595 9.87
26-Jun-95 1.004595 9.86
27-Jun-95 1.004595 9.86
28-Jun-95 1.004595 9.86
29-Jun-95 1.004595 9.85
30-Jun-95 1.000000 9.91
