SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-77169)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 36 [X]
and
REGISTRATION STATEMENT (No. 811-3455)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 36 [X]
The North Carolina Capital Management Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
(X) on (August 19, 1997) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the Notice required by
such Rule on or before August 29, 1997.
The 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 Financial Highlights
b *
c,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; Other Expenses
b(iii) Expenses; Breakdown of Expenses
c FMR and Its Affiliates
d Cover Page; Charter; Breakdown of Expenses; FMR and Its Affiliates;
Other Expenses
e FMR and Its Affiliates, Other Expenses
f Expenses
g Expenses; FMR and Its Affiliates, Other 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
h *
7 a Cover page; FMR and its Affiliates
b,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
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 August 19 ,
199 7 attached to this prospectus. The SAI has been filed with the
Securities and Exchange Commission (SEC) and is available along with other
related materials on the SEC's Internet Web site (http://www.sec.gov). The
SAI 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, FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NC-pro-089 7
37021
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 AUGUST 19 , 199 7
AND
ANNUAL REPORT
FOR THE YEAR ENDED(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109 JUNE 30, 199 7
THE
N
C
ORTH
AROLINA
CAPITAL MANAGEMENT TRUST
AND
STATEMENT OF ADDITIONAL INFORMATION
DATED AUGUST 19, 1997
CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly operating
expenses.
FINANCIAL HIGHLIGHTS A summary of each
fund's financial data.
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 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>
ANNUAL REPORT
<TABLE>
<CAPTION>
<S> <C> <C>
CASH PORTFOLIO:
PERFORMANCE A-1 How the fund has done over time.
FUND TALK A-3 The manager's review of the fund's
performance, strategy, and outlook.
INVESTMENTS A-5 A complete list of the fund's investments with
their market values.
FINANCIAL STATEMENTS A-8 Statements of assets and liabilities, operations,
and changes in net assets, as well as financial
highlights.
TERM PORTFOLIO:
PERFORMANCE A-12 How the fund has done over time.
FUND TALK A-15 The manager's review of the fund's performance,
strategy, and outlook.
INVESTMENTS A-16 A complete list of the fund's investments with
their market values.
FINANCIAL STATEMENTS A-17 Statements of assets and liabilities, operations,
and changes in net assets, as well as financial
highlights.
NOTES A-21 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-23 The auditor's opinion.
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF ADDITIONAL INFORMATION S-1
KEY FACTS
WHO MAY WANT TO INVEST
Shares of Cash Portfolio and Term Portfolio are offered exclusively to the
following entities of the State of North Carolina: local governments and
public authorities, as those terms are defined in North Carolina General
Statute 159-7, and school administrative units, local ABC boards, community
colleges or public hospitals (collectively, "investors"). Each fund offers
an economical and convenient vehicle for investment of available cash by
investors.
Cash Portfolio is designed for investors who would like to earn current
income while preserving the value of their investment. The rate of income
will vary from day to day, generally reflecting short-term interest rates.
Cash Portfolio is managed to keep its share price stable at $1.00. Cash
Portfolio does not constitute a balanced investment plan. However, because
it emphasizes stability, it could be well-suited for a portion of your
investment.
Term Portfolio is designed for investors who seek high current income from
a portfolio of investment-grade debt securities. Term Portfolio's level of
risk and potential reward depend on the quality and maturity of its
investments. 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 Term Portfolio's 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. Term Portfolio 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 may pay when you buy or
sell shares of a fund .
Cash Term
Portfoli Portfoli
o o
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 most of the other expenses for each fund.
12b-1 fees are paid by FMR from its management fee to Sterling, through
Fidelity Distributors Corporation (FDC), for services and expenses in
connection with the distribution of fund shares. Term Portfolio
shareholders may pay more than the economic equivalent of the maximum sales
charges permitted by the National Association of Securities Dealers, Inc.,
due to 12b-1 fees.
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 figures are based on historical expenses of each fund and
are calculated as a percentage of average net assets of each fund.
Cash
Term
Portfoli Portfoli
o o
Management fee* 0.19 0.20
% %
12b-1 fee (Distribution Fee) 0.16 0.16
% %
Other expenses 0.00 0.01
% %
Total operating expenses 0.35 0.37
% %
* The management fee rate represents the net rate retained by FMR after
payments made to the distributor. The management fee rates before payments
made to the distributor by FMR are 0.35% and 0.3 6 % 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 $ 4 $ 11 $ 20 $ 44
Term Portfolio $ 4 $ 12 $ 21 $ 47
Effective January 1, 1998, the management and 12b-1 fees will be reduced
as shown in the "Breakdown of Expenses" section, beginning on page .
Accordingly, the following figures are based on historical expenses of each
fund, adjusted to reflect fees effective January 1, 1998, and are
calculated as a percentage of average net assets of each fund.
Cash
Term
Portfoli Portfoli
o o
Management fee* 0.18 0.20
% %
12b-1 fee (Distribution Fee) 0.15 0.15
% %
Other expenses 0.00 0.00
% %
Total operating expenses 0.33 0.35
% %
* The management fee rate represents the net rate retained by FMR after
payments made to the distributor. The management fee rates before payments
made to the distributor by FMR are 0.33% and 0.35% for Cash Portfolio and
Term Portfolio, respectively.
EXPENSE TABLE EXAMPLE: Effective January 1, 1998, y ou 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 3 5 10
Year Years Years Years
Cash Portfolio $ 3 $ 11 $ 19 $ 42
Term Portfolio $ 4 $ 11 $ 20 $ 44
</TABLE>
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Cash Portfolio and Term
Portfolio have been audited by Coopers & Lybrand L.L.P., independent
accountants. The funds' financial highlights, financial statements, and
report of the auditor are included in the funds' Annual Report, which is
attached.
CASH PORTFOLIO
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share
Data and Ratios
Years ended June
30 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset
value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .051 .053 .052 .031 .030 .046 .070 .082 .085 .067
Investment Operations
Net interest income
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Less
Distributions (.051) (.053) (.052) (.031) (.030) (.046) (.070) (.082) (.085) (.067)
From net interest
income
Net asset value, end
of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total
returnA 5.25% 5.43% 5.28% 3.10% 3.04% 4.67% 7.23% 8.55% 8.83% 6.88%
Net assets, end
of $ 1,984 $ 1,740 $ 1,589 $ 1,221 $ 1,303 $ 1,651 $ 1,406 $ 1,080 $ 895 $ 653
period
(In millions)
Ratio of expenses
to .35% .36% .39% .39% .39% .39% .40% .42% .43% .43%
average B B B B
net assets
Ratio of net
interest 5.13% 5.27% 5.22% 3.05% 3.00% 4.47% 6.90% 8.20% 8.61% 6.68%
income to average net
assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
TERM PORTFOLIO
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years ended June
30 1997 1996 1995 1994D 1993 1992 1991 1990 1989 1988
Net asset
value, $ 9.820 $ 9.910 $ 9.850 $ 9.940 $ 9.910 $ 9.820 $ 9.730 $ 9.780 $ 9.820 $ 9.910
beginning of period
Income from Invest
ment .729A .601 .505 .288 .337 .560 .741 .816 .832 .762
Operations
Net investment income
Net realized
and (.170) (.093) .059 (.046) .031 .097 .090 (.050) (.040) (.090)
unrealized gain (loss)
Total from invest
ment .559 .508 .564 .242 .368 .657 .831 .766 .792 .672
operations
Less Distribut
ions (.729) (.598) (.504) (.312) (.338) (.567) (.741) (.816) (.832) (.762)
From net investment
income
From net realized
gain -- -- --- (.020) -- -- -- -- -- --
Total distribut
ions (.729) (.598) (.504) (.332) (.338) (.567) (.741) (.816) (.832) (.762)
Net asset value,
end of $ 9.650 $ 9.820 $ 9.910 $ 9.850 $ 9.940 $ 9.910 $ 9.820 $ 9.730 $ 9.780 $ 9.820
period
Total
returnB 5.89 5.25 5.87 2.47 3.78 6.86 8.83 8.15 8.44 7.02
% % % % % % % % % %
Net assets, end of
period $ 69 $ 64 $ 70 $ 66 $ 80 $ 89 $ 84 $ 83 $ 84 $ 117
(In millions)
Ratio of expenses
to .37 .38 .41 .41 .41 .41 .41 .40 .40 .27
average net
assets % % % % % % %C %C %C %C
Ratio of net
investment 7.48 6.06 5.12 3.14 3.41 5.69 7.56 8.37 8.52 7.75
income to average
net % % % % % % % % % %
assets
Portfolio turnover
rate 232 89 519 494 612 424 78 23 14 30
% % % % % % % % % %
</TABLE>
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D EFFECTIVE JULY 1, 1994, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
PERFORMANCE
Performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment 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 or a free annual report, 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 periodically throughout the year to oversee the funds'
activities, review contractual arrangements with companies that provide
services to the funds, and review the funds' performance. One trustee
serves as trustee for other Fidelity funds. The majority of trustees
are not otherwise affiliated with Fidelity or Sterling.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETING S 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.
The funds are managed by FMR, which chooses their investments and handles
their business affairs. FMR Texas Inc. (FMR Texas), located in Irving,
Texas, has primary responsibility for providing investment management
services for Cash Portfolio.
As of June 30, 1997, FMR advised funds having approximately 32 million
shareholder accounts with a total value of more than $451 billion.
Burnell Stehman is vice president and manager of The North Carolina Capital
Management Trust: Cash Portfolio, which he has managed since September
1982. He also manages several other money market funds. Mr. Stehman joined
Fidelity in 1979.
Curtis Hollingsworth is vice president and manager of The North Carolina
Capital Management Trust: Term Portfolio, which he has managed since
October 1995. He also manages several other bond funds. Since joining
Fidelity in 1983, Mr. Hollingsworth has worked as a fixed-income trader and
portfolio manager .
Fidelity investment personnel may invest in securities for their own
accounts 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. Fidelity
Investments Institutional Operations Company, Inc. (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
MONEY MARKET FUNDS IN GENERAL. The yield of a money market fund
will change daily based on changes in interest rates and market conditions.
Money market funds follow industry-standard guidelines on the quality,
maturity, and diversification of their investments, which are designed to
help maintain a stable $1.00 share price. Of course, there is no guarantee
that a money market fund will be able to maintain a stable $1.00 share
price. It is possible that a major change in interest rates or a default on
the fund's investments could cause its share price (and the value of your
investment) to change.
FIDELITY'S APPROACH TO MONEY MARKET FUNDS. Money market funds earn
income at current money market rates. In managing money market funds, FMR
stresses preservation of capital, liquidity, and income. The fund will
purchase only high-quality securities that FMR believes present minimal
credit risks and will observe maturity restrictions on securities it
buys.
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 General Statute 159-30 (the Statute), as
amended from time to time, and in 20 North Carolina Administrative Code
3.0703 (the Code).
Pursuant to an investment policy set by the Trustees, Cash Portfolio may
invest more than 25% of its total assets in obligations of banks as
permitted pursuant to the Statute and the Code. 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 fund 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 net asset value per share (NAV) of $1.00.
BOND FUNDS IN GENERAL. The yield and share price of a bond fund
change daily based on changes in interest rates and market conditions, and
in response to other economic, political or financial events. The types and
maturities of the securities a bond fund purchases and the credit quality
of their issuers will impact a bond fund's reaction to these events.
INTEREST RATE RISK. In general, bond prices rise when interest rates
fall and fall when interest rates rise. Longer-term bonds are usually more
sensitive to interest rate changes. In other words, the longer the maturity
of a bond, the greater the impact a change in interest rates is likely to
have on the bond's price. In addition, short-term interest rates and
long-term interest rates do not necessarily move in the same amount or in
the same direction. A short-term bond tends to react to changes in
short-term interest rates and a long-term bond tends to react to changes in
long-term interest rates.
ISSUER RISK. The price of a bond is affected by the credit quality
of its issuer. Changes in the financial condition of an issuer, changes in
general economic conditions, and changes in specific economic conditions
that affect a particular type of issuer can impact the credit quality of an
issuer. Lower quality bonds generally tend to be more sensitive to these
changes than higher quality bonds.
FIDELITY'S APPROACH TO BOND FUNDS. The total return from a bond
includes both income and price gains or losses. In selecting investments
for a bond fund, FMR considers a bond's expected income together with its
potential for price gains or losses. While income is the most important
component of bond returns over time, a bond fund's emphasis on income does
not mean the fund invests only in the highest-yielding bonds available, or
that it can avoid losses of principal.
FMR focuses on assembling a portfolio of income-producing bonds that it
believes will provide the best balance between risk and return within the
range of eligible investments for the fund. FMR's evaluation of a potential
investment includes an analysis of the credit quality of the issuer, its
structural features, its current price compared to FMR's estimate of its
long-term value, and any short-term trading opportunities resulting from
market inefficiencies.
In structuring a bond fund, FMR allocates assets among different market
sectors (for example, U.S. Treasury or U.S. agency securities) and
different maturities based on its view of the relative value of each sector
or maturity. The performance of the fund will depend on how successful FMR
is in pursuing this approach.
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. In addition, the fund may invest in other
instruments pursuant to the Statute and the Code. Pursuant to an investment
policy set by the Trustees, Term Portfolio may, under normal circumstances,
invest up to 25% of its total assets in the finance industry. Term
Portfolio expects to invest predominantly in U.S. Government securities.
Under the current Code, Term Portfolio may invest in securities with
maturities of up to seven years. FMR seeks to manage the fund so that it
generally reacts to changes in interest rates similarly to U.S.
Government b onds with ma turities of three years or less. As of June
30, 1997, Term Portfolio's dollar-weighted average maturity was
approximately 1 year.
FMR may use various investment techniques to hedge a portion of Term
Portfolio's risk, but there is no guarantee that these strategies will work
as intended. When you sell your Term Portfolio shares, they may be worth
more or less than what you paid for them.
FMR normally invests each fund'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 local government or public authority within the State are
subject to political and economic conditions of the State or local
government or public authority within the State.
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 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, Fannie Mae (formerly known as Federal National
Mortgage Association), the Government National Mortgage Association, the
Federal Housing Administration, the Farmers Home Administration, and the
United States Postal Service;
(iii) Obligations of the State of North Carolina and bonds and notes of any
North Carolina local government or public authority;
(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 Commerce of the State of
North Carolina, be fully collateralized;
(v) Prime quality 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;
(vi) 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;
(vii) 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; 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, as defined by the Securities Exchange Act of 1934, which is a
dealer recognized as a primary dealer by a 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.
Certain of the securities, instruments, or techniques listed may not be
eligible for purchase or use by a fund since each fund's investments are
subject to the Statute and the Code and any investment policies set by the
Trustees. 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
funds' SAI. 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 fund achieve its goal.
Fund holdings and recent investment strategies are detailed in each fund's
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 instruments issued by
the U.S. Government, corporations, financial institutions, and other
entities. These securities may carry fixed, variable, or floating interest
rates. Some money market securities employ a trust or 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 instruments 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, U.S. Government
securities such as those issued by Fannie Mae are supported by the
instrumentality's right to borrow money from the U.S. Treasury under
certain circumstances. Other U.S. Government securities, such as those
issued by the Federal Farm Credit Banks Funding Corporation, are supported
only by the credit of the entity that issued them.
RESTRICTION: A fund may invest in U.S. Government securities as permitted
pursuant to the Statute and the Code.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be fully or partially backed by the local government, or by the credit
of a private issuer or the current or anticipated revenues from specific
projects or assets. Because many municipal securities are issued to finance
similar types of projects, especially those relating to education, health
care, housing, transportation, and utilities, the municipal markets can be
affected by conditions in those sectors. In addition, all municipal
securities may be affected by uncertainties regarding their tax status,
legislative changes, or rights of municipal securities holders.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer generally pays the investor a
fixed , variable, or floating 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 sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in interest
rates and varying degrees of credit quality. In general, bond prices rise
when interest rates fall, and fall when interest rates rise. Longer-term
bonds and zero coupon bonds are generally more sensitive to interest rate
changes.
RESTRICTIONS: Term Portfolio currently intends to invest in debt securities
rated A-quality and above by Moody's Investors Service (Moody's) or rated
in the equivalent categories by Standard & Poor's (S&P), or is unrated but
judged to be of equivalent quality by FMR.
C REDIT A ND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit, guarantees,
puts and demand features, and insurance, provided by entities such as banks
and other financial institutions. These arrangements expose a fund to the
credit risk of the entity providing the credit or liquidity support.
Changes in the credit quality of the provider could affect the value of the
security and a fund's share price.
MORTGAGE SECURITIES are interests in pools of commercial or residential
mortgages, and include complex instruments such as collateralized mortgage
obligations and stripped mortgage-backed securities. Mortgage securities
may be issued by the U.S. Government or by private entities. For example,
Ginnie Maes (issued by the Government National Mortgage Association) are
interests in pools of mortgage loans insured or guaranteed by a U.S.
Government agency. Because mortgage securities pay both interest and
principal as their underlying mortgages are paid off, they are subject to
prepayment risk. This is especially true for stripped securities. Also, the
value of a mortgage security may be significantly affected by changes in
interest rates. Some mortgage securities may have a structure that makes
their reaction to interest rates and other factors difficult to predict,
making their value highly volatile.
RESTRICTION: A fund may invest in mortgage-backed securities as permitted
pursuant to the Statute and the Code.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other debt securities, although stripped securities may be more
volatile, and the value of certain types of stripped securities may move in
the same direction as interest rates. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the U.S.
Treasury.
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.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or another party. In exchange for this benefit, a fund may 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.
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 securities, 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: Cash Portfolio may not purchase a security if, as a result,
more than 10% of its total assets would be invested in illiquid and
restricted securities.
Term Portfolio may not purchase a security if, as a result, more than 10%
of its assets would be invested in illiquid and restricted securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and deli v ery for the security take place
at a later date than is customary for that type of security. The market
value of the security could change during this period.
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.
CASH MANAGEMENT. The funds may invest in money market securities
and in repurchase agreements.
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 may not invest more than 5% of its total
assets in any one issuer, except that, with respect to certificates of
deposit and bankers' acceptances, the fund may invest up to 10% of its
total assets in the highest quality securities of a single issuer for up to
three business days. These limitations do not apply to U.S. Government
securities.
RESTRICTIONS: With respect to 75% of its total assets, Term Portfolio may
not purchase a security if, as a result, more than 5% would be invested in
the securities of any issuer. This limitation does not apply to U.S.
Government securities.
Term Portfolio may not invest more than 25% of its total assets in any one
industry. This limitation does 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.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its 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, the original Portfolio of the trust, 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 of
$1.00 per share 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 seeks to achieve this objective by investing only in
certain of those high-grade money market instruments which are
authorized for investment by units of local government as specified in
North Carolina General Statute 159-30, as amended, and 20 North Carolina
Administrative Code 3.0703, as amended. Cash Portfolio may invest more
than 25% of its total assets in the obligations of banks. Cash
Portfolio will use its best efforts to maintain a constant net asset value
of $1.00 per share .
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 seeks to achieve its objective by normally investing only in
obligations of the United States, its agencies or instrumentalities, or
obligations fully guaranteed by the U.S. government, in obligations of the
State of North Carolina and bonds and notes of any North Carolina local
government or public authority, and in high grade money market
instruments, as permitted pursuant to North Carolina General Statute
159-30, as amended and 20 North Carolina Administrative Code 3.0703, as
amended.
Cash Portfolio may not purchase a security if, as a result, more than 10%
of its total assets would be invested in illiquid and restricted
securities.
Term Portfolio may not purchase a security if, as a result, more than 10%
of its assets would be invested in illiquid and restricted securities.
With respect to 75% of its total assets, Term Portfolio may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any issuer. This limitation does not apply to U.S. Government
securities.
Term Portfolio may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government securities.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 331/3% of its 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 most of the other expenses of each fund. Each fund's annual management
fee rate is 0.365% of average net assets through $400 million; 0.360% of
average net assets in excess of $400 million through $800 million; 0.355%
of average net assets in excess of $800 million through $1.2 billion;
0.350% of average net assets in excess of $1.2 billion through $1.6
billion; 0.340% of average net assets in excess of $1.6 billion through
$2.0 billion; and 0.330% of average net assets in excess of $2.0 billion.
For the fiscal year ended June 30, 1997, Cash Portfolio and Term Portfolio
paid FMR fees equal to 0.35% and 0.36%, respectively, of average net
assets.
Effective January 1, 1998, each fund's annual management fee rate will
be 0.350% of average net assets through $1.0 billion; 0.320% of average net
assets in excess of $1.0 billion through $2.0 billion; and 0.290% of
average net assets in excess of $2.0 billion.
FMR Texas is Cash Portfolio's sub-adviser and has primary responsibility
for managing its investments. FMR is responsible for providing other
management 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) for FMR Texas's services. FMR
paid FMR Texas a fee equal to 0.10% of Cash Portfolio's average net assets
for the fiscal year ended June 30, 1997.
OTHER EXPENSES
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for each fund. Fidelity Service Company, Inc. (FSC)
calculates the NAV and dividends for each fund and maintains each fund's
general accounting records. These expenses are paid by FMR pursuant to its
management contract.
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.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each p lan
recognizes that FMR may use its management fee to pay expenses associated
with the sale of fund shares. FMR pays 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 receipt of
orders for transactions in shares of the funds . FMR currently pays
Sterling, through FDC, monthly according to the following schedule: 0.160%
of average net assets through $1.6 billion; 0.155% of average net assets in
excess of $1.6 billion through $2.0 billion; and 0.150% of average net
assets in excess of $2.0 billion.
Effective January 1, 1998, FMR will pay Sterling, through FDC, monthly
according to the following schedule: 0.150% of average net assets through
$1.0 billion; 0.150% of average net assets in excess of $1.0 billion
through $2.0 billion; and 0.140% of average net assets in excess of $2.0
billion.
Each fund pays other expenses, including 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 the fiscal year ended
June 1997 was 232%. 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. Cash Portfolio's NAV is normally calculated at 12:00
noon 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 pages
and .
Share certificates are not available for Cash Portfolio or Term Portfolio.
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.
CASH PORTFOLIO
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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 upon request when you
Inc. open your account, to the following
One First Union Center address:
301 S. College Street, Suite 3200 The North Carolina Capital
Charlotte, NC 28202-6005 Management Trust
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
upon request when you open your
account, to any branch of First Union
National Bank of North Carolina
(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 noon Eastern
time on the day of the wire.
(small solid bullet) Federal funds and certain state transfer
payments will be accepted by wire.
(small solid bullet) If Sterling is not advised of your order
prior to 12:00 noon Eastern time on the
day of the wire, or if federal funds are
not received the same day your order is
placed, your order may be canceled,
and you could be held liable for resulting
fees and losses.
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TERM PORTFOLIO
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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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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 the funds.
(small solid bullet) Only federal funds will be accepted by
wire.
(small solid bullet) If Sterling is not advised of your order
prior to 4:00 p.m. Eastern time on the
business day on which your order is
received, or if 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. Cash
Portfolio's NAV is normally calculated at 12:00 noon 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 pages and .
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described on
these two pages.
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
SELLING SHARES BY TELEPHONE Redemption requests may be made by an
authorized finance official (or his/her agent or designee) who has
completed the account application by calling Sterling toll-free at
1-800-222-3232 or locally 1-704-372-8798 before 4:00 p.m. Eastern time.
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,
and
(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.
SELLING SHARES BY WIRE. 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 .
SELLING SHARES BY CHECK (CASH PORTFOLIO ONLY). If you hold shares of Cash
Portfolio, you may elect on your account application to establish a special
checking account with First Union, the fund's custodian, to redeem shares
from your Cash Portfolio account by writing a check. Fidelity reserves the
right to limit the number of checks you may write during a specified
period. Once your request to establish a checking account and a completed
signature card are received, you will be provided with a supply of checks.
Additional supplies of checks are available upon request to Sterling.
Checks will be drawn on First Union. To cover the amount of a check a
sufficient number of full and fractional shares will be redeemed from your
Cash Portfolio account at the next determined NAV after Sterling receives
the check from First Union. YOU ARE ADVISED THAT THE USE OF THE
CHECKWRITING FEATURE MAY BE LIMITED BY NORTH CAROLINA GENERAL STATUTE
159-28. PLEASE NOTE THAT CASH PORTFOLIO IS NOT PERMITTED OR AUTHORIZED TO
FUNCTION AS AN "OFFICIAL DEPOSITORY" FOR ANY OF ITS SHAREHOLDERS.
The checkwriting feature enables you to receive the dividends declared on
the shares to be redeemed through the day of redemption. Accordingly, check
redemption is not an appropriate way to close your Cash Portfolio account.
If the amount of a check is greater than the value of the shares in the
account, the check will be returned to the depositor. Cash Portfolio and
First Union reserve the right to suspend the checkwriting feature, and
intend to do so in the event that federal legislation or regulations impose
reserve requirements or other restrictions which are deemed by the Trustees
to be adverse to the interest of shareholders.
ACCOUNT SPECIAL REQUIREMENTS
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PHONE All accounts (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),
and address.
(small solid bullet) An authorized finance official (or
his/her agent or designee) who has
completed the account application
may 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 accounts (small solid bullet) The letter of instruction must be
signed by an authorized finance
official (or his/her agent or
designee) who has completed the
account application.
Wire (wire_graphic) All accounts (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
noon 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.
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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 and
prospectuses 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,
prospectuses or historical account information.
SPECIAL SERVICES. Special processing has been arranged with Fidelity for
institutions that wish to open multiple accounts. You may be required to
enter into a separate agreement with Fidelity. 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.
Note that exchanges out of a fund may have tax and/or accounting
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 for Term Portfolio are normally distributed in December.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Shareholders may elect to receive dividend distributions in cash.
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. For Term Portfolio, yo u will be sent a check for
your dividend and capital gain distributions . For Cash Portfolio, you
will be sent a wire for your dividend and capital gain distributions, if
any.
Dividends will be reinvested at each fund's NAV on the last day of the
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 the tax consequences, if any,
of your investment in a fund.
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.
Although most investors in each fund will be tax-exempt entities, the
information that follows pertains to taxable and tax-exempt investors who
must account for income and gains that may result from certain shareholder
transactions.
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.
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 when a fund has realized but not yet
distributed income or capital gains, you will pay the full price for the
shares and then receive a portion of the price back in the form of a
distribution that may be taxable to you.
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.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is calculated each day that each
of the Federal Reserve Bank of Richmond (Richmond Fed), First Union, the
funds' custodian, and the New York Stock Exchange (NYSE) are open, unless
following such schedule would cause the funds to be closed for two
consecutive business days, in which case, each fund will be open for
business and its NAV will be calculated each day that the Richmond Fed and
First Union are open for business.
The following holiday closings have been scheduled for 1997: New Year's
Day, Dr. Martin Luther King Jr. Day (observed), President's Day (observed),
Memorial Day (observed), Independence Day, Labor Day, Columbus Day
(observed), Veteran's Day, Thanksgiving Day and Christmas Day. Although FMR
expects the same holiday schedule to be observed in the future, the
Richmond Fed, First Union, or the NYSE may modify its holiday schedule at
any time. On any day that the Richmond Fed, First Union, or the NYSE 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, First Union, or the NYSE 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.
For Cash Portfolio , assets are valued on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps the money market fund maintain a stable $1.00
share price. For Term Portfolio , assets are valued on the
basis of information furnished by a pricing service or market
quotation s, if available, or by another method that the Board of
Trustees believes accurately reflects fair value. For Term Portfolio,
short-term securities with remaining maturities of sixty days or less for
which quotations and information furnished by a pricing service are
not readily available are valued on the basis of amortized cost.
EACH FUND'S OFFERING PRICE (price to buy one share) is its NAV. Each fund's
REDEMPTION PRICE (price to sell one share) is its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you may be asked to certify 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. Sterling may request certain information for verification purposes,
and Sterling records all telephone calls for your protection. 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, please call Sterling toll-free at 1-800-222-3232 or locally at
1-704-372-8798 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 sending a
facsimile to 1-704-372-2962 or telegram to Sterling.
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. 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, purchase orders received and
accepted before 12:00 noon Eastern time will earn the dividend declared for
that day; purchase orders received and accepted between 12:00 noon and 4:00
p.m. Eastern time will begin to earn dividends the following business day.
(small solid bullet) For Term Portfolio, purchase orders received and
accepted before 4:00 p.m. Eastern time will begin to earn dividends the
following business day.
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. Note the
following:
(small solid bullet) Normally, 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) For Cash Portfolio, for redemption orders placed
before 12:00 noon Eastern time, you will not earn that day's dividend; for
redemption orders received between 12:00 noon and 4:00 p.m. Eastern time,
you will earn that day's dividend.
(small solid bullet) For Term Portfolio, for redemption orders placed
before 4:00 p.m. Eastern time, you will earn that day's dividend.
(small solid bullet) For Term Portfolio, shares redeemed on a Friday or
prior to a holiday will continue to earn dividends until the next business
day.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and 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 NYSE 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 will be redeemed at the
NAV next determined on the business day on which your order is received and
accepted. 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) The fund you are exchanging into must be available for
sale in your state.
(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 business day following receipt and acceptance of the exchange
request.
(small solid bullet) When exchanging from Cash Portfolio to Term Portfolio,
you will purchase shares of Term Portfolio on the day your exchange request
is received and accepted, and you will receive the NAV next determined that
day for Term Portfolio. You will redeem shares of Cash Portfolio at the NAV
determined at that time to pay for the purchase of Term Portfolio shares.
You will receive the income dividend declared by Cash Portfolio on the
business day the exchange request is accepted and will receive the income
dividend declared by Term Portfolio on the following business day. However,
if your exchange request is received and accepted on a Friday or prior to a
holiday, you will continue to earn dividends from Cash Portfolio until the
next business day.
(small solid bullet) When exchanging from Term Portfolio to Cash Portfolio,
shares of Term Portfolio will earn dividends through the date of
redemption; however, exchange orders from Term Portfolio received and
accepted on a Friday or prior to a holiday will continue to earn
dividends until the next business day.
(small solid bullet) Exchanges may have tax and/or accounting 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.
(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 related 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 related
SAI do not constitute an offer by the funds, FDC, or Sterling to sell or to
buy shares of the funds to any person to whom it is unlawful to make such
offer.
The 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,c Trustees and Officers
15a,b Description of the Trust
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b,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 Financial Statements for the fiscal year ended June 30, 1997 are
incorporated herein by reference
* Not applicable
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST:
CASH PORTFOLIO
TERM PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 19, 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
August 19, 1997) . Please retain this document for future reference. To
obtain a free additional copy of the Prospectus and Annual Report, please
call Sterling Capital Distributors, Inc. in Charlotte, North Carolina at
the appropriate number listed below:
Toll-free 1-800-222-3232
or locally 1-704-372-8798
T ABLE OF CONTENTS P AGE
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 Plans
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER (CASH PORTFOLIO ONLY)
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, Inc. (FIIOC)
CUSTODIAN
First Union National Bank of North Carolina (First Union)
NC-ptb-0897
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 (the 1940 Act)) of a fund.
However, except for the fundamental investment limitations listed 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 limitation (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 borr owings
exceed this limitation due to a decline in net assets, such borrowings will
be promptly (within 3 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 outstand ing .);
(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 assets 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
to 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 securityholders 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, " 3 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
g overnment, 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) pledge, mortgage, or hypothecate its assets, except that, to secure
borrowings permitted by limitation (5) below, it may pledge securities
hav ing a market value at the time of pledge not exceeding 33 1/3% of
the value of the fund's total assets;
( 3 ) make short sales of securities;
(4 ) pu rchase any securities on margin, except for such short-term
credits as are necessary for the clearance of transactions;
(5) 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 3 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);
( 6 ) 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;
( 7) 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;
(8) purc hase 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 State s) i f, as a
result: more than 25% of total fund assets would be invested in any one
industry;
(9) purchase or sell real estate, but this shall n ot prevent the
fund from investing in bonds or other obligations secured by real estate or
interests therein;
(1 0) pu rchase or sell commodities or commodity contracts;
(1 1) 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;
(12) write or purchase any put or call options or any combinations
thereof;
(1 3 ) purchase the securities of other investment companies or
investment trusts; or
(1 4 ) invest in oil, gas or other mineral exploration or development
programs.
Inves tment limitation (5) is construed in conformity with the 1940 Act;
accordingly, "3 days" means three business days, exclusive of Sund ays
and holidays.
THE FOLLOWING LIMITATION S 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.
(II) The fund does not currently intend to 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).
Investment limitation (ii) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
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;
short-term currency transactions, 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 or 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 may 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 remains 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 a fund 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 a fund.
MORTGAGE-BACKED SECURITIES. A fund may purchase mortgage-backed securities
issued by government and non-government entities such as banks, mortgage
lenders, or other financial institutions. A mortgage-backed security is 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 semiannual 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 a 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. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. 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.
RESTRICTION: A fund may invest in mortgage-backed securities as permitted
pursuant to North Carolina General Statute 159-30 (the Statute) and 20
North Carolina Administrative Code 3.0703 (the Code).
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.
RESTRICTION: Cash Portfolio may invest in securities as permitted pursuant
to the Statute and the Code.
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 in 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 Corporation (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 government securities are created
by separating the income and principal components of a U.S. Government
security and selling them separately. 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
U.S. Treasury security by a Federal Reserve Bank.
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 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.
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
management contract. On behalf of Cash Portfolio, FMR has granted
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 National Financial
Services Corporation (NFSC) and Fidelity Brokerage Services (FBS),
indirect 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 (FBSL). As of January 1995, FBSL was converted to an unlimited
liability company and assumed the name FBS.
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 NFSC 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 years ended June 1997 and 1996 , the portfolio
turnover rates were 232 % and 89%, respectively , for Term
Portfolio. 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 the fiscal years ended June 1997, 1996, and 1995, the funds paid
no brokerage commissions.
During the fiscal year ended June 1997, 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
For Cash Portfolio, Fidelity Service Company, Inc. (FSC) normally
determines the fund's net asset value per share (NAV) at 12:00 noon and
4:00 p.m. Eastern time. For Term Portfolio, FSC normally determines the
fund's NAV as of the close of the New York Stock Exchange (NYSE) (normally
4:00 p.m. Eastern time). The valuation of portfolio securities is
determined as of these times for the purpose of computing each fund's NAV.
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, the fund'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 the fund'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. The fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize the fund'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 the
fund'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.
TERM PORTFOLIO. 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.
Or, fixed-income securities and convertible securities may 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
fund may use various pricing services or discontinue the use of any pricing
service.
Short-term securities with remaining maturities of sixty days or less for
which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value may be 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. Term 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
interest 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.
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.
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.
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 the 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 NAVs, adjusted
NAVs, 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 tables show Cash Portfolio's 7-day
yield, Term Portfolio's 30-day yield and total returns for periods ended
June 30, 1997.
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Seven-d One Five Ten One Five Ten
ay Yield Year Years Years* Year Years Years*
Cash Portfolio 5.35% 5.25% 4.41% 5.81% 5.25% 24.10% 75.88%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Thirty-da One Five Ten One Five Ten
y Yield Year Years Years* Year Years Years*
Term Portfolio 5.59% 5.89% 4.64% 6.24% 5.89% 25.47% 83.13%
</TABLE>
* Note: If FMR had not reimbursed certain fund expense s during this
period, the fund's total returns would have been lower.
The following tables show the income and capital elements of each fund's
cumulative total return. The tables compare each fund's return to the
record of the Standard & Poor's 500 Index (S&P 500), the Dow Jones
Industrial Average (DJIA), and the cost of living, as measured by the
Consumer Price Index (CPI), over the same period. The CPI information is as
of the month-end closest to the initial investment date for each fund. The
S&P 500 and DJIA comparisons are provided to show how each fund's total
return compared to the record of a broad unmanaged index of common stocks
and a narrower set of stocks of major industrial companies, respectively,
over the same period. Because Cash Portfolio invests in short-term
fixed-income securities and Term Portfolio invests in fixed-income
securities, common stocks represent a different type of investment from the
funds. Common stocks generally offer greater growth potential than the
funds, but generally experience greater price volatility, which means
greater potential for loss. In addition, common stocks generally provide
lower income than fixed-income investments such as the funds. The S&P 500
and DJIA returns are based on the prices of unmanaged groups of stocks and,
unlike each fund's returns, do not include the effect of brokerage
commissions or other costs of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in each fund during the 10-year period ended June 30, 1997,
assuming all distributions were reinvested. The figures below reflect the
fluctuating interest rates and bond prices of the specified periods and
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in a fund today. Tax
consequences of different investments have not been factored into the
figures below.
During the 10-year period ended June 30, 199 7 , a hypothetical
$10,000 investment in Cash Portfolio would have grown to $17,588 .
CASH PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA CPI
Ended June Initial Reinvested Reinvested Value
30 $10,000 Dividend Capital Gain
Investment Distributions Distributions
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $ 10,000 $ 7,588 $ 0 $ 17,588 $ 39,269 $ 42,862 $
14,123
1996 $ 10,000 $ 6,711 $ 0 $ 16,711 $ 29,153 $ 30,967 $
13,806
1995 $ 10,000 $ 5,851 $ 0 $ 15,851 $ 23,138 $ 24,400 $
13,436
1994 $ 10,000 $ 5,056 $ 0 $ 15,056 $ 18,354 $ 18,911 $
13,040
1993 $ 10,000 $ 4,604 $ 0 $ 14,604 $ 18,099 $ 17,847 $
12,722
1992 $ 10,000 $ 4,172 $ 0 $ 14,172 $ 15,925 $ 16,351 $
12,352
1991 $ 10,000 $ 3,540 $ 0 $ 13,540 $ 14,041 $ 13,899 $
11,982
1990 $ 10,000 $ 2,627 $ 0 $ 12,627 $ 13,074 $ 13,267 $
11,445
1989 $ 10,000 $ 1,632 $ 0 $ 11,632 $ 11,223 $ 10,825 $
10,934
1988 $ 10,000 $ 688 $ 0 $ 10,688 $ 9,312 $ 9,160 $
10,396
</TABLE>
Explanatory Notes: With an initial investment of $10,000 Cash Portfolio on
July 1, 1987, the net amount invested in Cash Portfolio 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 $ 17,588 . If distributions
had not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period would
have amounted to $ 5,667 for dividends. Cash Portfolio did not
distribute any capital gains during the period.
During the 10-year period ended June 30, 199 7 , a hypothetical
$10,000 investment in Term Portfolio would have grown to $18,313 .
TERM PORTFOLIO INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA CPI
Ended
June Initial Reinvested Reinvested Value
30 $10,000 Dividend Capital Gain
Investment Distributions Distributions
1997 $ 9,738 $ 8,545 $ 30 $ 18,313 $ 39,269 $ 42,862 $ 14,123
1996 $ 9,909 $ 7,355 $ 31 $ 17,295 $ 29,153 $ 30,967 $ 13,806
1995 $ 10,000 $ 6,401 $ 31 $ 16,432 $ 23,138 $ 24,400 $ 13,436
1994 $ 9,939 $ 5,551 $ 31 $ 15,521 $ 18,354 $ 18,911 $ 13,040
1993 $ 10,030 $ 5,117 $ 0 $ 15,147 $ 18,099 $ 17,847 $ 12,722
1992 $ 10,000 $ 4,595 $ 0 $ 14,595 $ 15,925 $ 16,351 $ 12,352
1991 $ 9,909 $ 3,750 $ 0 $ 13,659 $ 14,041 $ 13,899 $ 11,982
1990 $ 9,818 $ 2,732 $ 0 $ 12,550 $ 13,074 $ 13,267 $ 11,445
1989 $ 9,869 $ 1,736 $ 0 $ 11,605 $ 11,223 $ 10,825 $ 10,934
1988 $ 9,909 $ 793 $ 0 $ 10,702 $ 9,312 $ 9,160 $ 10,396
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Term Portfolio
on July 1, 1987, the net amount invested in Term Portfolio 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 $ 18,726 . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 6,255 for dividends and $ 20 for capital gains distributions.
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. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are 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, the 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's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The
total return of a benchmark index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike a fund's
returns, however, the index returns do not reflect brokerage commissions,
transaction fees, or other costs of investing directly in the securities
included in the index.
Term Portfolio may compare its performance to that of the Salomon Brothers
1-Year U.S. Treasury Benchmark (On-The-Run), a one-security total return
index which at the beginning of every month selects the Treasury maturing
closest to but not beyond one year from that date.
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.
In advertising materials, 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.
A fund may present its fund number, QuotronTM 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, the fund 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 Term Portfolio'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 June 30, 1997, FMR advised over $28 billion in tax-free fund
assets, $94 billion in money market fund assets, $354 billion in equity
fund assets, $72 billion in international fund assets, and $27 billion in
Spartan fund assets. The funds may refe rence 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.
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 the fund.
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, 1997, Cash Portfolio had a capital loss carryforward
aggregating approximately $58,500. This loss carryforward, of which $53,000
and $5,500 will expire on June 30, 2002 and 2004, respectively, is
available to offset future capital gains.
As of June 30, 1997, Term Portfolio had a capital loss carryforward
aggregating approximately $694,300. This loss carryforward, of which
$244,200 and $450,100 will expire on June 30, 2003 and 2004, respectively,
is available to offset future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in a fund's portfolio. Because the income earned on
most U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from a fund
attributable to these securities will also be free from income taxes. The
exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. Government securities.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
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 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, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
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 its division, 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. The business address of each
Trustee and officer who is an "interested person" (as defined in the 1940
Act) is 82 Devonshire Street, Boston, Massachusetts 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.
Those Trustees who are "interested persons" by virtue of their affiliation
with the trust, FMR, or Sterling are indicated by an asterisk (*).
*WILLIAM L. BYRNES ( 75 ), PRESIDENT AND TRUSTEE, is a Director of
Fidelity International Limited and Vice Chairman, a Director and Managing
Director of FMR Corp.
JOHN DAVID "J.D." FOUST (69), TRUSTEE, is a financial consultant
(Robinson-Humphrey Company Inc., 1995). Prior to 1995, Mr. Foust was a
financial consultant to Donaldson, Lufkin, & Jenrette Securities
Corporation (1990-1995). Prior to 1990, he served as Deputy State Treasurer
and Secretary of the Local Government Commission (1977-1989).
*W. OLIN NISBET III ( 57 ), TRUSTEE AND VICE PRESIDENT, is Chairman
and 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 Chairman (1997) and a Trustee of Davidson
College (1987).
HELEN A. POWERS (72), TRUSTEE. 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 (now NationsBank). She served as a member of the North
Carolina Banking Commission (1981-1985). 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) and the North
Carolina Community Foundation (1997) , a director of Memorial Mission
Medical Center (1991) and the Memorial Mission Foundation (1993), for which
the New Women's Health Center in Asheville, N.C. has been designated the
HELEN POWERS WOMEN'S HEALTH CENTER.
BERTRAM H. WITHAM (78), TRUSTEE and CHAIRMAN OF THE BOARD, is Chairman and
Director of Preferred Lodging Systems (property management), Director and
member of Executive Committee of Bill Glass Ministries, and Trustee of
other funds advised by FMR. Previously, he served as a consultant
(Treasurer until his retirement in 1978) to IBM Corp.
ROBERT C. POZEN ( 50 ), SENIOR VICE PRESIDENT (1997), is
President and a Director of FMR (1997); and President and a Director of FMR
Texas Inc. (1997), Fidelity Management & Research (U.K.) Inc. (1997), and
Fidelity Management & Research (Far East) Inc. (1997). Previously, Mr.
Pozen served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp. He is a Trustee of other funds advised by FMR.
J. CALVIN RIVERS, JR. ( 51 ), VICE PRESIDENT (1992), is Director and
Executive Vice President of Sterling Capital and Director and President of
Sterling.
FRED L. HENNING, JR. (58), VICE PRESIDENT (199 7 ), is Vice President
of Fidelity's fixed-income funds (1995) and Senior Vice President of FMR.
CURTIS HOLLINGSWORTH (40), VICE PRESIDENT of Term Por tfolio (1995),
i s an employee of FMR.
DWIGHT D. CHURCHILL (43), VICE PRESIDENT of Term Portfolio
(1997), and of other funds advised by FMR. He joined Fidelity in 1993.
BURNELL R. STEHMAN (65), VICE PRESIDENT of Cash Portfolio (1991), is Vice
President of FMR Texas (1989) and of other funds advised by FMR.
BOYCE GREER (41), VICE PRESIDENT of Cash Portfolio (1997), and of other
funds advised by FMR. He joined Fidelity in 1991.
ARTHUR S. LORING (49), SECRETARY, is Senior Vice President (1993) and
General Counsel of FMR, Vice President - Legal of FMR Corp., and
Vice President and Clerk of FDC.
RICHARD A. SILVER (50), TREASURER (199 7 ), is Treasurer of the
Fidelity funds and is an employee of FMR (199 7 ). Before joining
FMR, Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc. (1996-1997).
Prior to 1996, Mr. Silver was Senior Vice President and Chief Financial
Officer at The Colonial Group, Inc. Mr. Silver also served as Chairman of
the Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
THOMAS D. MAHER (52), ASSISTANT VICE PRESIDENT of Cash Portfolio, is
Assistant Vice President of Fidelity's municipal bond funds (1996) and of
Fidelity's money market funds and Vice President and Associate General
Counsel of FMR Texas Inc.
JOHN H. COSTELLO (50), ASSISTANT TREASURER (1995), is an employee of FMR.
LEONARD M. RUSH (51), ASSISTANT TREASURER (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
THOMAS J. SIMPSON (39), ASSISTANT TREASURER of Cash Portfolio
(1996) , is Assistant Treasurer of Fidelity's municipal bond funds
(1996) and of Fidelity's money market funds (1996) and an employee of FMR
(1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund
Controller of Liberty Investment Services (1987-1995).
DAVID H. POTEL ( 40 ), ASSISTANT SECRETARY, is an employee of FMR
Corp.
The following table sets forth information describing the compensation of
each trustee of each fund for his or her services for the fiscal year ended
June 30, 1997.
COMPENSATION TABLE
Trustees Aggregate Aggregate Total
Compensation Compensation Compensation
from from from the Fund
Cash Portfolio* Term Portfolio* Complex**
William L. Byrnes+ $ 0 $ 0 $ 0
John David Foust $ 25,179 $ 821 $ 26,000
W. Olin Nisbet III+ $ 0 $ 0 $ 0
Helen A. Powers $ 25,212 $ 788 $ 26,000
Bertram H. Witham $ 25,212 $ 788 $ 50,000
* Includes compensation paid to the Trustees by each fund. For the fiscal
year ended June 30, 1997 , certain of the non-interested trustees'
aggregate compensation from a fund includes accrued deferred compensation
as follows: Helen A. Powers, $ 26,000 and Bertram H. Witham, $26,000.
The Trustees do not receive any pension or retirement benefits from the
funds as compensation for their services as trustees of the funds.
** Information is for the calendar year ended December 31, 1996 for
235 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 and modified
in November 1995 and November 1996 by the other open-end investment
companies in the Fund Complex (the "other Open-End Funds"), Mr. Witham may
receive payments from the "other Open-End Funds" during his lifetime based
on his basic trustee fees and length of service. The obligation of the
"other Open-End Funds" to make such payments is neither secured nor funded.
Mr. Witham became eligible to participate in the program at the end of the
calendar year in which he reached age 72. During the year ended June 30,
1997, he received $50,000 in payments under that retirement program.
+ 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.
The non-interested Trustees may elect to defer receipt of all or a
portion of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Interest is accrued on amounts deferred under
the Plan. A fund's obligation to make payments of amounts accrued under the
Plan is a general unsecured obligation of the fund payable solely from the
fund's general assets and property. Deferral of Trustees' fees in
accordance with the Plan will not obligate any fund to retain the services
of any Trustee or to pay any particular level of compensation to any
Trustee. The Plan is administered under the direction of, and may be
interpreted, amended or supplemented by, the Trustees acting by majority
vote (excluding any Trustee whose benefit is the subject of such vote.)
The Trustees and officers of each fund are not eligible investors in the
funds. As of June 30, 1997, therefore, the Trustees and officers of each
fund did not own any of the outstanding shares of the funds.
As of June 30, 1997, no shareholder owned of record or beneficially 5% or
more of Cash Portfolio's outstanding shares.
As of June 30, 1997, the following owned of record or beneficially 5% or
more of Term Portfolio's outstanding shares: City of Charlotte, General
Fund, Charlotte, NC (11.3%); City of Burlington, Water and Sewer Account,
Burlington, NC (7.9%); City of Elizabeth City, P.O. Box 347, Elizabeth
City, NC (5.9%); Alamance County, 124 West Elm St., Graham, NC (5.7%); Wake
County, P.O. Box 550, Raleigh, NC (5.7%); Northern Hospital of Surry
County, Dobson, NC (5.0%).
MANAGEMENT CONTRACTS
FMR is manager of Cash Portfolio and Term Portfolio pursuant to
management contracts dated January 22, 1996, which were approved by
shareholders on December 12, 1990 and amended on January 22, 1996.
MANAGEMENT SERVICES. Each fund employs FMR to furnish
investment advisory and other services. Under the terms of 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
the fund in accordance with its investment objective, policies, and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the 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
securities laws and making necessary filings under state securities laws;
developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
MANAGEMENT-RELATED EXPENSES. Under the terms of each fund's
management contract, each fund is responsible for payment of all expenses
other than those specifically payable by FMR. Expenses payable by FMR
include expenses for typesetting, printing, and mailing proxy materials to
shareholders and all other expenses of proxy solicitations and shareholder
meetings, legal expenses, fees of the custodian, auditor and interested
Trustees, each fund's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares
under federal securities laws and making necessary filings under state
securities laws. Each fund's management contract further provides that FMR
will pay for typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer agent
bears the costs of providing these services to existing shareholders. FMR
also pays all fees associated with transfer agent, dividend disbursing, and
shareholder services and pricing and b ookkeeping services.
Each fund pays the following expenses: fees and expenses of the
non-interested Trustees, interest, taxes, brokerage commissions (if any),
and such nonrecurring expenses as may arise, includi ng costs of any
litigation to which a fund may be a party, and any obligation it may have
to indemnify its officers and Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under each management
contract, each fund pays FMR a monthly management fee at the annual rate of
0.365% of its average net assets through $400 million; 0.360% of its
average net assets in excess of $400 million through $800 million; 0.355%
of its average net assets in excess of $800 million through $1.2 billion;
0.350% of its average net assets in excess of $1.2 billion through $1.6
billion; 0.340% of its average net assets in excess of $1.6 billion through
$2.0 billion; and 0.330% of its average net assets in excess of $2.0
billion, throughout the month.
Effective January 1, 1998, each fund's annual management fee rate will
be 0.350% of average net assets through $1.0 billion; 0.320% of average net
assets in excess of $1.0 billion through $2.0 billion; and 0.290% of
average net assets in excess of $2.0 billion.
The management fee paid to FMR by each fund is reduced by an amount equal
to the fees and expenses paid by the fund to the non-interested Trustees.
The following table shows the amount of management fees paid by each fund
to FMR for the past three fiscal years, and the amount of credits reducing
management fees for each fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended Amount of Credits Management Fees
June 30 Reducing Management Paid to FMR
Fees
Cash Portfolio 1997 $ 1,021 $ 7,210,106 *
1996 -- $ 6,553,221 *
1995 ** -- $ 5,555,766 *
Term Portfolio 1997 $ 61 $ 239,396 *
1996 -- $ 238,697 *
1995 ** -- $ 261,780 *
</TABLE>
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
** Prior to November 1, 1995, the management fees were based on 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. Each fund's
shareholders approved a revised management fee schedule on January 22,
1996, which became effective on February 1, 1996. From November 1, 1995 to
February 1, 1996, FMR voluntarily implemented this revised management fee
schedule, which provides for lower management fee rates as each fund's
assets increase.
FMR may, from time to time, voluntarily reimburse all or a portion of
a 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 a fund's total returns
and yield, and repayment of the reimbursement by a 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 pursuant to which FMR Texas has
primary responsibility for providing portfolio investment management
services to the fund .
Under the terms of 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, if any ,
made by FMR pursuant to each fund's 12b-1 plan. 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 the fiscal years ended June 30, 1997,
1996, and 1995, FMR paid FMR Texas fees of $1,964,861,
$ 1,803,612 and $1,597,195, respectively.
CONTRACTS WITH FMR AFFILIATES
Each fund has entered into a transfer agent agreement with FIIOC, an
affiliate of FMR. Under the terms of the agreements, FIIOC performs
transfer agency, dividend disbursing, and shareholder services for each
fund.
For providing transfer agency services, FIIOC receives an annual account
fee and an asset-based fee each based on account size and fund type for
each retail account and certain institutional accounts. With respect to
certain institutional retirement accounts, FIIOC receives an annual account
fee and an asset-based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate changes.
FIIOC pays out-of-pocket expenses associated with transfer agent services.
FIIOC bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to existing shareholders, with the exception of proxy
statements.
Each fund has also entered into a service agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC calculates
the NAV and dividends for each fund, and maintains each fund's portfolio
and general accounting records. For providing pricing and
bookkeeping services, FSC receives monthly a fee based on each
fund's average daily net assets throughout the month .
FMR bears the cost of transfer, dividend disbursing, shareholder servicing
and pricing and bookkeeping services under the terms of its
management contract with each fund.
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation 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 agreements call 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 NAV. Promotional and
administrative expenses in connection with the offer and sale of shares are
paid by FMR. FDC in turn 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,
NC, which is an affiliate of United Asset Management Corporation, Boston,
MA . Under the terms of the agreement, Sterling has assumed
from FDC primary responsibility for the distribution of each fund's
shares.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of
each fund (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 the 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.
Under each Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of
its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue to
compensate FDC for services in connection with the distribution of shares,
including payments made to third parties that assist in selling shares of
the fund, or to third parties that render shareholder support
services.
Pursuant to the Plans, FMR, from its management fee, pays Sterling,
through FDC, a monthly distribution fee at an annual rate according to the
following schedule: 0.160% of average net assets through $1.6 billion;
0.155% of average net assets in excess of $1.6 billion through $2.0
billion; and 0.150% of average net assets in excess of $2.0 billion.
Effective January 1, 1998, FMR will pay Sterling, through FDC, monthly
according to the following schedule: 0.150% of average net assets through
$1.0 billion; 0.150% of average net assets in excess of $1.0 billion
through $2.0 billion; and 0.140% of average net assets in excess of $2.0
billion.
For the fiscal year ended June 30, 1997, FMR paid Sterling, through FDC,
$3,280,384 on behalf of Cash Portfolio and $106,505 on behalf of Term
Portfolio.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that each
Plan does not authorize payments by the fund other than those made to FMR
under its management contract with the fund. To the extent that each Plan
gives FMR and FDC greater flexibility in connection with the distribution
of fund shares, 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
and amended on January 22, 1996.
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 regulatory 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 other 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 trust. 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 trust 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 trust 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 trust. Expenses with respect to the trust 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 trust, 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 trust, 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 trust is an entity of the type
commonly known as "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 trust 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 trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any shareholder
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 trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose of
voting on removal of one or more Trustees. The trust 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 trust or the fund. If not so terminated, the trust and the funds will
continue indefinitely.
CUSTODIAN. First Union National Bank of North Carolina, Two First Union
Center, Charlotte, North Carolina, is custodian of the assets of the funds.
The custodian is responsible for the safekeeping of a fund's assets and the
appointment of any subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of a fund or in
deciding which securities are purchased or sold by a fund. However, a fund
may invest in obligations of the custodian and may purchase securities from
or sell securities to the custodian. The Bank of New York and The Chase
Manhattan Bank, each headquartered in New York, also may serve as special
purpose custodians of certain assets in connection with 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. Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts (Term Portfolio) and 1999 Bryan Street, Dallas, Texas (Cash
Portfolio) serves as the trust's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended June 30, 1997, and report of the auditor, are included in the
funds' Annual Report, which is attached to the funds' prospectus. The
funds' financial statements, including the financial highlights, and report
of the auditor are incorporated herein by reference. For a free additional
copy of the funds' Annual Report, contact Sterling toll-free at
1-800-222-3232 or locally at 1-704-372-8798, One First Union Square,
Charlotte, NC 28202.
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 RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for short-term municipal obligations will be designated
Moody's Investment Grade ("MIG"). A two-component rating is assigned to
variable rate demand obligations. The first component represents an
evaluation of the degree of risk associated with scheduled principal
repayment and interest payments and is designated by a long-term rating,
e.g., "Aaa" or "A." The second component represents an evaluation of the
degree of risk associated with the demand feature and is designated
"VMIG."
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.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL NOTES
Municipal notes maturing in three years or less will likely receive a
"note" rating symbol. Notes that have a put option or demand feature are
assigned a dual rating. The first rating addresses the likelihood of
repayment of principal and payment of interest due and for short-term
obligations is designated by a note rating symbol. The second rating
addresses only the demand feature, and is designated by a commercial paper
rating symbol, e.g., "A-1" or "A-2."
SP-1 - Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest, with
some vulnerability to adverse financial and economic changes over the term
of the notes.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for long-term municipal obligations fall within nine
categories. They range from Aaa (highest quality) to C (lowest quality).
Those bonds within the Aa through B categories that Moody's believes
possess the strongest credit attributes within those categories are
designated by the symbol "1."
AAA - Bonds that are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong position
of such issues.
AA - Bonds that are rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risks appear somewhat larger than the Aaa securities.
A - Bonds that 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.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL DEBT
Municipal debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB" through
"D"). While speculative grade debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major exposures to adverse conditions. Ratings from AA through CCC may be
modified by the addition of a plus sign (+) or minus sign (-) to show
relative standing within the major rating categories.
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 highest 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 RATINGS OF COMMERCIAL
PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a
superior ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a
strong ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be assigned a
Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements and Financial Highlights, included in the
Annual Report, for Cash Portfolio for the fiscal year ended June 30, 1997
are incorporated by reference into the fund's Statement of Additional
Information and were filed on August 13, 1997 for The North Carolina
Capital Management Trust (File No. 811-3455) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(2) Financial Statements and Financial Highlights, included in the
Annual Report, for Term Portfolio for the fiscal year ended June 30, 1997
are incorporated by reference into the fund's Statement of Additional
Information and were filed on August 13, 1997 for The North Carolina
Capital Management Trust (File No. 811-3455) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(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 Capital Management
Trust: Term Portfolio and Fidelity Management & Research Company dated
January 22, 1996 was electronically filed and is incorporated herein by
reference as Exhibit 5(a) to Post-Effective Amendment No. 33.
(b) Management Contract between The North Carolina Capital Management
Trust: Cash Portfolio and Fidelity Management & Research Company dated
January 22, 1996 was electronically filed and is incorporated herein by
reference as Exhibit 5(b) to Post-Effective Amendment No. 33.
(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 Capital
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated April 30, 1997 is electronically filed herein as Exhibit 6(a).
(b) General Distribution Agreement between The North Carolina Capital
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated April 30, 1997 is electronically filed herein as Exhibit 6(b).
(7) Non-interested Trustees' Deferred Compensation Plan dated June 15,
1992 for The North Carolina Cash Management Trust (currently known as The
North Carolina Capital Management Trust) is electronically filed herein as
Exhibit 7.
(8) (a) Custodian Agreement, Appendix A, Appendix B, and Appendix C
between Registrant and First Union National Bank of North Carolina dated
December 6, 1991 was electronically filed and is incorporated herein by
reference as Exhibit 8(a) to Post-Effective Amendment No. 30.
(b) Subcustodian Agreement, Appendix A, Appendix B, and Appendix C
between First Union National Bank of North Carolina and The Bank of New
York on behalf of the Registrant dated December 6, 1991 was electronically
filed and is incorporated herein by reference as Exhibit 8(b) to
Post-Effective Amendment No. 33.
(c) Fidelity Group Repo Custodian Agreement among The Bank of New York,
J. P. Morgan Securities, Inc., and the Registrant, dated February 12, 1996,
is incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(d) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
The Bank of New York and the Registrant, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(e) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(e) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November 13,
1995, is incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(f) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
Chemical Bank and the Registrant, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(g) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(g) Joint Trading Account Custody Agreement between The Bank of New York
and the Registrant, dated May 11, 1995, is incorporated herein by reference
to Exhibit 8(h) of Fidelity Institutional Cash Portfolios' (File No.
2-74808) Post-Effective Amendment No. 31.
(h) First Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and the Registrant, dated July 14, 1995, is
incorporated herein by reference to Exhibit 8(i) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(9) Not applicable.
(10) Not applicable.
(11) Consent of Coopers & Lybrand L.L.P. is electronically filed herein
as Exhibit 11.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) (a) Distribution and Service Plan between The North Carolina Capital
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated January 22, 1996 was electronically filed and is incorporated herein
by reference as Exhibit 15(a) to Post-Effective Amendment No. 33.
(b) Distribution and Service Plan between The North Carolina Capital
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated January 22, 1996 was electronically filed and is incorporated herein
by reference as Exhibit 15(b) to Post-Effective Amendment No. 33.
(c) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., on behalf
of Term Portfolio, dated January 22, 1996 was electronically filed and is
incorporated herein by reference as Exhibit 15(c) to Post-Effective
Amendment No. 33.
(d) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., on behalf
of Cash Portfolio, dated January 22, 1996 was electronically filed and is
incorporated herein by reference as Exhibit 15(d) to Post-Effective
Amendment No. 33.
(e) Amendment to Distribution and Service Plan between The North
Carolina Capital Management Trust: Term Portfolio and Fidelity Distributors
Corporation effective January 1, 1998 is electronically filed herein as
Exhibit 15(e).
(f) Amendment to Distribution and Service Plan between The North
Carolina Capital Management Trust: Cash Portfolio and Fidelity Distributors
Corporation effective January 1, 1998 is electronically filed herein as
Exhibit 15(f).
(g) Amendment to Distribution and Service Agent Agreement between
Fidelity Distributors Corporation and Sterling Capital Distributors, Inc.,
on behalf of Term Portfolio, effective January 1, 1998 is electronically
filed herein as Exhibit 15(g).
(h) Amendment to Distribution and Service Agent Agreement between
Fidelity Distributors Corporation and Sterling Capital Distributors, Inc.,
on behalf of Cash Portfolio, effective January 1, 1998 is electronically
filed herein as Exhibit 15(h).
(16) (a) Schedule and data points for 7-day yield for Cash Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(a) to Post-Effective Amendment No 31.
(b) Schedule and data points for 30-day yield for Term Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(b) to Post-Effective Amendment No. 30.
(c) Schedule and data points for total return for Term Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(c) to Post-Effective Amendment No. 30.
(d) Schedule and data points for adjusted NAV for Term Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(d) to Post-Effective Amendment No. 30.
(17) Financial Data Schedules for Cash Portfolio and Term Portfolio are
electronically filed herein as Exhibit 17.
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
July 31, 1997
Title of Class Number of Record Holders
Cash Portfolio 1637
Term Portfolio 69
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.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed
to by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
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 Board of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the
Board and Director of FMR, FMR Corp., FMR Texas
Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Chairman of the Board and Representative Director of
Fidelity Investments Japan Limited; President and
Trustee of funds advised by FMR.
Robert C. Pozen President and Director of FMR; President and Director
of FMR Texas Inc., FMR (U.K.) Inc., and FMR (Far
East) Inc.; General Counsel, Managing Director, and
Senior Vice President of FMR Corp.
J. Gary Burkhead President of FIIS; President and Director of FMR,
FMR Texas Inc., FMR (U.K.) Inc., and FMR (Far
East) Inc.; Managing Director of FMR Corp.; Senior
Vice President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board of FMR and Director of
FMR.
Marta Amieva Vice President of FMR.
John Carlson Vice President of FMR.
Dwight D. Churchill Senior Vice President of FMR.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR
William Danoff Senior Vice President of FMR and of a fund advised by
FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Senior Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
Bruce Herring Vice President of FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Senior Vice President of FMR and of a fund advised by
FMR; Associate Director and Senior Vice President of
Equity funds advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by
FMR; Vice President of High Income funds advised by
FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Mark G. Lohr Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Charles Mangum Vice President of FMR.
Kevin McCarey Vice President of FMR.
Diane McLaughlin Vice President of FMR.
Neal P. Miller Vice President of FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Scott Orr Vice President of FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Kennedy P. Richardson Vice President of FMR.
Mark Rzepczynski Vice President of FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Carol Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by
FMR; Senior Vice President and Director of
Operations and Compliance of FMR (U.K.) Inc.
Thomas Sprague Vice President of FMR.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Scott Stewart Vice President of FMR.
Cythia Straus Vice President of FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President 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.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
Texas, FMR, FMR Corp., FMR (Far East) Inc.,
and FMR (U.K.) Inc.; Chairman of the Board of
FMR; President and Chief Executive Officer of
FMR Corp.; Chairman of the Board and
Representative Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.
J. Gary Burkhead President of FIIS; President and Director of
FMR Texas, FMR, FMR (Far East) Inc., and
FMR (U.K.) Inc.; Managing Director of FMR
Corp.; Senior Vice President and Trustee of
funds advised by FMR.
Robert C. Pozen President and Director of FMR; President and
Director of FMR Texas Inc., FMR (U.K.) Inc.,
and FMR (Far East) Inc.; General Counsel,
Managing Director, and Senior Vice President
of FMR Corp.
Robert H. Auld Vice President of FMR Texas.
Robert K. Duby Vice President of FMR Texas and of funds
advised by FMR.
Robert Litterst Vice President of FMR Texas and of funds
advised by FMR.
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of Money Market funds advised by
FMR.
Scott A. Orr Vice President of FMR Texas and 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 Zenoble Vice President of FMR Texas and of Money
Market funds advised by FMR.
Mark G. Lohr Treasurer of FMR Texas, FMR (U.K.) Inc.,
FMR (Far East) Inc., and FMR; Vice President
of FMR.
Stephen G. Manning Assistant Treasurer of FMR Texas, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR; Vice
President and Treasurer of FMR Corp.
Jay Freedman Secretary of FMR Texas; Clerk of FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Corp.;
Assistant Clerk of FMR.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
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
Company, Inc., 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 certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 36 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 13th day
of August 1997.
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.
<TABLE>
<CAPTION>
<S> <C> <C>
(Signature) (Title) (Date)
/s/ Richard A. Silver Treasurer August 13, 1997
Richard A. Silver
/s/ William L. Byrnes* Trustee August 13, 1997
William L. Byrnes
/s/ John David Foust* Trustee August 13, 1997
John David Foust
/s/ W. Olin Nisbet III* Trustee August 13, 1997
W. Olin Nisbet III
/s/ Helen A. Powers** Trustee August 13, 1997
Helen A. Powers
/s/ Bertram H. Witham* Trustee August 13, 1997
Bertram H. Witham
</TABLE>
+ 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
Exhibit 6(a)
GENERAL DISTRIBUTION AGREEMENT
with
FIDELITY DISTRIBUTORS CORPORATION
Required authorizations and approvals having been obtained, The North
Carolina Capital Management Trust, a Massachusetts business trust which may
issue one or more series of beneficial interest ("Issuer"), with respect to
shares of Cash Portfolio, a series of the Issuer, and Fidelity Distributors
Corporation, a Massachusetts corporation having its principal place of
business in Boston, Massachusetts ("Distributors"), hereby consent pursuant
to the existing General Distribution Agreement dated April 1, 1987 and
amended on January 1, 1988, to an amendment in its entirety of said
Agreement as of April 30, 1997, as set forth below.
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse Distributors for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason
of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Issuer to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against
Distributors or any person indemnified unless Distributors or person, as
the case may be, shall have notified the Issuer in writing of the claim
within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon Distributors or any such person (or after Distributors or such
person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to Distributors or any person
against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to Distributors or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel,
Distributors, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse Distributors, officers or
directors or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
The Issuer agrees to notify Distributors promptly of the commencement of
any litigation or proceedings against it or any of its officers or trustees
in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until April 30,
1998 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust of the Issuer and agrees that the obligations assumed by the Issuer
under this contract shall be limited in all cases to the Issuer and its
assets. Distributors shall not seek satisfaction of any such obligation
from the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the Trustees or
any individual Trustee of the Issuer. Distributors understands that the
rights and obligations of each series of shares of the Issuer under the
Issuer's Declaration of Trust are separate and distinct from those of any
and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf, and
its corporate seal affixed, by one of its officers duly authorized, as of
the day and year first above written.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
on behalf of CASH PORTFOLIO
By: /s/ J. Gary Burkhead
Name: J. Gary Burkhead
Title: Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Arthur S. Loring
Name: Arthur S. Loring
Title: Vice President and Clerk
Exhibit 6(b)
GENERAL DISTRIBUTION AGREEMENT
with
FIDELITY DISTRIBUTORS CORPORATION
Required authorizations and approvals having been obtained, The North
Carolina Capital Management Trust, a Massachusetts business trust which may
issue one or more series of beneficial interest ("Issuer"), with respect to
shares of Term Portfolio, a series of the Issuer, and Fidelity Distributors
Corporation, a Massachusetts corporation having its principal place of
business in Boston, Massachusetts ("Distributors"), hereby consent pursuant
to the existing General Distribution Agreement dated April 1, 1987 and
amended on January 1, 1988, to an amendment in its entirety of said
Agreement as of April 30, 1997, as set forth below.
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse Distributors for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason
of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Issuer to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against
Distributors or any person indemnified unless Distributors or person, as
the case may be, shall have notified the Issuer in writing of the claim
within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon Distributors or any such person (or after Distributors or such
person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to Distributors or any person
against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to Distributors or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel,
Distributors, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse Distributors, officers or
directors or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
The Issuer agrees to notify Distributors promptly of the commencement of
any litigation or proceedings against it or any of its officers or trustees
in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until April 30,
1998 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust of the Issuer and agrees that the obligations assumed by the Issuer
under this contract shall be limited in all cases to the Issuer and its
assets. Distributors shall not seek satisfaction of any such obligation
from the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the Trustees or
any individual Trustee of the Issuer. Distributors understands that the
rights and obligations of each series of shares of the Issuer under the
Issuer's Declaration of Trust are separate and distinct from those of any
and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf, and
its corporate seal affixed, by one of its officers duly authorized, as of
the day and year first above written.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST
on behalf of TERM PORTFOLIO
By: /s/ J. Gary Burkhead
Name: J. Gary Burkhead
Title: Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Arthur S. Loring
Name: Arthur S. Loring
Title: Vice President and Clerk
Exhibit 7
June 15, 1992
The North Carolina Cash Management Trust
Deferred Compensation Plan
The North Carolina Cash Management Trust (the "Fund") has adopted this
Trustees' Deferred Compensation Plan (this "Plan") for the Trustees of the
Fund who are not "interested persons" of the Fund as such term is defined
in Section 2(a)(19) of the Investment Company Act of 1940 (the "Trustees").
1. Each Trustee may elect, prior to January 1 of each year, to defer
receipt of all or any portion of his or her retainer and meeting fees (the
"Trustees Fees") for such year.
2. Any Trustees Fees so deferred shall be credited at the time when they
would otherwise have been payable to an account on the books of the Fund to
be established for the electing Trustee. Interest on the Trustee's account
shall be compounded on the first day of each quarter, based upon the
balance of the Trustee's account as of the first day of the preceding
quarter. The interest rate used shall be equal to the prevailing rate
applicable to 90-day United States Treasury Bills at the beginning of the
preceding quarter.
3. Commencing as of the first day of the calendar quarter beginning after
the termination of the service of the electing Trustee, the amount in such
Trustee's account shall be paid out to him or her in equal installments.
The number of such installments shall equal the number of quarters in
respect of which such Trustees Fees were deferred. The amount of each
installment shall be equal to the product of (i) the balance of the
Trustee's account immediately prior to the payment of such installment and
(ii) a fraction, the numerator of which is one and the denominator of which
is the total number of installments remaining to be paid at that time.
Alternate payment schedules (including lump-sum payments) may be authorized
by majority vote of the Trustees (excluding the Trustee whose benefit is
the subject of such decision.
4. In the event of the Trustee's death, amounts payable to him or her
under this Plan shall be payable instead to his or her designated
beneficiary or otherwise in accordance with applicable law. The Trustee's
right to receive payments shall not otherwise be transferable. No
certificates will be issued in respect of interests in the Plan.
5. The Fund's obligation to make payments of amounts accrued under this
Plan is a general unsecured obligation of the Fund payable solely from the
Fund's general assets and property. No shares of any of the Fund's
portfolios shall be purchased for the Trustee's account, nor shall any
special fund or separate account be established for such amounts.
6. This Plan shall not obligate the Fund to retain any Trustee as a
Trustee, nor obligate the Fund to pay any (or any particular level of)
Trustee's Fees to any Trustee.
7. This Plan shall be administered under the direction of, and may be
interpreted, amended or supplemented by, the Trustees acting by majority
vote (excluding any Trustee whose benefit is the subject of such vote).
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 36
to the Registration Statement on Form N-1A of The North Carolina Capital
Management Trust: Cash Portfolio and Term Portfolio, of our report dated
August 12, 1997 on the financial statements and financial highlights
included in the June 30, 1997 Annual Report to Shareholders of Cash
Portfolio and Term Portfolio.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
August 13, 1997
Exhibit 15(e)
Amendment to Distribution and Service Plan
Whereas a Distribution and Service Plan (the "Plan") has been made as of
the 22nd day of January, 1996, by and between The North Carolina Capital
Management Trust on behalf of Term Portfolio (the "Portfolio"), Fidelity
Management & Research Company (the "Adviser"), and Fidelity Distributors
Corporation (the "Distributor").
Now, therefore, representatives of the Portfolio, the Adviser, and the
Distributor have entered into negotiations and have agreed upon the
following amended terms with reference to the provisions of Paragraph 5:
"5. The Adviser agrees to pay the Distributor as soon as practicable after
the end of each month and the Distributor agrees to accept, as full
compensation for all services and facilities to be provided hereunder, a
fee based on the monthly average of the net assets of the Portfolio
determined as of the close of business on each business day throughout the
month. The fee shall be payable by the Adviser from the Management Fee paid
to the Adviser by the Portfolio pursuant to the Management Contract dated
January 22, 1996 between the Adviser and the Portfolio. The fee due the
Distributor shall be payable at an annual rate determined on a cumulative
basis pursuant to the following schedule:
The Annual Fee Rate Is
On the first $1.0 billion of average daily net assets 0.150%
On average daily net assets in excess of $1.0 billion 0.150%
through $2.0 billion
On average daily net assets in excess of $2.0 billion 0.140%
All parties to this Plan understand that the agreement between the
Distributor and its agent, Sterling, will provide for a full pass-through
to Sterling of the fees payable hereunder, such payments by the Distributor
to Sterling to be made in consideration of Sterling's responsibilities
under its agreement with the Distributor. The Distributor, in consultation
with Sterling, reserves the right to reduce or waive the distribution fee
from time to time.
If this Plan becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for the part
of the month the Plan is in effect shall be prorated based on the number of
business days during such month that this Plan was in effect."
The terms of this amendment shall be effective as of January 1, 1998.
Except as expressly set forth in Paragraph 5 hereof, all terms and
conditions of the Plan shall remain unchanged and in full force and effect.
Exhibit 15(f)
Amendment to Distribution and Service Plan
Whereas a Distribution and Service Plan (the "Plan") has been made as of
the 22nd day of January, 1996, by and between The North Carolina Capital
Management Trust on behalf of Cash Portfolio (the "Portfolio"), Fidelity
Management & Research Company (the "Adviser"), and Fidelity Distributors
Corporation (the "Distributor").
Now, therefore, representatives of the Portfolio, the Adviser, and the
Distributor have entered into negotiations and have agreed upon the
following amended terms with reference to the provisions of Paragraph 5:
"5. The Adviser agrees to pay the Distributor as soon as practicable after
the end of each month and the Distributor agrees to accept, as full
compensation for all services and facilities to be provided hereunder, a
fee based on the monthly average of the net assets of the Portfolio
determined as of the close of business on each business day throughout the
month. The fee shall be payable by the Adviser from the Management Fee paid
to the Adviser by the Portfolio pursuant to the Management Contract dated
January 22, 1996 between the Adviser and the Portfolio. The fee due the
Distributor shall be payable at an annual rate determined on a cumulative
basis pursuant to the following schedule:
The Annual Fee Rate Is
On the first $1.0 billion of average daily net assets 0.150%
On average daily net assets in excess of $1.0 billion 0.150%
through $2.0 billion
On average daily net assets in excess of $2.0 billion 0.140%
All parties to this Plan understand that the agreement between the
Distributor and its agent, Sterling, will provide for a full pass-through
to Sterling of the fees payable hereunder, such payments by the Distributor
to Sterling to be made in consideration of Sterling's responsibilities
under its agreement with the Distributor. The Distributor, in consultation
with Sterling, reserves the right to reduce or waive the distribution fee
from time to time.
If this Plan becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for the part
of the month the Plan is in effect shall be prorated based on the number of
business days during such month that this Plan was in effect."
The terms of this amendment shall be effective as of January 1, 1998.
Except as expressly set forth in Paragraph 5 hereof, all terms and
conditions of the Plan shall remain unchanged and in full force and effect.
Exhibit 15(g)
Amendment to Distribution and Service Agent Agreement
Whereas Fidelity Distributors Corporation ("Distributors") and Sterling
Capital Distributors, Inc. ("Sterling") have entered into a Distribution
and Service Agent Agreement (the "Agreement") dated as of January 22, 1996,
with respect to the shares of The North Carolina Capital Management Trust:
Term Portfolio (the "Portfolio").
Now, therefore, representatives of Distributors and Sterling have entered
into negotiations and have agreed upon the following amended terms with
reference to the provisions of Paragraph 5:
"5. Distributors agrees to pay Sterling as soon as practicable after the
end of each month and Sterling agrees to accept, as full compensation for
all services and facilities to be provided hereunder, a fee based on the
monthly average of the net assets of the Portfolio determined as of the
close of business on each business day throughout the month. The fee shall
be payable at an annual rate determined on a cumulative basis pursuant to
the following schedule:
The Annual Fee Rate Is
On the first $1.0 billion of average daily net assets 0.150%
On average daily net assets in excess of $1.0 billion 0.150%
through $2.0 billion
On average daily net assets in excess of $2.0 billion 0.140%
Sterling understands that Distributors, with the consent of Sterling, has
reserved the right to reduce or waive the distribution fee from time to
time.
If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for the
part of the month this Agreement is in effect shall be prorated based on
the number of business days during such month that this Agreement was in
effect."
The terms of this amendment shall be effective as of January 1, 1998.
Except as expressly set forth in Paragraph 5 hereof, all terms and
conditions of the Agreement shall remain unchanged and in full force and
effect.
Agreement with the terms of Paragraph 5 hereof is signified by Sterling
and Distributors by authorized signature below.
Sterling Capital Distributors, Inc.
By: /s/ J. Calvin Rivers, Jr.
Name: J. Calvin Rivers, Jr.
Title: President
Fidelity Distributors Corporation
By: /s/ Arthur S. Loring
Name: Arthur S. Loring
Title: Vice President and Clerk
Exhibit 15(h)
Amendment to Distribution and Service Agent Agreement
Whereas Fidelity Distributors Corporation ("Distributors") and Sterling
Capital Distributors, Inc. ("Sterling") have entered into a Distribution
and Service Agent Agreement (the "Agreement") dated as of January 22, 1996,
with respect to the shares of The North Carolina Capital Management Trust:
Cash Portfolio (the "Portfolio").
Now, therefore, representatives of Distributors and Sterling have entered
into negotiations and have agreed upon the following amended terms with
reference to the provisions of Paragraph 5:
"5. Distributors agrees to pay Sterling as soon as practicable after the
end of each month and Sterling agrees to accept, as full compensation for
all services and facilities to be provided hereunder, a fee based on the
monthly average of the net assets of the Portfolio determined as of the
close of business on each business day throughout the month. The fee shall
be payable at an annual rate determined on a cumulative basis pursuant to
the following schedule:
The Annual Fee Rate Is
On the first $1.0 billion of average daily net assets 0.150%
On average daily net assets in excess of $1.0 billion 0.150%
through $2.0 billion
On average daily net assets in excess of $2.0 billion 0.140%
Sterling understands that Distributors, with the consent of Sterling, has
reserved the right to reduce or waive the distribution fee from time to
time.
If this Agreement becomes effective subsequent to the first day of a month
or shall terminate before the last day of a month, compensation for the
part of the month this Agreement is in effect shall be prorated based on
the number of business days during such month that this Agreement was in
effect."
The terms of this amendment shall be effective as of January 1, 1998.
Except as expressly set forth in Paragraph 5 hereof, all terms and
conditions of the Agreement shall remain unchanged and in full force and
effect.
Agreement with the terms of Paragraph 5 hereof is signified by Sterling
and Distributors by authorized signature below.
Sterling Capital Distributors, Inc.
By: /s/ J. Calvin Rivers, Jr.
Name: J. Calvin Rivers, Jr.
Title: President
Fidelity Distributors Corporation
By: /s/ Arthur S. Loring
Name: Arthur S. Loring
Title: Vice President and Clerk
<TABLE> <S> <C>
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<CIK> 0000702149
<NAME> The North Carolina Capital Management Trust
<SERIES>
<NUMBER> 11
<NAME> Cash Portfolio
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> jun-30-1997
<PERIOD-END> jun-30-1997
<INVESTMENTS-AT-COST> 1,985,132
<INVESTMENTS-AT-VALUE> 1,985,132
<RECEIVABLES> 254
<ASSETS-OTHER> 500
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,985,886
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,961
<TOTAL-LIABILITIES> 1,961
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<NAME> The North Carolina Capital Management Trust
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