1933 Act File No. 33-45753
1940 Act File No. 811-6561
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
X
Pre-Effective Amendment No.
Post-Effective Amendment No. 5 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 X
Amendment No. 6 X
111 CORCORAN FUNDS
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on _________________ pursuant to paragraph (b)
x 60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange
Commission a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, and:
x filed the Notice required by that Rule on July 15, 1994;
or
intends to file the Notice required by that Rule on or
about ____________; or
during the most recent fiscal year did not sell any
securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940, and, pursuant to Rule 24f-2(b)(2), need
not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin,
L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS REFERENCE SHEET
This amendment to the Registration Statement of the 111
Corcoran Funds, which consists of three portfolios: (1) 111
Corcoran North Carolina Municipal Securities Fund; (2) 111
Corcoran Bond Fund; and (3) 111 Corcoran Equity Fund, relates
only to 111 Corcoran Equity Fund and is comprised of the
following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-3) Cover Page.
Item 2. Synopsis (1-3) Summary of Fund Expenses;
(1-2) Financial Highlights.
Item 3. Condensed Financial
Information (1-3) Performance Information.
Item 4. General Description of
Registrant (1-3) General Information; (1-
3) Investment Information;
(1-3) Investment Objective; (1-
3) Investment Policies; (1)
North Carolina Municipal Bonds;
(1) Investment Risks; (1) Non-
Diversification; (1-3)
Investment Limitations.
Item 5. Management of the Fund (1-3) 111 Corcoran Funds
Information; (1-3) Management
of the Corcoran Funds; (1-3)
Distribution of Fund Shares; (1-
3) Administration of the Fund.
Item 6. Capital Stock and Other
Securities (1-3) Dividends; (1-3) Capital
Gains; (1-3) Shareholder
Information; (1-3) Voting
Rights; (1-3) Massachusetts
Partnership Law; (1-3) Effect
of Banking Laws; (1-3) Tax
Information; (1-3) Federal
Income Tax; (1) North Carolina
Taxes; (1) Other State and
Local Taxes.
Item 7. Purchase of Securities Being
Offered (1-3) Net Asset Value; (1-3)
Investing in the Fund; (3)
Brokerage Transactions,
Expenses of the Fund; (1-3)
Share Purchases; (1-3) Minimum
Investment Required; (1-3) What
Shares Cost; (1-3) Purchases at
Net Asset Value; (1-3) Sales
Charge Reallowance; (1-3)
Reducing the Sales Charge; (1-
3) Systematic Investment
Program; (1-3) Certificates and
Confirmations.
Item 8. Redemption or Repurchase (1-3) Exchange Privilege; (1-3)
Redeeming Shares; (1-3)
Systematic Withdrawal Program;
(1-3) Accounts with Low
Balances; (1-2) Redemption in
Kind.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION.
Item 10. Cover Page (1-3) Cover Page.
Item 11. Table of Contents (1-3) Table of Contents.
Item 12. General Information and
History (1-3) General Information About
the Fund.
Item 13. Investment Objectives and
Policies (1-3) Investment Objective and
Policies; (1-3) Investment
Limitations.
Item 14. Management of the Fund (1-3) The 111 Corcoran Funds
Management.
Item 15. Control Persons and Principal
Holders of Securities Not applicable.
Item 16. Investment Advisory and Other
Services (1-3) Investment Advisory
Services; (1-3) Administrative
Services.
Item 17. Brokerage Allocation (1-3) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered (1-3) Purchasing Shares; (1-3)
Determining Net Asset Value; (1-
3) Exchange Privilege; (1-3)
Redeeming Shares..
Item 20. Tax Status (1-3) Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance
Data (1-3) Total Return; (1-3)
Yield; (1) Tax-Equivalent
Yield; (1-3) Performance
Comparisons.
Item 23. Financial Statements (1-2) Filed in Part A; (3) to
be file by Amendment.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 3, 1994
111 CORCORAN EQUITY FUND
(A PORTFOLIO OF THE 111 CORCORAN FUNDS)
PROSPECTUS
The shares of 111 Corcoran Fund (the "Fund") offered by this
prospectus represent interests in a diversified portfolio in the 111
Corcoran Funds (the "Trust"), an open-end management investment
company (a mutual fund). The investment objective of the Fund is to
provide a relatively high total return over longer periods of time
through appreciation of capital and current income provided by
dividends and interest payments. The Fund pursues this objective by
investing primarily in dividend paying common stocks.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF CENTRAL CAROLINA BANK AND TRUST COMPANY OR ITS AFFILIATES, ARE NOT
ENDORSED OR GUARANTEED BY CENTRAL CAROLINA BANK AND TRUST COMPANY OR
ITS AFFILIATES, AND NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know
before you invest in the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Statement of Additional Information dated
December , 1994 with the Securities and Exchange Commission. The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. To request a copy of
the Statement of Additional Information free of charge, obtain other
information, or make inquiries about the Fund by writing or calling
at 1-800-422-2080.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated December , 1994
005826 (12/94)
Summary of Fund Expenses 1
General Information 3
Investment Information 3
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Investment Limitations 8
The above investment limitation
cannot be changed without
shareholder approval. 8
The 111 Corcoran Funds
Information 8
Management of the 111 Corcoran
Funds 8
Distribution Of Fund Shares 9
Administration Of The Fund 10
Brokerage Transactions 11
Expenses of the Fund 11
Net Asset Value 11
Investing in the Fund 11
Share Purchases 11
Minimum Investment Required 12
What Shares Cost 12
Purchases at Net Asset Value12
Sales Charge Reallowance 13
Reducing the Sales Charge 13
Systematic Investment Program1
4
Certificates and Confirmations
14
Dividends 14
Capital Gains 14
Redeeming Shares 16
Systematic Withdrawal Program1
7
Accounts with Low Balances 17
Shareholder Information 17
Voting Rights 17
Massachusetts Partnership Law1
7
Effect Of Banking Laws 18
Tax Information 18
Federal Income Tax 18
Performance Information 19
Addresses 20
Summary of Fund Expenses
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price) 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price) None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
Annual Fund Operating Expenses*
(As a percentage of projected average net assets)
Management Fee (after waiver) (1) 0.58%
12b-1 Fee (2). 0.00%
Total Other Expenses. 0.67%
Shareholder Services Fee (2) ...0.00%
Total Fund Operating Expenses (3) 1.25%
(1)The estimated management fee has been reduced to reflect the
anticipated voluntary waiver and/or reimbursement by the investment
adviser. The investment adviser, at its sole discretion, can terminate
this voluntary waiver and/or reimbursement at any time. The maximum
management fee is 0.85%.
(2)As of the date of this prospectus, the Fund is not paying or accruing
12b-1 or shareholder servicing agent fees. The Fund will not pay or
accrue 12b-1 or shareholder servicing agent fees until a separate
class of shares has been created for certain trust and institutional
investors, including qualified employee benefit plans. At that point
the Fund will be able to pay up to 0.35% of the Fund's average daily
net assets for 12b-1 fees and up to 0.25% of the Fund's average daily
net assets for shareholder servicing agent fees. See "The 111
Corcoran Funds Information."
(3)The Total Fund Operating Expenses are estimated to be 1.52% absent the
anticipated voluntary waivers and/or reimbursement by the Fund's
adviser.
*Total Fund Operating Expenses are estimated based on average expenses
expected to be incurred during the period ending May 31, 1995. During the
course of this period, expenses may be more or less than the average
amount shown.
The purpose of this table is to assist an investor in understanding
the various costs and expenses that a shareholder of the Fund will bear,
either directly or indirectly, for more complete descriptions of the
various costs and expenses, see "Investing in the Fund" and "The 111
Corcoran Funds Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return;
(2) redemption at the end of each time period; and
(3) payment of the maximum sales load. As noted in the
table above, the Fund charges no redemption fees. $ 57 $83
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
This example is based on estimated data for the Fund's fiscal year ended
May 31, 1995.
General Information
The 111 Corcoran Funds was established as a Massachusetts business trust
under a Declaration of Trust dated December 11, 1991. The Declaration of
Trust permits the 111 Corcoran Funds to offer separate series of shares of
beneficial interest representing interests in separate portfolios of
securities. This prospectus relates only to the 111 Corcoran Funds' equity
portfolio, known as 111 Corcoran Equity Fund (the "Fund"). The Fund is for
trust clients of Central Carolina Bank and its affiliates and individual
investors who desire a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing primarily in
dividend paying common stocks. Central Carolina Bank is the investment
adviser to the Fund, and Franklin Street Advisors, Inc. is the Fund's sub-
adviser. A minimum initial investment of $1,000 is required. Subsequent
investments must be in amounts of at least $100.
Fund shares are sold at net asset value plus an applicable sales charge
and are redeemed at net asset value.
Investment Information
Investment Objective
The investment objective of the Fund is to provide a relatively high total
return over longer periods of time through appreciation of capital and
current income provided by dividends and interest payments. While there is
no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus. The investment objective cannot be changed without approval of
shareholders. Unless indicated otherwise, the investment policies
described below may be changed by the Board of Trustees (the "Trustees")
without the approval of shareholders. Shareholders will be notified before
any material changes in these policies become effective.
Investment Policies
The Fund attempts to achieve its investment objective by investing
primarily in a broad, diversified range of dividend paying common stocks.
As a matter of investment policy, the Fund will invest so that, under
normal circumstances, at least 65% of its total assets are invested in
equity securities.
Acceptable Investments
The securities in which the Fund invests include, but are not limited to:
o common stocks of U.S. companies which are either listed on the New
York or American Stock Exchanges or traded in over-the-counter
markets, preferred stocks of such companies, warrants, and preferred
stocks convertible into common stocks of such companies;
o convertible bonds rated, at the time of purchase, at least BBB by
Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service,
Inc.("Fitch") , or at least Baa by Moody's Investors Service, Inc.
("Moody's"), or, if not rated, determined by the adviser to be of
comparable quality;
o domestic issues of corporate debt obligations, including zero coupon
bonds, rated, at the time of purchase, at least Baa by Moody's or at
least BBB by S&P or Fitch, or, if not rated, determined by the
adviser to be of comparable quality;
o American Depositary Receipts ("ADRs") of foreign companies traded on
the New York Stock Exchange or in the over-the-counter market;
o obligations of the United States government;
o notes, bonds(including zero coupon bonds), and discount notes of the
following U.S. government agencies or instrumentalities: Federal Home
Loan Bank System, Federal National Mortgage Association, Government
National Mortgage Association, Bank for Cooperatives (including
Central Bank for Cooperatives), Federal Land Banks, Federal
Intermediate Credit Banks, Tennessee Valley Authority, Export-Import
Bank of the United States, Commodity Credit Corporation, Federal
Financing Bank, The Student Loan Marketing Association, Federal Home
Loan Mortgage Corporation, or National Credit Union Administration;
o money market instruments; and
o repurchase agreements collateralized by eligible investments.
In addition, the Fund may borrow money, lend portfolio securities, invest
in securities of other investment companies, and engage in when-issued and
delayed delivery transactions. The Fund may also invest in put and call
options, futures, and options on futures, for hedging purposes.
Obligations rated BBB by S&P or Baa by Moody's have speculative
characteristics. Changes in economic conditions or other circumstances are
more likely to lead to weakened capacity to make principal and interest
payments than higher rated bonds. Downgraded securities will be evaluated
on a case-by-case basis by the adviser. The adviser will determine whether
or not the security continues to be an acceptable investment. If not, the
security will be sold. A description of the rating categories is contained
in the Appendix to the Statement of Additional Information.
The prices of fixed income securities fluctuate inversely to the direction
of interest rates.
Common Stocks. As described above, the Fund invests primarily in dividend
paying common stocks. As with other mutual funds that invest primarily in
common stocks, the Fund is subject to market risks. That is, the
possibility exists that common stocks will decline over short or even
extended periods of time, and the United States equity market tends to be
cyclical, experiencing both periods when stock prices generally increase
and periods when stock prices generally decrease. In addition, the Fund
may, from time to time, invest in issuers with smaller capitalization.
Small capitalization stocks have historically been more volatile in price
than larger capitalization stocks, such as those included in the Standard
& Poor's 500 Index. This is because, among other things, smaller companies
have a lower degree of liquidity in the equity market and tend to have a
greater sensitivity to changing economic conditions. Further, in addition
to exhibiting greater volatility, these stocks may, to some degree,
fluctuate independently of the stocks of large companies. That is, the
stocks of small capitalization companies may decline in price as the price
of large company stocks rises or vice versa. Therefore, investors should
expect that there will be periods of time when the Fund will exhibit
greater volatility than broad stock market indices such as the Standard &
Poor's 500 Index.
Convertible Securities. Convertible securities are fixed income securities
which may be exchanged or converted into a predetermined number of the
issuer's underlying common stock at the option of the holder during a
specified time period. Convertible securities may take the form of
convertible preferred stock, convertible bonds or debentures, units
consisting of "usable" bonds and warrants or a combination of the features
of several of these securities.
Convertible bonds and convertible preferred stocks generally retain the
investment characteristics of fixed income securities until they have been
converted but also react to movements in the underlying equity securities.
The holder is entitled to receive the fixed income of a bond or the
dividend preference of a preferred stock until the holder elects to
exercise the conversion privilege. Usable bonds are corporate bonds that
can be used in whole or in part, customarily at full face value, in lieu
of cash to purchase the issuer's common stock.
Securities of Foreign Issuers. The Fund may invest in the securities of
foreign issuers which are freely traded on United States securities
exchanges or in the over-the-counter market in the form of depositary
receipts. Securities of a foreign issuer may present greater risks in the
form of nationalization, confiscation, domestic marketability, or other
national or international restrictions. As a matter of practice, the Fund
will not invest in the securities of a foreign issuer if any such risk
appears to the investment adviser to be substantial.
Zero Coupon Securities. The Fund may invest in zero coupon bonds and zero
coupon convertible securities. The Fund may invest in zero coupon bonds
in order to receive the rate of return through the appreciation of the
bond. This application is extremely attractive in a falling rate
environment as the price of the bond rises rapidly in value a opposed to
regular coupon bonds. A zero coupon bond makes no periodic interest
payments and the entire obligation becomes due only upon maturity.
Zero coupon convertible securities are debt securities which are issued at
a discount to their face amount and do not entitle the holder to any
periodic payments of interest prior to maturity. Rather, interest earned
on zero coupon convertible securities accretes at a stated yield until the
security reaches its face amount at maturity. Zero coupon convertible
securities are convertible into a specific number of shares of the
issuer's common stock. In addition, zero coupon convertible securities
usually have put features that provide the holder with the opportunity to
sell the bonds back to the issuer at a stated price before maturity.
Generally, the price of zero coupon securities are more sensitive to
fluctuation in interest than are conventional bonds and convertible
securities. Additionally, federal tax law requires the holder of a zero
coupon security to recognize income from the security prior to the receipt
of cash payments. To maintain its qualification as a regulated investment
company and avoid liability of federal income taxes, the Fund will be
required to distribute income accrued from zero coupon securities which it
owns, and may have to sell portfolio securities (perhaps at
disadvantageous times) in order to generate cash to satisfy these
distribution requirements.
U.S. Government Obligations. These securities include but are not limited
to:
odirect obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
onotes, bonds and discount notes of U.S. government agencies or
instrumentalities.
Some of these obligations, such as Government National Mortgage
Association mortgage-backed securities, are backed by the full faith and
credit of the U.S. Treasury. No assurances can be given that the U.S.
government will provide financial support to other agencies or
instrumentalities, since it is not obligated to do so. These agencies and
instrumentalites are supported by:
othe issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
othe credit of the agency or instrumentality.
Investing In Securities of Other Investment Companies. The Fund may invest
in the securities of other open-end investment companies and in the
securities of closed-end investment companies, but it will not own more
than 3% of the total outstanding voting stock of any investment company,
invest more than 5% of its total assets in any one investment company, or
invest more than 10% of its total assets in investment companies in
general. The Fund will invest in other investment companies primarily for
the purpose of investing its short-term cash which has not yet been
invested in other portfolio instruments. However, from time to time, on a
temporary basis, the Fund may invest exclusively in one other investment
company managed similarly to it. Shareholders should realize that, when
the Fund invests in other investment companies, certain fund expenses,
such as custodian fees and administrative fees, may be duplicated. The
adviser will waive its investment advisory fee on assets invested in
securities of other investment companies.
Put and Call Options. The Fund may purchase put options on its portfolio
securities as a hedge to attempt to protect securities which the Fund
holds, or will be purchasing, against decreases in value. The Fund may
also write (sell) call options on all or any portion of its portfolio to
generate income. The Fund will write call options on securities either
held in its portfolio or which it has the right to obtain without payment
of further consideration, or for which it has segregated cash or U.S.
government securities in the amount of any additional consideration.
The Fund may purchase and write over-the-counter options on portfolio
securities in negotiated transactions with the buyers or writers of the
options when options on the portfolio securities held by the Fund are not
traded on an exchange. The Fund purchases and writes options only with
investment dealers and other financial institutions (such as commercial
banks or savings and loan associations) deemed creditworthy by the Fund's
adviser.
Over-the-counter options are two-party contracts with price and terms
negotiated between buyer and seller. In contrast, exchange-traded options
are third-party contracts with standardized strike prices and expiration
dates and are purchased from a clearing corporation. Exchange-traded
options have a continuous liquid market, while over-the-counter options
may not.
Futures Contracts and Options on Futures. The Fund may purchase and sell
financial futures and stock index futures contracts to hedge all or a
portion of its portfolio against changes in the price of its portfolio
securities, but will not engage in futures transactions for speculative
purposes.
The Fund may also write call options and purchase put options on financial
futures and stock index futures contacts as a hedge to attempt to protect
securities in its portfolio against decreases in value.
The Fund may not purchase or sell futures contracts or related options if
immediately thereafter the sum of the amount of margin deposits on the
Fund's existing futures positions and premiums paid for related options
would exceed 5% of the market value of the Fund's total assts.
Risks. When the Fund writes a call option, the Fund risks not
participating in any rise in the value of the underlying security.
In addition, when the Fund uses futures and options on futures as
hedging devices, there is a risk that the prices of the securities
subject to the futures contracts may not correlate perfectly with
the prices of the securities in the Fund's portfolio. This may cause
the futures contract and any related options to react differently
than the portfolio securities to market changes. In addition, the
Fund's investment adviser could be incorrect in its expectations
about the direction or extent of market factors, such as interest
rate and stock price movements. In these events, the Fund may lose
money on the futures contract or option.
It is not certain that a secondary market for positions in futures
contracts or options will exist at all times. Although the
investment adviser will consider liquidity before entering into
option transactions, there is no assurance that a liquid secondary
market will exist for any particular futures contract or option at
any particular time. The Fund's ability to establish and close out
futures and options positions depends on this secondary market.
Temporary Investments. In such proportions as, in the judgment of its
investment adviser, prevailing market conditions warrant, the Fund may,
for temporary defensive purposes, invest in:
o commercial paper which matures in 270 days or less so long as at
least two ratings are high quality ratings by nationally recognized
statistical rating organizations. Such ratings would include: A-1 or
A-2 by S&P, Prime-1 or Prime-2 by Moody's, or F-1 or F-2 by Fitch;
o time and savings deposits (including certificates of deposit) in
commercial or savings banks whose accounts are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC"), or in institutions whose accounts are
insured by the Savings Association Insurance Fund ("SAIF"), which is
also administered by the FDIC, including certificates of deposit
issued by and other time deposits in foreign branches of BIF-insured
banks; and
o bankers' acceptances.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies, but
which are subject to restrictions on resale under federal securities laws.
However, the Fund will limit investments in illiquid securities, including
certain restricted securities not determined by the Trustees to be liquid,
to 15% of its net assets.
When-Issued and Delayed Delivery Transactions. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete the
transaction may cause the Fund to miss a price or yield considered to be
advantageous. Settlement dates may be a month or more after entering into
these transactions, and the market values of the securities purchased may
vary from the purchase prices. Accordingly, the Fund may pay more/less
than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser
deems it appropriate to do so. In addition, the Fund may enter into
transactions to sell its purchase commitments to third parties at current
market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits
or losses upon the sale of such commitments.
Lending of Portfolio Securities. In order to generate additional income,
the Fund may lend portfolio securities on a short-term or long-term basis,
or both, to broker/dealers, banks, or other institutional borrowers of
securities. The Fund will only enter into loan arrangements with
broker/dealers, banks, or other institutions which the investment adviser
has determined are creditworthy under guidelines established by the
Trustees and will receive collateral in the form of cash or U.S.
government securities equal to at least 100% of the value of the
securities loaned.
Repurchase Agreements. The U.S. government securities and other securities
in which the Fund invests may be purchased pursuant to repurchase
agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at the
time of sale to repurchase them at a mutually agreed upon time and price.
To the extent that the original seller does not repurchase the securities
from the Fund, the Fund could receive less than the repurchase price on
any sale of such securities.
Investment Limitations
The Fund will not:
o borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a portfolio instrument for a
percentage of its cash value with an arrangement to buy it back on a
set date) or pledge securities except, under certain circumstances,
the Fund may borrow up to one-third of the value of its total assets
and pledge assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder
approval.
The 111 Corcoran Funds Information
Management of the 111 Corcoran Funds
Board Of Trustees. The 111 Corcoran Funds are managed by a Board of
Trustees. The Board of Trustees is responsible for managing the business
affairs of the 111 Corcoran Funds and for exercising all of the powers of
the 111 Corcoran Funds except those reserved for the shareholders. An
Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
Investment Adviser. Pursuant to an investment advisory contract with the
111 Corcoran Funds, investment decisions for the Fund are made by Central
Carolina Bank and Trust Company (the "Bank"), the Fund's investment
adviser, subject to direction by the Trustees. The adviser continually
conducts investment research and supervision for the Fund and is
responsible for the purchase or sale of portfolio instruments, for which
it receives an annual fee from the Fund.
Advisory Fees. The Fund's adviser is entitled to receive an annual
investment advisory fee equal to 0.85 of 1% of the Fund's average
daily net assets. The fee paid by the Fund, while higher than the
advisory fee paid by other mutual funds in general, is comparable to
fees paid by many mutual funds with similar objectives and policies.
The investment advisory contract allows the voluntary waiver, in whole
or in part, of the investment advisory fee or the reimbursement of
expenses by the adviser from time to time. The adviser can terminate
any voluntary waiver of its fee or reimbursement of expenses at any
time at its sole discretion.
Investment decisions for the Fund will be made independently from those
of any fiduciary or other accounts that may be managed by the Bank or
its affiliates. If, however, such accounts, the Fund, or the Bank for
its own account are simultaneously engaged in transactions involving
the same securities, the transactions may be combined and allocated to
each account. This system may adversely affect the price the Fund pays
or receives, or the size of the position it obtains. The Bank may
engage, for its own account or for other accounts managed by the Bank,
in other transactions involving fixed income securities which may have
adverse effects on the market for securities in the Fund's portfolio.
Adviser's Background. The Bank was founded in 1903 as Durham Bank and
Trust Company. The Bank was created from Durham Bank and Trust Company
on September 30, 1961. The Bank is the lead bank within CCB Financial
Corporation, which is a multibank holding company that includes a
commercial bank subsidiary with offices also in North Carolina. CCB
Financial Corp. was incorporated in North Carolina in November 1982.
The principal executive offices of the Bank are located at 111 Corcoran
Street, Durham, North Carolina 27702. The activities of the Bank
encompass a full range of commercial banking services, including trust
services.
The Bank has managed commingled funds since 1953. As of June 30, 1994,
the Trust Division managed assets in excess of $1.3 billion. The Trust
Division manages two commingled funds with assets of approximately
$52.5 million. The Bank has managed the 111 Corcoran Funds since their
inception in July, 1992. As of June 30, 1994, total assets in the 111
Corcoran Funds were $140.8 million.
As part of their regular banking operations, the Bank may make loans to
public companies. Thus, it may be possible, from time to time, for the
Fund to hold or acquire the securities of issuers which are lending
clients of the Bank. The lending relationship will not be a factor in
the selection of securities.
Sub-Adviser. Pursuant to the terms of an investment sub-advisory
agreement between the adviser and Franklin Street Advisors, Inc. (the
"Sub-Adviser"), the Sub-Adviser furnishes certain investment advisory
Services to the adviser, including investment research, statistical and
other factual information, and recommendations, based on the Sub-
Adviser's analysis, and assists the adviser in identifying securities
for potential purchase and/or sale on behalf of the Fund's portfolio.
For the services provided and the expenses incurred by the Sub-Adviser
pursuant to the sub-advisory agreement, the Sub-Adviser is entitled to
receive an annual sub-advisory fee equal to 0.65 of 1% of the Fund's
advisory fee, payable by the adviser, in quarterly installments. The
Sub-Adviser may elect to waive some or all of its fee. In no event
shall the Fund be responsible for any fees due to the Sub-Adviser for
its services to the adviser.
Sub-Adviser's Background. The Sub-Adviser, which is located at 1506
East Franklin Street, Chapel Hill, North Carolina, 27514, is a
registered investment advisory firm founded in 1990. The Sub-Adviser
manages assets in excess of $300 million. The Sub-Adviser has not
previously acted as an investment adviser to an investment company. The
Sub-Adviser is a wholly-owned subsidiary of Franklin Street Partners,
Inc., a privately-owned holding company that also owns a private non-
depository trust bank. Franklin Street Partners, Inc. has guaranteed to
the adviser the performance of the Sub-Adviser's obligations under the
sub-advisory agreement.
Robert C. Eubanks, Jr. has been the Fund's portfolio manager since its
inception. Mr. Eubanks is the President of Franklin Street Partners,
Inc., and has served in that capacity since 1990. He is also vice-
chairman and chief investment officer of Franklin Street Trust, an
affiliate of the Sub-Adviser. Prior to founding Franklin Street Trust,
he was co-founder and president of McMillion Eubanks Capital Management
in Greensboro, North Carolina.
Distribution Of Fund Shares
Federated Securities Corp. is the distributor for shares of the Fund. It
is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
Distribution and Shareholder Services Plans. Under a distribution plan
adopted in accordance with Investment Company Act Rule 12b-1 (the
"Distribution Plan"), the Fund will pay to the distributor an amount
computed at an annual rate of 0.35% of the Fund's average daily net assets
to finance any activity which is principally intended to result in the
sale of shares subject to the Distribution Plan. The distributor may
select financial institutions such as banks, fiduciaries, custodians for
public funds, investment advisers, and broker/dealers to provide sales
support services as agents for their clients or customers.
The Distribution Plan is a compensation type plan. As such, the Fund makes
no payments to distributor except as described above. Therefore, the Fund
does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it
from the Fund, interest, carrying or other financing charges in connection
with excess amounts expended, or the distributor's overhead expenses.
However, the distributor may be able to recover such amounts or may earn a
profit from future payments made by shares under the Distribution Plan.
In addition, the Fund has adopted a Shareholder Services Plan (the
"Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Fund to obtain certain personal
services for shareholders and the maintenance of shareholder accounts
("shareholder services"). The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to
perform shareholder services. Financial institutions will receive fees
based upon shares owned by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid will be
determined from time to time by the Fund and Federated Shareholder
Services.
The Glass-Steagall Act prohibits a depository institution (such as a
commercial bank or savings and loan association) from being an underwriter
or distributor of most securities. In the event the Glass-Steagall Act is
deemed to prohibit depository institutions from acting in the capacities
described above or should Congress relax current restrictions on
depository institutions, the Trustees will consider appropriate changes in
the services.
State securities laws governing the ability of depository institutions to
act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks and
financial institutions may be required to register as dealers pursuant to
state laws.
Administration Of The Fund
Administrative Services. Federated Administrative Services, a
subsidiary of Federated Investors, provides the Fund with the
administrative personnel and services necessary to operate the Fund.
Such services include shareholder servicing and certain legal and
accounting services. Federated Administrative Services provides these
at an annual rate as specified below:
Maximum Average Aggregate Daily
Administrative Fee Net Assets of the Trust
.150 of 1% on the first $250 million
.125 of 1% on the next $250 million
.100 of 1% on the next $250 million
.075 of 1% on assets in excess of $750
million
The administrative fee received during any fiscal year shall be at least
$50,000 per fund. Federated Administrative Services may choose voluntarily
to waive a portion of its fee.
Custodian. State Street Bank and Trust Company ("State Street Bank"),
Boston, Massachusetts, is custodian for the securities of the Fund.
Transfer Agent, Dividend Disbursing Agent and Portfolio Recordkeeper.
Federated Services Company, Pittsburgh, Pennsylvania, a subsidiary of
Federated Investors, is transfer agent for the shares of the Fund and
dividend disbursing agent for the Fund. Federated Services Company also
provides certain accounting and recordkeeping services with respect to the
portfolio investments of the Fund.
Legal Counsel. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P.,
Washington, D.C.
Independent Public Accountants. The independent public accountants for the
Fund are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
utilize those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can be
obtained elsewhere. In selecting among firms believed to meet these
criteria, the adviser may give consideration to those firms which have
sold or are selling shares of the Fund and other funds distributed by
Federated Securities Corp. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to review by the
Trustees.
Expenses of the Fund
The Fund pays all of its own expenses and its allocable share of Trust
expenses. These expenses include, but are not limited to, the costs of:
organizing the Trust and continuing its existence; Trustees' fees;
investment advisory and administrative services; printing prospectuses and
other Fund documents for shareholders; registering the Trust and the Fund;
taxes and commissions; issuing purchasing, repurchasing, and redeeming
shares; fees for custodian, transfer agent, dividend disbursing agent,
shareholder servicing agents, and registrars; printing, mailing, auditing,
accounting, and legal expenses; reports to shareholders and government
agencies; meeting of Trustees and shareholders and proxy solicitations
therefor; insurance premiums; association membership dues; and such
nonrecurring and extraordinary items as may arise. However, the adviser
may voluntarily waive and/or reimburse some expenses.
Net Asset Value
The Fund's net asset value per share fluctuates. It is determined by
dividing the sum of the market value of all securities and other assets,
less liabilities, by the number of shares outstanding.
Investing in the Fund
Share Purchases
Fund shares are sold on days on which the New York Stock Exchange is open
for business. Shares of the Fund may be purchased through Central Carolina
Bank or through brokers or dealers which have a sales agreement with the
distributor. In connection with the sale of Fund shares, the distributor
may from time to time offer certain items of nominal value to any
shareholder or investor. The Fund reserves the right to reject any
purchase request.
Through Central Carolina Bank. An investor may call Central Carolina Bank
to place an order to purchase shares of the Fund. (Call toll-free 1-800-
422-2080.) Texas residents must purchase shares through Federated
Securities Corp. at 1-800-618-8573. Orders through Central Carolina Bank
are considered received when the Fund is notified of the purchase order.
Purchase orders must be received by Central Carolina Bank before 3:00 p.m.
(Eastern time) and must be transmitted by Central Carolina Bank to the
Fund before 4:00 p.m. (Eastern time) in order for shares to be purchased
at that day's price. Payment is normally required in five business days.
It is the responsibility of Central Carolina Bank to transmit orders
promptly to the Fund.
Through Authorized Broker/Dealers. An investor may place an order through
authorized brokers and dealers to purchase shares of the Fund. Shares will
be purchased at the public offering price next determined after the Fund
receives the purchase request. Purchase requests through registered
broker/ dealers must be received by the broker/dealer and transmitted by
the broker/dealer to Central Carolina Bank before 3:00 p.m. (Eastern time)
and then transmitted by Central Carolina Bank to the Fund by 4:00 p.m.
(Eastern time) in order for shares to be purchased at that day's public
offering price.
Minimum Investment Required
The minimum initial investment in the Fund by an investor is $1,000.
Subsequent investments must be in amounts of at least $100. These minimums
may be waived for purchases by the Trust Division of Central Carolina Bank
for its fiduciary or custodial accounts. An institutional investor's
minimum investment will be calculated by combining all accounts it
maintains with the Fund.
What Shares Cost
Fund shares are sold at their net asset value next determined after an
order is received, plus a sales charge, as follows:
Sales Charge as a Sales Charge as a
Percentage of Percentage of Net
Amount of Transaction Public Offering Price Amount Invested
Less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.75% 3.90%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $750,000 2.00% 2.04%
$750,000 but less than $1 million 1.00% 1.01%
$1 million but less than $2 million 0.25%
0.25%
$2 million or more 0.00% 0.00%
The net asset value is determined at or after the close of the New York
Stock Exchange, Monday through Friday, except on: (i) days on which there
are not sufficient changes in the value of the Fund's portfolio securities
that its net asset value might be materially affected; (ii) days during
which no shares are tendered for redemption and no orders to purchase
shares are received; and (iii) the following holidays: New Year's Day,
Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Purchases at Net Asset Value
Shares of the Fund may be purchased at net asset value, without a sales
charge, by the Trust Division of Central Carolina Bank for accounts in
which the Trust Division holds or manages assets, by trust companies,
trust departments of other financial institutions and by banks and savings
and loans for their own accounts. Trustees, emeritus trustees, employees
and retired employees of the Trust, CCB Financial Corp., Central Carolina
Bank, or Federated Securities Corp. or their affiliates, or any bank or
investment dealer who has a sales agreement with Federated Securities
Corp. with regard to the Fund, and their spouses and children under 21,
may also buy shares at net asset value, without a sales charge. In
addition, customers, employee benefit plans, and employees of Franklin
Street Advisors, Inc. and its affiliated companies (other than Franklin
Street Securities) and their spouses and children under 21, may also buy
shares at net asset value, without a sales charge.
Sales Charge Reallowance
For sales of shares of the Fund, a dealer will normally receive up to 85%
of the applicable sales charge. For shares sold with a sales charge,
Central Carolina Bank will receive 85% of the applicable sales charge for
purchases of Fund shares made directly through Central Carolina Bank.
The sales charge for shares sold other than through Central Carolina Bank
or registered broker/dealers will be retained by the distributor. However,
the distributor will, periodically, uniformly offer to pay to dealers
additional amounts in the form of cash or promotional incentives, such as
reimbursement of certain expenses of qualified employees and their spouses
to attend informational meetings about the Fund or other special events at
recreational-type facilities, or items of material value. Such payments,
all or a portion of which may be paid from the sales charge the
distributor normally retains or any other source available to it, will be
predicated upon the amount of shares of the Fund that are sold by the
dealer.
Reducing the Sales Charge
The sales charge can be reduced on the purchase of Fund shares through:
o quantity discounts and accumulated purchases;
o signing a 13-month letter of intent; or
o using the reinvestment privilege.
Quantity Discounts and Accumulated Purchases. As shown in the table above,
larger purchases reduce the sales charge paid. The Fund will combine
purchases made on the same day by the investor, his spouse, and his
children under age 21 when it calculates the sales charge.
If an additional purchase of Fund shares is made, the Fund will consider
the previous purchases still invested in the Fund. For example, if a
shareholder already owns shares having a current value at the public
offering price of $90,000 and he purchases $10,000 more at the current
public offering price, the sales charge on the additional purchase
according to the schedule now in effect would be 3.75%, not 4.50%.
To receive the sales charge reduction, Central Carolina Bank or the
distributor must be notified by the shareholder in writing or by his
financial institution at the time the purchase is made that Fund shares
are already owned or that purchases are being combined. The Fund will
reduce the sales charge after it confirms the purchases.
Letter of Intent. If a shareholder intends to purchase at least $100,000
of shares in the Fund over the next 13 months, the sales charge may be
reduced by signing a letter of intent to that effect. This letter of
intent includes a provision for a sales charge adjustment depending on the
amount actually purchased within the 13-month period and a provision for
the custodian to hold 4.50% of the total amount intended to be purchased
in escrow (in shares of the Fund) until such purchase is completed.
The shares held in escrow will be applied to the shareholder's account at
the end of the 13-month period unless the amount specified in the letter
of intent is not purchased. In this event, an appropriate number of
escrowed shares may be redeemed in order to realize the difference in the
sales charge.
This letter of intent will not obligate the shareholder to purchase
shares, but if the shareholder does, each purchase during the period will
be at the sales charge applicable to the total amount intended to be
purchased. This letter may be dated as of a prior date to include any
purchases made within the past 90 days; however, these previous purchases
will not receive the reduced sales charge.
Reinvestment Privilege. If shares in the Fund have been redeemed, the
shareholder has a one-time right, within 30 days, to reinvest the
redemption proceeds at the next-determined net asset value without any
sales charge. Central Carolina Bank or the distributor must be notified by
the shareholder in writing or by his financial institution of the
reinvestment in order to eliminate a sales charge. If the shareholder
redeems his shares in the Fund, there may be tax consequences.
Systematic Investment Program
Once a Fund account has been opened, shareholders may add to their
investment on a regular basis in a minimum amount of $100. Under this
program, funds may be automatically withdrawn periodically from the
shareholder's checking account at Central Carolina Bank and invested in
Fund shares at the net asset value next determined after an order is
received by the Fund, plus the applicable sales charge. A shareholder may
apply for participation in this program through Central Carolina Bank or
through the distributor.
Certificates and Confirmations
As transfer agent for the Fund, Federated Services Company maintains a
share account for each shareholder. Share certificates are not issued
unless requested in writing to the Fund.
Detailed confirmations of each purchase and redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid
during that month.
Dividends
Dividends are declared daily and paid quarterly to all shareholders
invested in the Fund on the record date. Unless cash payments are
requested by contacting Central Carolina Bank, dividends are automatically
reinvested on payment dates in additional shares of the Fund at the
payment date's net asset value without a sales charge.
Capital Gains
Distributions of net long-term capital gains realized by the Fund, if any,
will be made at least annually.
Exchange Privilege
All shareholders of the Fund are shareholders of the 111 Corcoran Funds
(the "Trust") which consists of the Fund, 111 Corcoran Bond Fund, and 111
Corcoran North Carolina Municipal Securities Fund. Shareholders of the
Fund have access to 111 Corcoran Bond Fund and 111 Corcoran North Carolina
Municipal Securities Fund though an exchange program. In addition, shares
of the Fund may be exchanged for shares of certain funds in the Liberty
Family of Funds ("Liberty"), a group of Funds distributed by Federated
Securities Corp. Shareholders have access to the following Liberty funds:
o Liberty U.S. Government Money Market Trust--a U.S. government money
market fund; and
o American Leaders Fund, Inc.--a high-quality equity fund.
Each of the funds may also invest in certain other types of securities as
described in each fund's prospectus.
Shareholders who exercise this exchange privilege must exchange shares
having a net asset value of at least $1,000. Prior to any exchange, the
shareholder must receive a copy of the current prospectus of the
participating fund into which an exchange is to be made.
Exchanges are made at net asset value plus the difference between the
fund's sales charge already paid and any applicable sales charge on shares
of the fund to be acquired in the exchange.
The exchange privilege is available to shareholders residing in any state
in which the participating fund shares being acquired may legally be sold.
Upon receipt by Federated Services Company of proper instructions and all
necessary supporting documents, shares submitted for exchange will be
redeemed at the next-determined net asset value. If the exchanging
shareholder does not have an account in the participating fund whose
shares are being acquired, a new account will be established with the same
registration, dividend and capital gain options as the account from which
shares are exchanged, unless otherwise specified by the shareholder. In
the case where the new account registration is not identical to that of
the existing account, a signature guarantee is required. (See "Redeeming
Shares by Mail").
Exercise of this privilege is treated as a redemption and new purchase for
federal income tax purposes and, depending on the circumstances, a short
or long-term capital gain or loss may be realized. The Fund reserves the
right to modify or terminate the exchange privilege at any time.
Shareholders would be notified prior to any modification or termination.
Shareholders may obtain further information on the exchange privilege by
calling their Central Carolina Bank representative or an authorized
broker.
Exchange by Telephone. Shareholders may provide instructions for exchanges
between participating funds by telephone to their Central Carolina Bank
representative by calling 1-800-422-2080. In addition, investors may
exchange shares by calling their authorized broker directly.
An authorization form permitting the Fund to accept telephone exchange
requests must first be completed. It is recommended that investors request
this privilege at the time of their initial application. If not completed
at the time of initial application, authorization forms and information on
this service can be obtained through a Central Carolina Bank
representative or authorized broker.
Shares may be exchanged by telephone only between fund accounts having
identical shareholder registrations. Telephone exchange instructions may
be recorded. If reasonable procedures are not followed by the Fund, it may
be liable for losses due to unauthorized or fraudulent telephone
instructions.
Telephone exchange instructions must be received by Central Carolina Bank,
or an authorized broker and transmitted to Federated Services Company
before 4:00 p.m. (Eastern time) for shares to be exchanged the same day.
Shareholders who exchange into shares of the Fund will not receive a
dividend from the Fund on the date of the exchange.
Shareholders of the Fund may have difficulty in making exchanges by
telephone through banks, brokers and other financial institutions during
times of drastic economic or market changes. If shareholders cannot
contact their Central Carolina Bank representative or authorized broker by
telephone, it is recommended that an exchange request be made in writing
and sent by mail for next day delivery.
Written Exchange. A shareholder wishing to make an exchange by written
request may do so by sending it to: 111 Corcoran Funds, 111 Corcoran
Street, P.O. Box 931, Durham, North Carolina 27702. In addition, an
investor may exchange shares by sending a written request to their
authorized broker directly.
Any shares held in certificate form cannot be exchanged by telephone but
must be forwarded to Federated Services Company, the transfer agent, by a
Central Carolina Bank representative or authorized broker and deposited to
the shareholder's account before being exchanged.
Redeeming Shares
The Fund redeems shares at their net asset value next determined after the
Fund receives the redemption request. Redemptions will be made on days on
which the Fund computes its net asset value. Telephone or written requests
for redemptions must be received in proper form and can be made through
Central Carolina Bank or directly to the Fund.
By Telephone. A shareholder may redeem shares of the Fund by calling
Central Carolina Bank (call toll-free 1-800-422-2080) to request the
redemption. Shares will be redeemed at the net asset value next determined
after the Fund receives the redemption request from Central Carolina Bank.
Redemption requests through Central Carolina Bank must be received by
Central Carolina Bank before 3:00 p.m. (Eastern time) and must be
transmitted by Central Carolina Bank to the Fund before 4:00 p.m. (Eastern
time) in order for shares to be redeemed at that day's net asset value.
Central Carolina Bank is responsible for promptly submitting redemption
requests and providing proper redemption instructions to the Fund.
Registered broker/dealers may charge customary fees and commissions for
this service. Telephone redemption instructions may be recorded. If
reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
By Mail. Any shareholder may redeem Fund shares by sending a written
request to Central Carolina Bank. The written request should include the
shareholder's name, the Fund name, the account number, and the share or
dollar amount requested. If share certificates have been issued, they must
be properly endorsed and should be sent by registered or certified mail
with the written request to the Fund. Shareholders should call Central
Carolina Bank for assistance in redeeming by mail.
Shareholders requesting a redemption of $50,000 or more, a redemption of
any amount to be sent to an address other than that on record with the
Fund, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
o a trust company or commercial bank whose deposits are insured by BIF,
which is administered by the FDIC;
o a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
o a savings bank or savings and loan association whose deposits are
insured by SAIF, which is administered by the FDIC; or
o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in
the future to limit eligible signature guarantors to institutions that are
members of a signature guarantee program. The Fund and its transfer agent
reserve the right to amend these standards at anytime without notice.
Normally, a check for the proceeds is mailed within one business day, but
in no event more than seven days, after receipt of a proper written
request.
Systematic Withdrawal Program
Shareholders who desire to receive payments of a predetermined amount may
take advantage of the Systematic Withdrawal Program. Under this program,
Fund shares are redeemed to provide for periodic withdrawal payments in an
amount directed by the shareholder. Depending upon the amount of the
withdrawal payments, the amount of dividends paid and capital gains
distributions with respect to Fund shares, and the fluctuation of the net
asset value of Fund shares redeemed under this program, redemptions may
reduce, and eventually deplete, the shareholder's investment in the Fund.
For this reason, payments under this program should not be considered as
yield or income on the shareholder's investment in the Fund. To be
eligible to participate in this program, a shareholder must have an
account value of at least $10,000. A shareholder may apply for
participation in this program through his financial institution. For
shares sold with a sales charge, it is not advisable for shareholders to
be purchasing shares while participating in this program.
Accounts with Low Balances
Due to the high cost of maintaining accounts with low balances, the Fund
may redeem shares in any account and pay the proceeds to the shareholder
if the account balance falls below the required minimum value of $1,000
due to shareholder redemptions. This requirement does not apply, however,
if the balance falls below $1,000 because of changes in the Fund's net
asset value. Before shares are redeemed to close an account, the
shareholder is notified in writing and allowed 30 days to purchase
additional shares to meet the minimum requirement.
Shareholder Information
Voting Rights
Each share of the Fund gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All shares of each
portfolio in the 111 Corcoran Funds have equal voting rights except that
only shares of the Fund are entitled to vote on matters affecting only the
Fund.
As a Massachusetts business trust, the 111 Corcoran Funds are not required
to hold annual shareholder meetings. Shareholder approval will be sought
only for certain changes in the 111 Corcoran Funds' or the Fund's
operation and for the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders shall be called by the
Trustees upon the written request of shareholders owning at least 10% of
the outstanding shares of the 111 Corcoran Funds.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of 111 Corcoran
Funds on behalf of the Fund. To protect shareholders of the Fund, 111
Corcoran Funds has filed legal documents with Massachusetts that expressly
disclaim the liability of shareholders for such acts or obligations of 111
Corcoran Funds. These documents require notice of this disclaimer to be
given in each agreement, obligation, or instrument 111 Corcoran Funds or
its Trustees enter into or sign on behalf of the Fund.
In the unlikely event a shareholder is held personally liable for 111
Corcoran Funds' obligations on behalf of the Fund, 111 Corcoran Funds is
required to use its property to protect or compensate the shareholder. On
request, 111 Corcoran Funds will defend any claim made and pay any
judgment against a shareholder for any act or obligation of 111 Corcoran
Funds on behalf of the Fund. Therefore, financial loss resulting from
liability as a shareholder of the Fund will occur only if 111 Corcoran
Funds cannot meet its obligations to indemnify shareholders and pay
judgments against them from assets of the Fund.
Effect Of Banking Laws
Banking laws and regulations presently prohibit a bank holding company
registered under the Federal Bank Holding Company Act of 1956 or any bank
or non-bank affiliate thereof from sponsoring, organizing, controlling or
distributing the shares of a registered, open-end investment company
continuously engaged in the issuance of its shares, and prohibit banks
generally from issuing, underwriting, selling or distributing securities.
However, such banking laws and regulations do not prohibit such a holding
company affiliate or banks generally from acting as investment adviser,
transfer agent or custodian to such an investment company or from
purchasing shares of such a company as agent for and upon the order of
such a customer. Central Carolina Bank is subject to such banking laws and
regulations.
State securities laws governing the ability of depository institutions to
act as underwriters or distributors of securities may differ from
interpretations given to the Glass-Steagall Act and, therefore, banks and
financial institutions may be required to register as dealers pursuant to
state law.
Central Carolina Bank believes that it may perform the services for the
Fund contemplated by its advisory agreement with the 111 Corcoran Funds
without violation of the Glass-Steagall Act or other applicable banking
laws or regulations. Changes in either federal or state statutes and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as further judicial or administrative
decisions or interpretations of such or future statutes and regulations,
could prevent Central Carolina Bank from continuing to perform all or a
part of the above services for its customers and/or the Fund. If it were
prohibited from engaging in these customer-related activities, the
Trustees would consider alternative advisers and means of continuing
available investment services. In such event, changes in the operation of
the Fund may occur, including possible termination of any automatic or
other Fund share investment and redemption services then being provided by
Central Carolina Bank. It is not expected that existing shareholders would
suffer any adverse financial consequences (if another adviser with
equivalent abilities to Central Carolina Bank is found) as a result of any
of these occurrences.
Tax Information
Federal Income Tax
The Fund will pay no federal regular income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated
investment companies and to receive the special tax treatment afforded to
such companies.
The Fund will be treated as a single, separate entity for federal income
tax purposes so that income (including capital gains) and losses realized
by the other portfolios of 111 Corcoran Funds will not be combined for tax
purposes with those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income
tax on any dividends and other distribution, including capital gains
distributions, received. This applies whether dividends and distributions
are received in cash or as additional shares. Distributions representing
long-term capital gains, if any, will be taxable to shareholders as long-
term capital gains no matter how long the shareholders have held the
shares.
Performance Information
From time to time the Fund advertises its total return and yield.
Total return represents the change, over a specific period of time, in the
value of an investment in the Fund after reinvesting all income and
capital gain distributions. It is calculated by dividing that change by
the initial investment and is expressed as a percentage.
The yield of the Fund is calculated by dividing the net investment income
per share (as defined by the Securities and Exchange Commission) earned by
the Fund over a thirty-day period by the maximum offering price per share
of the Fund on the last day of the period. This number is then annualized
using semi-annual compounding. The yield does not necessarily reflect
income actually earned by the Fund and, therefore, may not correlate to
the dividends or other distributions paid to shareholders.
The performance information reflects the effect of the maximum sales load
which, if excluded, would increase the total return and yield.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
Addresses
111 Corcoran Equity Fund Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
Investment Adviser
Central Carolina Bank and Trust Company 111 Corcoran Street
Durham, North Carolina
27702
Sub-Adviser
Franklin Street Advisors, Inc. 1506 East Franklin Street
Chapel Hill, North
Carolina 27514
Custodian
State Street Bank and Trust Company P.O. Box 8602
Boston, Massachusetts
02266-8602
Transfer Agent, Dividend Disbursing Agent and
Portfolio Recordkeeper
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania
15222
111 Corcoran Equity Fund
Prospectus
A Diversified Portfolio of 111 Corcoran Funds,
an Open-End Management Investment Company
Prospectus dated December __, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY ANY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A
PROSPECTUS.
SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED OCTOBER 3, 1994
111 CORCORAN EQUITY FUND
(A PORTFOLIO OF THE 111 CORCORAN FUNDS)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of 111 Corcoran Equity Fund (the "Fund") dated December ,
1994. This Statement is not a prospectus itself. To receive a copy of
the prospectus, write the Fund or call toll-free 1-800-422-2080.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December , 1994
[logo] FEDERATED SECURITIES CORP.
---------------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
1
General Information About The Fund
1
Investment Objective And Policies
1
Types of Investments 1
Convertible Securities 1
Warrants 1
Futures and Options Transactions
1
Futures Contracts 2
Put Options on Financial Futures
Contracts 2
Call Options on Financial Futures
Contracts 2
"Margin" in Futures Transactions
3
Restricted and Illiquid Securities
3
When-Issued and Delayed Delivery
Transactions 3
Repurchase Agreements 4
Reverse Repurchase Agreements
4
Lending of Portfolio Securities
4
Portfolio Turnover 4
Investment Limitations 4
Selling Short And Buying On Margin
4
Issuing Senior Securities and Borrowing
Money 5
Pledging Assets 5
Investing in Real Estate 5
Investing in Commodities 5
Underwriting 5
Diversification of Investments
5
Concentration of Investments
5
Lending Cash or Securities5
Investing in Restricted Securities
6
Investing in Illiquid Securities
6
Investing in Minerals 6
Investing in New Issuers 6
Investing in Issuers Whose Securities are
Owned by Officers and Trustees of
the Trust 6
Purchasing Securities To Exercise Control
6
Investing in Warrants 6
Investing in Options 6
Writing Covered Call Options
6
Investing in Securities Of Other Investment Companies
6
The 111 Corcoran Funds Management
7
Officers and Trustees 7
The Funds 11
Fund Ownership 11
Trustee Liability 11
Investment Advisory Services11
Adviser to the Fund 11
Advisory Fees 12
Sub-Adviser to the Fund 12
Sub-Advisory Fees 12
State Expense Limitations12
Administrative Services 12
Brokerage Transactions 12
Purchasing Shares 13
Distribution and Shareholder Services Plans
13
Determining Net Asset Value 13
Determining Market Value of Securities
13
Exchange Privilege 14
Redeeming Shares 14
Redemption in Kind 14
Tax Status 14
The Fund's Tax Status 14
Shareholders' Tax Status 14
Capital Gains 14
Total Return 15
Yield 15
Performance Comparisons 15
Appendix 17
General Information About The Fund
The Fund is a portfolio in the 111 Corcoran Funds (the "Trust"), which
was established as a Massachusetts business trust under a Declaration of
Trust dated December 11, 1991.
Investment Objective And Policies
The Fund's investment objective is to provide a relatively high total
return over longer periods of time through appreciation of capital and
current income provided by dividends and interest payments. The objective
cannot be changed without approval of shareholders. Unless otherwise
indicated, the investment policies described below may be changed by the
Board of Trustees ("Trustees") without shareholder approval. Shareholders
will be notified before any material change in these policies becomes
effective.
Types of Investments
The Fund invests principally in a professionally-managed and diversified
portfolio of dividend paying common stocks. Although the Fund may invest
in other securities and in money market instruments, it is the Fund's
policy, under normal market conditions, to invest at least 65% of its
assets in equity securities. The securities in which the Fund may invest
include foreign securities, as described in the prospectus.
Convertible Securities
When owned as part of a unit along with warrants, which are options to
buy the common stock, convertible securities function as convertible
bonds, except that the warrants generally will expire before the bond's
maturity. Convertible securities are senior to equity securities, and
therefore, have a claim to assets of the corporation prior to the holders
of common stock in the case of liquidation. However, convertible
securities are generally subordinated to similar nonconvertible
securities of the same company. The interest income and dividends from
convertible bonds and preferred stocks provide a stable stream of income
with generally higher yields than common stocks, but lower than non-
convertible securities of similar quality.
The Fund will exchange or convert the convertible securities held in its
portfolio into shares of the underlying common stock in instances in
which, in the investment adviser's opinion, the investment
characteristics of the underlying common shares will assist the Fund in
achieving its investment objective. Otherwise, the Fund will hold or
trade the convertible securities. In selecting convertible securities for
the Fund, the Fund's adviser evaluates the investment characteristics of
the convertible security as a fixed income instrument, and the investment
potential of the underlying equity security for capital appreciation. In
evaluating these matters with respect to a particular convertible
security, the Fund's adviser considers numerous factors, including the
economic and political outlook, the value of the security relative to
other investment alternatives, trends in the determinants of the issuer's
profits, and the issuer's management capability and practices.
Warrants
Warrants are basically options to purchase common stock at a specific
price (usually at a premium above the market value of the optioned common
stock at issuance) valid for a specific period of time. Warrants may
have a life ranging from less than a year to twenty years or may be
perpetual. However, most warrants have expiration dates after which they
are worthless. In addition, if the market price of the common stock does
not exceed the warrant's exercise price during the life of the warrant,
the warrant will expire as worthless. Warrants have no voting rights,
pay no dividends, and have no right with respect to the assets of the
corporation issuing them. The percentage increase or decrease in the
market price of the warrant may end to be greater than the percentage
increase or decrease in the market price of the optioned common stock.
Futures and Options Transactions
As a means of reducing fluctuations in the net asset value of shares of
the Fund, the Fund may attempt to hedge its portfolio by buying and
selling financial futures contracts and stock index futures contracts,
buying put options on portfolio securities and listed put options on
futures contracts, and writing call options on futures contracts. The
Fund may also write covered call options on portfolio securities to
attempt to increase its current income.
The Fund will maintain its positions in securities, options and
segregated cash subject to puts and calls until the options are
exercised, closed, or have expired. An option position on financial
futures contracts may be closed out over-the-counter or on a nationally-
recognized exchange which provides a secondary market for options of the
same series.
In addition to purchasing put options and writing call options as
described in the prospectus, the Fund may purchase and write over-the-
counter options on portfolio securities in negotiated transactions with
the buyers or writers of the options when options on the portfolio
securities held by the Fund are not traded on an exchange. The Fund
purchases and writes options only with investment dealers and other
financial institutions (such as commercial banks or savings and loan
associations) deemed creditworthy by the Fund's investment adviser.
Over-the-counter options are two party contracts with price and terms
negotiated between buyer and seller. In contrast, exchange-traded options
are third party contracts with standardized strike prices and expiration
dates and are purchased from a clearing corporation. Exchange-traded
options have a continuous liquid market while over-the-counter options
may not.
The Fund may also write call options and purchase put options on
financial futures and stock index futures contracts as a hedge to attempt
to protect securities in its portfolio against decreases in value.
Futures Contracts
A futures contract is a firm commitment by two parties: the seller
who agrees to make delivery of the specific type of security called
for in the contract ("going short") and the buyer who agrees to take
delivery of the security ("going long") at a certain time in the
future.
A stock index futures contract is a bilateral agreement which
obligates the seller to deliver (and the purchaser to take delivery
of) an amount of cash equal to a specific dollar amount times the
difference between the value of a specific stock index at the close
of trading of the contract and the price at which the agreement is
originally made. There is no physical delivery of the stocks
constituting the index and no price is paid upon entering into a
futures contract, in general, contracts are closed out prior to
their expiration.
Put Options on Financial Futures Contracts
The Fund may purchase listed put options on financial futures
contracts. Unlike entering directly into a futures contract, which
requires the purchaser to buy a financial instrument on a set date
at a specified price, the purchase of a put option on a futures
contract entitles (but does not obligate) its purchaser to decide on
or before a future date whether to assume a short position at the
specified price.
Generally, if the hedged portfolio securities decrease in value
during the term of an option, the related futures contracts will
also decrease in value and the option will increase in value. In
such an event, the Fund will normally close out its option by
selling an identical option. If the hedge is successful, the
proceeds received by the Fund upon the sale of the second option
will be large enough to offset both the premium paid by the Fund for
the original option plus the decrease in value of the hedged
securities.
Alternatively, the Fund may exercise its put option to close out the
position. To do so, it would simultaneously enter into a futures
contract of the type underlying the option (for a price less then
the strike price of the option) and exercise the option. The Fund
would then deliver the futures contract in return for payment of the
strike price. If the Fund neither closes out nor exercises an
option, the option will expire on the date provided in the option
contract, and only the premium paid for the contract will be lost.
Call Options on Financial Futures Contracts
In addition to purchasing put options on futures, the Fund may write
listed call options on futures contracts to hedge its portfolio.
When the Fund writes a call option on a futures contract, it is
undertaking the obligation of assuming a short futures position
(selling a futures contract) at the fixed strike price at any time
during the life of the option if the option is exercised. As stock
prices fall, causing the prices of futures to go down, the Fund's
obligation under a call option on a future (to sell a futures
contract) costs less to fulfill, causing the value of the Fund's
call option position to increase.
In other words, as the underlying futures price goes down below the
strike price, the buyer of the option has no reason to exercise the
call, so that the Fund keeps the premium received for the option.
This premium can substantially offset the drop in value of the
Fund's fixed income or indexed portfolio which is occurring as
interest rates rise.
Prior to the expiration of a call written by the Fund, or exercise
of it by the buyer, the Fund may close out the option by buying an
identical option. If the hedge is successful, the cost of the second
option will be less than the premium received by the Fund for the
initial option. The net premium income of the Fund will then
substantially offset the decrease in value of the hedged securities.
The Fund will not maintain open, positions in futures contracts it
has sold or call options it has written on futures contracts if, in
the aggregate, the value of the open positions (marked to market)
exceeds the current market value of its securities portfolio plus or
minus the unrealized gain or loss on those open positions, adjusted
for the correlation of volatility between the hedged securities and
the futures contracts. If this limitation is exceeded at any time,
the Fund will take prompt action to close out a sufficient number of
open contracts to bring its open futures and options positions
within this limitation.
"Margin" in Futures Transactions
Unlike the purchase or sale of a security, the Fund does not pay or
receive money upon the purchase or sale of a futures contract.
Rather, the Fund is required to deposit an amount of "initial
margin" in cash or U.S. Treasury bills with its custodian (or the
broker, if legally permitted). The nature of initial margin in
futures transactions is different from that of margin in securities
transactions in that initial margin in futures transactions does not
involve the borrowing of funds by the Fund to finance the
transactions. Initial margin is in the nature of a performance bond
or good faith deposit on the contract which is returned to the Fund
upon termination of the futures contract, assuming all contractual
obligations have been satisfied.
A futures contract held by the Fund is valued daily at the official
settlement price or the exchange on which it is traded. Each day the
Fund pays or receives cash, called "variation margin," equal to the
daily change in value of the futures contract. This process is known
as "marking to market." Variation margin does not represent a
borrowing or loan by the Fund but is instead settlement between the
Fund and the broker of the amount one would owe the other if the
futures contract expired. In computing its daily net asset value,
the Fund will mark to market its open futures positions.
The Fund is also required to deposit and maintain margin when it
writes call options on futures contracts.
The Fund will comply with the following restrictions when purchasing
and selling futures contracts. First, the Fund will not participate
in futures transactions if the sum of its initial margin deposits on
open contracts will exceed 5% of the market value of the Fund's
total assets, after taking into account the unrealized profits and
losses on those contracts it has entered into. Second, the Fund will
not enter into these contracts for speculative purposes. Third,
since the Fund does not constitute a commodity pool, it will not
market itself as such, nor serve as a vehicle for trading in the
commodities futures or commodity options markets. Connected with
this, the Fund will disclose to all prospective investors, the
limitations on its futures and option transactions, and make clear
that these transactions are entered into only for bona fide hedging
purposes, or other permissible purposes pursuant to regulations
promulgated by the Commodity Futures Trading Commission ("CFTC").
Finally, because the Fund will submit to the CFTC special calls for
information, the Fund will not register as a commodities pool
operator.
Restricted and Illiquid Securities
The ability of the Trustees to determine the liquidity of certain
restricted securities is permitted under a Securities and Exchange
Commission (the "SEC") Staff position set forth in the adopting release
for Rule 144A under the Securities Act of 1933 (the "Rule"). The Rule is
a non-exclusive, safe-harbor for certain secondary market transactions
involving securities subject to restrictions on resale under federal
securities laws. The Rule provides an exemption from registration for
resales of otherwise restricted securities to qualified institutional
buyers. The Rule was expected to further enhance the liquidity of the
secondary market for securities eligible for resale under the Rule. The
Trust, on behalf of the Fund, believes that the Staff of the SEC has left
the question of determining the liquidity of all restricted securities
for determination to the Trustees. The Trustees consider the following
criteria in determining the liquidity of certain restricted securities:
othe frequency of trades and quotes for the security;
othe number of dealers willing to purchase or sell the security and the
number of other potential buyers;
odealer undertakings to make a market in the security; and
othe nature of the security and the nature of the marketplace trades.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price and yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid assets
of the Fund sufficient to make payment for the securities to be purchased
are segregated on the Fund's records at the trade date. These assets are
marked to market daily and are maintained until the transaction has been
settled. The Fund does not intend to engage in when-issued and delayed
delivery transactions to an extent that would cause the segregation of
more than 20% of the total value of its assets.
Repurchase Agreements
The Fund requires its custodian to take possession of the securities
subject to repurchase agreements and these securities are marked to
market daily. To the extent that the original seller does not repurchase
the securities from the Fund, the Fund could receive less than the
repurchase price on any sale of such securities. In the event that such a
defaulting seller filed for bankruptcy or became insolvent, disposition
of such securities by the Fund might be delayed pending court action. The
Fund believes that, under the regular procedures normally in effect for
custody of the Fund's portfolio securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor of the
Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's adviser to be creditworthy pursuant to guidelines established by
the Trustees.
Reverse Repurchase Agreements
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument to
another person, such as a financial institution, broker, or dealer, in
return for a percentage of the instrument's market value in cash, and
agrees that on a stipulated date in the future the Fund will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase agreements
may enable the Fund to avoid selling portfolio instruments at a time when
a sale may be deemed to be disadvantageous, but the ability to enter into
reverse repurchase agreements does not ensure that the Fund will be able
to avoid selling portfolio instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund
in a dollar amount sufficient to make payment for the obligations to be
purchased are segregated at the trade date. These securities are marked
to market daily and are maintained until the transaction is settled.
Lending of Portfolio Securities
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are subject
to termination at the option of the Fund or the borrower. The Fund may
pay reasonable administrative and custodial fees in connection with a
loan and may pay a negotiated portion of the interest earned on the cash
or equivalent collateral to the borrower or placing broker.
Portfolio Turnover
Although the Fund does not intend to invest for the purpose of seeking
short-term profits, securities in the Fund's portfolio will be sold
whenever the adviser believes it is appropriate to do so in light of the
Fund's investment objective without regard to the length of time a
particular security may have been held. For the fiscal year ending May
31, 1995, the Fund does not expect its portfolio turnover to exceed 125%.
Generally, a high portfolio turnover rate results in increased
transaction costs and higher taxes paid by the Fund's shareholders. In
addition, a high rate of portfolio turnover may result in the realization
of larger amount of capital gains which, when distributed to the Fund's
shareholders, are taxable to them. Nevertheless, transactions for the
Fund's portfolio will be based only upon investment considerations and
will not be limited by any other considerations when the Fund's adviser
deems it appropriate to make changes in the Fund's portfolio.
Investment Limitations
Selling Short And Buying On Margin
The Fund will not sell any securities short or purchase any
securities on margin, other than in connection with buying stock
index futures contracts, put options on stock index futures, put
options on financial futures and portfolio securities, and writing
covered call options, but may obtain such short-term credits as may
be necessary for clearance of purchases and sales of portfolio
securities. A deposit or payment by the Fund of initial or variation
margin in connection with futures contracts or related options
transactions is not considered the purchase of a security on margin.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets, including
the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure to facilitate management of the
portfolio by enabling the Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of its total assets are outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. For purposes of this limitation, the
following will not be deemed to be pledges of the Fund's assets: (a)
the deposit of assets in escrow in connection with the writing of
covered put or call options and the purchase of securities on a when-
issued basis; and (b) collateral arrangements with respect to (i)
the purchase and sale of stock options (and options on stock
indices) and (ii) initial or variation margin for futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in the securities of
companies whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or
interests in real estate.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts. However, the Fund may purchase put
options on stock index futures, put options on financial futures,
stock index futures contracts, and put options on portfolio
securities, and may write covered call options.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities which the Fund may
purchase pursuant to its investment objective, policies, and
limitations.
Diversification of Investments
With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities issued by any one
issuer (other than cash, cash items, or securities issued or
guaranteed by the government of the United States or its agencies or
instrumentalities and repurchase agreements collateralized by such
securities) if, as a result, at the time of such purchase, more than
5% of the value of its total assets would be invested in the
securities of that issuer, or if it would own more than 10% of the
outstanding voting securities of any one issuer.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total
assets in any one industry. However, the Fund may invest 25% or more
of the value of its assets in cash or cash items, securities issued
or guaranteed by the U.S. government, its agencies or
instrumentalities, or instruments secured by these money market
instruments, such as repurchase agreements.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio
securities. This shall not prevent the Fund from purchasing or
holding money market instruments, repurchase agreements, obligations
of the U.S. government, its agencies or instrumentalities, variable
rate demand notes, bonds debentures, notes, certificates of
indebtedness, or certain debt instruments as permitted by its
investment objective, policies, and limitations or the Trust's
Declaration of Trust.
The above investment limitations cannot be changed without shareholder
approval. The following limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Restricted Securities
The Fund will not invest more than 5% of its total assets in
securities subject to restrictions on resale under the Securities
Act of 1933, except for commercial paper issued under Section 4(2)
of the Securities Act of 1933 and certain other restricted
securities which meet the criteria for liquidity as established by
the Trustees.
Investing in Illiquid Securities
The Fund will not invest more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements
providing for settlement in more than seven days after notice, non-
negotiable fixed time deposits with maturities over seven days, over-
the-counter options, and certain securities not determined by the
Trustees to be liquid.
Investing in Minerals
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may
invest in the securities of issuers which invest in or sponsor such
programs.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in securities of issuers which have records of less than
three years of continuous operations, including the operation of any
predecessor.
Investing in Issuers Whose Securities are Owned by Officers and
Trustees of the Trust
The Fund will not purchase or retain the securities of any issuer if
the officers and Trustees of the Trust or the Fund's investment
adviser, owning individually more than 1/2 of 1% of the issuer's
securities, together own more than 5% of the issuer's securities.
Purchasing Securities To Exercise Control
The Fund will not purchase securities of a company for purpose of
exercising control or management.
Investing in Warrants
The Fund will not invest more than 5% of its net assets in warrants,
including those acquired in units or attached to other securities.
To comply with certain state restrictions, the Fund will limits its
investment in such warrants not listed on the New York or American
Stock Exchanges to 2% of its net assets. (If State restrictions
change, this latter restriction may be revised without notice to
shareholders). For purposes of this investment restriction, warrants
acquired by the Fund in units with or attached to securities may be
deemed to be without value.
Investing in Options
The Fund will not purchase put or call options on securities or on
futures contracts if more than 5% of the value of the Fund's total
assets would be invested in premiums on open option positions.
Writing Covered Call Options
The Fund will not write call options on securities unless the
securities are held in the Fund's portfolio or unless the Fund is
entitled to them in deliverable form without further payment or
after segregating cash in the amount of any further payment. The
Fund will not write call options in excess of 5% of the value of its
total assets.
Investing in Securities Of Other Investment Companies
The Fund will limit its investment in other investment companies to
no more than 3% of the total outstanding voting stock of any
investment company, will invest no more than 5% of its total assets
in any one investment company, and will invest no more than 10% of
its total assets in investment companies in general. The Fund will
purchase securities of closed-end investment companies only in open
market transactions involving only customary broker's commissions.
However, these limitations are not applicable if the securities are
acquired in a merger, consolidation, reorganization, or acquisition
of assets.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not
result in a violation of such restriction.
The Fund does not intend to borrow money or pledge securities in excess
of 5% of the value of its net assets during the coming fiscal year.
For purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of investment
to be "cash items."
To comply with registration requirements in certain states, the Fund (1)
will limit the aggregate value of the assets underlying covered call
options or put options written by the Fund to not more than 25% of its
net assets, (2) will limit the premiums paid for options purchased by the
Fund to 5% of its net assets, (3) will limit the margin deposits on
futures contracts entered into by the Fund to 5% of its net assets, and
(4) will limit investments in warrants to 5% of its net assets. No more
than 2% will be in warrants which are listed on the New York or American
Stock Exchanges. (If state requirements change, these restrictions may be
revised without shareholder notification.)
The 111 Corcoran Funds Management
Officers and Trustees
Officers and Trustees are listed with their addresses, principal
occupations, and present positions, including any affiliation with
Central Carolina Bank, Federated Investors, Federated Services Company,
Federated Securities Corp., Federated Administrative Services, and the
Funds (as defined below.)
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life
and Casualty Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, Vice President of the Trust.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D.
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Trustee
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Professor of Medicine and Trustee, University of Pittsburgh;
Director of Corporate Health, University of Pittsburgh Medical Center;
Director, Trustee, or Managing General Partner of the Funds.
Edward L. Flaherty, Jr.@
5916 Penn Mall
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N Park
Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Counsel,
Horizon Financial, F.A., Western Region.
Peter E. Madden
225 Franklin Street
Boston, MA
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation and Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer
5916 Penn Mall
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Meyer and Flaherty; Chairman, Meritcare, Inc.;
Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or Managing
General Partner of the Funds; formerly, Vice Chairman, Horizon Financial,
F.A.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp.; President, Passport Research, Ltd.; Trustee, Federated
Administrative Services, Federated Services Company, and Federated
Shareholder Services; President or Vice President of the Funds; Director,
Trustee, or Managing General Partner of some of the Funds. Mr. Donahue is
the son of John F. Donahue, Chairman and Trustee of the Trust.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Vice President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
President, Treasurer and Trustee
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and
Secretary, Federated Research Corp. and Passport Research, Ltd.; Trustee,
Federated Services Company; Executive Vice President, Secretary, and
Trustee, Federated Administrative Services; Secretary and Trustee,
Federated Shareholder Services; Executive Vice President and Director,
Federated Securities Corp.; Vice President and Secretary of the Funds.
Joseph S. Machi
Federated Investors Tower
Pittsburgh, PA
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services; Vice President and
Assistant Treasurer of some of the Funds.
* This Trustee/Director is deemed to be an "interested person" of the
Trust/Fund as defined in the Investment Company Act of 1940, as
amended.
@ Member of the Trust Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board of
Trustees between meetings of the Board.
The Funds
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; California Municipal Cash Trust;
Cash Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward
D. Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Intermediate Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Intermediate Government Trust;
Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate
U.S. Government Fund, Inc.; Fortress Municipal Income Fund, Inc.;
Fortress Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.;
Government Income Securities, Inc.; High Yield Cash Trust; Insight
Institutional Series, Inc.; Insurance Management Series; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds,
Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty
High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty Term Trust, Inc. - 1999; Liberty U.S. Government Money Market
Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; The Medalist Funds; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; Municipal
Securities Income Trust; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO Monument
Funds; The Shawmut Funds; Short-Term Municipal Trust; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.;
Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
Trademark Funds; Trust for Financial Institutions; Trust for Government
Cash Reserves; Trust for Short-Term U.S. Government Securities; Trust for
U.S. Treasury Obligations; and World Investment Series, Inc.
Fund Ownership
Officers and Trustees own less than 1% of the Fund's outstanding shares.
Trustee Liability
The 111 Corcoran Funds' Declaration of Trust provides that the Trustees
are not liable for errors of judgment or mistakes of fact or law.
However, they are not protected against any liability to which they would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct
of their office.
Investment Advisory Services
Adviser to the Fund
The Fund's investment adviser is Central Carolina Bank (the "Adviser").
The Adviser shall not be liable to the Fund or any shareholder for any
losses that may be sustained in the purchase, holding, lending, or sale
of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the
Fund.
Because of internal controls maintained by Central Carolina Bank to
restrict the flow of non-public information, Fund investments are
typically made without any knowledge of Central Carolina Bank's or its
affiliates' lending relationships with an issuer.
Advisory Fees
For its advisory services, the Adviser receives an annual investment
advisory fee as described in the prospectus.
Sub-Adviser to the Fund
The Fund's sub-adviser is Franklin Street Advisors, Inc. (the "Sub-
Adviser"). The Sub-Adviser shall not be liable to the Fund or any
shareholder for any losses that may be sustained in the purchase,
holding, lending, or sale of any security or for anything done or omitted
by it, except acts or omissions involving willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties imposed upon it by
its contract with the Fund.
Because of internal controls maintained by the Sub-Adviser to restrict
the flow of non-public information, Fund investments are typically made
without any knowledge of the Sub-Adviser's or its affiliates' lending
relationships with an issuer.
Sub-Advisory Fees
For its sub-advisory services, the Sub-Adviser receives an annual sub-
advisory fee as described in the prospectus.
State Expense Limitations
The Adviser has undertaken to comply with expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If the Fund's normal
operating expenses (including the investment advisory fee, but not
including brokerage commissions, interest, taxes and extraordinary
expenses) exceed 2 1/2% per year of the first $30 million of average
net assets, 2% per year of the next $70 million of average net
assets, and 1 1/2% per year of the remaining average net assets, the
Adviser will reimburse the Fund for its expenses over the
limitation.
If the Fund's monthly projected operating expenses exceed this
expense limitation, the investment advisory fee paid will be reduced
by the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
Adviser will be limited, in any single fiscal year, by the amount of
the investment advisory fee.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
Administrative Services
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for the fees
set forth in the prospectus.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the Adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the Adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can be
obtained elsewhere. The Adviser makes decisions on portfolio transactions
and selects brokers and dealers subject to review by the Trustees. The
Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the
Adviser and may include:
oadvice as to the advisability of investing in securities;
osecurity analysis and reports;
oeconomic studies;
oindustry studies;
oreceipt of quotations for portfolio evaluations; and
osimilar services.
The Adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to the value of
the brokerage and research services provided.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising the Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the Adviser or its affiliates might otherwise have
paid, it would tend to reduce their expenses.
Purchasing Shares
Except under certain circumstances described in the prospectus, shares
are sold at their net asset value plus a sales charge on days the New
York Stock Exchange is open for business. The procedure for purchasing
shares of the Fund is explained in the prospectus under "Investing in the
Fund."
Distribution and Shareholder Services Plans
These arrangements permit the payment of fees to financial institutions,
the distributor, and Federated Shareholder Services, to stimulate
distribution activities and to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may
include, but are not limited to, marketing efforts; providing office
space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses.
By adopting the Distribution Plan, the Board of Trustees expects that the
Fund will be able to achieve a more predictable flow of cash for
investment purposes and to meet redemptions. This will facilitate more
efficient portfolio management and assist the Fund in pursuing its
investment objective. By identifying potential investors whose needs are
served by the Fund' objective, and properly servicing these accounts, it
may be possible to curb sharp fluctuations in rates of redemptions and
sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail; and
(3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders'' requests and inquiries concerning their
accounts.
Determining Net Asset Value
Net asset value generally changes each day. The days on which net asset
value is calculated by the Fund are described in the prospectus. Net
asset value will not be calculated on Good Friday and on certain federal
holidays.
Determining Market Value of Securities
Market values of the Fund's portfolio securities are determined as
follows:
oaccording to the last sale price on a national securities exchange, if
available;
oin the absence of recorded sales for bonds and other fixed-income
securities, as determined by an independent pricing service;
ofor short-term obligations, according to the mean between bid and asked
prices, as furnished by an independent pricing service, or for short-
term obligations with maturities of less than 60 days at the time of
purchase, at amortized cost unless the Trustees determine this is not
fair value; or
oat fair value as determined in good faith by the Trustees.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices.
Pricing services may consider:
oyield;
oquality;
ocoupon rate;
omaturity;
otype of issue;
otrading characteristics; and
oother market data.
Over-the-counter put options will be valued at the mean between the bid
and the asked prices.
Exchange Privilege
Shareholders using the exchange privilege must exchange shares having a
new asset value of at least $1,000. Before the exchange, the shareholder
must receive a prospectus of the fund for which the exchange is being
made.
This privilege is available to shareholders resident in any state in
which the fund shares being acquired may be sold. Upon receipt of proper
instructions and required supporting documents, shares submitted for
exchange are redeemed and the proceeds invested in shares of the other
fund.
Instructions for exchanges may be given in writing or by telephone.
Exchange procedures are explained in the prospectus under "Exchange
Privilege."
Redeeming Shares
The Fund redeems shares at the next computed net asset value after the
Fund receives the redemption request. Redemption procedures are explained
in the prospectus under "Redeeming Shares."
Redemption in Kind
Although the Trust intends to redeem shares in cash, it reserves the
right under certain circumstances to pay the redemption price in whole or
in part by a distribution of securities from the Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities
and Exchange Commission rules, taking such securities at the same value
employed in determining net asset value and selecting the securities in a
manner the Trustees determine to be fair and equitable.
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Fund is obligated to redeem shares
for any one shareholder in cash only up to the lesser of $250,000 or 1%
of the Fund's net asset value during any 90-day period.
Tax Status
The Fund's Tax Status
The Fund will pay no federal income tax because it expects to meet
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment
afforded to such companies. To qualify for this treatment, the Fund must,
among other requirements:
oderive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
oderive less than 30% of its gross income from the sale of securities
held less than three months;
oinvest in securities within certain statutory limits; and
odistribute to its shareholders at least 90% of its net income earned
during the year.
Shareholders' Tax Status
No portion of any income dividend paid by the Fund is eligible for the
dividends received deductions available to corporations.
Capital Gains
Capital gains or losses may be realized by the Fund on the sale of
portfolio securities and as a result of discounts from par value on
securities held to maturity. Sales would generally be made because
of:
othe availability of higher relative yields;
odifferentials in market values;
onew investment opportunities;
ochanges in creditworthiness of an issuer; or
oan attempt to preserve gains or limit losses.
Distribution of long-term capital gains are taxed as such, whether
they are taken in cash or reinvested, and regardless of the length
of time the shareholder has owned the shares.
Total Return
The average annual total return for the Fund is the average compounded
rate of return for a given period that would equate a $1,000 initial
investment to the ending redeemable value of that investment. The ending
redeemable value is computed by multiplying the number of shares owned at
the end of the period by the offering price per share at the end of the
period. The number of shares owned at the end of the period is based on
the number of shares purchased at the beginning of the period with
$1,000, less any applicable sales load, adjusted over the period by any
additional shares, assuming the monthly reinvestment of all dividends and
distributions.
Yield
The yield for the Fund is determined by dividing the net investment
income per share (as defined by the Securities and Exchange Commission)
earned by the Fund over a thirty-day period by the maximum offering price
per share on the last day of the period. This value is then annualized
using semi-annual compounding. This means that the amount of income
generated during the thirty-day period is assumed to be generated each
month over a twelve-month period and is reinvested every six months. The
yield does not necessarily reflect income actually earned by the Fund
because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment in
the Fund, the performance will be reduced for those shareholders paying
those fees.
Performance Comparisons
The Fund's performance depends upon such variables as:
oportfolio quality;
oaverage portfolio maturity;
otype of instruments in which the portfolio is invested;
ochanges in interest rates and market value of portfolio securities;
ochanges in the Fund's expenses; and
ovarious other factors.
The Fund's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings
and offering price per share are factors in the computation of yield and
total return as described below.
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute
offering price. The financial publications and/or indices which the Fund
uses in advertising may include:
oStandard & Poor's Ratings Group Daily Stock Price Index of 500 Common
Stocks, a composite index of common stocks in industry, transportation,
and financial and public utility companies, can be used to compare to
the total returns of funds whose portfolios are invested primarily in
common stocks. In addition, the Standard & Poor's index assumes
reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated in Standard & Poor's figures.
oLipper Analytical Services, Inc. ranks funds in various fund categories
by making comparative calculations using total return. Total return
assumes the reinvestment of all capital gains distributions and income
dividends and takes into account any change in the maximum offering
price over a specific period of time. From time to time, the Fund will
quote its Lipper ranking in the "index funds" category in advertising
and sales literature.
oMorningstar, Inc., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their risk-
adjusted returns. The maximum rating is five stars, and ratings are
effective for two weeks.
Advertisements and other sales literature for the Fund may quote total
returns which are calculated on non-standardized base periods. The total
returns represent the historic change in the value of an investment in
the Fund based on monthly reinvestment of dividends over a specified
period of time.
Advertisements may quote performance information which does not reflect
the effect of the sales load.
Appendix
Standard And Poor's Ratings Group Corporate Bond Ratings
AAA--Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA--Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A--Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effect
of changes in circumstances and economic conditions than debt in higher
rated categories.
BBB--Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
NR--NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not
rate a particular type of obligation as a matter of policy. S&P may apply
a plus (+) or minus (-) to the above rating classifications to show
relative standing within the classifications.
Plus(+) or Minus (-): The ratings from "AA to CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the
major rating categories.
Moody's Investors Service, Inc., Corporate Bond Ratings
Aaa--Bonds which are rated "Aaa" are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa--Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group, they comprise what are
generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in
"Aaa"ecurities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long term
risks appear somewhat larger than in "Aaa" securities.
A--Bonds which are rated "A" possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some
time in the future.
Baa--Bonds which are rated "Baa" are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
NR--Not rated by Moody's. Moody's applies numerical modifiers, 1, 2 and 3
in each generic rating classification from "Aa" through "B" in its
corporate bond rating system. The modifier 1 indicates that the security
ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks in the lower end of its generic rating category.
Fitch Investors Service, Inc., Long-Term Debt Ratings
AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest
and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA--Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated "AAA". Because
bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issuers is generally rate "F-1+".
A--Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.
BBB--Bonds are considered to be investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than
for bonds with higher ratings.
NR --NR indicates that Fitch does not rate the specific issue.
Plus (+) or Minus (-): Plus and minus signs are used with a rating
symbol to indicate the relative position of a credit within the rating
category, Plus and minus signs, however, are not used in the "AAA"
category.
Standard and Poor's Ratings Group Commercial Paper Ratings
A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+)
designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issues designated A-1.
Moody's Investors Service, Inc., Commercial Paper Ratings
PRIME-1--Issuers rated Prime-1 (or related supporting institutions) have
a superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well-established industries,
high rates of return on funds employed, conservative capitalization
structure with moderate reliance on debt and ample asset protection;
broad margins in earning coverage of fixed financial charges and high
internal cash generation; well-established access to a range of financial
markets and assured sources of alternate liquidity.
PRIME-2--Issuers rate Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited above,
but to a lesser degree. Earnings trends and coverage ratios, while sound,
will be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
Fitch Investors Service, Inc., Short-Term Debt Ratings
F-1+--Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely
payment.
F-1--Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues
rated F-1+.
F-2--Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not
as great as for issues assigned F-1+ and F-1 ratings.
005902 (12/94)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements to be filed by amendment.
(b) Exhibits:
(1) Copy of Declaration of Trust of the
Registrant (1);
(i) Amendment No. 1 to
Declaration of Trust dated February 3,
1992 (1);
(ii) Conformed copy of Amendment
No. 2 to Declaration of Trust dated
August 25, 1994;+
(2) Copy of By-Laws of the Registrant (1);
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of
Beneficial Interest of the Registrant (1),
(6);
(5) Conformed copy of Investment Advisory
Contract of the Registrant and Exhibits A and
B thereto;+
(i) Form of Exhibit C to the present
Investment Advisory Contract to add 111
Corcoran Equity Fund;+
(ii) Form of Sub-Advisory Agreement;+
(iii) Form of Exhibit A to Sub-Advisory
Agreement on behalf of 111 Corcoran Equity
Fund;+
(6) Conformed copy of Distributor's Contract of
the Registrant and Exhibit A thereto;+
(i) Form of Exhibit B to Distributor's
Contract to add 111 Corcoran Equity Fund;+
(7) Not applicable;
(8) Conformed copy of Custodian Agreement of the
Registrant (4);
(9) (i) Conformed copy of Fund Accounting and
Shareholder Recordkeeping Agreement of the
Registrant (5);
(ii) Conformed copy of Administrative
Services Agreement (5);
(iii) Form of Shareholder Services Plan;+
(iv) Form of Exhibit A to Shareholder
Services Plan on behalf of 111 Corcoran Equity
Fund;+
(10) Copy of Opinion and Consent of Counsel
as to legality of shares being
registered (2);
(11) Not applicable;
(12) Not applicable;
+ All exhibits have been filed electronically.
(1) Response is incorporated by reference to Registrant's
Initial Registration Statement on Form N-1A filed February
19, 1992. (File Nos. 33-45753 and 811-6561)
(2) Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A filed April 23, 1992.
(File Nos. 33-45753 and 811-6561)
(3) Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 1 on form N-1A filed
October 23, 1992 (File Nos. 33-45753 and 811-6561)
(4) Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 3 of form N-1A filed July
27, 1993 (File Nos. 33-45753 and 811-6561)
(5) Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 4 on Form N-1A filed July
26, 1994 (File Nos. 33-45753 and 811-6561)
(6) To be filed by Amendment.
(13) Copy of Initial Capital Understanding
(2);
(14) Not Applicable;
(15) Copy of Rule 12b-1 Distribution Plan;+
(i) Form of Exhibit A to Rule 12b-1 Plan
on behalf of 111 Corcoran Equity Fund;+
(ii) Copy of Rule 12b-1 Agreement;+
(iii) Copy of Fee Schedule for Rule 12b-1
Agreement with Federated Securities
Corp.;+
(16) (i) 111 Corcoran Bond Fund Schedule
for Computation of Fund Performance
Data (3);
(ii) 111 Corcoran North Carolina Municipal
Securities Fund Schedule for
Computation of Fund Performance (3);
(17) Not applicable (Financial Data
Schedule);
(18) Power of Attorney (1).
+ All exhibits have been filed electronically.
(1) Response is incorporated by reference to Registrant's
Initial Registration Statement on Form N-1A filed February
19, 1992. (File Nos. 33-45753 and 811-6561)
(2) Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A filed April 23, 1992.
(File Nos. 33-45753 and 811-6561)
(3) Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 1 on form N-1A filed
October 23, 1992 (File Nos. 33-45753 and 811-6561)
Item 25. Persons Controlled by or Under Common Control with
Registrant
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of September 23,
1994
Shares of beneficial interest
no par value
111 Corcoran Bond Fund 287
111 Corcoran North Carolina Municipal
Securities Fund 337
Item 27. Indemnification: (1)
Item 28. Business and Other Connections of Investment Adviser
and Sub-Adviser:
Item 28. (a) Central Carolina Bank and Trust Company
(CCB), the Fund's adviser, was founded in 1903 as
Durham Bank and Trust Company. Central Carolina
Bank was created from Durham Bank and Trust Company
on September 30, 1961. CCB is the lead bank within
CCB Financial Corporation which is a multibank
holding company that includes a commercial bank
subsidiary with offices also in North Carolina.
CCB Financial Corp. was incorporated in North
Carolina in November 1982. The principal executive
offices of the bank are located at 111 Corcoran
Street, Durham, North Carolina 27702. The
activities of the bank encompass a full range of
commercial banking services, including trust
services.
CCB has managed commingled funds since 1953. As of
June 30, 1994, the Trust Division managed assets in
excess of $1.3 billion. The Trust Division manages
2 commingled funds with assets of approximately
$52.5 million.
Franklin Street Advisors, Inc. is the Fund's
sub-adviser. The principal executive offices
of the sub-adviser are located at 1506 East
Franklin Street, Chapel Hill, North Carolina
27514. The sub-adviser is a registered
investment advisory firm founded in 1990, and
currently manages assets in excess of $300
million. Franklin Street Advisors, Inc. has not
previously acted as an investment adviser to an
investment company. Franklin Street Advisors,
Inc. is a wholly-owned subsidiary of Franklin
Street Partners, Inc., a privately-owned
holding company. Franklin Street Partners, Inc.
also owns a private non-depository trust bank,
Franklin Street Trust Company, as well as
another subsidiary, Franklin Street Securities,
Inc.
The principal executive officers of the Fund's
Investment Adviser and Sub-Adviser, the Directors
of the Fund's Adviser and Sub-Adviser, and Partners
of the Fund's Sub-Adviser are set forth in the
following tables.
(b)
(1) (2) (3)
Other Substantial
Position with Business,
Profession,
Name the Adviser Vocation or
Employment
W.L. Burns, Jr. Chairman and Chairman of the
Board
Director Central Carolina
Bank Financial
Corporation;
Retired President
and Chief
Financial Officer,
Central Carolina
Bank Financial
Corporation and
Central Carolina
Bank and Trust
Company
Ernest C. Roessler President; Chief President, Chief
Executive Officer Executive Officer,
and Director Central Carolina
Bank Financial
Corporation
J. Scott Edwards Executive Vice
President
Richard L. Furr Executive Vice
President
J. Harper Beall, III Director President,
Fairfield Chair Company
(1) (2) (3)
Other Substantial
Position with Business,
Profession,
Name the Adviser Vocation or
Employment
James B. Brame, Jr. Director President and Chief
Executive Officer
Brame Specialty
Co., Inc.
Timothy B. Burnett Director President, Bessemer
Improvement Co.
Arthur W. Clark Director Retired Chairman of
the Board,
President and
Chief Executive
Officer, Peoples
Security Life
Insurance Company
Kinsley van R. Dey, Jr. Director Retired President
and Chief
Executive Officer,
Liggett Group,
Inc.; Director,
GTE South
Frances Hill Fox Director Owner, Croasdaile
Farms; Secretary-
Treasurer
Croasdaile, Inc.
T. E. Haigler, Jr. Director Retired President
and Chief
Executive Officer,
Burroughs Wellcome
Co.; Director,
Factory Stores of
America, Inc.
George R. Herbert Director Vice Chairman and
President
Emeritus, Research
Triangle
Institute;
Director, Duke
Power; Trustee
Emeritus, Duke
University
Edward S. Holmes Director Partner Holmes &
McLaurin,
Attorneys at Law
(1) (2) (3)
Other Substantial
Position with Business,
Profession,
Name the Adviser Vocation or
Employment
Owen G. Kenan Director President, Kenan
Enterprises, Inc.,
Kenan Oil Co.,
Inc., Kenan
Developments,
Inc.; Director,
Kenan Transport
Co., Inc.; Vice
Chairman and
Director Flagler
Systems, Inc.;
Chairman and
Manager, Kenan
Global Ent., LLC
Eugene J. McDonald Director President; Duke
Management
Company; Executive
Vice President;
Duke University;
Director SBSF
Funds, Inc.,
Sphinx Phar., Flag
Mutual Funds
Hamilton W. McKay, Jr., M.D. Director
President;
Carolina Allergy
Clinic, PA
Eric B. Munson Director Executive Director;
University of
North Carolina
Hospitals
John B. Stedman Director Retired, Chairman
of Republic Bank
and Trust Company
H. Allen Tate, Jr. Director President, Allen
Tate Company, Inc.
Dr. Phail Wynn, Jr. Director President, Durham
Technical
Community College
(1) (2) (3)
Other Substantial
Position with Business,
Profession,
Name the Sub-Adviser Vocation or
Employment
Robert C. Eubanks Director; President; President; Franklin
Robert C. Eubanks, Jr. and Partner Street
Partners, Inc.; Director, Franklin
Street Trust Company, Director and
President, Franklin Street
Securities, Inc.; founder, McMillion
and Eubanks Capital
Management, Inc.; former Chairman of the
Board of Trustees, University
of North Carolina
Paul J. Rizzo Director and Partner Director, Franklin
Street Trust
Company, and
Franklin Street
Securities, Inc.;
Vice Chairman of the
Board, IBM; former
Dean, Kenan Flagler
Business School
(University of North
Carolina); and
serves as
independent director
of several
corporations traded
on the New York
Stock Exchange
H. Michael Weaver Director and Partner Director, Franklin
Street Trust Company,
and Franklin Street
Securities, Inc.; Chairman
of the Board, W.H.
Weaver Construction
Co. (Greensboro, NC);
former Chairman of the Board of
Trustees, University of North
Carolina
Carol E. Manzon Secretary- Secretary-
Treasurer,
Treasurer Franklin Street
Partners, Inc., Franklin Street
Trust Company and
Franklin Street
Securities, Inc.
(1) (2) (3)
Other Substantial
Position with Business,
Profession,
Name the Sub-Adviser Vocation or
Employment
Lisa O'Dell Vice President Assistant
Secretary, and Partner
Franklin Street Trust
Company; Vice President,
Franklin Street
Securities, Inc. and
Franklin Street
Partners, Inc.; former
Research Manager with
Donaldson, Lufkin & Jenrette
George M. Salley Vice President Vice President,
and Partner Franklin Street Trust
Company; former Senior Vice
President and portfolio
manager, Wachovia Investment
Management
M. Rex Teaney, III Partner President and
Director, Franklin Street Trust
Company; former Senior
Vice President,
Wachovia National Bank
of North Carolina;
Member, Board of Directors,
Public Securities
Association and Bank Capital Markets
Association; Member, Municipal
Securities Rulemaking
Board
Susan T. Kaderbek Partner Vice President,
Franklin Street Securities,
Inc.; former tax
analyst, Bear Stearns;
former associate,
McGladrey & Pullen and
Arthur Andersen
(1) (2) (3)
Other Substantial
Position with Business,
Profession,
Name the Sub-Adviser Vocation or
Employment
Richard V. Fulp Partner Director, Franklin
Street Trust Company; former Group
Executive Vice President,
Bank of America;
Director, Depository
Trust Company; former
Chairman of American Bankers
Association Trust and
Investment Management
Division
Walter R. Davis Partner Director, Franklin
Street Trust Company; Founder and
Chief Executive of
Premian Corporation;
founder and former
Chief Executive of Basin,
Inc.; former Chairman of the Board of
Trustees of the University of
North Carolina
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares
of the Registrant, also acts as principal underwriter
for the following open-end investment companies:
Alexander Hamilton Funds; American Leaders Fund, Inc.;
Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; BayFunds; The
Biltmore Funds; The Biltmore Municipal Funds;
California Municipal Cash Trust; Cash Trust Series,
Inc.; Cash Trust Series II; DG Investor Series; Edward
D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated
Growth Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust;
Federated Index Trust; Federated Institutional Trust;
Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated
Short-Intermediate Government Trust; Federated Short-
Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government
Bond Fund; First Priority Funds; First Union Funds;
Fixed Income Securities, Inc.; Fortress Adjustable Rate
U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fountain
Square Funds; Fund for U.S. Government Securities,
Inc.; Government Income Securities, Inc.; High Yield
Cash Trust; Independence One Mutual Funds; Insight
Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International
Series Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty
High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money
Market Trust; Liberty Utility Fund, Inc.; Liquid Cash
Trust; Managed Series Trust; Mark Twain Funds; Marshall
Funds, Inc.; Money Market Management, Inc.; The
Medalist Funds; Money Market Obligations Trust; Money
Market Trust; The Monitor Funds; Municipal Securities
Income Trust; New York Municipal Cash Trust; 111
Corcoran Funds; Peachtree Funds; The Planters Funds;
Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; SouthTrust Vulcan Funds;
Star Funds; The Starburst Funds; The Starburst Funds
II; Stock and Bond Fund, Inc.; Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Tower
Mutual Funds; Trademark Funds; Trust for Financial
Institutions; Trust for Government Cash Reserves; Trust
for Short-Term U.S. Government Securities; Trust for
U.S. Treasury Obligations; Vision Fiduciary Funds,
Inc.; Vision Group of Funds, Inc.; and World Investment
Series, Inc.
Federated Securities Corp. also acts as principal
underwriter for the following closed-end investment
company: Liberty Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
Richard B. Fisher Director, Chairman, Chief Vice
President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice President,
Federated Investors Tower President, and Treasurer, Treasurer,
and
Pittsburgh, PA 15222-3779 Federated Securities Trustee
Corp.
John W. McGonigle Director, Executive Vice Vice
President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley, IV Executive Vice President Vice
President
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and Rules
31a-1 through 31a-3 promulgated thereunder are maintained at
one of the following locations:
Registrant Federated Investors
Tower
Pittsburgh, PA 15222-
3779
Federated Services Company Federated Investors
Tower
("Transfer Agent, Dividend Pittsburgh, PA
15222-3779
Disbursing Agent and Portfolio
Recordkeeper")
Federated Administrative Services Federated Investors
Tower
("Administrator") Pittsburgh, PA 15222-
3779
Central Carolina Bank and Trust 111 Corcoran Street
Company Durham, NC 27702
("Adviser")
Franklin Street Advisors, Inc. 1506 East Franklin
Street
("Sub-Adviser") Chapel Hill, North
Carolina
27514
State Street Bank and Trust P.O. Box 8602
Company Boston, MA 02266-8602
("Custodian")
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the
provisions of Section 16(c) of the 1940 Act with
respect to the removal of Trustees and the calling of
special shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.
Registrant hereby undertakes to file a post-effective
amendment on behalf of 111 Corcoran Equity Fund, a
portfolio of 111 Corcoran Funds, using financial
statements for 111 Corcoran Equity Fund, which need not
be certified, within four to six months from the date
of this Post-Effective Amendment No. 5.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant,
111 CORCORAN FUNDS, has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 3rd day
of October, 1994.
111 CORCORAN FUNDS
BY: /s/C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
October 3, 1994
Pursuant to the requirements of the Securities Act of
1933, this Amendment to its Registration Statement has been
signed below by the following person in the capacity and on
the date indicated:
NAME TITLE
DATE
By: /s/C. Grant Anderson
C. Grant Anderson Attorney In Fact October 3,
1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Trustee, and
Treasurer
(Principal Financial
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Form N-1A Exhibit No. 1(ii)
Regulation S-K Exhibit No. 3(a)
111 CORCORAN FUNDS
Amendment No. 2
to
DECLARATION OF TRUST
dated December 11, 1991
THIS Declaration of Trust is amended as follows:
Strike the first paragraph of Section 5 of Article III
from the Declaration of Trust and substitute in its place
the following:
"Section 5. Establishment and Designation of Series
or Class.
Without limiting the authority of the Trustees set
forth in Article XII, Section 8, inter alia, to
establish and designate any additional series or class
or to modify the rights and preferences of any
existing Series or Class, the initial series shall be,
and are established and designated as:
111 Corcoran Bond Fund
111 Corcoran Equity Fund
111 Corcoran North Carolina Municipal Securities
Fund"
The undersigned Assistant Secretary of 111 Corcoran
Funds hereby certifies that the above stated Amendment is a
true and correct Amendment to the Declaration of Trust, as
adopted by the Board of Trustees on the 25th day of August,
1994.
WITNESS the due execution hereof this 25th day of
August, 1994.
/s/ C. Grant
Anderson
C. Grant Anderson
Assistant Secretary
[INVADVCO]111-CORCORAN AUTHOR
JMH
-1-
Form N-1A Exhibit 5
Regulation S-K Exhibit No. 10
111 Corcoran Funds
INVESTMENT ADVISORY CONTRACT
This Contract is made this first day of May, 1992, between
Central Carolina Bank & Trust Co., a state chartered bank,
having its principal place of business in Durham, North Carolina
(the "Adviser"), and 111 Corcoran Funds, a Massachusetts
business trust having its principal place of business in
Pittsburgh, Pennsylvania (the "Trust").
WHEREAS, the Trust is an open-end management investment
company as that term is defined in the Investment Company Act of
1940 and is registered as such with the Securities and Exchange
Commission; and
WHEREAS, the Adviser is engaged in the business of
rendering investment advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser
for each of the portfolios ("Funds") of the Trust which executes
an exhibit to this Contract, and Adviser accepts the
appointments. Subject to the direction of the Trustees of the
Trust, Adviser shall provide investment research and supervision
of the investments of each of the Funds and conduct a continuous
program of investment evaluation and of appropriate sale or
other disposition and reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each
of the Funds will be guided by each of the Fund's investment
objective and policies and the provisions and restrictions
contained in the Declaration of Trust and By-Laws of the Trust
and as set forth in the Registration Statement and exhibits as
may be on file with the Securities and Exchange Commission.
3. Each Fund shall pay or cause to be paid all of its own
expenses and its allocable share of Trust expenses, including
without limitation, the expenses of organizing the Trust and
continuing its existence; fees and expenses of Trustees and
officers of the Trust; fees for investment advisory services and
administrative personnel and services; fees and expenses of
preparing and its Registration Statements under the Securities
Act of 1933 and the Investment Company Act of 1940 and any
amendments thereto; expenses of registering and qualifying the
Trust, the Funds and shares ("Shares") of the Funds under
Federal and state laws and regulations; expenses of preparing,
printing and distributing prospectuses (and any amendments
thereto) to current shareholders; interest expense, taxes, fees
and commissions of every kind; expenses of issue (including cost
of Share certificates), purchase, repurchase and redemption of
Shares, including expenses attributable to a program of periodic
issue; charges and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents, and
registrars; printing and mailing costs, auditing, accounting and
legal expenses; reports to shareholders and governmental
officers and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance
expenses; association membership dues; and such nonrecurring
items as may arise, including all losses and liabilities
incurred in administering the Trust and the Funds. Each Fund
will also pay its allocable share of such extraordinary expenses
as may arise including expenses incurred in connection with
litigation, proceedings, and claims and the legal obligations of
the Trust to indemnify its officers and Trustees and agents with
respect thereto.
4. Each of the Funds shall pay to Adviser, for all
services rendered to such Fund by Adviser hereunder, the fees
set forth in the exhibits attached hereto.
5. The net asset value of each Fund's Shares as used
herein will be calculated to the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods
as it deems appropriate reduce its compensation (and, if
appropriate, assume expenses of one or more of the Funds or
classes thereof) to the extent the expenses of any Fund or a
class thereof exceed such lower expense limitation as the
Adviser may, by notice to the Fund, voluntarily declare to be
effective.
7. This Contract shall begin for each Fund as of the date
of execution of the applicable exhibit and shall continue in
effect with respect to each Fund presently set forth on an
exhibit (and any subsequent Funds added pursuant to an exhibit
during the initial term of this contract) for two years from the
date of this contract set forth above and thereafter for
successive periods of one year, subject to the provisions for
termination and all of the other terms and conditions hereof if:
(a) such continuation shall be specifically approved at least
annually by the vote of a majority of the Trustees of the Trust,
including a majority of the Trustees who are not parties to this
Contract or interested persons of any such party (other than as
Trustees of the Trust) cast in person at a meeting called for
that purpose; and (b) Adviser shall not have notified a Fund in
writing at least sixty (60) days prior to the anniversary date
of this Contract in any year thereafter that it does not desire
such continuation with respect to that Fund. If a Fund is added
after the first approval by the Trustees as described above,
this Contract will be effective as to that Fund upon execution
of the applicable exhibit and will continue in effect until the
next annual approval of this Contract by the Trustees and
thereafter for successive periods of one year, subject to
approval as described above.
8. Notwithstanding any provision in this Contract, it may
be terminated at any time with respect to any Fund, without the
payment of any penalty, by the Trustees of the Trust or by a
vote of a majority of the shareholders of that Fund on sixty
(60) days' written notice to Adviser.
9. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser
may employ or contract with such other person, persons,
corporation, or corporations at its own cost and expense as it
shall determine in order to assist it in carrying out this
Contract.
10. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties
under this Contract on the part of Adviser, Adviser shall not be
liable to the Trust or to any of the Funds or to any shareholder
for any act or omission in the course of or connected in any way
with rendering services or for any losses that may be sustained
in the purchase, holding, or sale of any security.
11. This Contract may be amended at any time by agreement
of the parties provided that the amendment shall be approved
both by the vote of a majority of the Trustees of the Trust,
including a majority of Trustees who are not parties to this
Contract or interested persons of any such party to this
Contract (other than as Trustees of the Trust), cast in person
at a meeting called for that purpose, and on behalf of a Fund by
a majority of the outstanding voting securities of such Fund.
12. Adviser is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust and agrees that the obligations pursuant to
this Contract of a particular Fund and of the Trust with respect
to that particular Fund be limited solely to the assets of that
particular Fund, and Adviser shall not seek satisfaction of any
such obligation from any other Fund, the shareholders of any
Fund, the Trustees, officers, employees or agents of the Trust,
or any of them.
13. This Contract shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
14. This Contract will become binding on the parties hereto
upon their execution of the attached exhibits to this Contract.
EXHIBIT A
111 Corcoran Bond Fund
For all services rendered by Adviser hereunder, the above-
named Fund of the Trust shall pay to Adviser and Adviser agrees
to accept as full compensation for all services rendered
hereunder, an annual investment advisory fee equal to .75 of 1%
of the average daily net assets of the Fund.
The portion of the fee based upon average daily net assets
of the Fund shall be accrued daily at the rate of 1/365th of .75
of 1% applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this first day of May,
1992.
Attest: CENTRAL CAROLINA BANK & TRUST CO.
/s/ Alberta M. Buxton By:/s/ Steven W.
Templeton
Assistant Secretary Senior
Vice President
Attest: 111 CORCORAN FUNDS
/s/ S. Elliott Cohan By:/s/ J.
Christopher Donahue
Assistant Secretary
Vice President
EXHIBIT B
111 Corcoran North Carolina Municipal Securities Fund
For all services rendered by Adviser hereunder, the above-
named Fund of the Trust shall pay to Adviser and Adviser agrees
to accept as full compensation for all services rendered
hereunder, an annual investment advisory fee equal to .75 of 1%
of the average daily net assets of the Fund.
The portion of the fee based upon average daily net assets
of the Fund shall be accrued daily at the rate of 1/365th of .75
of 1% applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this first day of May,
1992.
Attest: CENTRAL CAROLINA BANK & TRUST CO.
/s/ Alberta M. Buxton By:/s/ Steven
W. Templeton
Assistant Secretary Senior
Vice President
Attest: 111 CORCORAN
FUNDS
/s/ S. Elliott Cohan By:/s/ J.
Christopher Donahue
Assistant Secretary
Vice President
Form N-1A Exhibit No. 5(i)
Regulation S-K Exhibit No. 10(i)
EXHIBIT C
111 Corcoran Equity Fund
For all services rendered by Adviser hereunder, the
above-named Fund of the Trust shall pay to Adviser and
Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory
fee equal to .85 of 1% of the average daily net assets of
the Fund.
The portion of the fee based upon average daily net
assets of the Fund shall be accrued daily at the rate of
1/365th of .85 of 1% applied to the daily net assets of the
Fund.
The advisory fee so accrued shall be paid to Adviser
daily.
Witness the due execution hereof this 1st day of
September, 1994.
Attest: CENTRAL CAROLINA BANK AND
TRUST COMPANY
By:
Assistant Secretary
Senior Vice President
Attest: 111
CORCORAN FUNDS
By:
Assistant Secretary
Vice President
[ADSUDINEW]111-CORCORAN AUTHOR
JMH
-1-
Form N-1A Exhibit No. 6
Regulation S-K Exhibit No. 1
111 CORCORAN FUNDS
DISTRIBUTOR'S CONTRACT
AGREEMENT made this first day of May, 1992, by and between
111 CORCORAN FUNDS (the "Trust"), a Massachusetts business
trust, and FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania
Corporation.
In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto
as follows:
1. The Trust hereby appoints FSC as its agent to sell and
distribute shares of the Trust which may be offered in one or
more series (the "Funds") or classes (the "Classes") of shares
(the "Shares"), as described and set forth on one or more
exhibits to this Agreement, at the current offering price
thereof as described and set forth in the current prospectuses
of the Trust. FSC hereby accepts such appointment and agrees to
provide such other services for the Trust, if any, and accept
such compensation from the Trust, if any, as set forth in the
applicable exhibit to this Agreement.
2. The sale of any Shares may be suspended without prior
notice whenever in the judgment of the Trust it is in its best
interest to do so.
3. Neither FSC nor any other person is authorized by the
Trust to give any information or to make any representation
relative to any Shares other than those contained in the
Registration Statement, Prospectuses or Statements of Additional
Information ("SAI's") filed with the Securities and Exchange
Commission, as the same may be amended from time to time, or in
any supplemental information to said Prospectuses or SAI's
approved by the Trust. FSC agrees that any other information or
representations other than those specified above which it or any
dealer or other person who purchases Shares through FSC may make
in connection with the offer or sale of Shares, shall be made
entirely without liability on the part of the Trust. No person
or dealer, other than FSC, is authorized to act as agent for the
Trust for any purpose. FSC agrees that in offering or selling
Shares as agent of the Trust, it will, in all respects, duly
conform to all applicable state and federal laws and the rules
and regulations of the National Association of Securities
Dealers, Inc., including its Rules of Fair Practice. FSC will
submit to the Trust copies of all sales literature before using
the same and will not use such sales literature if disapproved
by the Trust.
4. This Agreement is effective with respect to each Class
as of the date of execution of the applicable exhibit and shall
continue in effect with respect to each Class presently set
forth on an exhibit and any subsequent Classes added pursuant to
an exhibit during the initial term of this Agreement for one
year from the date set forth above, and thereafter for
successive periods of one year if such continuance is approved
at least annually by the Trustees of the Trust including a
majority of the members of the Board of Trustees of the Trust
who are not interested persons of the Trust and have no direct
or indirect financial interest in the operation of any
Distribution Plan relating to the Trust or in any related
documents to such Plan ("Disinterested Trustees") cast in person
at a meeting called for that purpose. If a Class is added after
the first annual approval by the Trustees as described above,
this Agreement will be effective as to that Class upon execution
of the applicable exhibit and will continue in effect until the
next annual approval of this Agreement by the Trustees and
thereafter for successive periods of one year, subject to
approval as described above.
5. This Agreement may be terminated with regard to a
particular Fund or Class at any time, without the payment of any
penalty, by the vote of a majority of the Disinterested Trustees
or by a majority of the outstanding voting securities of the
particular Fund or Class on not more than sixty (60) days'
written notice to any other party to this Agreement. This
Agreement may be terminated with regard to a particular Fund or
Class by FSC on sixty (60) days' written notice to the Trust.
6. This Agreement may not be assigned by FSC and shall
automatically terminate in the event of an assignment by FSC as
defined in the Investment Company Act of 1940, provided,
however, that FSC may employ such other person, persons,
corporation or corporations as it shall determine in order to
assist it in carrying out its duties under this Agreement.
7. FSC shall not be liable to the Trust for anything done
or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard
of the duties imposed by this Agreement.
8. This Agreement may be amended at any time by mutual
agreement in writing of all the parties hereto, provided that
such amendment is approved by the Trustees of the Trust
including a majority of the Disinterested Trustees of the Trust
cast in person at a meeting called for that purpose.
9. This Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the
Trust agrees to indemnify and hold harmless FSC and each person,
if any, who controls FSC within the meaning of Section 15 of the
Securities Act of 1933 and Section 20 of the Securities Act of
1934, as amended, against any and all loss, liability, claim,
damage and expense whatsoever (including but not limited to any
and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) arising out of
or based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement,
Prospectuses or SAI's (as from time to time amended and
supplemented) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading, unless such statement or
omission was made in reliance upon and in conformity with
written information furnished to the Trust about FSC by or on
behalf of FSC expressly for use in the Registration Statement,
any Prospectuses, SAI's, or any amendment or supplement
thereof.
If any action is brought against FSC or any controlling
person thereof with respect to which indemnity may be sought
against the Trust pursuant to the foregoing paragraph, FSC shall
promptly notify the Trust in writing of the institution of such
action and the Trust shall assume the defense of such action,
including the employment of counsel selected by the Trust and
payment of expenses. FSC or any such controlling person thereof
shall have the right to employ separate counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of FSC or such controlling person unless the employment
of such counsel shall have been authorized in writing by the
Trust in connection with the defense of such action or the Trust
shall not have employed counsel to have charge of the defense of
such action, in any of which events such fees and expenses shall
be borne by the Trust. Anything in this paragraph to the
contrary notwithstanding, the Trust shall not be liable for any
settlement of any such claim of action effected without its
written consent. The Trust agrees promptly to notify FSC of the
commencement of any litigation or proceedings against the Trust
or any of its officers or Trustees or controlling persons in
connection with the issue and sale of Shares or in connection
with the Registration Statement, Prospectuses, or SAI's.
(b) FSC agrees to indemnify and hold harmless the Trust,
each of its Trustees, each of its officers who have signed the
Registration Statement and each other person, if any, who
controls the Trust within the meaning of Section 15 of the
Securities Act of 1933, but only with respect to statements or
omissions, if any, made in the Registration Statement or any
Prospectus, or SAI or any amendment or supplement thereof in
reliance upon, and in conformity with, information furnished to
the Trust about FSC by or on behalf of FSC expressly for use in
the Registration Statement or any Prospectus, SAI or any
amendment or supplement thereof. In case any action shall be
brought against the Trust or any other person so indemnified
based on the Registration Statement or any Prospectus, SAI, or
any amendment or supplement thereof, and with respect to which
indemnity may be sought against FSC, FSC shall have the rights
and duties given to the Trust, and the Trust and each other
person so indemnified shall have the rights and duties given to
FSC by the provisions of subsection (a) above.
(c) Nothing herein contained shall be deemed to protect
any person against liability to the Trust or its shareholders to
which such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of the duties of such person or by reason of the
reckless disregard by such person of the obligations and duties
of such person under this Agreement.
(d) Insofar as indemnification for liabilities may be
permitted pursuant to Section 17 of the Investment Company Act
of 1940 for Trustees, officers, FSC and controlling persons of
the Trust by the Trust pursuant to this Agreement, the Trust is
aware of the position of the Securities and Exchange Commission
as set forth in the Investment Company Act Release No. IC-11330.
Therefore, the Trust undertakes that in addition to complying
with the applicable provisions of this Agreement, in the absence
of a final decision on the merits by a court or other body
before which the proceeding was brought, that an indemnification
payment will not be made unless in the absence of such a
decision, a reasonable determination based upon factual review
has been made (i) by a majority vote of a quorum of non-party
Disinterested Trustees, or (ii) by independent legal counsel in
a written opinion that the indemnitee was not liable for an act
of willful misfeasance, bad faith, gross negligence or reckless
disregard of duties. The Trust further undertakes that
advancement of expenses incurred in the defense of a proceeding
(upon undertaking for repayment unless it is ultimately
determined that indemnification is appropriate) against an
officer, Trustee, FSC or controlling person of the Trust will
not be made absent the fulfillment of at least one of the
following conditions: (i) the indemnitee provides security for
his undertaking; (ii) the Trust is insured against losses
arising by reason of any lawful advances; or (iii) a majority of
a quorum of non-party Disinterested Trustees or independent
legal counsel in a written opinion makes a factual determination
that there is reason to believe the indemnitee will be entitled
to indemnification.
11. FSC is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust and agrees that the obligations assumed by
the Trust pursuant to this agreement shall be limited in any
case to the Trust and its assets and FSC shall not seek
satisfaction of any such obligation from the shareholders of the
Trust, the Trustees, officers, employees or agents of the Trust,
or any of them.
12. If at any time the Shares of any Fund are offered in
two or more Classes, FSC agrees to adopt compliance standards as
to when a class of shares may be sold to particular investors.
13. This Agreement will become binding on the parties
hereto upon the execution of the attached exhibits to the
Agreement.
Exhibit A
111 CORCORAN FUNDS
111 Corcoran Bond Fund
111 Corcoran North Carolina Municipal Securities Fund
In consideration of the mutual covenants set forth in the
Distributor's Contract dated May 1, 1992 between 111 Corcoran
Funds and Federated Securities Corp., 111 Corcoran Funds
executes and delivers this Exhibit on behalf of the Funds, and
with respect to the separate Classes of Shares thereof, first
set forth in this Exhibit.
Witness the due execution hereof this first day of May,
1992
ATTEST: 111 CORCORAN FUNDS
/s/ S. Elliott Cohan By:/s/ J. Christopher
Donahue
Assistant Secretary Vice President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ Richard B. Fisher By:/s/ Edward C. Gonzales
Assistant Secretary Vice President
(SEAL)
Form N-1A Exhibit No. 6(i)
Regulation S-K Exhibit No. 1(i)
Exhibit B
111 CORCORAN FUNDS
111 Corcoran Equity Fund
The following provisions are hereby incorporated and
made part of the Distributor's Contract dated the 1st day of
May, 1992, between 111 Corcoran Funds and Federated
Securities Corp. ("FSC") with respect to the Class of the
Fund set forth above.
1. The Trust hereby appoints FSC to engage in
activities principally intended to result in the sale of
shares of the Class. Pursuant to this appointment FSC is
authorized to select a group of brokers ("Brokers") to sell
shares of the above-listed Class ("Shares"), at the current
offering price thereof as described and set forth in the
respective prospectuses of the Trust, and to render
administrative support services to the Trust and its
shareholders. In addition, FSC is authorized to select a
group of Administrators ("Administrators") to render
administrative support services to the Trust and its
shareholders.
2. Administrative support services may include, but
are not limited to, the following eleven functions: (1)
account openings: the Broker or Administrator communicates
account openings via computer terminals located on the
Broker or Administrator's premises; 2) account closings:
the Broker or Administrator communicates account closings
via computer terminals; 3) enter purchase transactions:
purchase transactions are entered through the Broker or
Administrator's own personal computer or through the use of
a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption
transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges
to provide accounting support for all transactions. Broker
or Administrator also wires funds and receives funds for
Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the
Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator
posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator
maintains and distributes current copies of prospectuses and
shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of
its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and
develops methods of making such materials accessible to
customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the
product needs of customers.
3. During the term of this Agreement, the Trust will
pay FSC for services pursuant to this Agreement, a monthly
fee computed at the annual rate of .35% of the average
aggregate net asset value of the Shares held during the
month. For the month in which this Agreement becomes
effective or terminates, there shall be an appropriate
proration of any fee payable on the basis of the number of
days that the Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as
it deems appropriate reduce its compensation to the extent
any Classes' expenses exceed such lower expense limitation
as FSC may, by notice to the Trust, voluntarily declare to
be effective.
5. FSC will enter into separate written agreements
with various firms to provide certain of the services set
forth in Paragraph 1 herein. FSC, in its sole discretion,
may pay Brokers and Administrators a periodic fee in respect
of Shares owned from time to time by their clients or
customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time
to time by FSC in its sole discretion.
6. FSC will prepare reports to the Board of Trustees
of the Trust on a quarterly basis showing amounts expended
hereunder including amounts paid to Brokers and
Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in
the Distributor's Contract dated May 1, 1992, between 111
Corcoran Funds and Federated Securities Corp., 111 Corcoran
Funds executes and delivers this Exhibit on behalf of the
Funds, and with respect to the separate Classes of Shares
thereof, set forth in this Exhibit.
Witness the due execution hereof this 1st day of
September, 1994
ATTEST: 111 CORCORAN FUNDS
By:
Assistant Secretary Vice President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Assistant Secretary Vice President
(SEAL)
1
Form N-1A Exhibit No. 5(ii)
Regulation S-K Exhibit No. 10 (ii)
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT (the "Agreement") is made
between Central Carolina Bank and Trust Company, a state-
chartered bank headquartered in Durham, North Carolina
(hereinafter referred to as "Adviser") and Franklin Street
Advisors, Inc., a North Carolina corporation headquartered
in Chapel Hill, North Carolina (hereinafter referred to as
the "Sub-Adviser").
W I T N E S S E T H :
That the parties hereto, intending to be legally bound
hereby agree as follows:
1. Appointment.
Adviser serves as the investment adviser to 111
Corcoran Equity Fund (the "Fund"), a portfolio of 111
Corcoran Funds, a business trust formed under the laws of
the Commonwealth of Massachusetts (the "Trust"). In this
capacity, Adviser desires to employ the services of Sub-
Adviser and Sub-Adviser agrees to furnish the services for
the compensation as set forth below.
2. Services as Sub-Adviser.
Sub-Adviser shall furnish certain investment advisory
services to Adviser, as may from time to time be reasonably
requested by Adviser, including investment research,
statistical and other factual information, and
recommendations based on Sub-Adviser's analysis, and
assistance to the Adviser in identifying securities for
potential purchase and/or sale.
3. Compensation.
For its services under this Agreement, Adviser shall
pay to Sub-Adviser an annual fee in quarterly installments
(the "Sub-Advisory Fee") as set forth in Exhibit A hereto.
In the event that the fee due from the Trust on behalf of
the Fund to Adviser (the "Advisory Fee") is reduced in order
to meet expense limitations imposed on the Fund by state
securities laws or regulations, or in the event that all or
a portion of the Advisory Fee is voluntarily waived by the
Adviser, the Sub-Advisory Fee shall be reduced in an amount
so that the Sub-Advisory Fee shall always be an amount equal
to 65/85 of the Advisory Fee.
Notwithstanding any other provision of this Agreement,
if the Fund's expenses exceed such lower expense
limitations, the Sub-Adviser may from time to time and for
such periods as it deems appropriate voluntarily reduce its
compensation (and, if appropriate, assume expenses of the
Fund) by notice to the Trust.
4. Term of Agreement.
(a) The effective date of this Agreement shall be
the date as specified by the parties in Exhibit A hereto
("Effective Date"). This Agreement shall continue in effect
for the period specified in Exhibit A, provided each annual
continuance is specifically approved at least annually: (i)
by the vote of a majority of the Trust's Board of Trustees
who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940,
the "Act") of any such party cast in person at a meeting
called for the purpose of voting on such approval; and (ii)
either by the vote of a majority of the Trust's Board of
Trustees or by the vote of a majority of the outstanding
voting securities (as defined in the Act) of the Fund.
(b) This Agreement may be terminated at any time
without the payment of any penalty: (i) by the Trust's
Board of Trustees or by a vote of a majority of the
outstanding voting securities, as defined in the Act, of the
Fund upon sixty (60) days' written notice to Adviser; or
(ii) by Sub-Adviser or Adviser upon 120 days' written notice
to the other party to the Agreement.
(c) This Agreement shall automatically terminate:
(i) in the event of its assignment, as defined in the Act;
or (ii) in the event of termination of the Investment
Advisory Contract between Adviser and the Trust (the
"Investment Advisory Contract") for any reason whatsoever.
5. Modification of Relationships.
So long as both Adviser and Sub-Adviser shall be
legally qualified to act as an investment adviser to the
Fund, neither Adviser nor Sub-Adviser shall act as an
investment adviser (as such term is defined in the Act) to
the Fund except as provided herein and in the Investment
Advisory Contract or in such other manner as may be
expressly agreed between Adviser and Sub-Adviser.
Provided, however, that if the Adviser or Sub-Adviser
shall resign prior to the end of any term of this Agreement
or for any reason be unable or unwilling to serve for a
successive term which has been approved by the Trust's Board
of Trustees pursuant to the provisions of Section 4 of this
Agreement or Section 6 of the Investment Advisory Contract,
the remaining party, Sub-Adviser or Adviser, as the case may
be, shall not be prohibited from serving as an investment
adviser to the Fund by reason of the provisions of this
Section 5.
6. Standard of Care.
Sub-Adviser shall exercise its best judgment in
rendering the services listed in Section 2 above. Sub-
Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund or
shareholders of the Fund in connection with the matters to
which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect
Sub-Adviser against liability to the Fund or to its
shareholders to which Sub-Adviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or
by reason of Sub-Adviser's reckless disregard of its
obligations and duties under this Agreement ("disabling
conduct"). Except for such disabling conduct, the Adviser
shall indemnify the Sub-Adviser (and its officers,
directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with
the Sub-Adviser) against any liability arising from the Sub-
Adviser's conduct under this Agreement. It is agreed that
the Sub-Adviser shall have no responsibility or liability
for the accuracy or completeness of the Adviser's
Registration Statement under the Act and the Securities Act
of 1933, as amended, except for information supplied by the
Sub-Adviser for inclusion therein.
7. Service to Other Accounts.
Nothing in this Agreement shall prevent the Sub-Adviser
or any "affiliated person" (as defined in the Act) of the
Sub-Adviser from acting as investment adviser or manager for
any other person, firm or corporation and shall not in any
way limit or restrict the Sub-Adviser or any such affiliated
person from buying, selling or trading any securities for
its or their own accounts of for the accounts of others for
whom it or they may be acting, provided, however, that the
Sub-Adviser expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligations to the Adviser under this
Agreement. In addition, the Adviser understands that the
persons employed by Sub-Adviser to assist in the performance
of Sub-Adviser's duties under this Agreement will not devote
their full time to such service and nothing contained in
this Agreement shall be deemed to limit or restrict the
right of Sub-Adviser or any affiliate of Sub-Adviser to
engage in and devote time and attention to other businesses
or to render services of any kind or nature. The Sub-
Adviser shall be deemed to be an independent contractor and,
unless otherwise expressly provided or authorized, have no
authority to act or represent the Adviser in any way or
otherwise be deemed an agent of the Adviser.
8. Reference to the Sub-Adviser.
Neither the Adviser or any affiliate or agent thereof
shall make reference to or use the name of the Sub-Adviser
or any of its affiliates in any advertising or promotional
materials without the prior approval of the Sub-Adviser,
which approval shall not be unreasonably withheld.
9. Amendment.
This Agreement may be amended from time to time by
agreement of the parties hereto provided that such amendment
shall be approved both by the vote of a majority of the
Trust's Board of Trustees, including a majority of Trustees
who are not parties to this Agreement or interested persons,
as defined in the Act, of any such party at a meeting called
for that purpose, and by the holders of a majority of the
outstanding voting securities, as defined in the Act, of the
Fund.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on their behalf by their duly
authorized officers, and their corporate seals to be affixed
hereto this day of , 1994.
ATTEST: CENTRAL CAROLINA BANK
AND TRUST COMPANY
By:
Secretary Senior Vice President
(Corporate Seal)
ATTEST: FRANKLIN STREET ADVISORS, INC.
By:
Secretary President
(Corporate Seal)
Form N-1A Exhibit No. 5(iii)
Regulation S-K Exhibit No. 10 (iii)
Exhibit A
111 Corcoran Funds
111 Corcoran Equity Fund
Sub-Advisory Agreement
THIS EXHIBIT A (the "Exhibit") to the Sub-Advisory
Agreement dated
, 1994 between Central Carolina Bank and Trust
Company, a state-chartered bank headquartered in Durham,
North Carolina ("Adviser") and Franklin Street Advisors,
Inc., a North Carolina corporation headquartered in Chapel
Hill, North Carolina ("Sub-Adviser")';
For all services rendered by Sub-Adviser under the
Agreement, Adviser shall pay Sub-Adviser a Sub-Advisory Fee
equal to .65 of 1% of the average daily net assets of the
Fund.
The effective date of the Agreement shall be the day
of
, 1994 to be renewed on , 1996 and
annually thereafter.
This Exhibit duly incorporates by reference the Sub-
Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on their behalf by their duly
authorized officers, and their corporate seals to be affixed
hereto this day of , 1994.
ATTEST CENTRAL CAROLINA BANK
AND TRUST COMPANY
By:
Secretary Senior Vice President
(Corporate Seal)
ATTEST: FRANKLIN STREET ADVISORS, INC.
By:
Secretary President
(Corporate Seal)
GUARANTY
In order to induce Central Carolina Bank and Trust
Company ("Adviser"), investment adviser to 111 Corcoran
Equity Fund, to enter into the Sub-Advisory Agreement
("Agreement") dated as of , 1994 with Franklin
Street Advisors, Inc. ("Sub-Adviser"), from which Agreement
the undersigned, Franklin Street Partners, Inc., as the
parent corporation of Sub-Adviser, will receive a benefit,
the undersigned hereby unconditionally guarantees the full
and prompt performance of Sub-Adviser of all of Sub-
Advisers' obligations to Adviser under this Agreement.
Dated: , 1994
FRANKLIN STREET PARTNERS, INC.
By:
President
-1-
Form N-1A Exhibit No. 9(iii)
Regulation S-K Exhibit No. 10 (iv)
111 CORCORAN FUNDS
Shareholder Services Plan
This Shareholder Services Plan ("Plan") is adopted as of
this 1st day of September, 1994, by the Board of Trustees of 111
Corcoran Funds (the "Trust"), a Massachusetts business trust,
with respect to certain classes ("Classes") of the portfolios of
the Trust (the "Portfolios") set forth in exhibits hereto.
1. This Plan is adopted to allow the Trust to make payments
as contemplated herein to obtain certain personal services for
shareholders and/or the maintenance of shareholder accounts
("Services").
2. This Plan is designed to compensate broker/dealers and
other participating financial institutions and other persons
("Providers") for providing services to the Trust and its
shareholders. The Plan will be administered by Federated
Administrative Services ("FAS"). In compensation for the
services provided pursuant to this Plan, Providers will be paid
a monthly fee computed at the annual rate not to exceed .25% of
the average aggregate net asset value of the shares of the Trust
held during the month.
3. Any payments made by the Portfolios to any Provider
pursuant to this Plan will be made pursuant to the "Shareholder
Services Agreement" entered into by FAS on behalf of the Trust
and the Provider. Providers which have previously entered into
"Administrative Agreements" or "Rule 12b-1 Agreements" with
Federated Securities Corp. may be compensated under this Plan
for Services performed pursuant to those Agreements until the
Providers have executed a "Shareholder Services Agreement"
hereunder.
4. The Trust has the right (i) to select, in its sole
discretion, the Providers to participate in the Plan and (ii) to
terminate without cause and in its sole discretion any
Shareholder Services Agreement.
5. Quarterly in each year that this Plan remains in effect,
FAS shall prepare and furnish to the Board of Trustees of the
Trust, and the Board of Trustees shall review, a written report
of the amounts expended under the Plan.
6. This Plan shall become effective (i) after approval by
majority votes of: (a) the Trust's Board of Trustees; and (b)
the members of the Board of the Trust who are not interested
persons of the Trust and have no direct or indirect financial
interest in the operation of the Trust's Plan or in any related
documents to the Plan ("Disinterested Trustees"), cast in person
at a meeting called for the purpose of voting on the Plan; and
(ii) upon execution of an exhibit adopting this Plan.
7. This Plan shall remain in effect with respect to each
Class presently set forth on an exhibit and any subsequent
Classes added pursuant to an exhibit during the initial year of
the Plan for the period of one year from the date set forth
above and may be continued thereafter if this Plan is approved
with respect to each Class at least annually by a majority of
the Trust's Board of Trustees and a majority of the
Disinterested Trustees, cast in person at a meeting called for
the purpose of voting on such Plan. If this Plan is adopted
with respect to a Class after the first annual approval by the
Trustees as described above, this Plan will be effective as to
that Class upon execution of the applicable exhibit pursuant to
the provisions of paragraph 6(ii) above and will continue in
effect until the next annual approval of this Plan by the
Trustees and thereafter for successive periods of one year
subject to approval as described above.
8. All material amendments to this Plan must be approved by
a vote of the Board of Trustees of the Trust and of the
Disinterested Trustees, cast in person at a meeting called for
the purpose of voting on it.
9. This Plan may be terminated at any time by: (a) a
majority vote of the Disinterested Trustees; or (b) a vote of a
majority of the outstanding voting securities of the Trust as
defined in Section 2(a)(42) of the Investment Company Act of
1940, as amended.
10. While this Plan shall be in effect, the selection and
nomination of Disinterested Trustees of the Trust shall be
committed to the discretion of the Disinterested Trustees then
in office.
11. All agreements with any person relating to the
implementation of this Plan shall be in writing and any
agreement related to this Plan shall be subject to termination,
without penalty, pursuant to the provisions of Paragraph 9
herein.
12. This Plan shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Witness the due execution hereof this 1st day of September,
1994.
111 CORCORAN FUNDS
By:
President
Form N-1A Exhibit No. 9(iv)
Regulation S-K Exhibit No. 10 (v)
EXHIBIT A
to Shareholder Services Plan of
111 CORCORAN FUNDS
111 Corcoran Equity Fund
This Plan is adopted by 111 Corcoran Funds with respect to
the Class of Shares of the portfolio of the Trust as set forth
above.
In compensation for the services provided pursuant to this
Plan, Providers will be paid a monthly fee computed at the
annual rate of 0.25 of 1% of the average aggregate net asset
value of the 111 Corcoran Equity Fund held during the month.
Witness the due execution hereof this 1st day of September,
1994.
111 CORCORAN FUNDS
By:
President
1
Form N-1A Exhibit No. 15
Regulation S-K Exhibit No. 1(ii)
111 Corcoran Funds
PLAN
This Plan ("Plan") is adopted as of September 1, 1994 by
the Board of Trustees of 111 Corcoran Funds (the "Trust"), a
Massachusetts business trust with respect to certain classes of
shares ("Classes") of the portfolios of the Trust (the "Funds")
set forth in exhibits hereto.
1. This Plan is adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940 ("Act") so as to allow the Trust
to make payments as contemplated herein, in conjunction with the
distribution of Classes of the Funds ("Shares").
2. This Plan is designed to finance activities of Federated
Securities Corp. ("FSC") principally intended to result in the
sale of Shares to include: (a) providing incentive to
broker/dealers and other Financial Institutions ("Institutions")
that sell Shares; (b) paying for the costs incurred in
conjunction with advertising and marketing of Shares to include
expenses of preparing, printing and distributing prospectuses and
sales literature to prospective shareholders and Institutions;
and (c) other costs incurred in the implementation and operation
of the Plan. In compensation for services provided pursuant to
this Plan, FSC will be paid a fee in respect of the Classes set
forth on the applicable exhibit.
3. Any payment to FSC in accordance with this Plan will be
made pursuant to the "Distributor's Contract" entered into by the
Trust and FSC. Any payments made by FSC to Brokers and
Administrators with funds received as compensation under this
Plan will be made pursuant to the "Rule 12b-1 Agreement" entered
into by FSC and the Institutions.
4. FSC has the right (i) to select, in its sole discretion,
the Brokers and Administrators to participate in the Plan and
(ii) to terminate without cause and in its sole discretion any
Rule 12b-1 Agreement.
5. Quarterly in each year that this Plan remains in effect,
FSC shall prepare and furnish to the Board of Trustees of the
Trust, and the Board of Trustees shall review, a written report
of the amounts expended under the Plan and the purpose for which
such expenditures were made.
6. This Plan shall become effective with respect to each
Class (i) after approval by majority votes of: (a) the Trust's
Board of Trustees; (b) the Disinterested Trustees of the Trust,
cast in person at a meeting called for the purpose of voting on
the Plan; and (c) the outstanding voting securities of the
particular Class, as defined in Section 2(a)(42) of the Act and
(ii) upon execution of an exhibit adopting this Plan with respect
to such Class.
7. This Plan shall remain in effect with respect to each
Class presently set forth on an exhibit and any subsequent
Classes added pursuant to an exhibit during the initial year of
this Plan for the period of one year from the date set forth
above and may be continued thereafter if this Plan is approved
with respect to each Class at least annually by a majority of the
Trust's Board of Trustees and a majority of the Disinterested
Trustees, cast in person at a meeting called for the purpose of
voting on such Plan. If this Plan is adopted with respect to a
Class after the first annual approval by the Trustees as
described above, this Plan will be effective as to that Class
upon execution of the applicable exhibit pursuant to the
provisions of paragraph 6(ii) above and will continue in effect
until the next annual approval of this Plan by the Trustees and
thereafter for successive periods of one year subject to approval
as described above.
8. All material amendments to this Plan must be approved by
a vote of the Board of Trustees of the Trust and of the
Disinterested Trustees, cast in person at a meeting called for
the purpose of voting on it.
9. This Plan may not be amended in order to increase
materially the costs which the Classes may bear for distribution
pursuant to the Plan without being approved by a majority vote of
the outstanding voting securities of the Classes as defined in
Section 2(a)(42) of the Act.
10. This Plan may be terminated with respect to a
particular Class at any time by: (a) a majority vote of the
Disinterested Trustees; or (b) a vote of a majority of the
outstanding voting securities of the particular Class as defined
in Section 2(a)(42) of the Act; or (c) by FSC on 60 days notice
to the Trust.
11. While this Plan shall be in effect, the selection and
nomination of Disinterested Trustees of the Trust shall be
committed to the discretion of the Disinterested Trustees then in
office.
12. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without
penalty, pursuant to the provisions of Paragraph 10 herein.
13. This Plan shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
Form N-1A Exhibit No. 15(i)
Regulation S-K Exhibit No. 1(iii)
PLAN
EXHIBIT A
111 Corcoran Funds
111 Corcoran Equity Fund
This Plan is adopted by 111 Corcoran Funds with respect to
the initial Class of Shares of the portfolio of the Trust set
forth above.
In compensation for the services provided pursuant to this
Plan, FSC will be paid a monthly fee computed at the annual rate
of .35 of 1% of the average aggregate net asset value of the
Shares of 111 Corcoran Funds held during the month.
Witness the due execution hereof this 1st day of September,
1994.
111 CORCORAN FUNDS
By:
President
1
Form N-1A Exhibit No. 15(ii)
Regulation S-K Exhibit No. 1(iv)
RULE 12b-1 AGREEMENT
This Agreement is made between the Broker/Dealer or
Financial Institution executing this Agreement ("Institution")
and Federated Securities Corp. ("FSC") for the mutual funds
(referred to individually as the "Fund" and collectively as the
"Funds") for which FSC serves as Distributor of shares of
beneficial interest or capital stock ("Shares") and which have
adopted a Rule 12b-1 Plan ("Plan") and approved this form of
agreement pursuant to Rule 12b-1 under the Investment Company
Act of 1940. In consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. FSC hereby appoints Institution to render or cause to
be rendered sales-related services to the Funds and their
shareholders.
2. The services to be provided under Paragraph 1 may
include, but are not limited to, the following:
(a) maintaining and distributing current copies of
prospectuses and shareholder reports;
(b) advertising the availability of its services and
products;
(c) providing assistance and review in designing materials
to send to customers and potential customers and
developing methods of making such materials accessible
to customers and potential customers;
(d) responding to customers' and potential customers'
questions about the Funds; and
(e) providing training and supervision of its personnel.
The services listed above are illustrative. The Institution is
not required to perform each service and may at any time perform
either more or fewer services than described above.
3. During the term of this Agreement, FSC will pay the
Institution fees for each Fund as set forth in a written
schedule delivered to the Institution pursuant to this
Agreement. FSC's fee schedule for Institution may be changed by
FSC sending a new fee schedule to the Institution pursuant to
Paragraph 12 of this Agreement. For the payment period in which
this Agreement becomes effective or terminates, there shall be
an appropriate proration of the fee on the basis of the number
of days that the Rule 12b-1 Agreement is in effect during the
quarter.
4. The Institution will not perform or provide any duties
which would cause it to be a fiduciary under Section 4975 of the
Internal Revenue Code, as amended. For purposes of that
Section, the Institution understands that any person who
exercises any discretionary authority or discretionary control
with respect to any individual retirement account or its assets,
or who renders investment advice for a fee, or has any authority
or responsibility to do so, or has any discretionary authority
or discretionary responsibility in the administration of such an
account, is a fiduciary.
5. The Institution understands that the Department of
Labor views ERISA as prohibiting fiduciaries of discretionary
ERISA assets from receiving administrative service fees or other
compensation from funds in which the fiduciary's discretionary
ERISA assets are invested. To date, the Department of Labor has
not issued any exemptive order or advisory opinion that would
exempt fiduciaries from this interpretation. Without specific
authorization from the Department of Labor, fiduciaries should
carefully avoid investing discretionary assets in any fund
pursuant to an arrangement where the fiduciary is to be
compensated by the fund for such investment. Receipt of such
compensation could violate ERISA provisions against fiduciary
self-dealing and conflict of interest and could subject the
fiduciary to substantial penalties.
6. The Institution agrees not to solicit or cause to be
solicited directly, or indirectly at any time in the future, any
proxies from the shareholders of any or all of the Funds in
opposition to proxies solicited by management of the Fund or
Funds, unless a court of competent jurisdiction shall have
determined that the conduct of a majority of the Board of
Trustees of the Fund or Funds constitutes willful misfeasance,
bad faith, gross negligence or reckless disregard of their
duties. This paragraph 6 will survive the term of this
Agreement.
7. With respect to each Fund this Agreement shall continue
in effect for one year from the date of its execution, and
thereafter for successive periods of one year if the form of
this Agreement is approved at least annually by the Trustees of
the Fund, including a majority of the members of the Board of
Trustees of the Fund who are not interested persons of the Fund
and have no direct or indirect financial interest in the
operation of the Fund's Plan or in any related documents to the
Plan ("Disinterested Trustees") cast in person at a meeting
called for that purpose.
8. Notwithstanding paragraph 7, this Agreement may be
terminated as follows:
(a) at any time, without the payment of any penalty, by
the vote of a majority of the Disinterested Trustees
of the Fund or by a vote of a majority of the
outstanding voting securities of the Fund as defined
in the Investment Company Act of 1940 on not more than
sixty (60) days' written notice to the parties to this
Agreement;
(b) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of
1940 or upon the termination of the "Administrative
Support and Distributor's Contract" or "Distributor's
Contract" between the Fund and FSC; and
(c) by either party to the Agreement without cause by
giving the other party at least sixty (60) days'
written notice of its intention to terminate.
9. The termination of this Agreement with respect to any
one Fund will not cause the Agreement's termination with respect
to any other Fund.
10. The Institution agrees to obtain any taxpayer
identification number certification from its customers required
under Section 3406 of the Internal Revenue Code, and any
applicable Treasury regulations, and to provide FSC or its
designee with timely written notice of any failure to obtain
such taxpayer identification number certification in order to
enable the implementation of any required backup withholding.
11. This Agreement supersedes any prior service agreements
between the parties for the Funds.
12. This Agreement may be amended by FSC from time to time
by the following procedure. FSC will mail a copy of the
amendment to the Institution's address, as shown below. If the
Institution does not object to the amendment within thirty (30)
days after its receipt, the amendment will become part of the
Agreement. The Institution's objection must be in writing and
be received by FSC within such thirty days.
13. This Agreement shall be construed in accordance with
the Laws of the Commonwealth of Pennsylvania.
INSTITUTION
Address
City State Zip Code
Dated:
By:
Authorized Signature
Title
Print Name of Authorized Signature
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-
3779
By:
James F. Getz, President
Form N-1A Exhibit No. 15(iii)
Regulation S-K Exhibit No. 1(v)
FEE SCHEDULE FOR RULE 12b-1 AGREEMENT WITH
FEDERATED SECURITIES CORP.
September 1, 1994
111 CORCORAN FUNDS
FSC will pay the Institution a periodic fee for the
following Funds and Classes computed at an annual rate of the
average net asset value of Shares held in each of these Funds
and Classes during the period in accounts for which the
Institution provides services under the 12b-1 Agreement, so long
as the average net asset value of the Shares in the Funds and
Classes during the period is at least $100,000.
Fund and Class of Shares Fee Rate Period Date
111 Corcoran Equity Fund .35 of 1% Monthly ,
1994
