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. 6 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 7 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)
X on May 31, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
filed the Notice required by that Rule on _________________; or
X intends to file the Notice required by that Rule on or about
July 17, 1995; 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.
Copy to: Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin
2101 L Street, N.W.
Washington, D.C. 20037
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-
3) 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; (1-3)
Acceptable Investments; (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
111 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; (3) Expenses of the
Fund; (1-3) Investing in 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; (1-3) 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; (3) Trustees'
Compensation.
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 (1-3) Filed in Part A.
111
Corcoran
Funds
111 Corcoran
Equity Fund
Supplement to Prospectus Dated
December 2, 1994
A Diversified Portfolio of
111 Corcoran Funds, an Open-End,
Management Investment Company
May 30, 1995
FEDERATED SECURITIES CORP.
Distributor
682365309
G01135-01 (5/95)
111 CORCORAN EQUITY FUND
(A PORTFOLIO OF THE 111 CORCORAN FUNDS)
--------------------------------------------------------------------------------
SUPPLEMENT TO PROSPECTUS DATED DECEMBER 2, 1994
The following information is a supplement to your prospectus. We're providing it
to keep you up to date and comply with regulations that require mutual fund
companies to update shareholders concerning changes in prospectuses.
We suggest that you keep this information for your records.
A. Please insert the following "Summary of Fund Expenses" table immediately
following the Table of Contents and before the section entitled "Financial
Highlights". In addition, please add the heading "Summary of Fund Expenses"
to the Table of Contents page, as the first heading.
SUMMARY OF FUND EXPENSES
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
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 average net assets)
Management Fee (after waiver)(1).................................................................... 0.00%
12b-1 Fee(2)........................................................................................ 0.00%
Total Other Expenses................................................................................ 1.25%
Shareholder Services Fee(2)............................................................... 0.00%
Total Fund Operating Expenses(3)............................................................ 1.25%
</TABLE>
(1) The estimated management fee has been reduced to reflect the 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 2.87% absent the
voluntary waivers and/or reimbursement by the Fund's adviser and Federated
Administrative Services.
* 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.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
------------------------------------------------------------------------------------------ ------ -------
<S> <C> <C>
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
</TABLE>
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 ENDING MAY 31,
1995.
B. Please insert the following "Financial Highlights" table immediately
following the section entitled "Summary of Fund Expenses" and before the
section entitled "General Information." In addition, please add the heading
"Financial Highlights" to the Table of Contents page, after the heading
"Summary of Fund Expenses."
111 CORCORAN EQUITY FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31, 1995
(UNAUDITED)(a)
--------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
-------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------------------------------------------------------
Net investment income 0.07
-------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 0.87
------------------------------------------------------------------------------------- ----------
Total from investment operations 0.94
------------------------------------------------------------------------------------- ----------
LESS DISTRIBUTIONS
-------------------------------------------------------------------------------------
Distributions from net investment income (0.07)
-------------------------------------------------------------------------------------
Distributions in excess of net investment income (0.01)
------------------------------------------------------------------------------------- ----------
Total distributions (0.08)
------------------------------------------------------------------------------------- ----------
NET ASSET VALUE, END OF PERIOD $10.86
------------------------------------------------------------------------------------- ----------
TOTAL RETURN (b) 9.31%
-------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
-------------------------------------------------------------------------------------
Expenses 1.25%(c)
-------------------------------------------------------------------------------------
Net investment income 2.25%(c)
-------------------------------------------------------------------------------------
Expense waiver/reimbursement (d) 2.61%(c)
-------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $5,926
-------------------------------------------------------------------------------------
Portfolio turnover 0.92%
-------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from December 5, 1994 (date of initial
public investment) to March 31, 1995.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
C. Please delete the fourth bullet point on page 3 of the prospectus and replace
it with the following:
"- notes, bonds (including zero coupon bonds), and discount notes of the U.S.
government agencies or instrumentalities, such as the Farm Credit System,
including the National Bank for Cooperatives and Banks for Cooperatives;
Federal Home Loan Banks; Federal Home Loan Mortgage Corporation; Federal
National Mortgage Corporation; Government National Mortgage Association;
Export-Import Bank of the United States; Commodity Credit Corporation;
Federal Financing Bank; The Student Loan Marketing Association; National
Credit Union Administration; and Tennessee Valley Authority."
D. Please insert the following as a new section immediately following the
section entitled "Temporary Investments." on page 6 of the prospectus:
"DERIVATIVE CONTRACTS AND SECURITIES
The term "derivative" has traditionally been applied to certain contracts
(including, futures, forward, option and swap contracts) that "derive" their
value from changes in the value of an underlying security, currency, commodity
or index. Certain types of securities that incorporate the performance
characteristics of these contracts are also referred to as "derivatives". The
term has also been applied to securities "derived" from the cash flows from
underlying securities, mortgages or other obligations. Derivative contracts and
securities can be used to reduce or increase the volatility of an investment
portfolio's total performance. While the response of certain derivative
contracts and securities to market changes may differ from traditional
investments, such as stock and bonds, derivatives do not necessarily present
greater market risks than traditional investments. The Fund will only use
derivative contracts for the purposes disclosed in the applicable prospectus
sections above. To the extent that the Fund invests in securities that could be
characterized as derivatives, it will only do so in a manner consistent with its
investment objectives, policies, and limitations."
E. Please delete the second sentence of the section entitled "Sub-Adviser" on
page 9 of the prospectus and replace it with the following:
"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 daily assets of the Fund payable by
the Investment Adviser from the Advisory fees."
F. Please insert the following as the fourth and fifth paragraphs in the section
entitled "Distribution and Shareholder Services Plans." on page 10 of the
prospectus:
"OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor may also pay
financial institutions a fee based on the average net asset value of shares of
their customers invested in the Fund for providing administrative services. This
fee is in addition to the amounts paid under the distribution plan for
administrative services, and, if paid, will be reimbursed by the Bank and not by
the Fund.
The Bank or its affiliates may also offer the pay a fee from their own assets to
financial institutions as financial assistance for providing substantial
marketing and sales support. The support may include sponsoring sales,
educational and training seminars for their employees, providing sales
literature, and engineering computer software programs that emphasize the
attributes of the Fund. Such assistance will be predicated upon the amount of
shares the dealer sells or may sell, and/or upon the type and nature of sales
and operational support furnished by the financial institution. These payments
will be made by the Bank and will not be made from the assets of the Fund."
G. Please delete the section entitled "Legal Counsel" from page 11. In addition,
please delete the heading "Legal Counsel" from the Table of Contents page,
and delete the references to "Legal Counsel" on the address page of the
prospectus.
H. Please delete the first sentence of the section entitled "Dividends" on page
14 of the prospectus and replace it with the following:
"Dividends are declared quarterly and paid quarterly to all shareholders
invested in the Fund on the record date."
I. Please insert the following as the last sentence of the first paragraph of
the section entitled "Voting Rights" on page 18 of the prospectus.
"As of May 5, 1995, Central Carolina Bank & Trust, acting in various capacities
for numerous accounts, was the owner of record of 1,897,226 shares (95.8%) of
the Fund, and therefore, may, for certain purposes, be deemed to control the
Fund and be able to affect the outcome of certain matters presented for a vote
of shareholders."
J. Please delete the last sentence of the section entitled "Performance
Information" on page 20 of the prospectus and replace it with the following:
"From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare its
performance to certain indices."
K. Please insert the following Financial Statements immediately following the
section entitled "Performance Information" and before the address page. In
addition, please add the heading "Financial Statements" immediately following
the heading "Performance Information" on the Table of Contents page.
111 CORCORAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------------------------------------------------------------- ----------
<C> <C> <S> <C>
COMMON STOCKS--97.3%
------------------------------------------------------------------------------------
AEROSPACE--0.6%
--------------------------------------------------------------------
500 United Technologies Corp. $ 34,563
-------------------------------------------------------------------- ----------
AUTOMOBILE--2.2%
--------------------------------------------------------------------
2,000 Chrysler Corp. 83,750
--------------------------------------------------------------------
1,000 General Motors Corp. 44,250
-------------------------------------------------------------------- ----------
Total 128,000
-------------------------------------------------------------------- ----------
BROADCASTING--1.1%
--------------------------------------------------------------------
1,000 CBS, Inc. 64,000
-------------------------------------------------------------------- ----------
CHEMICALS--10.7%
--------------------------------------------------------------------
1,500 Air Products & Chemicals, Inc. 78,188
--------------------------------------------------------------------
1,500 Dow Chemical Co. 109,500
--------------------------------------------------------------------
1,000 duPont (E.I.) de Nemours & Co. 60,500
--------------------------------------------------------------------
1,000 Eastman Chemical Co. 55,625
--------------------------------------------------------------------
1,300 Eastman Kodak Co. 69,063
--------------------------------------------------------------------
3,000 Engelhard Corp. 88,875
--------------------------------------------------------------------
1,000 Grace (W.R.) & Co. 53,250
--------------------------------------------------------------------
2,000 Praxair, Inc. 46,500
--------------------------------------------------------------------
2,000 Upjohn Co. 71,500
-------------------------------------------------------------------- ----------
Total 633,001
-------------------------------------------------------------------- ----------
CONSUMER GOODS--4.8%
--------------------------------------------------------------------
2,400 General Electric Co. 129,900
--------------------------------------------------------------------
</TABLE>
111 CORCORAN EQUITY FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------------------------------------------------------------- ----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------------------------------------------
CONSUMER GOODS--CONTINUED
--------------------------------------------------------------------
1,000 Georgia-Pacific Corp. $ 79,750
--------------------------------------------------------------------
2,000 Goodyear Tire and Rubber 73,500
-------------------------------------------------------------------- ----------
Total 283,150
-------------------------------------------------------------------- ----------
ELECTRONICS--7.4%
--------------------------------------------------------------------
2,000 AMP, Inc. 72,000
--------------------------------------------------------------------
1,000 Avnet, Inc. 40,375
--------------------------------------------------------------------
2,000 E-Systems, Inc. 90,750
--------------------------------------------------------------------
1,000 Hewlett-Packard Co. 120,375
--------------------------------------------------------------------
1,000 Schlumberger Ltd. 59,625
--------------------------------------------------------------------
2,000 Sensormatic Electronics Corp. 56,000
-------------------------------------------------------------------- ----------
Total 439,125
-------------------------------------------------------------------- ----------
ENTERTAINMENT--3.1%
--------------------------------------------------------------------
2,000 Disney (Walt) Co. 106,750
--------------------------------------------------------------------
2,000 Promus Cos., Inc. 75,000
-------------------------------------------------------------------- ----------
Total 181,750
-------------------------------------------------------------------- ----------
FINANCE--8.9%
--------------------------------------------------------------------
2,000 American Express Co. 69,750
--------------------------------------------------------------------
1,500 Household International, Inc. 65,250
--------------------------------------------------------------------
2,000 Merrill Lynch & Co., Inc. 85,250
--------------------------------------------------------------------
1,435 Morgan (J.P.) & Co., Inc. 87,535
--------------------------------------------------------------------
1,500 Morgan Stanley Group, Inc. 101,062
--------------------------------------------------------------------
3,000 Travelers, Inc. 115,875
-------------------------------------------------------------------- ----------
Total 524,722
-------------------------------------------------------------------- ----------
HEALTH CARE--2.7%
--------------------------------------------------------------------
2,000 Columbia/HCA Healthcare 86,000
--------------------------------------------------------------------
2,000 SmithKline Beecham PLC 75,000
-------------------------------------------------------------------- ----------
Total 161,000
-------------------------------------------------------------------- ----------
</TABLE>
111 CORCORAN EQUITY FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------------------------------------------------------------- ----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------------------------------------------
INSURANCE--7.5%
--------------------------------------------------------------------
1,000 Chubb Corp. $ 79,000
--------------------------------------------------------------------
3,000 Equitable Companies, Inc. 66,000
--------------------------------------------------------------------
1,000 ITT Corp. 102,625
--------------------------------------------------------------------
2,000 Jefferson-Pilot Corp. 118,250
--------------------------------------------------------------------
2,300 Providian Corp. 80,788
-------------------------------------------------------------------- ----------
Total 446,663
-------------------------------------------------------------------- ----------
METALS--1.4%
--------------------------------------------------------------------
2,000 Aluminum Co. of America 82,750
-------------------------------------------------------------------- ----------
MINING--5.3%
--------------------------------------------------------------------
2,000 Barrick Gold Corp. 50,000
--------------------------------------------------------------------
3,000 Cyprus Amax Minerals Co. 85,125
--------------------------------------------------------------------
1,500 Flucor Corp. 72,375
--------------------------------------------------------------------
3,000 Halliburton Co. 109,125
-------------------------------------------------------------------- ----------
Total 316,625
-------------------------------------------------------------------- ----------
MORTGAGE--5.1%
--------------------------------------------------------------------
1,000 Federal Home Loan Mortgage Corp. 60,500
--------------------------------------------------------------------
2,950 Federal National Mortgage Association 240,056
-------------------------------------------------------------------- ----------
Total 300,556
-------------------------------------------------------------------- ----------
OFFICE EQUIPMENT--1.4%
--------------------------------------------------------------------
1,000 International Business Machines 81,875
-------------------------------------------------------------------- ----------
OFFICE SUPPLIES--1.3%
--------------------------------------------------------------------
1,500 Consolidated Papers, Inc. 74,625
-------------------------------------------------------------------- ----------
OIL--8.2%
--------------------------------------------------------------------
1,500 Amoco Corp. 95,437
--------------------------------------------------------------------
1,000 Anadarko Petroleum Corp. 43,750
--------------------------------------------------------------------
1,000 British Petroleum PLC 83,875
--------------------------------------------------------------------
3,000 Chevron Corp. 144,000
--------------------------------------------------------------------
</TABLE>
111 CORCORAN EQUITY FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------------------------------------------------------------- ----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------------------------------------------
OIL--CONTINUED
--------------------------------------------------------------------
2,000 Total Compagnie Francaise des Petroles $ 60,000
--------------------------------------------------------------------
2,000 Unocal Corp. 57,500
-------------------------------------------------------------------- ----------
Total 484,562
-------------------------------------------------------------------- ----------
PUBLISHING--1.0%
--------------------------------------------------------------------
1,300 Reader's Digest Association, Inc. 62,562
-------------------------------------------------------------------- ----------
REAL ESTATE--0.7%
--------------------------------------------------------------------
2,000 Pennsylvania Real Estate Investment Trust 40,250
-------------------------------------------------------------------- ----------
RESTAURANTS--1.7%
--------------------------------------------------------------------
3,000 McDonald's Corp. 102,375
-------------------------------------------------------------------- ----------
RETAIL--4.9%
--------------------------------------------------------------------
2,000 Dayton Hudson Corp. 143,000
--------------------------------------------------------------------
4,000 Federated Department Stores, Inc. 88,500
--------------------------------------------------------------------
1,300 Home Depot, Inc. 57,525
-------------------------------------------------------------------- ----------
Total 289,025
-------------------------------------------------------------------- ----------
SERVICES--1.1%
--------------------------------------------------------------------
2,000 Browning Ferris Industries, Inc. 68,000
-------------------------------------------------------------------- ----------
TELECOMMUNICATIONS--7.9%
--------------------------------------------------------------------
3,000 AT & T Corp. 155,250
--------------------------------------------------------------------
4,000 GTE Corp. 133,000
--------------------------------------------------------------------
2,000 Motorola, Inc. 109,250
--------------------------------------------------------------------
3,500 Tele Communications, Inc. 73,500
-------------------------------------------------------------------- ----------
Total 471,000
-------------------------------------------------------------------- ----------
TRANSPORTATION--3.3%
--------------------------------------------------------------------
1,500 CSX Corp. 118,125
--------------------------------------------------------------------
1,200 Norfolk Southern Corp. 80,250
-------------------------------------------------------------------- ----------
Total 198,375
-------------------------------------------------------------------- ----------
</TABLE>
111 CORCORAN EQUITY FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------------------------------------------------------------- ----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------------------------------------------
UTILITIES--5.0%
--------------------------------------------------------------------
3,000 Houston Industries, Inc. $ 114,375
--------------------------------------------------------------------
5,000 Public Service Co. of North Carolina, Inc. 75,000
--------------------------------------------------------------------
2,600 Southwestern Bell Corp. 109,525
-------------------------------------------------------------------- ----------
Total 298,900
-------------------------------------------------------------------- ----------
TOTAL COMMON STOCKS (IDENTIFIED COST, $5,311,595) 5,767,454
-------------------------------------------------------------------- ----------
MUTUAL FUND SHARES--1.4%
------------------------------------------------------------------------------------
81,875 Goldman Sachs Money Market Fund (AT NET ASSET VALUE) 81,875
-------------------------------------------------------------------- ----------
TOTAL INVESTMENTS (IDENTIFIED COST, $5,393,470) $5,849,329+
-------------------------------------------------------------------- ----------
</TABLE>
+ The cost of investments for federal tax purposes amounts to $5,393,470. The
net unrealized appreciation of investments on a federal tax basis amounts to
$455,859, which is comprised of $504,767 appreciation and $48,908 depreciation
at March 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($5,925,972) at March 31, 1995.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
---------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $5,393,470) $5,849,329
---------------------------------------------------------------------------------
Receivable for shares sold 192,544
---------------------------------------------------------------------------------
Income receivable 14,754
---------------------------------------------------------------------------------
Receivable from Adviser 14,050
--------------------------------------------------------------------------------- ----------
Total assets 6,070,677
---------------------------------------------------------------------------------
LIABILITIES:
---------------------------------------------------------------------------------
Payable for investments purchased $109,995
----------------------------------------------------------------------
Dividends payable 14,995
----------------------------------------------------------------------
Accrued expenses 19,715
---------------------------------------------------------------------- --------
Total liabilities 144,705
--------------------------------------------------------------------------------- ----------
NET ASSETS for 545,715 shares of beneficial interest outstanding $5,925,972
--------------------------------------------------------------------------------- ----------
NET ASSETS CONSIST OF:
---------------------------------------------------------------------------------
Paid in capital $5,473,815
---------------------------------------------------------------------------------
Net unrealized appreciation of investments 455,859
---------------------------------------------------------------------------------
Accumulated net realized loss on investments (3,227)
---------------------------------------------------------------------------------
Distributions in excess of net investment income (475)
--------------------------------------------------------------------------------- ----------
Total Net Assets $5,925,972
--------------------------------------------------------------------------------- ----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($5,925,972 / 545,715 shares outstanding) $10.86
--------------------------------------------------------------------------------- ----------
Offering Price Per Share (100/97.75 of $10.86)* $11.11
--------------------------------------------------------------------------------- ----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
STATEMENT OF OPERATIONS
PERIOD ENDED MARCH 31, 1995*
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
-------------------------------------------------------------------------------------
Interest $ 25,030
-------------------------------------------------------------------------------------
Dividends 34,594
------------------------------------------------------------------------------------- --------
Total income 59,624
-------------------------------------------------------------------------------------
EXPENSES:
-------------------------------------------------------------------------------------
Investment advisory fee $14,476
--------------------------------------------------------------------------
Administrative personnel and services fee 15,891
--------------------------------------------------------------------------
Custodian fees 8,946
--------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 2,372
--------------------------------------------------------------------------
Trustees' fees 655
--------------------------------------------------------------------------
Legal fees 852
--------------------------------------------------------------------------
Portfolio accounting fees 15,277
--------------------------------------------------------------------------
Printing and postage 3,932
--------------------------------------------------------------------------
Miscellaneous 3,304
-------------------------------------------------------------------------- -------
Total expenses 65,705
--------------------------------------------------------------------------
Deduct--
--------------------------------------------------------------------------
Waiver of investment advisory fee $14,476
----------------------------------------------------------------
Waiver of administration personnel and services fees 15,891
----------------------------------------------------------------
Reimbursement of other operating expenses by Adviser 14,050 44,417
---------------------------------------------------------------- ------- -------
Net expenses 21,288
------------------------------------------------------------------------------------- --------
Net investment income 38,336
------------------------------------------------------------------------------------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
-------------------------------------------------------------------------------------
Net realized loss on investments (3,227)
-------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 455,859
------------------------------------------------------------------------------------- --------
Net realized and unrealized gain on investments 452,632
------------------------------------------------------------------------------------- --------
Change in net assets resulting from operations $490,968
------------------------------------------------------------------------------------- --------
</TABLE>
* For the period from December 5, 1994 (date of initial public investment) to
March 31, 1995.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31, 1995*
(UNAUDITED)
---------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
--------------------------------------------------------------------------
OPERATIONS--
--------------------------------------------------------------------------
Net investment income $ 38,336
--------------------------------------------------------------------------
Net realized loss on investments ($3,227, as computed for federal tax
purposes) (3,227)
--------------------------------------------------------------------------
Net change in unrealized appreciation of investments 455,859
-------------------------------------------------------------------------- -------------
Change in net assets resulting from operations 490,968
-------------------------------------------------------------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
--------------------------------------------------------------------------
Distributions from net investment income (38,336)
--------------------------------------------------------------------------
Distributions in excess of net investment income (475)
-------------------------------------------------------------------------- -------------
Change in net assets resulting from distributions to shareholders (38,811)
-------------------------------------------------------------------------- -------------
SHARE TRANSACTIONS--
--------------------------------------------------------------------------
Proceeds from sale of shares 6,028,963
--------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 2,284
--------------------------------------------------------------------------
Cost of shares redeemed (557,432)
-------------------------------------------------------------------------- -------------
Change in net assets from share transactions 5,473,815
-------------------------------------------------------------------------- -------------
Change in net assets 5,925,972
--------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------
Beginning of period 0
-------------------------------------------------------------------------- -------------
End of period (including distributions in excess of net investment
income of $475) $ 5,925,972
-------------------------------------------------------------------------- -------------
</TABLE>
* For the period from December 5, 1994 (date of initial public investment) to
March 31, 1995.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
--------------------------------------------------------------------------------
(1) ORGANIZATION
111 Corcoran Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of two diversified portfolios and one non-diversified
portfolio. The financial statements included herein present only those of 111
Corcoran Equity Fund (the "Fund"), a diversified portfolio. The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on national securities exchanges. Unlisted securities and
short-term securities are generally valued at the prices provided by an
independent pricing service. Short-term securities with remaining
maturities of sixty days or less at the time of purchase may be valued at
amortized cost, which approximates fair market value. Investments in other
open-end investment companies are valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and expenses are accrued daily. Bond premium and discount,
if applicable, are amortized as required by the Internal Revenue Code, as
amended (the "Code").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
111 CORCORAN EQUITY FUND
--------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31, 1995*
---------------
<S> <C>
--------------------------------------------------------------------------
Shares sold 597,014
--------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 210
--------------------------------------------------------------------------
Shares redeemed (51,509)
-------------------------------------------------------------------------- ------------
Net change resulting from share transactions 545,715
-------------------------------------------------------------------------- ------------
</TABLE>
* For the period from December 5, 1994 (date of initial public investment) to
March 31, 1995.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Central Carolina Bank and Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.85 of 1% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive its fee and reimburse
certain operating expenses of the Fund. The Adviser can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT AND PORTFOLIO ACCOUNTING FEES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses incurred by the Fund will be
borne initially by FAS and are estimated to be ($35,000). The Fund has agreed to
reimburse FAS for the organizational expenses during the five year period
following December 2, 1994 (the date the Fund became effective).
INTERFUND TRANSACTIONS--During the period ended March 31, 1995, the Fund engaged
in purchase transactions with funds that have a common investment adviser (or
affiliated investment advisers), common Directors/Trustees, and/or common
Officers. These transactions were made at current market value pursuant to Rule
17a-7 under the Act amounting to $1,050,115.
111 CORCORAN EQUITY FUND
--------------------------------------------------------------------------------
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended March 31, 1995, were as follows:
<TABLE>
<S> <C>
--------------------------------------------------------------------------------
PURCHASES $5,350,915
-------------------------------------------------------------------------------- ----------
SALES $ 36,129
-------------------------------------------------------------------------------- ----------
</TABLE>
May 30, 1995
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 investments company (a mutual fund). The
investment objective of the Fund is to provide 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 ARE
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 2,
1994 with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may 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 2, 1994
TABLE OF CONTENTS
--------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
------------------------------------------------------
GENERAL INFORMATION 2
------------------------------------------------------
INVESTMENT INFORMATION 2
------------------------------------------------------
Investment Objective 2
Investment Policies 2
Acceptable Investments 2
Investment Limitations 7
Portfolio Turnover 8
THE 111 CORCORAN FUNDS INFORMATION 8
------------------------------------------------------
Management of the 111 Corcoran Funds 8
Distribution of Fund Shares 10
Administration of the Fund 10
BROKERAGE TRANSACTIONS 11
------------------------------------------------------
EXPENSES OF THE FUND 11
------------------------------------------------------
NET ASSET VALUE 12
------------------------------------------------------
INVESTING IN THE FUND 12
------------------------------------------------------
Share Purchases 12
Minimum Investment Required 12
What Shares Cost 13
Purchases at Net Asset Value 13
Sales Charge Reallowance 13
Reducing the Sales Charge 14
Systematic Investment Program 15
Certificates and Confirmations 15
Dividends 15
Capital Gains 15
EXCHANGE PRIVILEGE 15
------------------------------------------------------
REDEEMING SHARES 17
------------------------------------------------------
Systematic Withdrawal Program 18
Accounts with Low Balances 18
SHAREHOLDER INFORMATION 18
------------------------------------------------------
Voting Rights 18
Massachusetts Partnership Law 19
EFFECT OF BANKING LAWS 19
------------------------------------------------------
TAX INFORMATION 20
------------------------------------------------------
Federal Income Tax 20
PERFORMANCE INFORMATION 20
------------------------------------------------------
ADDRESSES 21
------------------------------------------------------
SUMMARY OF FUND EXPENSES
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
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%
</TABLE>
(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.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <C> <C>
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
</TABLE>
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 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:
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;
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 Fund's adviser to be of
comparable quality;
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 Fund's
adviser to be of comparable quality;
American Depositary Receipts ("ADRs") of foreign companies traded on the
New York Stock Exchange or in the over-the-counter market;
obligations of the United States government;
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;
money market instruments rated, at the time of purchase, A-1 or A-2 by
S&P, Prime-1 or Prime-2 by Moody's, or F-1 or F-2 by Fitch, or, if not
rated, determined by the adviser to be of comparable quality; and
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
Fund's adviser. The Fund's 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. The Fund will not invest more than 10% of its total
assets in securities of foreign issuers.
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:
direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
notes, 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 instrumentalities are supported by:
the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
the discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
the 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 assets.
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:
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;
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
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.
There is the risk that when lending portfolio securities, the securities may not
be available to the Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
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:
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.
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 a 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.
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 Advisors, 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") with respect to shares. Under the services plan, financial institutions
will enter into shareholder service agreements with the Fund to provide
administrative support services to their customers who from time to time may be
owners of record or beneficial owners of the shares. In return for providing
these support services, a financial institution may receive payments from the
Fund at a rate not exceeding 0.25% of the average daily net assets of the shares
beneficially owned by the financial institution's customers for whom it is the
holder of record or with whom it has a servicing relationship.
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:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE TRUST
<C> <S>
.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
</TABLE>
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 and cash 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. LLP, 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 Trust. 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:
<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE AS
A PERCENTAGE OF A PERCENTAGE OF
AMOUNT OF TRANSACTION PUBLIC OFFERING PRICE NET AMOUNT INVESTED
<S> <C> <C>
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%
</TABLE>
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:
quantity discounts and accumulated purchases;
signing a 13-month letter of intent; or
using the reinvestment privilege.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in the table on the
previous page, 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:
Liberty U.S. Government Money Market Trust--a U.S. government money
market fund; and
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:
a trust company or commercial bank whose deposits are insured by BIF,
which is administered by the FDIC;
a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
a savings bank or savings and loan association whose deposits are insured
by SAIF, which is administered by the FDIC; or
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
---------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
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. LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
---------------------------------------------------------------------------------------------------------------------
</TABLE>
111 CORCORAN EQUITY FUND
PROSPECTUS
A Diversified Portfolio
of 111 Corcoran Funds,
an Open-End Management
Investment Company
Prospectus dated December 2, 1994
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
005826 (12/94)
111 Corcoran Equity Fund
(A Portfolio of 111 Corcoran Funds)
Supplement to Statement of Additional Information dated December 2, 1994
A. Please insert the following as a new section immediately following
the section entitled "Lending of Portfolio Securities" on page 4. In
addition, please add the heading "Portfolio Turnover" immediately
following the heading "Lending of Portfolio Securites" on the Table of
Contents page.
"Portfolio Turnover
The Fund may trade or dispose of portfolio securities as considered
necessary to meet its investment objective. For the period from
December 5, 1995 (date of initial public investment) to March 31, 1995,
the portfolio turnover rate for the Fund was 0.92%."
B. Please insert the following name and biographical information for
John E. Murray, Jr. into the section entitled "Officers and Trustees" on
page 7 immediately following that of Gregor F. Meyer:
"John E. Murray, Jr., J.D.,S.J.D.
President, Duquesne University
Pittsburgh, PA
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds."
C. Please delete the section entitled "The Funds" on page 9 and replace
it with the following. In addition, please delete its reference from
the "Table of Contents":
"As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; 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
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; 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.; G.; 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 U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; New York
Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The Planters
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; The Virtus Funds; World
Investment Series, Inc."
D. Please insert the following as the second paragraph of the section
entitled "Fund Ownership" on page 10:
"As of May 5, 1995, the following shareholder of record owned 5% or more
of the outstanding shares of the Fund: Central Carolina Bank & Trust
owned approximately 1,897,226 shares (95.8%) of the outstanding shares
of the Fund."
E.Please insert the following as a new section immediately following the
section entitled "Fund Ownership" on page 10. In addition, please
insert the heading "Trustees' Compensation" immediately following the
heading "Fund Ownership" on the Table of Contents page.
"Trustees' Compensation
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM
THE TRUST THE TRUST*#
John F. Donahue $ 0
Chairman and Trustee
Thomas G. Bigley $ 0
Trustee
John T. Conroy, Jr. $ 1,128
Trustee
William J. Copeland $ 1,156
Trustee
James E. Dowd $ 1,156
Trustee
Lawrence D. Ellis, M.D. $ 1,099
Trustee
Edward L. Flaherty, Jr. $ 1,156
Trustee
Peter E. Madden $ 1,099
Trustee
Gregor F. Meyer $ 1,099
Trustee
John E. Murray, Jr. $ 0
Trustee
Wesley W. Posvar $ 1,099
Trustee
Marjorie P. Smuts $ 1,099
Trustee
Edward C. Gonzales $ 0
Trustee
*Information is furnished for the period from month/date/year,
organization date of the Trust, to May 31, 1994. The Trust is the only
investment company in the Fund Complex.
#The aggregate compensation is provided for the Trust which is comprised
of three portfolios. "
F. Please insert the following as the second sentence in the section
entitled "Advisory Fees" on page 10:
"For the period from December 5, 1995 (date of initial public
investment) to March 31, 1995, the Adviser earned advisory fees of
$3,406, all of which was voluntarily waived."
G. Please insert the following as the second sentence in the section
entitled "Sub-Advisory Fees" on page 10:
"For the period from December 5, 1995 (date of initial public
investment) to March 31, 1995, the Sub-Adviser earned sub-advisory fees
of $11,070, all of which was voluntarily waived."
H. Please insert the following as the second sentence in the section
entitled "Administrative Services" on page 11:
"For the period from December 5, 1995 (date of initial public
investment) to March 31, 1995, the Fund incurred $15,891 in
administrative services fees, all of which was voluntarily waived."
I. Please insert the following as the last paragraph of the section
entitled "Brokerage Transactions" on page 11:
"For the period from December 5, 1995 (date of initial public
investment) to March 31, 1995, the Fund paid $121 in brokerage
commissions on brokerage transactions."
J. Please insert the following as the last paragraph of the section
entitled "Distribution and Shareholder Services Plans" on page 11:
"For the period from December 5, 1995 (date of initial public
investment) to March 31, 1995, the Fund paid no fees pursuant to the
Fund's distribution plan. For the same period, the Fund paid no
shareholder services fees."
K. Please delete the paragraph in the section entitled "Total Return"
on page 13 and replace it with the following:
"The Fund's cumulative total return from December 5, 1995 (date of
initial public investment) to March 31, 1995 was 6.85%. Cumulative
total return reflects the Fund's total performance over a specific
period of time. This total return assumes and is reduced by the payment
of the maximum sales load. The Fund's total return is representative of
only four months of investment activity since the Fund's effective
date."
L. Please insert the following as the first paragraph in the section
entitled "Yield" on page 13:
"The Fund's yield for the thirty-day period ended March 31, 1995 was
1.23%."
May 30, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated
Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
682365309
G01135-02 (5/95)
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 2,
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 2, 1994
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
--------------------------------------------------------------------------------
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
Investment Limitations 4
THE 111 CORCORAN FUNDS MANAGEMENT 7
---------------------------------------------------------------
Officers and Trustees 7
The Funds 9
Fund Ownership 10
Trustee Liability 10
INVESTMENT ADVISORY SERVICES 10
---------------------------------------------------------------
Adviser to the Fund 10
Advisory Fees 10
Sub-Adviser to the Fund 10
Sub-Advisory Fees 10
State Expense Limitations 10
ADMINISTRATIVE SERVICES 11
---------------------------------------------------------------
BROKERAGE TRANSACTIONS 11
---------------------------------------------------------------
PURCHASING SHARES 11
---------------------------------------------------------------
Distribution and Shareholder Services Plans 11
DETERMINING NET ASSET VALUE 11
---------------------------------------------------------------
Determining Market Value of Securities 12
EXCHANGE PRIVILEGE 12
---------------------------------------------------------------
REDEEMING SHARES 12
---------------------------------------------------------------
Redemption in Kind 12
TAX STATUS 12
---------------------------------------------------------------
The Fund's Tax Status 12
Shareholders' Tax Status 13
Capital Gains 13
TOTAL RETURN 13
---------------------------------------------------------------
YIELD 13
---------------------------------------------------------------
PERFORMANCE COMPARISONS 13
---------------------------------------------------------------
APPENDIX 15
---------------------------------------------------------------
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 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 than 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:
.the frequency of trades and quotes for the security;
.the number of dealers willing to purchase or sell the security and the number
of other potential buyers;
.dealer undertakings to make a market in the security; and
.the 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.
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 limit 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.
--------------------------------------------------------------------------------
Thomas G. Bigley
28th Floor
One Oxford Centre
Pittsburgh, PA 15219
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's Hospital of
Pittsburgh; Director, Trustee or Managing General Partner of the Funds;
formerly, Senior Partner, Ernst & Young LLP.
--------------------------------------------------------------------------------
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 is deemed to be an "interested person" of the Trust 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; Arrow Funds; 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; 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:
.advice as to the advisability of investing in securities;
.security analysis and reports;
.economic studies;
.industry studies;
.receipt of quotations for portfolio evaluations; and
.similar services.
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 in advising the
Funds and other accounts. To the extent that receipt of these services may
supplant services for which the Adviser might otherwise have paid, it would tend
to reduce its 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's 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:
.according to the last sale price on a national securities exchange, if
available;
.in the absence of recorded sales for bonds and other fixed-income securities,
as determined by an independent pricing service;
.for 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
.at 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:
.yield;
.quality;
.coupon rate;
.maturity;
.type of issue;
.trading characteristics; and
.other 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:
.derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
.derive less than 30% of its gross income from the sale of securities held less
than three months;
.invest in securities within certain statutory limits; and
.distribute 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:
the availability of higher relative yields;
differentials in market values;
new investment opportunities;
changes in creditworthiness of an issuer; or
an 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 SEC) 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 SEC 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:
.portfolio quality;
.average portfolio maturity;
.type of instruments in which the portfolio is invested;
.changes in interest rates and market value of portfolio securities;
.changes in the Fund's expenses; and
.various 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:
.STANDARD & POOR'S RATINGS GROUP DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS,
which is a composite index of common stocks in industry, transportation, and
financial and public utility companies, and 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.
.LIPPER 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.
.MORNINGSTAR, 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 & 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" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than 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 & 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 rated Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. 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 (filed in Part A).
(b) Exhibits:
(1) (i) Conformed Copy of Declaration of Trust of the
Registrant;+
(ii) Conformed Copy of Amendment No. 1 to
Declaration of Trust dated February 3, 1992;+
(iii) Conformed copy of Amendment No. 2 to
Declaration of Trust dated August 25, 1994 (6);
(2) Copy of By-Laws of the Registrant;+
(3) Not applicable;
(4) (i) Copy of Specimen Certificate for Shares of
Beneficial Interest of the 111 Corcoran Bond Fund
(5);
(ii) Copy of Specimen Certificate for Shares of
Beneficial Interest of the 111 Corcoran North
Carolina Municipal Securities Fund (5);
(iii) Copy of Specimen Certificate for Shares of
Beneifical Interest of the 111 Corcoran Equity Fund;+
(5) (i) Conformed copy of Investment Advisory Contract
of the Registrant and Exhibits A and B thereto (6);
(ii) Conformed Copy of Exhibit C to the present
Investment Advisory Contract to add 111 Corcoran
Equity Fund;+
(iii) Conformed Copy of Sub-Advisory Agreement
including Exhibit A on behalf of 111 Corcoran Equity
Fund;+
(6) (i) Conformed copy of Distributor's Contract of the
Registrant and Exhibit A thereto (6);
(ii) Conformed Copy 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;+
(9) (i) Conformed copy of Fund Accounting and
Shareholder Recordkeeping Agreement of the
Registrant;+
(ii) Conformed copy of Administrative Services
Agreement (5);
(iii) Conformed Copy of Shareholder Services Plan;+
(iv) Conformed Copy of Exhibit A to Shareholder
Services Plan on behalf of 111 Corcoran Equity Fund;+
+ All exhibits have been filed electronically.
(5) 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)
(6) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 5 of form N-1A filed October 3, 1994 (File
Nos. 33-45753 and 811-6561)
(10) Conformed Copy of Opinion and Consent of Counsel
as to legality of shares being registered;+
(11) Not applicable;
(12) Not applicable;
(13) Conformed Copy of Initial Capital
Understanding;+
(14) Not Applicable;
(15) (i) Copy of Rule 12b-1 Distribution Plan (6);
(ii) Conformed Copy of Exhibit A to Rule 12b-1
Plan on behalf of 111 Corcoran Equity
Fund;+
(iii) Copy of Rule 12b-1 Agreement (6);
(iv) Copy of Fee Schedule for Rule 12b-1
Agreement with Federated Securities
Corp.(6);
(16) (i) Copy of 111 Corcoran Bond Fund Schedule
or Computation of Fund Performance Data (3);
(ii) Copy of 111 Corcoran North Carolina Municipal
Securities Fund Schedule for Computation of
Fund Performance Data (3);
(iii) Copy of 111 Corcoran Equity Fund
Schedule for Computation of Fund Performance
Data; +
(17) Financial Data Schedule;+
(18) Not applicable;
(19) Conformed Copy of Power of Attorney;+
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 May 5, 1995
Shares of beneficial interest
no par value
111 Corcoran Equity Fund 46
111 Corcoran Bond Fund 365
111 Corcoran North Carolina Municipal
Securities Fund 411
Item 27. Indemnification: (1)
+ All exhibits have been filed electronically.
(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)
(6) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 5 of form N-1A filed October 3, 1994 (File
Nos. 33-45753 and 811-6561)
Item 28. Business and Other Connections of Investment Adviser and
Sub-Adviser:
(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. Harper Beall, III Director President, Fairfield
Chair Company
James B. Brame, Jr. Director President, Brame
Specialty Co., Inc.
Timothy B. Burnett Director President, Bessemer
Improvement Company
Edward S. Holmes Director Partner Holmes &
McLaurin, Attorneys at
Law
Owen G. Kenan Director President, Kenan
Enterprises, Inc.,
Kenan Oil Co., Inc.,
Kenan Developments,
Inc.; Director, Kenan
Transport Co., Inc.;
Vice Chairman, Flagler
Systems, Inc.;
Chairman, Kenan Global
Ent., LLC
Eugene J. McDonald Director President; Duke
Management Company;
Executive Vice
President; Duke
University; Director
SBSF Funds, Inc.,
Sphinx Phar., Flag
Group of Mutual Funds
Hamilton W. McKay, Jr., M.D. Director Physician, Carolina
Asthma & Allergy
Center, P.A.
Eric B. Munson Director Executive Director;
University of North
Carolina Hospitals
H. Allen Tate, Jr. Director President, Allen Tate
Company, Inc.
Dr. Phail Wynn, Jr. Director President, Durham
Technical Community
College
Other Substantial
Position with Business, Profession,
Name the Sub-Adviser Vocation or Employment
Robert C. Eubanks Director; President; President; Franklin
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.
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
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; Arrow Funds; 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; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; The
Monitor Funds; Municipal Securities Income Trust; Newpoint
Funds; New York Municipal Cash Trust; 111 Corcoran Funds;
Peachtree Funds; The Planters 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;
The Virtus Funds; 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 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
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
Solon A. Person, IV 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
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet 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
Kevin J. Crenny Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson 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
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph L. Epstein 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
Michael D. Fitzgerald 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
Craig S. Gonzales 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
Stephen A. LaVersa 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
Richard C. Mihm 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
Robert D. Oehlschlager 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
John C. Shelar, Jr. 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
Jamie M. Teschner 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
Paul A. Uhlman 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
Michael P. Wolff 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
Charlene H. Jennings 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, Assistant
Federated Investors Tower Federated 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, NC 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
reholders.
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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, 111 CORCORAN FUNDS,
certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Pittsburgh and
Commonwealth of Pennsylvania, on the 24th day of May, 1995.
111 CORCORAN FUNDS
BY: /s/C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
May 24, 1995
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 Attorney In Fact May 24, 1995
C. Grant Anderson For the Persons
ASSISTANT SECRETARY Listed Below
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Treasurer
and Trustee (Principal
Financial and Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr. Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 19 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of 111CORCORAN FUNDS and
the Assistant General Counsel of Federated Investors, and each of them,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be
filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, by means of the Securities and Exchange
Commission's electronic disclosure system known as EDGAR; and to file
the same, with all exhibits thereto and other documents in connection
thterewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and
authority to sign and perform each and every act and thing requisite and
necessary to be done in connection thereiwth, as fully to all intents
and purposes as each of them might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman and Trustee April 28,
1995
John F. Donahue (Chief Executive Officer)
/s/ Edward C. Gonzales Vice President, Treasurer and
Edward C. Gonzales Trustee April 28,
1995
(Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee April 28, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee April 28, 1995
John T. Conroy, Jr.
/s/ William J. Copeland Trustee April 28, 1995
William J. Copeland
/s/ James E. Dowd Trustee April 28, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee April 28, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee April 28, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee April 28, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee April 28, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee April 28, 1995
John E. Murray, Jr.
/s/ Marjorie P. Smuts Trustee April 28, 1995
Marjorie P. Smuts
/s/ Wesley W. Posvar Trustee April 28, 1995
Wesley W. Posvar
Sworn to and subscribed before me this 28th day of April, 1995.
/s/ Marie M. Hamm
Notary Public
Exhibit 1(i) under Form N-1A
Exhibit 3(a) under Item 601/Reg, S-K
DECLARATION OF TRUST
111 CORCORAN FUNDS
Dated December 11, 1991
DECLARATION OF TRUST made December 11, 1991, by J. Christopher
Donahue, Frank Polefrone and Joseph M. Huber.
WHEREAS, the Trustees desire to establish a trust fund for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under
this Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name.
This Trust shall be known as 111 Corcoran Funds.
Section 2. Definitions.
Wherever used herein, unless otherwise required by the context or
specifically provided:
(a) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Majority Shareholder Vote" (the 67% or 50%
requirement of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings
given them in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to 111 Corcoran Funds;
(c) "Class" refers to a class of Shares established and designated
under or in accordance with the provisions of Article III;
(d) "Series" refers to a series of Shares established and
designated under or in accordance with the provisions of Article
III;
(e) "Series Company" refers to the form of a registered open-end
investment company described in Section 18(f)(2) of the 1940 Act or
in any successor statutory provision;
(f) "Shareholder" means a record owner of Shares of any Series or
Class;
(g) The "Trustees" refer to the individual Trustees in their
capacity as Trustees hereunder of the Trust and their successor or
successors for the time being in office as such Trustees;
(h) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from
time to time, or if more than one Series or Class of Shares is
authorized by the Trustees, the equal proportionate units into
which each Series or Class of Shares shall be divided from time to
time and includes fractions of Shares as well as whole Shares; and
(i) The "1940 Act" refers to the Investment Company Act of 1940,
and the Rules and Regulations thereunder, (including any exemptions
granted thereunder) as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous
source of managed investments by investing primarily in securities
(including options) and also in debt instruments, commodities, commodity
contracts and options thereon.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided
into transferable Shares, without par value. Subject to the
provisions of Section 5 of this Article III, each Share shall have
voting rights as provided in Article VIII hereof, and holders of
the Shares of any Series shall be entitled to receive dividends,
when and as declared with respect thereto in the manner provided in
Article X, Section 1 hereof. The Shares of any Series may be
issued in two or more Classes, as the Trustees may authorize
pursuant to Article XII, Section 8 hereof. Unless the Trustees
have authorized the issuance of Shares of a Series in two or more
Classes, each Share of a Series shall represent an equal
proportionate interest in the assets and liabilities of the Series
with each other Share of the same Series, none having priority or
preference over another. If the Trustees have authorized the
issuance of Shares of a Series in two or more Classes, then the
Classes may have such variations as to dividend, redemption, and
voting rights, net asset values, expenses borne by the Classes, and
other matters as the Trustees have authorized provided that each
Share of a Class shall represent an equal proportionate interest in
the assets and liabilities of the Class with each other Share of
the same Class, none having priority or preference over another.
The number of Shares authorized shall be unlimited. The Trustees
may from time to time divide or combine the Shares of any Series or
Class into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Series or Class.
Section 2. Ownership of Shares.
The ownership of Shares shall be recorded in the books of the Trust
or a transfer agent which books shall be maintained separately for
the Shares of each Series or Class. The Trustees may make such
rules as they consider appropriate for the transfer of Shares and
similar matters. The record books of the Trust or any transfer
agent, as the case may be, shall be conclusive as to who are the
Shareholders of each Series or Class and as to the number of
Shares of each Series or Class held from time to time by each.
Section 3. Investment in the Trust.
The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize.
After the date of the initial contribution of capital (which shall
occur prior to the initial public offering of Shares), the number
of Shares to represent the initial contribution shall be considered
as outstanding and the amount received by the Trustees on account
of the contribution shall be treated as an asset of the Trust to be
allocated among any Series or Classes in the manner described in
Section 5(a) of this Article. Subsequent to such initial
contribution of capital, Shares (including Shares which may have
been redeemed or repurchased by the Trust) may be issued or sold at
a price which will net the relevant Series or Class, as the case
may be, before paying any taxes in connection with such issue or
sale, not less than the net asset value (as defined in Article X,
Section 3) thereof; provided, however, that the Trustees may in
their discretion impose a sales charge upon investments in the
Trust.
Section 4. No Pre-emptive Rights.
Shareholders shall have no pre-emptive or other right to subscribe
to any additional Shares or other securities issued by the Trust.
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 North Carolina Municipal Securities Fund.
Shares of any Series or Class established in this Section 5 shall
have the following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration
received by the Trust for the issue or sale of Shares of a
particular Series or Class, together with all assets in which
such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to that Series or Class for all purposes, subject only
to the rights of creditors, and shall be so recorded upon the
books of account of the Trust. Such consideration, assets,
income, earnings, profits and proceeds thereof, from whatever
source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred
to as "assets belonging to" that Series or Class. In the event
that there are any assets, income, earnings, profits and
proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular Series or Class
(collectively "General Assets"), the Trustees shall allocate
such General Assets to, between or among any one or more of the
Series or Classes established and designated from time to time
in such manner and on such basis as they, in their sole
discretion, deem fair and equitable, and any General Assets so
allocated to a particular Series or Class shall belong to that
Series or Class. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series or
Classes for all purposes.
(b) Liabilities Belonging to Series or Class. The assets
belonging to each particular Series or Class shall be charged
with the liabilities of the Trust in respect to that Series or
Class and all expenses, costs, charges and reserves
attributable to that Series or Class, and any general
liabilities of the Trust which are not readily identifiable as
belonging to any particular Series or Class shall be allocated
and charged by the Trustees to and among any one or more of the
Series or Classes established and designated from time to time
in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The liabilities, expenses,
costs, charges and reserves so charged to a Series or Class are
herein referred to as "liabilities belonging to" that Series or
Class. Each allocation of liabilities belonging to a Series or
class by the Trustees shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
(c) Dividends, Distributions, Redemptions, Repurchases
and_Indemnification. Notwithstanding any other provisions of
this Declaration, including, without limitation, Article X, no
dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any
Series or Class) with respect to, nor any redemption or
repurchase of the Shares of any Series or Class shall be
effected by the Trust other than from the assets belonging to
such Series or Class, nor except as specifically provided in
Section 1 of Article XI hereof, shall any Shareholder of any
particular Series or Class otherwise have any right or claim
against the assets belonging to any other Series or Class
except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other Series or Class.
(d) Voting. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of
Article VIII, only Shareholders of a particular Series or Class
shall be entitled to vote on any matters affecting such Series
or Class. Except with respect to matters as to which any
particular Series or Class is affected, all of the Shares of
each Series or Class shall, on matters as to which such Series
or Class is entitled to vote, vote with other Series or Classes
so entitled as a single class. Notwithstanding the foregoing,
with respect to matters which would otherwise be voted on by
two or more Series or Classes as a single class, the Trustees
may, in their sole discretion, submit such matters to the
Shareholders of any or all such Series or Classes, separately.
(e) Fraction. Any fractional Share of a Series or Class shall
carry proportionately all the rights and obligations of a whole
Share of that Series or Class, including rights with respect to
voting, receipt of dividends and distributions, redemption of
Shares and termination of the Trust or of any Series or Class.
(f) Exchange Privilege. The Trustees shall have the authority to
provide that the holders of Shares of any Series or Class shall
have the right to exchange said Shares for Shares of one or
more other Series or Classes in accordance with such
requirements and procedures as may be established by the
Trustees.
(g) Combination of Series or Classes. The Trustees shall have
the authority, without the approval of the Shareholders of any
Series or Class, unless otherwise required by applicable law,
to combine the assets and liabilities belonging to a single
Series or Class with the assets and liabilities of one or more
other Series or Classes.
(h) Elimination of Series or Classes. At any time that there are
no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may amend
this Declaration of Trust to abolish that Series or Class and
to rescind the establishment and designation thereof.
ARTICLE IV
THE TRUSTEES
Section 1. Management of the Trust.
The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to
carry out that responsibility. The Trustees who shall serve until
the election of Trustees at the Meeting of Shareholders subsequent
to the initial public offering of Shares shall be J. Christopher
Donahue, Frank Polefrone and Joseph M. Huber.
Section 2. Election of Trustees at Meeting of Shareholders.
On a date fixed by the Trustees, which shall be subsequent to the
initial public offering of Shares, the Shareholders shall elect
Trustees. The number of Trustees shall be determined by the
Trustees pursuant to Article IV, Section 5.
Section 3. Term of Office of Trustees.
The Trustees shall hold office during the lifetime of this Trust,
and until its termination as hereinafter provided; except (a) that
any Trustee may resign his office at any time by written instrument
signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written
instrument signed by at least two-thirds of the number of Trustees
prior to such removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to
be retired or who has become mentally or physically incapacitated
may be retired by written instrument signed by a majority of the
other Trustees, specifying the date of his retirement; and (d) a
Trustee may be removed at any special meeting of Shareholders of
the Trust by a vote of two-thirds of the outstanding Shares.
Section 4. Termination of Service and Appointment of Trustees.
In case of the death, resignation, retirement, removal or mental or
physical incapacity of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing
such other person as they in their discretion shall see fit. Such
appointment shall be effected by the signing of a written
instrument by a majority of the Trustees in office. An appointment
of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at
or after the effective date of said retirement, resignation or
increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this Trust, the trust estate shall
vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. Any appointment authorized by this
Section 4 is subject to the provisions of Section 16(a) of the 1940
Act.
Section 5. Number of Trustees.
The number of Trustees, not less than three (3) nor more than
twenty (20) serving hereunder at any time, shall be determined by
the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled or while any Trustee is physically or mentally
incapacitated, the other Trustees shall have all the powers
hereunder and the certificate signed by a majority of the other
Trustees of such vacancy, absence or incapacity, shall be
conclusive, provided, however, that no vacancy which reduces the
number of Trustees below three (3) shall remain unfilled for a
period longer than six calendar months.
Section 6. Effect of Death, Resignation, etc. of a Trustee.
The death, resignation, retirement, removal, or mental or physical
incapacity of the Trustees, or any one of them, shall not operate
to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust.
Section 7. Ownership of Assets.
The assets belonging to each Series or Class shall be held separate
and apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any successor
Trustee. All of the assets belonging to each Series or Class or
owned by the Trust shall at all times be considered as vested in
the Trustees. No Shareholder shall be deemed to have a severable
ownership interest in any individual asset belonging to any Series
or Class or owned by the Trust or any right of partition or
possession thereof, but each Shareholder shall have a proportionate
undivided beneficial interest in a Series or Class.
ARTICLE V
POWERS OF THE TRUSTEES
Section 1. Powers.
The Trustees in all instances shall act as principals, and are and
shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to
make and execute any and all contracts and instruments that they
may consider necessary or appropriate in connection with the
management of the Trust or a Series or Class. The Trustees shall
not be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and
power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the
purpose of this Trust. Without limiting the foregoing, the
Trustees shall have the following specific powers and authority,
subject to any applicable limitation in this Declaration of Trust
or in the By-Laws of the Trust:
(a) To buy, and invest funds in their hands in securities
including, but not limited to, common stocks, preferred stocks,
bonds, debentures, warrants and rights to purchase securities,
options, certificates of beneficial interest, money market
instruments, notes or other evidences of indebtedness issued by
any corporation, trust or association, domestic or foreign, or
issued or guaranteed by the United States of America or any
agency or instrumentality thereof, by the government of any
foreign country, by any State of the United States, or by any
political subdivision or agency or instrumentality of any State
or foreign country, or in "when-issued" or "delayed-delivery"
contracts for any such securities, or in any repurchase
agreement or reverse repurchase agreement, or in debt
instruments, commodities, commodity contracts and options
thereon, or to retain assets belonging to each and every Series
or Class in cash, and from time to time to change the
investments of the assets belonging to each Series or Class;
(b) To adopt By-Laws of the Trust not inconsistent with the
Declaration of Trust providing for the conduct of the business
of the Trust and to amend and repeal them to the extent that
they do not reserve that right to the Shareholders;
(c) To Elect and remove such officers of the Trust and appoint
and terminate such agents of the Trust as they consider
appropriate;
(d) To appoint or otherwise engage a bank or trust company as
custodian of any assets belonging to any Series or Class
subject to any conditions set forth in this Declaration of
Trust or in the By-Laws;
(e) To appoint or otherwise engage transfer agents, dividend
disbursing agents, Shareholder servicing agents, investment
advisers, sub-investment advisers, principal underwriters,
administrative service agents, and such other agents as the
Trustees may from time to time appoint or otherwise engage;
(f) To provide for the distribution of any Shares of any Series
or Class either through a principal underwriter in the manner
hereinafter provided for or by the Trust itself, or both;
(g) To set record dates in the manner hereinafter provided for;
(h) To delegate such authority as they consider desirable to a
committee or committees composed of Trustees, including without
limitation, an Executive Committee, or to any officers of the
Trust and to any agent, custodian or underwriter;
(i) To sell or exchange any or all of the assets belonging to one
or more Series or Classes, subject to the provisions of Article
XII, Section 4(b) hereof;
(j) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to
execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(k) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable
form; or either in its own name or in the name of a custodian
or a nominee or nominees, subject in either case to proper
safeguards according to the usual practice of Massachusetts
trust companies or investment companies;
(m) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which belongs to any Series or Class;
to consent to any contract, lease, mortgage, purchase, or sale
of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security which belongs to any
Series or Class;
(n) To engage in and to prosecute, compound, compromise, abandon,
or adjust, by arbitration, or otherwise, any actions, suits,
proceedings, disputes, claims, demands, and things relating to
the Trust, and out of the assets belonging to any Series or
Class to pay, or to satisfy, any debts, claims or expenses
incurred in connection therewith, including those of
litigation, upon any evidence that the Trustees may deem
sufficient (such powers shall include without limitation any
actions, suits, proceedings, disputes, claims, demands and
things relating to the Trust wherein any of the Trustees may be
named individually and the subject matter of which arises by
reason of business for or on behalf of the Trust);
(o) To make distributions of income and of capital gains to
Shareholders;
(p) To borrow money;
(q) From time to time to issue and sell the Shares of any Series
or Class either for cash or for property whenever and in such
amounts as the Trustees may deem desirable, but subject to the
limitation set forth in Section 3 of Article III.
(r) To purchase insurance of any kind, including, without
limitation, insurance on behalf of any person who is or was a
Trustee, Officer, employee or agent of the Trust, or is or was
serving at the request of the Trust as a Trustee, Director,
Officer, agent or employee of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity
or arising out of his status as such.
(s) To sell, exchange, lend, pledge, mortgage, hypothecate,
lease, or write options with respect to or otherwise deal in
any property rights relating to any or all of the assets
belonging to any Series or Class.
The Trustees shall have all of the powers set forth in this
Section 1 with respect to all assets and liabilities of each Series and
Class.
Section 2. Principal Transactions.
The Trustees shall not cause the Trust on behalf of any Series or
Class to buy any securities (other than Shares) from or sell any
securities (other than Shares) to, or lend any assets belonging to
any Series or Class to any Trustee or officer or employee of the
Trust or any firm of which any such Trustee or officer is a member
acting as principal unless permitted by the 1940 Act, but the Trust
may employ any such other party or any such person or firm or
company in which any such person is an interested person in any
capacity not prohibited by the 1940 Act.
Section 3. Trustees and Officers as Shareholders.
Any Trustee, officer or other agent of the Trust or any Series or
Class may acquire, own and dispose of Shares of any Series or Class
to the same extent as if he were not a Trustee, officer or agent;
and the Trustees may issue and sell or cause to be issued or sold
Shares of any Series or Class to and buy such Shares from any such
person or any firm or company in which he is an interested person
subject only to the general limitations herein contained as to the
sale and purchase of such Shares; and all subject to any
restrictions which may be contained in the By-Laws.
Section 4. Parties to Contract.
The Trustees may enter into any contract of the character described
in Article VII or in Article IX hereof or any other capacity not
prohibited by the 1940 Act with any corporation, firm, trust or
association, although one or more of the shareholders, Trustees,
officers, employees or agents of the Trust or any Series or Class
or their affiliates may be an officer, director, trustee,
shareholder or interested person of such other party to the
contract, and no such contract shall be invalidated or rendered
voidable by reason of the existence of any such relationship, nor
shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust or
any Series or Class under or by reason of said contract or
accountable for any profit realized directly or indirectly
therefrom, in the absence of actual fraud. The same person
(including a firm, corporation, trust or association) may be the
other party to contracts entered into pursuant to Article VII or
Article IX or any other capacity not prohibited by the 1940 Act,
and any individual may be financially interested or otherwise an
interested person of persons who are parties to any or all of the
contracts mentioned in this Section 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
Section 1. Trustee Reimbursement.
The Trustees shall be reimbursed from the assets belonging to each
particular Series or Class for all of such Trustees' expenses as
such expenses are allocated to and among any one or more of the
Series or Classes pursuant to Article III, Section 5(b), including,
without limitation, expenses of organizing the Trust or any Series
or Class and continuing its or their existence; fees and expenses
of Trustees and Officers of the Trust; fees for investment advisory
services, administrative services and principal underwriting
services provided for in Article VII, Sections 1, 2 and 3; fees and
expenses of preparing and printing Registration Statements under
the Securities Act of 1933 and the 1940 Act and any amendments
thereto; expenses of registering and qualifying the Trust and any
Series or Class and the Shares of any Series or Class under federal
and state laws and regulations; expenses of preparing, printing and
distributing prospectuses and any amendments thereto sent to
shareholders, underwriters, broker-dealers and to investors who may
be considering the purchase of Shares; expenses of registering,
licensing or other authorization of the Trust or any Series or
Class as a broker-dealer and of its or their officers as agents and
salesmen under federal and state laws and regulations; interest
expenses, taxes, fees and commissions of every kind; expenses of
issue (including cost of share certificates), purchases,
repurchases and redemptions 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 Shareholders and proxy solicitations therefor;
insurance expenses; association membership dues and nonrecurring
items as may arise, including all losses and liabilities by them
incurred in administering the Trust and any Series or Class,
including expenses incurred in connection with litigation,
proceedings and claims and the obligations of the Trust under
Article XI hereof and the By-Laws to indemnify its Trustees,
Officers, employees, shareholders and agents, and any contract
obligation to indemnify principal underwriters under Section 3 of
Article VII; and for the payment of such expenses, disbursements,
losses and liabilities, the Trustees shall have a lien on the
assets belonging to each Series or Class prior to any rights or
interests of the Shareholders of any Series or Class. This section
shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
Section 2. Trustee Compensation.
The Trustees shall be entitled to compensation from the Trust from
the assets belonging to any Series or Class for their respective
services as Trustees, to be determined from time to time by vote of
the Trustees, and the Trustees shall also determine the
compensation of all Officers, consultants and agents whom they may
elect or appoint. The Trust may pay out of the assets belonging to
any Series or Class any Trustee or any corporation, firm, trust or
other entity of which a Trustee is an interested person for
services rendered in any capacity not prohibited by the 1940 Act,
and such payments shall not be deemed compensation for services as
a Trustee under the first sentence of this Section 2 of Article VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER_AGENT
Section 1. Investment Adviser.
Subject to a Majority Shareholder Vote by the relevant Series or
Class, the Trustees may in their discretion from time to time enter
into an investment advisory contract whereby the other party to
such contract shall undertake to furnish the Trustees investment
advisory services for such Series or Class upon such terms and
conditions and for such compensation as the Trustees may in their
discretion determine. Subject to a Majority Shareholder Vote by
the relevant Series or Class, the investment adviser may enter into
a sub-investment advisory contract to receive investment advice
and/or statistical and factual information from the sub-investment
adviser for such Series or Class upon such terms and conditions and
for such compensation as the Trustees, in their discretion, may
agree. Notwithstanding any provisions of this Declaration of
Trust, the Trustees may authorize the investment adviser or sub-
investment adviser or any person furnishing administrative
personnel and services as set forth in Article VII, Section 2
(subject to such general or specific instructions as the Trustees
may from time to time adopt) to effect purchases, sales or
exchanges of portfolio securities belonging to a Series or Class on
behalf of the Trustees or may authorize any officer or Trustee to
effect such purchases, sales, or exchanges pursuant to
recommendations of the investment adviser (and all without further
action by the Trustees). Any such purchases, sales and exchanges
shall be deemed to have been authorized by the Trustees. The
Trustees may also authorize the investment adviser to determine
what firms shall be employed to effect transactions in securities
for the account of a Series or Class and to determine what firms
shall participate in any such transactions or shall share in
commissions or fees charged in connection with such transactions.
Section 2. Administrative Services.
The Trustees may in their discretion from time to time contract for
administrative personnel and services whereby the other party shall
agree to provide the Trustees administrative personnel and services
to operate the Trust or a Series or Class on a daily basis, on such
terms and conditions as the Trustees may in their discretion
determine. Such services may be provided by one or more entities.
Section 3. Principal Underwriter.
The Trustees may in their discretion from time to time enter into
an exclusive or nonexclusive contract or contracts providing for
the sale of the Shares of a Series or Class to net such Series or
Class not less than the amount provided in Article III, Section 3
hereof, whereby a Series or Class may either agree to sell the
Shares to the other party to the contract or appoint such other
party its sales agent for such shares. In either case, the
contract shall be on such terms and conditions (including
indemnification of principal underwriters allowable under
applicable law and regulation) as the Trustees may in their
discretion determine not inconsistent with the provisions of this
Article VII; and such contract may also provide for the repurchase
or sale of Shares of a Series or Class by such other party as
principal or as agent of the Trust and may provide that the other
party may maintain a market for shares of a Series or Class.
Section 4. Transfer Agent.
The Trustees may in their discretion from time to time enter into
transfer agency and shareholder services contracts whereby the
other party shall undertake to furnish a transfer agency and
shareholder services. The contracts shall be on such terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or of
the By-Laws. Such services may be provided by one or more
entities.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers.
Subject to the provisions set forth in Article III, Section 5(d),
the shareholders shall have power to vote, (i) for the election of
Trustees as provided in Article IV, Section 2; (ii) for the removal
of Trustees as provided in Article IV, Section 3(d); (iii) with
respect to any investment adviser or sub-investment adviser as
provided in Article VII, Section 1; (iv) with respect to the
amendment of this Declaration of Trust as provided in Article XII,
Section 7; (v) to the same extent as the shareholders of a
Massachusetts business corporation as to whether or not a court
action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders; and (vi) with respect to such additional matters
relating to the Trust as may be required by law, by this
Declaration of Trust, or the By-Laws of the Trust or any regulation
of the Trust or the Commission or any State, or as the Trustees may
consider desirable. Each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional
vote. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. Until Shares
of a Series or Class are issued, the Trustees may exercise all
rights of Shareholders of such Series or Class with respect to
matters affecting such Series or Class, and may take any action
with respect to the Trust or such Series or Class required or
permitted by law, this Declaration of Trust or any By-Laws of the
Trust to be taken by Shareholders.
Section 2. Meetings.
A Shareholders meeting shall be held as specified in Section 2 of
Article IV at the principal office of the Trust or such other place
as the Trustees may designate. Special meetings of the
Shareholders may be called by the Trustees or the Chief Executive
Officer of the Trust and shall be called by the Trustees upon the
written request of Shareholders owning at least one-tenth of the
outstanding Shares of all Series and Classes entitled to vote.
Shareholders shall be entitled to at least fifteen days' notice of
any meeting.
Section 3. Quorum and Required Vote.
Except as otherwise provided by law, to constitute a quorum for the
transaction of any business at any meeting of Shareholders there
must be present, in person or by proxy, holders of more than fifty
percent of the total number of outstanding Shares of all Series and
Classes entitled to vote at such meeting. When any one or more
Series or Classes is entitled to vote as a single Series or Class,
more than fifty percent of the shares of each such Series or Class
entitled to vote shall constitute a quorum at a Shareholder's
meeting of that Series or Class. If a quorum shall not be present
for the purpose of any vote that may properly come before the
meeting, the Shares present in person or by proxy and entitled to
vote at such meeting on such matter may, by plurality vote, adjourn
the meeting from time to time to such place and time without
further notice than by announcement to be given at the meeting
until a quorum entitled to vote on such matter shall be present,
whereupon any such matter may be voted upon at the meeting as
though held when originally convened. Subject to any applicable
requirement of law or of this Declaration of Trust or the By-Laws,
a plurality of the votes cast shall elect a Trustee, and all other
matters shall be decided by a majority of the votes cast and
entitled to vote thereon.
Section 4. Additional Provisions.
The By-Laws may include further provisions for Shareholders' votes
and meetings and related matters.
ARTICLE IX
CUSTODIAN
The Trustees may, in their discretion, from time to time enter
into contracts providing for custodial and accounting services to the
Trust or any Series or Class. The contracts shall be on the terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or of the
By-Laws. Such services may be provided by one or more entities,
including one or more sub-custodians.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends
to the Shareholders of any Series or Class, and the amount of
such dividends and the payment of them shall be wholly in the
discretion of the Trustees. Such dividends may be accrued and
automatically reinvested in additional Shares (or fractions
thereof) of the relevant Series or Class or paid in cash or
additional Shares of such Series or Class, all upon such terms
and conditions as the Trustees may prescribe.
(b) The Trustees may distribute in respect of any fiscal year as
dividends and as capital gains distributions, respectively,
amounts sufficient to enable any Series or Class to qualify as
a regulated investment company to avoid any liability for
federal income taxes in respect of that year.
c) The decision of the Trustees as to what constitutes income and
what constitutes principal shall be final, and except as
specifically provided herein the decision of the Trustees as to
what expenses and charges of any Series or Class shall be
charged against principal and what against the income shall be
final. Any income not distributed in any year may be permitted
to accumulate and as long as not distributed may be invested
from time to time in the same manner as the principal funds of
any Series or Class.
(d) All dividends and distributions on Shares of a particular
Series or Class shall be distributed pro rata to the holders of
that Series or Class in proportion to the number of Shares of
that Series or Class held by such holders and recorded on the
books of the Trust or its transfer agent at the date and time
of record established for that payment.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class at
any time desires to dispose of Shares of such Series or Class
recorded in his name, he may deposit a written request (or such
other form of request as the Trustees may from time to time
authorize) requesting that the Trust purchase his Shares,
together with such other instruments or authorizations to
effect the transfer as the Trustees may from time to time
require, at the office of the Transfer Agent, and the Trust
shall purchase his Shares out of assets belonging to such
Series or Class. The purchase price shall be the net asset
value of his shares reduced by any redemption charge as the
Trustees from time to time may determine.
Payment for such Shares shall be made by the Trust to the
Shareholder of record within that time period required under
the 1940 Act after the request (and, if required, such other
instruments or authorizations of transfer) is deposited,
subject to the right of the Trustees to postpone the date of
payment pursuant to Section 4 of this Article X. If the
redemption is postponed beyond the date on which it would
normally occur by reason of a declaration by the Trustees
suspending the right of redemption pursuant to Section 4 of
this Article X, the right of the Shareholder to have his Shares
purchased by the Trust shall be similarly suspended, and he may
withdraw his request (or such other instruments or
authorizations of transfer) from deposit if he so elects; or,
if he does not so elect, the purchase price shall be the net
asset value of his Shares determined next after termination of
such suspension (reduced by any redemption charge), and payment
therefor shall be made within the time period required under
the 1940 Act.
(b) The Trust may purchase Shares of a Series or Class by
agreement with the owner thereof at a purchase price not
exceeding the net asset value per Share (reduced by any
redemption charge) determined (1) next after the purchase or
contract of purchase is made or (2) at some later time.
(c) The Trust may pay the purchase price (reduced by any
redemption charge) in whole or in part by a distribution in
kind of securities from the portfolio of the relevant Series or
Class, taking such securities at the same value employed in
determining net asset value, and selecting the securities in
such manner as the Trustees may deem fair and equitable.
Section 3. Net Asset Value of Shares.
The net asset value of each Share of a Series or Class outstanding
shall be determined at such time or times as may be determined by
or on behalf of the Trustees. The power and duty to determine net
asset value may be delegated by the Trustees from time to time to
one or more of the Trustees or Officers of the Trust, to the other
party to any contract entered into pursuant to Section 1 or 2 of
Article VII or to the custodian or to a transfer agent or other
person designated by the Trustees.
The net asset value of each Share of a Series or Class as of any
particular time shall be the quotient (adjusted to the nearer cent)
obtained by dividing the value, as of such time, of the net assets
belonging to such Series or Class (i.e., the value of the assets
belonging to such Series or Class less the liabilities belonging to
such Series or Class exclusive of capital and surplus) by the total
number of Shares outstanding of the Series or Class at such time in
accordance with the requirements of the 1940 Act and applicable
provisions of the By-Laws of the Trust in conformity with generally
accepted accounting practices and principles.
The Trustees may declare a suspension of the determination of net
asset value for the whole or any part of any period in accordance
with the 1940 Act.
Section 4. Suspension of the Right of Redemption.
The Trustees may declare a suspension of the right of redemption or
postpone the date of payment for the whole or any part of any
period in accordance with the 1940 Act.
Section 5. Trust's Right to Redeem Shares.
The Trust shall have the right to cause the redemption of Shares of
any Series or Class in any Shareholder's account for their then
current net asset value and promptly make payment to the
shareholder (which payment may be reduced by any applicable
redemption charge), if at any time the total investment in the
account does not have a minimum dollar value determined from time
to time by the Trustees in their sole discretion.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification
of Shareholders.
The Trustees, officers, employees or agents of the Trust shall have
no power to bind any Shareholder of any Series or Class personally
or to call upon such Shareholder for the payment of any sum of
money or assessment whatsoever, other than such as the Shareholder
may at any time agree to pay by way of subscription to any Shares
or otherwise.
No Shareholder or former Shareholder of any Series or Class shall
be liable solely by reason of his being or having been a
Shareholder for any debt, claim, action, demand, suit, proceeding,
judgment, decree, liability or obligation of any kind, against, or
with respect to the Trust or any Series or Class arising out of any
action taken or omitted for or on behalf of the Trust or such
Series or Class, and the Trust or such Series or Class shall be
solely liable therefor and resort shall be had solely to the
property of the relevant Series or Class of the Trust for the
payment or performance thereof.
Each Shareholder or former Shareholder of any Series or Class (or
their heirs, executors, administrators or other legal
representatives or, in case of a corporate entity, its corporate or
general successor) shall be entitled to be indemnified and
reimbursed by the Trust to the full extent of such liability and
the costs of any litigation or other proceedings in which such
liability shall have been determined, including, without
limitation, the fees and disbursements of counsel if, contrary to
the provisions hereof, such Shareholder or former Shareholder of
such Series or Class shall be held to be personally liable. Such
indemnification and reimbursement shall come exclusively from the
assets of the relevant Series or Class.
The Trust shall, upon request by a Shareholder or former
Shareholder, assume the defense of any claim made against any
Shareholder for any act or obligation of the Trust or any Series or
Class and satisfy any judgment thereon.
Section 2. Limitation of Personal Liability of Trustees,
Officers, Employees or Agents of the Trust.
No Trustee, officer, employee or agent of the Trust shall have the
power to bind any other Trustee, officer, employee or agent of the
Trust personally. The Trustees, officers, employees or agents of
the Trust incurring any debts, liabilities or obligations, or in
taking or omitting any other actions for or in connection with the
Trust are, and each shall be deemed to be, acting as Trustee,
officer, employee or agent of the Trust and not in his own
individual capacity.
Trustees and officers of the Trust shall be liable for their
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of
Trustee or officer, as the case may be, and for nothing else.
Section 3. Express Exculpatory Clauses and Instruments.
The Trustees shall use every reasonable means to assure that all
persons having dealings with the Trust or any Series or Class shall
be informed that the property of the Shareholders and the Trustees,
officers, employees and agents of the Trust or any Series or Class
shall not be subject to claims against or obligations of the Trust
or any other Series or Class to any extent whatsoever. The
Trustees shall cause to be inserted in any written agreement,
undertaking or obligation made or issued on behalf of the Trust or
any Series or Class (including certificates for Shares of any
Series or Class) an appropriate reference to the provisions of this
Declaration, providing that neither the Shareholders, the Trustees,
the officers, the employees nor any agent of the Trust or any
Series or Class shall be liable thereunder, and that the other
parties to such instrument shall look solely to the assets
belonging to the relevant Series or Class for the payment of any
claim thereunder or for the performance thereof; but the omission
of such provisions from any such instrument shall not render any
Shareholder, Trustee, officer, employee or agent liable, nor shall
the Trustee, or any officer, agent or employee of the Trust or any
Series or Class be liable to anyone for such omission. If,
notwithstanding this provision, any Shareholder, Trustee, officer,
employee or agent shall be held liable to any other person by
reason of the omission of such provision from any such agreement,
undertaking or obligation, the Shareholder, Trustee, officer,
employee or agent shall be indemnified and reimbursed by the Trust.
ARTICLE XII
MISCELLANEOUS
Section 1. Trust is not a Partnership.
It is hereby expressly declared that a trust and not a partnership
is created hereby.
Section 2. Trustee Action Binding, Expert Advice, No Bond or
Surety.
The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. Subject to
the provisions of Article XI, the Trustees shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees may
take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and subject to the
provisions of Article XI, shall be under no liability for any act
or omission in accordance with such advice or for failing to follow
such advice. The Trustees shall not be required to give any bond
as such, nor any surety if a bond is required.
Section 3. Establishment of Record Dates.
The Trustees may close the Share transfer books of the Trust
maintained with respect to any Series or Class for a period not
exceeding sixty (60) days preceding the date of any meeting of
Shareholders of the Trust or any Series or Class, or the date for
the payment of any dividend or the making of any distribution to
Shareholders, or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares of any Series
or Class shall go into effect; or in lieu of closing the Share
transfer books as aforesaid, the Trustees may fix in advance a
date, not exceeding sixty (60) days preceding the date of any
meeting of Shareholders of the Trust or any Series or Class, or the
date for the payment of any dividend or the making of any
distribution to Shareholders of any Series or Class, or the date
for the allotment of rights, or the date when any change or
conversion or exchange of Shares of any Series or Class shall go
into effect, or the last day on which the consent or dissent of
Shareholders of any Series or Class may be effectively expressed
for any purpose, as a record date for the determination of the
Shareholders entitled to notice of, and, to vote at, any such
meeting and any adjournment thereof, or entitled to receive payment
of any such dividend or distribution, or to any such allotment of
rights, or to exercise the rights in respect of any such change,
conversion or exchange of shares, or to exercise the right to give
such consent or dissent, and in such case such Shareholders and
only such Shareholders as shall be Shareholders of record on the
date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend or
distribution, or to receive such allotment or rights, or to
exercise such rights, as the case may be, notwithstanding, after
such date fixed aforesaid, any transfer of any Shares on the books
of the Trust maintained with respect to any Series or Class.
Nothing in the foregoing sentence shall be construed as precluding
the Trustees from setting different record dates for different
Series or Classes.
Section 4. Termination of Trust.
(a) This Trust shall continue without limitation of time but
subject to the provisions of paragraphs (b), (c) and (d) of
this Section 4.
(b) The Trustees may, by majority action, with the approval of
the holders of more than fifty percent of the outstanding
Shares of each Series or Class entitled to vote and voting
separately by Series or Class, sell and convey the assets of
the Trust or any Series or Class to another trust or
corporation. Upon making provision for the payment of all
liabilities, by assumption or otherwise, the Trustees shall
distribute the remaining proceeds belonging to each Series or
Class ratably among the holders of the Shares of that Series or
Class then outstanding.
(c) Subject to a Majority Shareholder Vote by such Series or
Class, the Trustees may at any time sell and convert into money
all the assets of the Trust or any Series or Class. Upon
making provision for the payment of all outstanding
obligations, taxes and other liabilities, accrued or
contingent, belonging to each Series or Class, the Trustees
shall distribute the remaining assets belonging to each Series
or Class ratably among the holders of the outstanding Shares of
that Series or Class.
(d) Upon completion of the distribution of the remaining proceeds
of the remaining assets as provided in paragraphs (b) and (c),
the Trust or the applicable Series or Class shall terminate and
the Trustees shall be discharged of any and all further
liabilities and duties hereunder or with respect thereto and
the right, title and interest of all parties shall be canceled
and discharged.
Section 5. Offices of the Trust, Filing of Copies,
Headings, Counterparts.
The Trust shall maintain a usual place of business in
Massachusetts, which, initially, shall be 176 Federal Street,
Boston, Massachusetts, and shall continue to maintain an office at
such address unless changed by the Trustees to another location in
Massachusetts. The Trust may maintain other offices as the
Trustees may from time to time determine. The original or a copy
of this instrument and of each declaration of trust supplemental
hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of
each supplemental declaration of trust shall be filed by the
Trustees with the Massachusetts Secretary of State and the Boston
City Clerk, as well as any other governmental office where such
filing may from time to time be required. Headings are placed
herein for convenience of reference only and in case of any
conflict, the text of this instrument, rather than the headings
shall control. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Section 6. Applicable Law.
The Trust set forth in this instrument is created under and is to
be governed by and construed and administered according to the laws
of The Commonwealth of Massachusetts. The Trust shall be of the
type commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
Section 7. Amendments -- General.
Prior to the initial issuance of Shares pursuant to Section 3 of
Article III, a majority of the Trustees then in office may amend or
otherwise supplement this instrument by making a Declaration of
Trust supplemental hereto, which thereafter shall form a part
hereof. Subsequent to such initial issuance of Shares, amendments
or supplements to this instrument may be authorized by a majority
of the Trustees then in office and by the holders of a majority of
the Shares of all Series and classes then outstanding and entitled
to vote thereon (except that any amendments or supplements changing
the name of the Trust or pursuant to Section 8 hereunder may be
made without shareholder approval), or by any larger vote which may
be required by applicable law or this Declaration of Trust in any
particular case, which amendment or supplement thereafter shall
form a part hereof. Any such amendment or supplement (which may be
in the form of a complete restatement) may be evidenced by either
(i) a supplemental Declaration of Trust signed by at least a
majority of the Trustees then in office or (ii) by a certificate of
the President and Secretary of the Trust setting forth such
amendment or supplement and certifying that such amendment or
supplement has been duly authorized by the Trustees, and if
required, by the shareholders. Copies of the supplemental
Declaration of Trust or the certificate of the President and
Secretary, as the case may be, shall be filed as specified in
Section 5 of this Article XII.
Section 8. Amendments -- Series.
The establishment and designation of any series or class of Shares
in addition to those established and designated in Section 5 of
Article III hereof shall be effective upon the execution by a
majority of the then Trustees of an amendment to this
Declaration of Trust, taking the form of a complete restatement
or otherwise, setting forth such establishment and designation
and the relative rights and preferences of any such Series or
Class, or as otherwise provided in such instrument.
Without limiting the generality of the foregoing, the Declaration
of the Trust may be amended to:
(a) create one or more Series or Classes of Shares (in addition
to any Series or Classes already existing or otherwise) with
such rights and preferences and such eligibility requirements
for investment therein as the Trustees shall determine and
reclassify any or all outstanding Shares as Shares of
particular Series or Classes in accordance with such
eligibility requirements;
(b) combine two or more Series or Classes of Shares into a single
Series or Class on such terms and conditions as the Trustees
shall determine;
(c) change or eliminate any eligibility requirements for
investment in Shares of any Series or Class, including without
limitation the power to provide for the issue of Shares of any
Series or Class in connection with any merger or consolidation
of the Trust with another trust or company or any acquisition
by the Trust of part or all of the assets of another trust or
company;
(d) change the designation of any Series or Class of Shares;
(e) change the method of allocating dividends among the various
Series and Classes of Shares;
(f) allocate any specific assets or liabilities of the Trust or
any specific items of income or expense of the Trust to one or
more Series and Classes of Shares;
(g) specifically allocate assets to any or all Series or Classes
of Shares or create one or more additional Series or Classes of
Shares which are preferred over all other Series or Classes of
Shares in respect of assets specifically allocated thereto or
any dividends paid by the Trust with respect to any net income,
however determined, earned from the investment and reinvestment
of any assets so allocated or otherwise and provide for any
special voting or other rights with respect to such Series or
Classes.
Section 9. Use of Name.
The Trust acknowledges that Central Carolina Bank & Trust Company
has reserved the right to grant the non-exclusive use of the name
"111 Corcoran" or any derivative thereof to any other investment
company, investment company portfolio, investment adviser,
distributor, or other business enterprise, and to withdraw from the
Trust or one or more Series or Classes any right to the use of the
name "111 Corcoran".
IN WITNESS WHEREOF, the undersigned have executed this instrument
the day and year first above written.
/s/ J. Christopher Donahue
/s/ Frank Polefrone
J. Christopher Donahue
Frank Polefrone
/s/ Joseph M. Huber
Joseph M. Huber
COMMONWEALTH OF PENNSYLVANIA )
: ss:
COUNTY OF ALLEGHENY )
I hereby certify that on December 11, 1991, before me, the
subscriber, a Notary Public of the Commonwealth of Pennsylvania, in for
the County of Allegheny, personally appeared J. Christopher Donahue,
Frank Polefrone and Joseph M. Huber, who acknowledged the foregoing
Declaration of Trust to be their act.
Witness my hand and notarial seal the day and year above written.
/s/ Elain T. Polens
Notary Public
Exhibit 1(ii) under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
111 CORCORAN FUNDS
Amendment No. 1
to
DECLARATION OF TRUST
Dated December 11, 1991
THIS Declaration of Trust is amended, effective January 13, 1992,
as follows:
A. Strike the first paragraph of Section 1 of Article IV in its
entirety from the Declaration of Trust and substitute in its place the
following:
SECTION 1. MANAGEMENT OF THE TRUST
The business and affairs of the Trust shall be
managed by the Trustees, and they shall have
all powers necessary and desirable to carry out
that responsibility. The Trustees who shall
serve until the election of Trustees at the
Meeting of Shareholders subsequent to the
initial public offering of Shares shall be John
F. Donahue, John T. Conroy, Jr., William J.
Copeland, James E. Dowd, Lawrence D. Ellis,
M.D., Edward L. Flaherty, Jr., Edward C.
Gonzales, Peter E. Madden, Gregor F. Meyer,
Wesley W. Posvar and Marjorie P. Smuts.
The undersigned Assistant Secretary of 111 Corcoran Funds hereby
certifies that the above-stated amendments are true and correct
Amendments to the Declaration of Trust, as adopted by the Trustees of
the Trust by Unanimous Consent on the 12th day of January, 1992.
WITNESS the due execution hereof this 13th day of January, 1992.
/s/ Joseph M. Huber
Joseph M. Huber
Assistant Secretary
Exhibit 2 under Form N-1A
Exhibit 3(b) under Item 601/Reg. S-K
111 CORCORAN FUNDS
BY-LAWS
ARTICLE I
OFFICERS AND THEIR ELECTION
Section 1. Officers. The officers of the Trust shall be a
Chairman of the Trustees, a President, one or more Vice Presidents, a
Treasurer, a Secretary and such other officers as the Trustees may from
time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in any Series or Class of the Trust.
Section 2. Election of Officers. The President, Vice
President(s), Treasurer and Secretary shall be chosen annually by the
Trustees. The Chairman of the Trustees shall be chosen annually by and
from the Trustees.
Two or more offices may be held by a single person except the
offices of President and Secretary. The officers shall hold office
until their successors are chosen and qualified.
Section 3. Resignations and Removals and Vacancies. Any officer
of the Trust may resign by filing a written resignation with the
Chairman of the Trustees or with the Trustees or with the Secretary,
which shall take effect on being so filed or at such time as may be
therein specified. The Trustees may remove any officer, with or without
cause, by a majority vote of all of the Trustees. The Trustees may fill
any vacancy created in any office whether by resignation, removal or
otherwise.
ARTICLE II
POWERS AND DUTIES OF TRUSTEES AND OFFICERS
Section 1. Trustees. The business and affairs of the Trust shall
be managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.
Section 2. Chairman of the Trustees ("Chairman"). The Chairman
shall be the chief executive officer of the Trust. He shall have
general supervision over the business of the Trust and policies of the
Trust. He shall employ and define the duties of all employees of the
Trust, shall have power to discharge any such employees, shall exercise
general supervision over the affairs of the Trust and shall perform such
other duties as may be assigned to him from time to time by the
Trustees. He shall preside at the meetings of shareholders and of the
Trustees. The Chairman shall appoint a Trustee or officer to preside at
such meetings in his absence.
Section 3. President. The President, in the absence of the
Chairman, shall perform all duties and may exercise any of the powers of
the Chairman subject to the control of the other Trustees. He shall
counsel and
advise the Chairman on matters of major importance and shall perform
such other duties as may be assigned to him from time to time by the
Trustees, the Chairman or the Executive Committee.
Section 4. Vice President. The Vice President (or if more than
one, the senior Vice President) in the absence of the President shall
perform all duties and may exercise any of the powers of the President
subject to the control of the Trustees. Each Vice President shall
perform such other duties as may be assigned to him from time to time by
the Trustees, the Chairman or the Executive Committee. Each Vice
President shall be authorized to sign documents on behalf of the Trust.
Section 5. Secretary. The Secretary shall be the chief legal
officer of the Trust responsible for providing legal guidance to the
Trust. The Secretary shall keep or cause to be kept in books provided
for that purpose the Minutes of the Meetings of Shareholders and of the
Trustees; shall see that all Notices are duly given in accordance with
the provisions of these By-Laws and as required by law; shall be
custodian of the records and of the Seal of the Trust and see that the
Seal is affixed to all documents, the execution of which on behalf of
the Trust under its Seal is duly authorized; shall keep directly or
through a transfer agent a register of the post office address of each
shareholder of each Series or Class of the Trust, and make all proper
changes in such register, retaining and filing his authority for such
entries; shall see that the books, reports, statements, certificates and
all other documents and records required by law are properly kept and
filed; and in general shall perform all duties incident to the Office of
Secretary and such other duties as may from time to time be assigned to
him by the Trustees, Chairman or the Executive Committee.
Section 6. Treasurer. The Treasurer shall be the principal
financial and accounting officer of the Trust responsible for the
preparation and maintenance of the financial books and records of the
Trust. He shall deliver all funds and securities belonging to any
Series or Class to such custodian or sub-custodian as may be employed by
the Trust for any Series or Class. The Treasurer shall perform such
duties additional to the foregoing as the Trustees, Chairman or the
Executive Committee may from time to time designate.
Section 7. Assistant Vice President. The Assistant Vice President or
Vice Presidents of the Trust shall have such authority and perform such
duties as may be assigned to them by the Trustees, the Executive
Committee or the Chairman.
Section 8. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretary or Secretaries and the Assistant Treasurer or
Treasurers shall perform the duties of the Secretary and of the
Treasurer, respectively, in the absence of those Officers and shall have
such further powers and perform such other duties as may be assigned to
them respectively by the Trustees or the Executive Committee or the
Chairman.
Section 9. Salaries. The salaries of the Officers shall be fixed
from time to time by the Trustees. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a Trustee.
ARTICLE III
POWERS AND DUTIES OF THE
EXECUTIVE AND OTHER COMMITTEES
Section 1. Executive and Other Committees. The Trustees may elect
from their own number an Executive Committee to consist of not less than
two members. The Executive Committee shall be elected by a resolution
passed by a vote of at least a majority of the Trustees then in office.
The Trustees may also elect from their own number other committees from
time to time, the number composing such committees and the powers
conferred upon the same to be determined by vote of the Trustees.
Section 2. Vacancies in Executive Committee. Vacancies occurring
in the Executive Committee from any cause shall be filled by the
Trustees by a resolution passed by the vote of at least a majority of
the Trustees then in office.
Section 3. Executive Committee to Report to Trustees. All action
by the Executive Committee shall be reported to the Trustees at their
meeting next succeeding such action.
Section 4. Procedure of Executive Committee. The Executive
Committee shall fix its own rules of procedure not inconsistent with
these By-Laws or with any directions of the Trustees. It shall meet at
such times and places and upon such notice as shall be provided by such
rules or by resolution of the Trustees. The presence of a majority
shall constitute a quorum for the transaction of business, and in every
case an affirmative vote of a majority of all the members of the
Committee present shall be necessary for the taking of any action.
Section 5. Powers of Executive Committee. During the intervals
between the Meetings of the Trustees, the Executive Committee, except as
limited by the By-Laws of the Trust or by specific directions of the
Trustees, shall possess and may exercise all the powers of the Trustees
in the management and direction of the business and conduct of the
affairs of the Trust in such manner as the Executive Committee shall
deem to be in the best interests of the Trust, and shall have power to
authorize the Seal of the Trust to be affixed to all instruments and
documents requiring same. Notwithstanding the foregoing, the Executive
Committee shall not have the power to elect Trustees, increase or
decrease the number of Trustees, elect or remove any Officer, declare
dividends, issue shares or recommend to shareholders any action
requiring shareholder approval.
Section 6. Compensation. The members of any duly appointed
committee shall receive such compensation and/or fees as from time to
time may be fixed by the Trustees.
Section 7. Informal Action by Executive Committee or Other
Committee. Any action required or permitted to be taken at any meeting
of the Executive Committee or any other duly appointed Committee may be
taken without a meeting if a consent in writing setting forth such
action is signed by all members of such committee and such consent is
filed with the records of the Trust.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings. A special meeting of the
shareholders of the Trust or of a particular Series or Class shall be
called by the Secretary whenever ordered by the Trustees, the Chairman
or requested in writing by the holder or holders of at least one-tenth
of the outstanding shares of the Trust or of the relevant Series or
Class, entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than two days to call such
special meeting, the Trustees, Chairman or the shareholders so
requesting may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the
Secretary.
Section 2. Notices. Except as above provided, notices of any
special meeting of the shareholders of the Trust or a particular Series
or Class, shall be given by the Secretary by delivering or mailing,
postage prepaid, to each shareholder entitled to vote at said meeting, a
written or printed notification of such meeting, at least fifteen days
before the meeting, to such address as may be registered with the Trust
by the shareholder.
Section 3. Place of Meeting. Meetings of the shareholders of the
Trust or a particular Series or Class, shall be held at the principal
place of business of the Trust in Pittsburgh, Pennsylvania, or at such
place within or without The Commonwealth of Massachusetts as fixed from
time to time by resolution of the Trustees.
Section 4. Action by Consent. Any action required or permitted to
be taken at any meeting of shareholders may be taken without a meeting,
if a consent in writing, setting forth such action, is signed by all the
shareholders entitled to vote on the subject matter thereof, and such
consent is filed with the records of the Trust.
Section 5. Proxies. Any shareholder entitled to vote at any
meeting of shareholders may vote either in person or by proxy. Every
proxy shall be in writing subscribed by the shareholder or his duly
authorized attorney and dated, but need not be sealed, witnessed or
acknowledged. All proxies shall be filed with and verified by the
Secretary or an Assistant Secretary of the Trust or, the person acting
as Secretary of the Meeting.
ARTICLE V
TRUSTEES' MEETINGS
Section 1. Number and Qualifications of Trustees. The number of
Trustees shall be as fixed from time to time by a majority of the
Trustees but shall be no less than three nor more than twenty. The
Trustees may from time to time increase or decrease the number of
Trustees to such number as they deem expedient, not to be less than
three nor more than twenty, however, and fill the vacancies so created.
The term of office of a Trustee shall not be affected by any decrease in
the number of Trustees made by the Trustees pursuant to the foregoing
authorization.
Section 2. Special Meetings. Special meetings of the Trustees
shall be called by the Secretary at the written request of the Chairman
or any Trustee, and if the Secretary when so requested refuses or fails
for more than twenty-four hours to call such meeting, the Chairman or
such Trustee may in the name of the Secretary call such meeting by
giving due notice in the manner required when notice is given by the
Secretary.
Section 3. Regular Meetings. Regular meetings of the Trustees may
be held without call or notice at such places and at such times as the
Trustees may from time to time determine, provided that any Trustee who
is absent when such determination is made shall be given notice of the
determination.
Section 4. Quorum and Vote. A majority of the Trustees shall
constitute a quorum for the transaction of business. The act of a
majority of the Trustees present at any meeting at which a quorum is
present shall be the act of the Trustees unless a greater proportion is
required by the Declaration of Trust or these By-Laws or applicable law.
In the absence of a quorum, a majority of the Trustees present may
adjourn the meeting from time to time until a quorum shall be present.
Notice of any adjourned meeting need not be given.
Section 5. Notices. It shall be sufficient notice of a special
meeting to send notice by mail to a Trustee at least forty-eight hours
or by telegram, telex or telecopy or other electronic fascimile
transmission method at least twenty-four hours before the meeting
addressed to the Trustee at his usual or last known business or
residence address or to give notice to such Trustee in person or by
telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any Trustee if a written waiver of notice,
executed by such Trustee before the meeting, is filed with the records
of the meeting, or to any Trustee who attends the meeting without
protesting the lack of notice to such Trustee prior thereto or at its
commencement. Subject to compliance with Section 15(c) of the 1940 Act,
notice or waiver of notice need not specify the purpose of any special
meeting.
Section 6. Place of Meeting. Meetings of the Trustees shall be
held at the principal place of business of the Trust in Pittsburgh,
Pennsylvania, or at such place within or without The Commonwealth of
Massachusetts as fixed from time to time by resolution of the Trustees,
or as the person or persons requesting said meeting to be called may
designate, but any meeting may adjourn to any other place.
Section 7. Telephonic Meeting. Subject to compliance with
Sections 15(c) and 32(a) of the 1940 Act, if it is impractical for the
Trustees to meet in person, the Trustees may meet by means of a
telephone conference circuit to which all Trustees are connected or of
which all Trustees shall have waived notice, which meeting shall be
deemed to have been held at a place designated by the Trustees at the
meeting.
Section 8. Special Action. When all the Trustees shall be present
at any meeting, however called, or whenever held, or shall assent to the
holding of the meeting without notice, or after the meeting shall sign a
written assent thereto on the record of such meeting, the acts of such
meeting shall be valid as if such meeting had been regularly held.
Section 9. Action by Consent. Any action by the Trustees may be
taken without a meeting if a written consent thereto is signed by all
the Trustees and filed with the records of the Trustees' meetings. Such
consent shall be treated as a vote of the Trustees for all purposes.
Section 10. Compensation of Trustees. The Trustees may receive a
stated salary for their services as Trustees, and by resolution of
Trustees a fixed fee and expenses of attendance may be allowed for
attendance at each Meeting. Nothing herein contained shall be construed
to preclude any Trustee from serving the Trust in any other capacity, as
an officer, agent or otherwise, and receiving compensation therefor.
ARTICLE VI
SHARES
Section 1. Certificates. All certificates for shares shall be
signed by the Chairman, President or any Vice President and by the
Treasurer or Secretary or any Assistant Treasurer or Assistant Secretary
and sealed with the seal of the Trust. The signatures may be either
manual or facsimile signatures and the seal may be either facsimile or
any other form of seal. Certificates for shares for which the Trust has
appointed an independent Transfer Agent and Registrar shall not be valid
unless countersigned by such Transfer Agent and registered by such
Registrar. In case any officer who has signed any certificate ceases to
be an officer of the Trust before the certificate is issued, the
certificate may nevertheless be issued by the Trust with the same effect
as if the officer had not ceased to be such officer as of the date of
its issuance. Share certificates of each Series or Class shall be in
such form not inconsistent with law or the Declaration of Trust or these
By-Laws as may be determined by the Trustees.
Section 2. Transfer of Shares. The shares of each Series and
Class of the Trust shall be transferable, so as to affect the rights of
the Trust or any Series or Class, only by transfer recorded on the books
of the Trust or its transfer agent, in person or by attorney.
Section 3. Equitable Interest Not Recognized. The Trust shall be
entitled to treat the holder of record of any share or shares of a
Series or Class as the absolute owner thereof and shall not be bound to
recognize any equitable or other claim or interest in such share or
shares of a Series or Class on the part of any other person except as
may be otherwise expressly provided by law.
Section 4. Lost, Destroyed or Mutilated Certificates. In case any
certificate for shares is lost, mutilated or destroyed, the Trustees may
issue a new certificate in place thereof upon indemnity to the relevant
Series or Class against loss and upon such other terms and conditions as
the Trustees may deem advisable.
Section 5. Transfer Agent and Registrar: Regulations. The
Trustees shall have power and authority to make all such rules and
regulations as they may deem expedient concerning the issuance, transfer
and registration of certificates for shares and may appoint a Transfer
Agent and/or Registrar of certificates for shares of each Series or
Class, and may require all such share certificates to bear the signature
of such Transfer Agent and/or of such Registrar.
ARTICLE VII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust maintained on behalf of
each Series and Class or any of them shall be open to the inspection of
the shareholders of any Series or Class; and no shareholder shall have
any right of inspecting any account or book or document of the Trust
except that, to the extent such account or book or document relates to
the Series or Class in which he is a Shareholder or the Trust generally,
such Shareholder shall have such right of inspection as conferred by
laws or authorized by the Trustees or by resolution of the Shareholders
of the relevant Series or Class.
ARTICLE VIII
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. Agreements, Etc. The Trustees or the Executive
Committee may authorize any Officer or Agent of the Trust to enter into
any Agreement or execute and deliver any instrument in the name of the
Trust on behalf of any Series or Class, and such authority may be
general or confined to specific instances; and, unless so authorized by
the Trustees or by the Executive Committee or by these By-Laws, no
Officer, Agent or Employee shall have any power or authority to bind the
Trust by any Agreement or engagement or to pledge its credit or to
render it liable pecuniarily for any purpose or for any amount.
Section 2. Checks, Drafts, Etc. All checks, drafts, or orders for
the payment of money, notes and other evidences of indebtedness shall be
signed by such Officers, Employees, or Agents, as shall from time to
time be designated by the Trustees or the Executive Committee, or as may
be specified in or pursuant to the agreement between the Trust on behalf
of any Series or Class and the custodian appointed, pursuant to the
provisions of the Declaration of Trust.
Section 3. Endorsements, Assignments and Transfer of Securities.
All endorsements, assignments, stock powers, other instruments of
transfer or directions for the transfer of portfolio securities, whether
or not registered in nominee form, or belonging to any Series or Class
shall be made by such Officers, Employees, or Agents as may be
authorized by the Trustees or the Executive Committee.
Section 4. Evidence of Authority. Anyone dealing with the Trust
shall be fully justified in relying on a copy of a resolution of the
Trustees or of any committee thereof empowered to act in the premises
which is certified as true by the Secretary or an Assistant Secretary
under the seal of the Trust.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 1. General. Every person who is or has been a Trustee or
officer of the Trust and persons who serve at the Trust's request as
director, officer, trustee, partner or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise shall be
indemnified by the Trust (or the appropriate Series or Class, where such
Trustee or officer is acting on behalf of or with respect to a single
Series or Class) to the fullest extent permitted by law against
liability and all expenses, including amounts incurred in satisfaction
of judgments, settlements, compromises, fines, penalties, and counsel
fees reasonable incurred or paid by him in connection with any debt,
claim, action, demand, suit or proceeding of any kind, whether civil or
criminal, in which he becomes involved as a party or otherwise by virtue
of his being or having been a Trustee or officer of the Trust or his
serving or having served as a director, officer, trustee, partner or
fiduciary of another corporation, partnership, joint venture, trust or
other enterprise at the request of the Trust; provided that the Trust
shall indemnify any such person seeking indemnification in connection
with a proceeding initiated by such person only if such proceeding was
authorized by the Board of Trustees.
Section 2. No Indemnification. No indemnification shall be
provided hereunder to a Trustee or officer against any liability to the
Trust or any Series or Class or the Shareholders of any Series or Class
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
Section 3. Conditions for Indemnification. Except as provided in
Section 4 hereof, in the absence of a final decision on the merits by a
court or other body before which such proceeding was brought, an
indemnification payment will not be made, unless a reasonable
determination based upon a factual review has been made by a majority
vote of a quorum of non-party trustees who are not interested persons of
the Trust, or 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.
Section 4. Advancement of Expenses. The Trust shall pay the
expenses incurred in the defense of a proceeding in advance of its final
disposition (upon undertaking for repayment unless it is ultimately
determined that indemnification is appropriate) if at least one of the
following conditions is fulfilled: (i) the indemnitee provides security
for his undertaking, (ii) the Trust or any relevant Series or Class is
insured against any loss arising by reason of any lawful advance or
(iii) a majority of a quorum of disinterested non-party trustees or
independent legal counsel in a written opinion makes a factual
determination that there is reason to believe the indemnitee will be
entitled to indemnification.
Section 5. Non-Exclusivity. Nothing contained in this Article
shall affect any rights to indemnification to which Trustees, officers
or any other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain insurance on their
behalf.
ARTICLE X
SEAL
The seal of the Trust shall consist of a flat-faced die with the
word "Massachusetts", together with the name of the Trust and the year
of its organization cut or engraved thereon but, unless otherwise
required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document,
instrument or other paper executed and delivered by or on behalf of the
Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust and each Series or Class shall be as
designated from time to time by the Trustees.
ARTICLE XII
AMENDMENTS
These By-Laws may be amended by a majority vote of all of the
Trustees.
ARTICLE XIII
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of any statute of The Commonwealth of Massachusetts, or under
the provisons of the Declaration of Trust or these By-Laws, a waiver
thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. A notice shall be deemed to have been given if
telegraphed, cabled, or sent by wireless when it has been delivered to a
representative of any telegraph, cable or wireless company with
instructions that it be telegraphed, cabled, or sent by wireless. Any
notice shall be deemed to be given if mailed at the time when the same
shall be deposited in the mail.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the
shareholders of each Series or Class a written financial report of the
transactions of that Series or Class including financial statements
which shall at least annually be certified by independent public
accountants.
ARTICLE XV
BOOKS AND RECORDS
The books and records of the Trust and any Series or Class,
including the stock ledger or ledgers, may be kept in or outside The
Commonwealth of Massachusetts at such office or agency of the Trust as
may from time to time be determined by the Trustees.
ARTICLE XVI
TERMS
Terms defined in the Declaration of Trust and not otherwise defined
herein are used herein with the meanings set forth or referred to in the
Declaration of Trust.
Exhibit 4(iii) under Form N-1A
Exhibit 3(c) under Item 601/Reg. S-K
111 CORCORAN FUNDS
111 Corcoran Equity Fund
Number Shares
_____ _____
Account No. Alpha Code Organized Under the See Reverse Side For
Laws of the Commonwealth Certain Definitions
of Massachusetts
THIS IS TO CERTIFY THAT is the owner of
CUSIP 682365 30 9
Fully Paid and Non-Assessable Shares of Beneficial Interest of 111
CORCORAN EQUITY FUND of the 111 CORCORAN FUNDS hereafter called the
"Trust," transferable on the books of the Trust by the owner, in person
or by duly authorized attorney, upon surrender of this Certificate
properly endorsed.
The shares represented hereby are issued and shall be held subject
to the provisions of the Declaration of Trust and By-Laws of the Trust,
and all amendments thereto, all of which the holder by acceptance hereof
assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be
signed in its name by its proper officers and to be sealed with its
Seal.
Dated: 111 CORCORAN FUNDS
Seal
1992
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Pittsburgh)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-
...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants
Act.............................
in common (State)
Additional abbreviations may also be used though not in the above
list.
For value received__________ hereby sell, assign, and transfer
unto
Please insert social security or other
identifying number of assignee
______________________________________
________________________________________________________________________
_____
(Please print or typewrite name and address, including zip code, of
assignee)
________________________________________________________________________
_____
________________________________________________________________________
_____
______________________________________________________________________
shares
of beneficial interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________
_______________________________________________________________
_Attorney
to transfer the said shares on the books of the within named Trust with
full power of substitution in the premises.
Dated______________________
NOTICE:_____________________________
_
The signature to this assignment
must correspond with the name as
written upon the face of the
certificate in every particular,
without alteration or enlargement or
any change whatever.
All persons dealing with 111 CORCORAN FUNDS, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares
in the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is
boxed.
D. The Massachusetts corporate seal appears in the bottom middle of
the page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit 5(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
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
/s/ John G. Mitchell By:/s/ Steven D. Templeton
Assistant Secretary Senior Vice
President
Attest: 111 CORCORAN FUNDS
/s/ S. Elliott Cohan By:/s/ J. C. Donahue
Assistant Secretary
Vice President
Exhibit 5(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
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 1st day of September,
1994.
ATTEST: CENTRAL CAROLINA BANK
AND TRUST COMPANY
/s/John G. Mitchell By: /s/ Steven D. Templeton
Assistant Secretary Senior Vice President
(Corporate Seal)
ATTEST: FRANKLIN STREET ADVISORS, INC.
/s/ Carol E. Manzon By: /s/ Robert C. Eubanks, Jr.
Secretary President
(Corporate Seal)
Exhibit A
111 Corcoran Funds
111 Corcoran Equity Fund
Sub-Advisory Agreement
THIS EXHIBIT A (the "Exhibit") to the Sub-Advisory Agreement dated
September 1, 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 1st day of
September, 1994 to be renewed on or before September 1, 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 1st day of September,
1994.
ATTEST CENTRAL CAROLINA BANK
AND TRUST COMPANY
/s/ John G. Mitchell By: /s/ Steven D. Templeton
Assistant Secretary Senior Vice President
(Corporate Seal)
ATTEST: FRANKLIN STREET ADVISORS, INC.
/s/ Carol E. Manzon By: /s/Robert C. Eubanks, Jr.
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 September 1,
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: September 1, 1994
FRANKLIN STREET PARTNERS, INC.
By: /s/ Robert C. Eubanks, Jr.
President
Exhibit 6(ii) under Form N-1A
Exhibit 1 under Item 601/Reg, S-K
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
/s/ S. Elliott Cohan By:/s/ J. C. Donahue
Assistant Secretary Vice President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ John W. McGonigle By:/s/ E. C. Gonzales
Assistant Secretary Executive Vice President
(SEAL)
Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian With Respect to Property of the
Funds Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 6
2.5 Payments for Shares 7
2.6 Availability of Federal Funds 7
2.7 Collection of Income 7
2.8 Payment of Fund Moneys 8
2.9 Liability for Payment in Advance of Receipt of
Securities Purchased. 9
2.10 Payments for Repurchases or Redemptions of
Shares of a Fund 9
2.11 Appointment of Agents 10
2.12 Deposit of Fund Assets in Securities System 10
2.13 Segregated Account 12
2.14 Joint Repurchase Agreements 13
2.15 Ownership Certificates for Tax Purposes 13
2.16 Proxies 13
2.17 Communications Relating to Fund Portfolio
Securities 13
2.18 Proper Instructions 14
2.19 Actions Permitted Without Express Authority 14
2.20 Evidence of Authority 15
2.21 Notice to Trust by Custodian Regarding
Cash Movement. 15
3. Duties of Custodian With Respect to the Books of
Account and Calculation of Net Asset Value and Net
Income 15
4. Records 16
5. Opinion of Funds' Independent Public
Accountants/Auditors 16
6. Reports to Trust by Independent Public
Accountants/Auditors 17
7. Compensation of Custodian 17
8. Responsibility of Custodian 17
9. Effective Period, Termination and Amendment 19
10. Successor Custodian 20
11. Interpretive and Additional Provisions 21
12. Massachusetts Law to Apply 22
13. Notices 22
14. Counterparts 22
15. Limitations of Liability 22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on Exhibit 1, as
it may be amended from time to time, (the "Trust"), which may be
Massachusetts business trusts or Maryland corporations or have such
other form of organization as may be indicated, on behalf of the
portfolios (hereinafter collectively called the "Funds" and individually
referred to as a "Fund") of the Trust, having its principal place of
business at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779, and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street,
Boston, Massachusetts, 02110, hereinafter called the "Custodian", and
FEDERATED SERVICES COMPANY, a Delaware business trust company, having
its principal place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania, 15222-3779, hereinafter called ("Company").
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the
assets of each of the Funds of the Trust. Except as otherwise
expressly provided herein, the securities and other assets of each
of the Funds shall be segregated from the assets of each of the
other Funds and from all other persons and entities. The Trust
will deliver to the Custodian all securities and cash owned by the
Funds and all payments of income, payments of principal or capital
distributions received by them with respect to all securities
owned by the Funds from time to time, and the cash consideration
received by them for shares ("Shares") of beneficial
interest/capital stock of the Funds as may be issued or sold from
time to time. The Custodian shall not be responsible for any
property of the Funds held or received by the Funds and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of
Section 2.18), the Custodian shall from time to time employ one or
more sub-custodians upon the terms specified in the Proper
Instructions, provided that the Custodian shall have no more or
less responsibility or liability to the Trust or any of the Funds
on account of any actions or omissions of any sub-custodian so
employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian With Respect to Property of the Funds Held
by the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash
property, including all securities owned by each Fund, other
than securities which are maintained pursuant to Section
2.12 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein
as "Securities System", or securities which are subject to a
joint repurchase agreement with affiliated funds pursuant to
Section 2.14. The Custodian shall maintain records of all
receipts, deliveries and locations of such securities,
together with a current inventory thereof, and shall conduct
periodic physical inspections of certificates representing
stocks, bonds and other securities held by it under this
Contract in such manner as the Custodian shall determine
from time to time to be advisable in order to verify the
accuracy of such inventory. With respect to securities held
by any agent appointed pursuant to Section 2.11 hereof, and
with respect to securities held by any sub-custodian
appointed pursuant to Section 1 hereof, the Custodian may
rely upon certificates from such agent as to the holdings of
such agent and from such sub-custodian as to the holdings of
such sub-custodian, it being understood that such reliance
in no way relieves the Custodian of its responsibilities
under this Contract. The Custodian will promptly report to
the Trust the results of such inspections, indicating any
shortages or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or
discrepancies.
2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by a Fund held by the Custodian or
in a Securities System account of the Custodian only upon
receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and
only in the following cases:
(1) Upon sale of such securities for the account of a Fund
and receipt of payment therefor;
(2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Trust;
(3) In the case of a sale effected through a Securities
System, in accordance with the provisions of Section
2.12 hereof;
(4) To the depository agent in connection with tender or
other similar offers for portfolio securities of a
Fund, in accordance with the provisions of Section 2.17
hereof;
(5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or
other consideration is to be delivered to the
Custodian;
(6) To the issuer thereof, or its agent, for transfer into
the name of a Fund or into the name of any nominee or
nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.11 or
into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the
new securities are to be delivered to the Custodian;
(7) Upon the sale of such securities for the account of a
Fund, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery custom"; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except
as may arise from the Custodian's own failure to act in
accordance with the standard of reasonable care or any
higher standard of care imposed upon the Custodian by
any applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract;
(8) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the
new securities and cash, if any, are to be delivered to
the Custodian;
(9) In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
(10)For delivery in connection with any loans of portfolio
securities of a Fund, but only against receipt of
adequate collateral in the form of (a) cash, in an
amount specified by the Trust, (b) certificated
securities of a description specified by the Trust,
registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer, or (c)
securities of a description specified by the Trust,
transferred through a Securities System in accordance
with Section 2.12 hereof;
(11)For delivery as security in connection with any
borrowings requiring a pledge of assets by a Fund, but
only against receipt of amounts borrowed, except that
in cases where additional collateral is required to
secure a borrowing already made, further securities may
be released for the purpose;
(12)For delivery in accordance with the provisions of any
agreement among the Trust or a Fund, the Custodian and
a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act")
and a member of The National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding escrow
or other arrangements in connection with transactions
for a Fund;
(13)For delivery in accordance with the provisions of any
agreement among the Trust or a Fund, the Custodian, and
a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization
or organizations, regarding account deposits in
connection with transaction for a Fund;
(14)Upon receipt of instructions from the transfer agent
("Transfer Agent") for a Fund, for delivery to such
Transfer Agent or to the holders of shares in
connection with distributions in kind, in satisfaction
of requests by holders of Shares for repurchase or
redemption; and
(15)For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Executive
Committee of the Trust on behalf of a Fund signed by an
officer of the Trust and certified by its Secretary or
an Assistant Secretary, specifying the securities to be
delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities. Securities held by the
Custodian (other than bearer securities) shall be registered
in the name of a particular Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless
the Trust has authorized in writing the appointment of a
nominee to be used in common with other registered
investment companies affiliated with the Fund, or in the
name or nominee name of any agent appointed pursuant to
Section 2.11 or in the name or nominee name of any sub-
custodian appointed pursuant to Section 1. All securities
accepted by the Custodian on behalf of a Fund under the
terms of this Contract shall be in "street name" or other
good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of each Fund,
subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of each
Fund, other than cash maintained in a joint repurchase
account with other affiliated funds pursuant to Section 2.14
of this Contract or by a particular Fund in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended, (the "1940
Act"). Funds held by the Custodian for a Fund may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the
1940 Act and that each such bank or trust company and the
funds to be deposited with each such bank or trust company
shall be approved by vote of a majority of the Board of
Trustees/Directors ("Board") of the Trust. Such funds shall
be deposited by the Custodian in its capacity as Custodian
for the Fund and shall be withdrawable by the Custodian only
in that capacity. If requested by the Trust, the Custodian
shall furnish the Trust, not later than twenty (20) days
after the last business day of each month, an internal
reconciliation of the closing balance as of that day in all
accounts described in this section to the balance shown on
the daily cash report for that day rendered to the Trust.
2.5 Payments for Shares. The Custodian shall make such
arrangements with the Transfer Agent of each Fund, as will
enable the Custodian to receive the cash consideration due
to each Fund and will deposit into each Fund's account such
payments as are received from the Transfer Agent. The
Custodian will provide timely notification to the Trust and
the Transfer Agent of any receipt by it of payments for
Shares of the respective Fund.
2.6 Availability of Federal Funds. Upon mutual agreement
between the Trust and the Custodian, the Custodian shall
make federal funds available to the Funds as of specified
times agreed upon from time to time by the Trust and the
Custodian in the amount of checks, clearing house funds, and
other non-federal funds received in payment for Shares of
the Funds which are deposited into the Funds' accounts.
2.7 Collection of Income.
(1) The Custodian shall collect on a timely basis all
income and other payments with respect to registered
securities held hereunder to which each Fund shall be
entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely
basis all income and other payments with respect to
bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or
its agent thereof and shall credit such income, as
collected, to each Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian
shall detach and present for payment all coupons and
other income items requiring presentation as and when
they become due and shall collect interest when due on
securities held hereunder. The collection of income
due the Funds on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the
responsibility of the Trust. The Custodian will have
no duty or responsibility in connection therewith,
other than to provide the Trust with such information
or data as may be necessary to assist the Trust in
arranging for the timely delivery to the Custodian of
the income to which each Fund is properly entitled.
(2) The Custodian shall promptly notify the Trust whenever
income due on securities is not collected in due course
and will provide the Trust with monthly reports of the
status of past due income unless the parties otherwise
agree.
2.8 Payment of Fund Moneys. Upon receipt of Proper
Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay
out moneys of each Fund in the following cases only:
(1) Upon the purchase of securities, futures contracts or
options on futures contracts for the account of a Fund
but only (a) against the delivery of such securities,
or evidence of title to futures contracts, to the
Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and
has been designated by the Custodian as its agent for
this purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer, (b)
in the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.12 hereof or (c) in the case of repurchase
agreements entered into between the Trust and any other
party, (i) against delivery of the securities either in
certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to
repurchase such securities from the Fund;
(2) In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2
hereof;
(3) For the redemption or repurchase of Shares of a Fund
issued by the Trust as set forth in Section 2.10
hereof;
(4) For the payment of any expense or liability incurred by
a Fund, including but not limited to the following
payments for the account of the Fund: interest; taxes;
management, accounting, transfer agent and legal fees;
and operating expenses of the Fund, whether or not such
expenses are to be in whole or part capitalized or
treated as deferred expenses;
(5) For the payment of any dividends on Shares of a Fund
declared pursuant to the governing documents of the
Trust;
(6) For payment of the amount of dividends received in
respect of securities sold short;
(7) For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of
a resolution of the Executive Committee of the Trust on
behalf of a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth
the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to
be made.
2.9 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase
of securities for the account of a Fund is made by the
Custodian in advance of receipt of the securities purchased,
in the absence of specific written instructions from the
Trust to so pay in advance, the Custodian shall be
absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the
Custodian.
2.10Payments for Repurchases or Redemptions of Shares of a Fund.
From such funds as may be available for the purpose of
repurchasing or redeeming Shares of a Fund, but subject to
the limitations of the Declaration of Trust/Articles of
Incorporation and any applicable votes of the Board of the
Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available
for payment to holders of shares of such Fund who have
delivered to the Transfer Agent a request for redemption or
repurchase of their shares including without limitation
through bank drafts, automated clearinghouse facilities, or
by other means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders.
2.11Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove)
any other bank or trust company which is itself qualified
under the 1940 Act and any applicable state law or
regulation, to act as a custodian, as its agent to carry out
such of the provisions of this Section 2 as the Custodian
may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.12Deposit of Fund Assets in Securities System. The Custodian
may deposit and/or maintain securities owned by the Funds in
a clearing agency registered with the Securities and
Exchange Commission ("SEC") under Section 17A of the
Exchange Act, which acts as a securities depository, or in
the book-entry system authorized by the U.S. Department of
the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(1) The Custodian may keep securities of each Fund in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian
in the Securities System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
(2) The records of the Custodian with respect to securities
of the Funds which are maintained in a Securities
System shall identify by book-entry those securities
belonging to each Fund;
(3) The Custodian shall pay for securities purchased for
the account of each Fund upon (i) receipt of advice
from the Securities System that such securities have
been transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the
account of a Fund upon (i) receipt of advice from the
Securities System that payment for such securities has
been transferred to the Account, and (ii) the making of
an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund.
Copies of all advices from the Securities System of
transfers of securities for the account of a Fund shall
identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Trust at its request.
Upon request, the Custodian shall furnish the Trust
confirmation of each transfer to or from the account of
a Fund in the form of a written advice or notice and
shall furnish to the Trust copies of daily transaction
sheets reflecting each day's transactions in the
Securities System for the account of a Fund.
(4) The Custodian shall provide the Trust with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
(5) The Custodian shall have received the initial
certificate, required by Section 9 hereof;
(6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Trust for any loss or damage to a Fund resulting from
use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their
employees or from failure of the Custodian or any such
agent to enforce effectively such rights as it may have
against the Securities System; at the election of the
Trust, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim
against the Securities System or any other person which
the Custodian may have as a consequence of any such
loss or damage if and to the extent that a Fund has not
been made whole for any such loss or damage.
(7) The authorization contained in this Section 2.12 shall
not relieve the Custodian from using reasonable care
and diligence in making use of any Securities System.
2.13Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the
Trust, the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions for a
Fund, (ii) for purpose of segregating cash or government
securities in connection with options purchased, sold or
written for a Fund or commodity futures contracts or options
thereon purchased or sold for a Fund, (iii) for the purpose
of compliance by the Trust or a Fund with the procedures
required by any release or releases of the SEC relating to
the maintenance of segregated accounts by registered
investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to Proper Instructions, a certified copy of
a resolution of the Board or of the Executive Committee
signed by an officer of the Trust and certified by the
Secretary or an Assistant Secretary, setting forth the
purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14Joint Repurchase Agreements. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain
any assets of a Fund and any affiliated funds which are
subject to joint repurchase transactions in an account
established solely for such transactions for the Fund and
its affiliated funds. For purposes of this Section 2.14,
"affiliated funds" shall include all investment companies
and their portfolios for which subsidiaries or affiliates of
Federated Investors serve as investment advisers,
distributors or administrators in accordance with applicable
exemptive orders from the SEC. The requirements of
segregation set forth in Section 2.1 shall be deemed to be
waived with respect to such assets.
2.15Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with
respect to securities of a Fund held by it and in connection
with transfers of securities.
2.16Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities
are registered otherwise than in the name of a Fund or a
nominee of a Fund, all proxies, without indication of the
manner in which such proxies are to be voted, and shall
promptly deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17Communications Relating to Fund Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of
calls and maturities of securities and expirations of rights
in connection therewith and notices of exercise of call and
put options written by the Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the
Custodian from issuers of the securities being held for the
Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust all written
information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
If the Trust desires to take action with respect to any
tender offer, exchange offer or any other similar
transaction, the Trust shall notify the Custodian in writing
at least three business days prior to the date on which the
Custodian is to take such action. However, the Custodian
shall nevertheless exercise its best efforts to take such
action in the event that notification is received three
business days or less prior to the date on which action is
required.
2.18Proper Instructions. Proper Instructions as used throughout
this Section 2 means a writing signed or initialed by one or
more person or persons as the Board shall have from time to
time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved. Oral
instructions will be deemed to be Proper Instructions if (a)
the Custodian reasonably believes them to have been given by
a person previously authorized in Proper Instructions to
give such instructions with respect to the transaction
involved, and (b) the Trust promptly causes such oral
instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to
the authorization by the Board of the Trust accompanied by a
detailed description of procedures approved by the Board,
Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices
provided that the Board and the Custodian are satisfied that
such procedures afford adequate safeguards for a Fund's
assets.
2.19Actions Permitted Without Express Authority. The Custodian
may in its discretion, without express authority from the
Trust:
(1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Contract, provided that all such
payments shall be accounted for to the Trust in such
form that it may be allocated to the affected Fund;
(2) surrender securities in temporary form for securities
in definitive form;
(3) endorse for collection, in the name of a Fund, checks,
drafts and other negotiable instruments; and
(4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the
securities and property of each Fund except as
otherwise directed by the Trust.
2.20Evidence of Authority. The Custodian shall be protected in
acting upon any instructions, notice, request, consent,
certificate or other instrument or paper reasonably believed
by it to be genuine and to have been properly executed on
behalf of a Fund. The Custodian may receive and accept a
certified copy of a vote of the Board of the Trust as
conclusive evidence (a) of the authority of any person to
act in accordance with such vote or (b) of any determination
of or any action by the Board pursuant to the Declaration of
Trust/Articles of Incorporation as described in such vote,
and such vote may be considered as in full force and effect
until receipt by the Custodian of written notice to the
contrary.
2.21Notice to Trust by Custodian Regarding Cash Movement. The
Custodian will provide timely notification to the Trust of
any receipt of cash, income or payments to the Trust and the
release of cash or payment by the Trust.
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of
the Trust to keep the books of account of each Fund and/or compute
the net asset value per share of the outstanding Shares of each
Fund or, if directed in writing to do so by the Trust, shall
itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in the
Fund's currently effective prospectus and Statement of Additional
Information ("Prospectus") and shall advise the Trust and the
Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Trust to do so,
shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of
the net asset value per share and the daily income of a Fund shall
be made at the time or times described from time to time in the
Fund's currently effective Prospectus.
4. Records.
The Custodian shall create and maintain all records relating to
its activities and obligations under this Contract in such manner
as will meet the obligations of the Trust and the Funds under the
1940 Act, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such records
shall be the property of the Trust and shall at all times during
the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Trust and
employees and agents of the SEC. In the event of termination of
this Contract, the Custodian will deliver all such records to the
Trust, to a successor Custodian, or to such other person as the
Trust may direct. The Custodian shall supply daily to the Trust a
tabulation of securities owned by a Fund and held by the Custodian
and shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
5. Opinion of Funds' Independent Public Accountants/Auditors.
The Custodian shall take all reasonable action, as the Trust may
from time to time request, to obtain from year to year favorable
opinions from each Fund's independent public accountants/auditors
with respect to its activities hereunder in connection with the
preparation of the Fund's registration statement, periodic
reports, or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public Accountants/Auditors.
The Custodian shall provide the Trust, at such times as the Trust
may reasonably require, with reports by independent public
accountants/auditors for each Fund on the accounting system,
internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian for the
Fund under this Contract; such reports shall be of sufficient
scope and in sufficient detail, as may reasonably be required by
the Trust, to provide reasonable assurance that any material
inadequacies would be disclosed by such examination and, if there
are no such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to
time between Company and the Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable care in
carrying out the provisions of this Contract; provided, however,
that the Custodian shall be held to any higher standard of care
which would be imposed upon the Custodian by any applicable law or
regulation if such above stated standard of reasonable care was
not part of this Contract. The Custodian shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for
the Trust) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice,
provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and
without negligence. Subject to the limitations set forth in
Section 15 hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in the issue
at hand and be without liability for any action taken or thing
done by it in carrying out the terms and provisions of this
Contract in accordance with the above standards.
In order that the indemnification provisions contained in this
Section 8 shall apply, however, it is understood that if in any
case the Trust may be asked to indemnify or save the Custodian
harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is
further understood that the Custodian will use all reasonable care
to identify and notify the Trust promptly concerning any situation
which presents or appears likely to present the probability of
such a claim for indemnification. The Trust shall have the option
to defend the Custodian against any claim which may be the subject
of this indemnification, and in the event that the Trust so elects
it will so notify the Custodian and thereupon the Trust shall take
over complete defense of the claim, and the Custodian shall in
such situation initiate no further legal or other expenses for
which it shall seek indemnification under this Section. The
Custodian shall in no case confess any claim or make any
compromise in any case in which the Trust will be asked to
indemnify the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the Custodian
with respect to redemptions effected by check shall be in
accordance with a separate Agreement entered into between the
Custodian and the Trust.
If the Trust requires the Custodian to take any action with
respect to securities, which action involves the payment of money
or which action may, in the reasonable opinion of the Custodian,
result in the Custodian or its nominee assigned to a Fund being
liable for the payment of money or incurring liability of some
other form, the Custodian may request the Trust, as a prerequisite
to requiring the Custodian to take such action, to provide
indemnity to the Custodian in an amount and form satisfactory to
the Custodian.
Subject to the limitations set forth in Section 15 hereof, the
Trust agrees to indemnify and hold harmless the Custodian and its
nominee from and against all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees)
(referred to herein as authorized charges) incurred or assessed
against it or its nominee in connection with the performance of
this Contract, except such as may arise from it or its nominee's
own failure to act in accordance with the standard of reasonable
care or any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such above-
stated standard of reasonable care were not part of this Contract.
To secure any authorized charges and any advances of cash or
securities made by the Custodian to or for the benefit of a Fund
for any purpose which results in the Fund incurring an overdraft
at the end of any business day or for extraordinary or emergency
purposes during any business day, the Trust hereby grants to the
Custodian a security interest in and pledges to the Custodian
securities held for the Fund by the Custodian, in an amount not to
exceed 10 percent of the Fund's gross assets, the specific
securities to be designated in writing from time to time by the
Trust or the Fund's investment adviser. Should the Trust fail to
make such designation, or should it instruct the Custodian to make
advances exceeding the percentage amount set forth above and
should the Custodian do so, the Trust hereby agrees that the
Custodian shall have a security interest in all securities or
other property purchased for a Fund with the advances by the
Custodian, which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of the
Trust instructing their purchase shall be considered the requisite
description and designation of the property so pledged for
purposes of the requirements of the Uniform Commercial Code.
Should the Trust fail to cause a Fund to repay promptly any
authorized charges or advances of cash or securities, subject to
the provision of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use available
cash and to dispose of pledged securities and property as is
necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.12 hereof
in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of the Trust
has approved the initial use of a particular Securities System as
required in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or terminate this
Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust/Articles
of Incorporation, and further provided, that the Trust may at any
time by action of its Board (i) substitute another bank or trust
company for the Custodian by giving notice as described above to
the Custodian, or (ii) immediately terminate this Contract in the
event of the appointment of a conservator or receiver for the
Custodian by the appropriate banking regulatory agency or upon the
happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board of the
Trust, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed
and in the form for transfer, all securities then held by it
hereunder for each Fund and shall transfer to separate accounts of
the successor custodian all of each Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote
of the Board of the Trust, deliver at the office of the Custodian
and transfer such securities, funds and other properties in
accordance with such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board shall have been
delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank"
as defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing business in
Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities,
funds and other properties held by the Custodian and all
instruments held by the Custodian relative thereto and all other
property held by it under this Contract for each Fund and to
transfer to separate accounts of such successor custodian all of
each Fund's securities held in any Securities System. Thereafter,
such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination
hereof owing to failure of the Trust to procure the certified copy
of the vote referred to or of the Board to appoint a successor
custodian, the Custodian shall be entitled to fair compensation
for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the
provisions of this Contract relating to the duties and obligations
of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian
and the Trust may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Contract
as may in their joint opinion be consistent with the general tenor
of this Contract. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or state
regulations or any provision of the Declaration of Trust/Articles
of Incorporation. No interpretive or additional provisions made
as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth
of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices and
other writings delivered or mailed postage prepaid to the Trust at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779,
or to the Custodian at address for SSBT only: 225 Franklin
Street, Boston, Massachusetts, 02110, or to such other address as
the Trust or the Custodian may hereafter specify, shall be deemed
to have been properly delivered or given hereunder to the
respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust
of those Trusts which are business trusts and agrees that the
obligations and liabilities assumed by the Trust and any Fund
pursuant to this Contract, including, without limitation, any
obligation or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the relevant
Fund and its assets and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the
relevant Fund, from any other Fund or its shareholders or from the
Trustees, Officers, employees or agents of the Trust, or any of
them. In addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against the Trust,
for whatever reasons, involving more than one Fund, the Trust
shall have the exclusive right to determine the appropriate
allocations of liability for any such claim between or among the
Funds.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed effective as of the 1st day of
December, 1993.
ATTEST: INVESTMENT COMPANIES
/s/John G. McGonigle_________ By /s/John G. Donahue_____________
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._________________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
12/01/93 111 Corcoran Funds
</TABLE>
Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of December 1, 1994, by and between those
investment companies listed on Exhibit 1 as may be amended from time
to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Trust"), on
behalf of the portfolios (individually referred to herein as a "Fund"
and collectively as "Funds") of the Trust, and FEDERATED SERVICES
COMPANY, a Delaware business trust, having its principal office and
place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), with authorized and issued shares of capital
stock or beneficial interest ("Shares"); and
WHEREAS, the Trust may desire to retain the Company to provide
certain pricing, accounting and recordkeeping services for each of the
Funds, including any classes of shares issued by any Fund ("Classes")
if so indicated on Exhibit 1, and the Company is willing to furnish
such services; and
WHEREAS, the Trust may desire to appoint the Company as its
transfer agent, dividend disbursing agent if so indicated on Exhibit
1, and agent in connection with certain other activities, and the
Company desires to accept such appointment; and
WHEREAS, the Trust may desire to appoint the Company as its agent
to select, negotiate and subcontract for custodian services from an
approved list of qualified banks if so indicated on Exhibit 1, and the
Company desires to accept such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct
the Company to subcontract for the performance of certain of its
duties and responsibilities hereunder to State Street Bank and Trust
Company or another agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for
those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby,
the parties hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain pricing
and accounting services to the Funds, and/or the Classes, for the
period and on the terms set forth in this Agreement. The Company
accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided in Article 3 of this
Section.
Article 2. The Company's Duties.
Subject to the supervision and control of the Trust's Board of
Trustees or Directors ("Board"), the Company will assist the Trust
with regard to fund accounting for the Trust, and/or the Funds, and/or
the Classes, and in connection therewith undertakes to perform the
following specific services;
A. Value the assets of the Funds using: primarily, market
quotations, including the use of matrix pricing, supplied by
the independent pricing services selected by the Company in
consultation with the adviser, or sources selected by the
adviser, and reviewed by the board; secondarily, if a
designated pricing service does not provide a price for a
security which the Company believes should be available by
market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the fund
holding the security, or if the adviser does not supply the
names of such brokers, the Company will attempt on its own
to find brokers to price those securities; thirdly, for
securities for which no market price is available, the
Pricing Committee of the Board will determine a fair value
in good faith. Consistent with Rule 2a-4 of the 40 Act,
estimates may be used where necessary or appropriate. The
Company's obligations with regard to the prices received
from outside pricing services and designated brokers or
other outside sources, is to exercise reasonable care in the
supervision of the pricing agent. The Company is not the
guarantor of the securities prices received from such agents
and the Company is not liable to the Fund for potential
errors in valuing a Fund's assets or calculating the net
asset value per share of such Fund or Class when the
calculations are based upon such prices. All of the above
sources of prices used as described are deemed by the
Company to be authorized sources of security prices. The
Company provides daily to the adviser the securities prices
used in calculating the net asset value of the fund, for its
use in preparing exception reports for those prices on which
the adviser has comment. Further, upon receipt of the
exception reports generated by the adviser, the Company
diligently pursues communication regarding exception reports
with the designated pricing agents.
B. Determine the net asset value per share of each Fund and/or
Class, at the time and in the manner from time to time
determined by the Board and as set forth in the Prospectus
and Statement of Additional Information ("Prospectus") of
each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Fund,
and/or Class, as required under Section 31(a) of the 1940
Act and the Rules thereunder in connection with the services
provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records to be maintained by Rule 31a-1 under
the 1940 Act in connection with the services provided by the
Company. The Company further agrees that all such records it
maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust such
records upon the Trust's request;
G. At the request of the Trust, prepare various reports or
other financial documents required by federal, state and
other applicable laws and regulations; and
H. Such other similar services as may be reasonably requested
by the Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services
rendered pursuant to Section One of this Agreement in
accordance with the fees agreed upon from time to time
between the parties hereto. Such fees do not include out-of-
pocket disbursements of the Company for which the Funds
shall reimburse the Company upon receipt of a separate
invoice. Out-of-pocket disbursements shall include, but
shall not be limited to, the items agreed upon between the
parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear
the cost of: custodial expenses; membership dues in the
Investment Company Institute or any similar organization;
transfer agency expenses; investment advisory expenses;
costs of printing and mailing stock certificates,
Prospectuses, reports and notices; administrative expenses;
interest on borrowed money; brokerage commissions; taxes and
fees payable to federal, state and other governmental
agencies; fees of Trustees or Directors of the Trust;
independent auditors expenses; Federated Administrative
Services and/or Federated Administrative Services, Inc.
legal and audit department expenses billed to Federated
Services Company for work performed related to the Trust,
the Funds, or the Classes; law firm expenses; or other
expenses not specified in this Article 3 which may be
properly payable by the Funds and/or classes.
C. The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
E. The fee for the period from the effective date of this
Agreement with respect to a Fund or a Class to the end of
the initial month shall be prorated according to the
proportion that such period bears to the full month period.
Upon any termination of this Agreement before the end of any
month, the fee for such period shall be prorated according
to the proportion which such period bears to the full month
period. For purposes of determining fees payable to the
Company, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the
Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person
or persons as the Company may believe to be particularly
suited to assist it in performing services under this
Section One. Such person or persons may be third-party
service providers, or they may be officers and employees who
are employed by both the Company and the Funds. The
compensation of such person or persons shall be paid by the
Company and no obligation shall be incurred on behalf of the
Trust, the Funds, or the Classes in such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement,
the Trust hereby appoints the Company to act as, and the Company
agrees to act as, transfer agent and dividend disbursing agent for
each Fund's Shares, and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of any Fund
("Shareholder(s)"), including without limitation any periodic
investment plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the
Board shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved.
Oral instructions will be deemed to be Proper Instructions if (a) the
Company reasonably believes them to have been given by a person
previously authorized in Proper Instructions to give such instructions
with respect to the transaction involved, and (b) the Trust, or the
Fund, and the Company promptly cause such oral instructions to be
confirmed in writing. Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices
provided that the Trust, or the Fund, and the Company are satisfied
that such procedures afford adequate safeguards for the Fund's assets.
Proper Instructions may only be amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Trust
as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the
purchase of shares and promptly deliver payment and
appropriate documentation therefore to the custodian of
the relevant Fund, (the "Custodian"). The Company shall
notify the Fund and the Custodian on a daily basis of
the total amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the
Fund's current Prospectus, the Company shall compute
and issue the appropriate number of Shares of each Fund
and/or Class and hold such Shares in the appropriate
Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder
or its agent requests a certificate, the Company, as
Transfer Agent, shall countersign and mail by first
class mail, a certificate to the Shareholder at its
address as set forth on the transfer books of the
Funds, and/or Classes, subject to any Proper
Instructions regarding the delivery of certificates.
(4) In the event that any check or other order for the
purchase of Shares of the Fund and/or Class is returned
unpaid for any reason, the Company shall debit the
Share account of the Shareholder by the number of
Shares that had been credited to its account upon
receipt of the check or other order, promptly mail a
debit advice to the Shareholder, and notify the Fund
and/or Class of its action. In the event that the
amount paid for such Shares exceeds proceeds of the
redemption of such Shares plus the amount of any
dividends paid with respect to such Shares, the Fund
and/the Class or its distributor will reimburse the
Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of
any distribution to Shareholders, the Company shall act
as Dividend Disbursing Agent for the Funds in
accordance with the provisions of its governing
document and the then-current Prospectus of the Fund.
The Company shall prepare and mail or credit income,
capital gain, or any other payments to Shareholders. As
the Dividend Disbursing Agent, the Company shall, on or
before the payment date of any such distribution,
notify the Custodian of the estimated amount required
to pay any portion of said distribution which is
payable in cash and request the Custodian to make
available sufficient funds for the cash amount to be
paid out. The Company shall reconcile the amounts so
requested and the amounts actually received with the
Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of any
such distribution or dividend, appropriate credits
shall be made to the Shareholder's account, for
certificated Funds and/or Classes, delivered where
requested; and
(2) The Company shall maintain records of account for each
Fund and Class and advise the Trust, each Fund and
Class and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and
redemption directions and, if such redemption requests
comply with the procedures as may be described in the
Fund Prospectus or set forth in Proper Instructions,
deliver the appropriate instructions therefor to the
Custodian. The Company shall notify the Funds on a
daily basis of the total amount of redemption requests
processed and monies paid to the Company by the
Custodian for redemptions.
(2) At the appropriate time upon receiving redemption
proceeds from the Custodian with respect to any
redemption, the Company shall pay or cause to be paid
the redemption proceeds in the manner instructed by the
redeeming Shareholders, pursuant to procedures
described in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other
request for redemption does not comply with the
procedures for redemption approved by the Fund, the
Company shall promptly notify the Shareholder of such
fact, together with the reason therefor, and shall
effect such redemption at the price applicable to the
date and time of receipt of documents complying with
said procedures.
(4) The Company shall effect transfers of Shares by the
registered owners thereof.
(5) The Company shall identify and process abandoned
accounts and uncashed checks for state escheat
requirements on an annual basis and report such actions
to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each
Fund, and/or Class, and maintain pursuant to applicable
rules of the Securities and Exchange Commission ("SEC")
a record of the total number of Shares of the Fund
and/or Class which are authorized, based upon data
provided to it by the Fund, and issued and outstanding.
The Company shall also provide the Fund on a regular
basis or upon reasonable request with the total number
of Shares which are authorized and issued and
outstanding, but shall have no obligation when
recording the issuance of Shares, except as otherwise
set forth herein, to monitor the issuance of such
Shares or to take cognizance of any laws relating to
the issue or sale of such Shares, which functions shall
be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records
pursuant to applicable rules of the SEC relating to the
services to be performed hereunder in the form and
manner as agreed to by the Trust or the Fund to include
a record for each Shareholder's account of the
following:
(a) Name, address and tax identification number (and
whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account,
including dividends paid and date and price for all
transactions;
(d) Any stop or restraining order placed against the
account;
(e) Information with respect to withholding in the case
of a foreign account or an account for which
withholding is required by the Internal Revenue
Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(h) Any information required in order for the Company
to perform the calculations contemplated or
required by this Agreement.
(3) The Company shall preserve any such records required to
be maintained pursuant to the rules of the SEC for the
periods prescribed in said rules as specifically noted
below. Such record retention shall be at the expense of
the Company, and such records may be inspected by the
Fund at reasonable times. The Company may, at its
option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in
the Company's files, records and documents created and
maintained by the Company pursuant to this Agreement,
which are no longer needed by the Company in
performance of its services or for its protection. If
not so turned over to the Fund, such records and
documents will be retained by the Company for six years
from the year of creation, during the first two of
which such documents will be in readily accessible
form. At the end of the six year period, such records
and documents will either be turned over to the Fund or
destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding
in each state for "blue sky" purposes as determined
according to Proper Instructions delivered from
time to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption
fees, or other transaction- or sales-related
payments;
(f) Such other information as may be agreed upon from
time to time.
(2) The Company shall prepare in the appropriate form, file
with the Internal Revenue Service and appropriate state
agencies, and, if required, mail to Shareholders, such
notices for reporting dividends and distributions paid
as are required to be so filed and mailed and shall
withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules and
regulations.
(3) In addition to and not in lieu of the services set
forth above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant,
agent in connection with accumulation, open-account
or similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder
reports and Prospectuses to current Shareholders,
withholding taxes on accounts subject to back-up or
other withholding (including non-resident alien
accounts), preparing and filing reports on U.S.
Treasury Department Form 1099 and other appropriate
forms required with respect to dividends and
distributions by federal authorities for all
Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts,
preparing and mailing activity statements for
Shareholders, and providing Shareholder account
information; and
(b) provide a system which will enable the Fund to
monitor the total number of Shares of each Fund
and/or Class sold in each state ("blue sky
reporting"). The Fund shall by Proper Instructions
(i) identify to the Company those transactions and
assets to be treated as exempt from the blue sky
reporting for each state and (ii) verify the
classification of transactions for each state on
the system prior to activation and thereafter
monitor the daily activity for each state. The
responsibility of the Company for each Fund's
and/or Class's state blue sky registration status
is limited solely to the recording of the initial
classification of transactions or accounts with
regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from
Shareholders relating to their Share accounts and such
other correspondence as may from time to time be
addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists,
mail proxy cards and other material supplied to it by
the Fund in connection with Shareholder Meetings of
each Fund; receive, examine and tabulate returned
proxies, and certify the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or
their classes' Prospectus and for complying with all applicable
requirements of the Securities Act of 1933, as amended (the
"1933 Act"), the 1940 Act and any laws, rules and regulations
of government authorities having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew such
supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by
facsimile, if authorized by the Trust and shall bear the seal
of the Trust or facsimile thereof; and notwithstanding the
death, resignation or removal of any officer of the Trust
authorized to sign certificates, the Company may continue to
countersign certificates which bear the manual or facsimile
signature of such officer until otherwise directed by the
Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration
of any dividend or distribution on account of any Fund's
shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company
an annual maintenance fee for each Shareholder account as
agreed upon between the parties and as may be added to or
amended from time to time. Such fees may be changed from time
to time subject to written agreement between the Trust and the
Company. Pursuant to information in the Fund Prospectus or
other information or instructions from the Fund, the Company
may sub-divide any Fund into Classes or other sub-components
for recordkeeping purposes. The Company will charge the Fund
the same fees for each such Class or sub-component the same as
if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this Section
Two may be assigned by either party without the written consent of the
other party.
A. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors
and assigns.
B. The Company may without further consent on the part of the
Trust subcontract for the performance hereof with (A) State
Street Bank and its subsidiary, Boston Financial Data
Services, Inc., a Massachusetts Trust ("BFDS"), which is
duly registered as a transfer agent pursuant to
Section 17A(c)(1) of the Securities Exchange Act of 1934, as
amended, or any succeeding statute ("Section 17A(c)(1)"), or
(B) a BFDS subsidiary duly registered as a transfer agent
pursuant to Section 17A(c)(1), or (C) a BFDS affiliate, or
(D) such other provider of services duly registered as a
transfer agent under Section 17A(c)(1) as Company shall
select; provided, however, that the Company shall be as
fully responsible to the Trust for the acts and omissions of
any subcontractor as it is for its own acts and omissions;
or
C. The Company shall upon instruction from the Trust
subcontract for the performance hereof with an Agent
selected by the Trust, other than BFDS or a provider of
services selected by Company, as described in (2) above;
provided, however, that the Company shall in no way be
responsible to the Trust for the acts and omissions of the
Agent.
SECTION THREE: Custody Services Procurement.
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate and
obtain custody services from a financial institution that (i) meets
the criteria established in Section 17(f) of the 1940 Act and (ii) has
been approved by the Board as eligible for selection by the Company as
a custodian (the "Eligible Custodian"). The Company accepts such
appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the
Company shall:
A. evaluate the nature and the quality of the custodial
services provided by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the
Trust as Custodian of the Trust's assets substantially on
the terms set forth as the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for
the benefit of the Trust, with the Trust as a party to each
such agreement. The Company shall not be a party to any
agreement with any such Custodian;
D. establish procedures to monitor the nature and the quality
of the services provided by the Custodians;
E. continuously monitor the nature and the quality of services
provided by the Custodians; and
F. periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature
and amount of disbursement made on account of the Trust with
respect to each custodial agreement; and (iii) such other
information as the Board shall reasonably request to enable
it to fulfill its duties and obligations under Sections
17(f) and 36(b) of the 1940 Act and other duties and
obligations thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three
of this Agreement, the Trust and/or the Fund agree to pay
the Company an annual fee as agreed upon between the
parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued
by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Trust and/or the Funds and a
duly authorized officer of the Company.
Article 12. Representations.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the services
contemplated in Section Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the
following documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share
certificates of the Trust or the Funds in the forms
approved by the Board of the Trust with a certificate
of the Secretary of the Trust as to such approval;
(4) All account application forms and other documents
relating to Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing
the original issuance of each Fund's, and/or Class's
Shares;
(2) Each Registration Statement filed with the SEC and
amendments thereof and orders relating thereto in
effect with respect to the sale of Shares of any Fund,
and/or Class;
(3) A certified copy of each amendment to the governing
document and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian
and agents for fund accountant, custody services
procurement, and shareholder recordkeeping or transfer
agency services;
(5) Specimens of all new Share certificates representing
Shares of any Fund, accompanied by Board resolutions
approving such forms;
(6) Such other certificates, documents or opinions which
the Company may, in its discretion, deem necessary or
appropriate in the proper performance of its duties;
and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and
in good standing under the laws of the State of
Delaware.
(2) It is duly qualified to carry on its business in the
State of Delaware.
(3) It is empowered under applicable laws and by its
charter and by-laws to enter into and perform this
Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations
under this Agreement.
(5) It has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement.
(6) It is in compliance with federal securities law
requirements and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing
and in good standing under the laws of its state of
organization;
(2) It is empowered under applicable laws and by its
Charter and By-Laws to enter into and perform its
obligations under this Agreement;
(3) All corporate proceedings required by said Charter and
By-Laws have been taken to authorize it to enter into
and perform its obligations under this Agreement;
(4) The Trust is an open-end investment company registered
under the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings
have been made and will continue to be made, with
respect to all Shares of each Fund being offered for
sale.
Article 15. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in
carrying out the provisions of this Contract. The Company shall
be entitled to rely on and may act upon advice of counsel (who
may be counsel for the Trust) on all matters, and shall be
without liability for any action reasonably taken or omitted
pursuant to such advice, provided that such action is not in
violation of applicable federal or state laws or regulations,
and is in good faith and without negligence.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and
affiliates, harmless against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-
adviser or other party contracted by or approved by the
Trust or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf
of the Fund, its Shareholders or investors
regarding the purchase, redemption or transfer of
Shares and Shareholder account information;
(b) are received by the Company from independent
pricing services or sources for use in valuing the
assets of the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or other
third parties contracted by or approved by the
Trust of Fund for use in the performance of
services under this Agreement;
(d) have been prepared and/or maintained by the Fund or
its affiliates or any other person or firm on
behalf of the Trust.
(3) The reliance on, or the carrying out by the Company or
its agents or subcontractors of Proper Instructions of
the Trust or the Fund.
(4) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations of
any state that such Shares be registered in such state
or in violation of any stop order or other
determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares
in such state.
Provided, however, that the Company shall not be
protected by this Article 15.A. from liability for any
act or omission resulting from the Company's willful
misfeasance, bad faith, negligence or reckless disregard
of its duties of failure to meet the standard of care set
forth in 15.A. above.
C. Reliance
At any time the Company may apply to any officer of the Trust
or Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the
services to be performed by the Company under this Agreement,
and the Company and its agents or subcontractors shall not be
liable and shall be indemnified by the Trust or the appropriate
Fund for any action reasonably taken or omitted by it in
reliance upon such instructions or upon the opinion of such
counsel provided such action is not in violation of applicable
federal or state laws or regulations. The Company, its agents
and subcontractors shall be protected and indemnified in
recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers
of the Trust or the Fund, and the proper countersignature of
any former transfer agent or registrar, or of a co-transfer
agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party
of such assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the
defense of such claim. The party seeking indemnification shall
in no case confess any claim or make any compromise in any case
in which the other party may be required to indemnify it except
with the other party's prior written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other. Should the Trust
exercise its rights to terminate, all out-of-pocket expenses
associated with the movement of records and materials will be borne by
the Trust or the appropriate Fund. Additionally, the Company reserves
the right to charge for any other reasonable expenses associated with
such termination. The provisions of Article 15 shall survive the
termination of this Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and
the Trust may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their
joint opinion be consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the
Charter. No interpretive or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this
Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth
of Massachusetts
Article 20. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the
Company at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-
3779, or to such other address as the Trust or the Company may
hereafter specify, shall be deemed to have been properly delivered or
given hereunder to the respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Trust and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders of
the Trust, but bind only the appropriate property of the Fund, or
Class, as provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Company and signed by an authorized officer of
the Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders of
the Company, but bind only the property of the Company as provided in
the Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Trust or the Funds by either of the
parties hereto except by the specific written consent of the other
party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the Trust,
the Company shall upon termination of this Agreement deliver to such
successor agent at the office of the Company all properties of the
Trust held by it hereunder. If no such successor agent shall be
appointed, the Company shall at its office upon receipt of Proper
Instructions deliver such properties in accordance with such
instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or
before the date when such termination shall become effective, then the
Company shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the 1940 Act, of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown
by its last published report, of not less than $2,000,000, all
properties held by the Company under this Agreement. Thereafter, such
bank or trust company shall be the successor of the Company under this
Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a result
of work stoppage, power or other mechanical failure, natural disaster,
governmental action, communication disruption or other impossibility
of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party may
assign to a successor all of or a substantial portion of its business,
or to a party controlling, controlled by, or under common control with
such party. Nothing in this Article 28 shall prevent the Company from
delegating its responsibilities to another entity to the extent
provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal, void
or unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and year
first above written.
ATTEST: INVESTMENT COMPANIES
(listed on Exhibit 1)
/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
Portfolios
Classes
12/01/93 111 CORCORAN FUNDS
12/01/94 111 Corcoran Bond Fund
12/01/94 111 Corcoran North Carolina Municipal Securities Fund
12/01/94 111 Corcoran Equity Fund
FEDERATED SERVICES COMPANY provides the following services:
Fund Accounting
Shareholder Recordkeeping
Custody Services Procurement
</TABLE>
Exhibit 9(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
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:/s/E. C. Gonzales
President
Exhibit 9(iv) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
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:/s/ E. C. Gonzales
President
Exhibit 10 under Form N-1A
Exhibit 5 under Item 601/Reg. S-K
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR. __________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
MARIO SANTILLIOR FAX (412) 471-0738 (1914 - 1971)
THEODORE M. HAMMER
April 22, 1992
The Trustees of
111 Corcoran Funds
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
111 Corcoran Funds ("Trust") proposes to offer and sell two
separate series of Shares of Beneficial Interest representing interests
in separate portfolios of securities known as 111 Corcoran North
Carolina Municipal Securities Fund and 111 Corcoran Bond Fund (all such
shares of beneficial interest being herein referred to as "Shares") in
the manner and on the terms set forth in its Registration Statement
filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended.
As counsel we have participated in the organization of the Trust,
its registration under the Investment Company Act of 1940 and the
preparation and filing of its Registration Statement under the
Securities Act of 1933. We have examined and are familiar with the
provisions of the written Declaration of Trust dated December 11, 1991,
as amended, ("Declaration of Trust"), the Bylaws of the Trust and such
other documents and records deemed relevant. We have also reviewed
questions of law and consulted with counsel thereon as deemed necessary
or appropriate by us for the purposes of this opinion.
Based on the foregoing, it is our opinion that:
1. The Trust is duly organized and validly existing pursuant to
the Declaration of Trust.
2. The Shares which are currently being registered by the
amended Registration Statement referred to above may be legally and
validly issued from time to time in accordance with the Declaration of
Trust upon receipt of consideration sufficient to comply with the
provisions of Article III, Section 3, of the Declaration of Trust and
subject to compliance with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and applicable state laws
regulating the sale of securities. Such Shares, when so issued will be
fully paid and non-assessable.
We consent the your filing this opinion as an exhibit to the
amended Registration Statement referred to above and to any application
or registration statement filed under the securities laws of any of the
States of the United States. We further consent to the reference to our
firm under the caption Legal Counsel in the prospectuses filed as a part
of such amended Registration Statement, applications and registration
statements.
Very truly yours
HOUSTON, HOUSTON & DONNELLY
By: Thomas J. Donnelly
TJD:heh
Exhibit 13 under Form N-1A
Exhibit 99 under Item 601/Reg. S-K
FEDERATED ADMINISTRATIVE SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(412) 288-1900
April 7, 1992
111 Corcoran Funds
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Federated Administrative Services agrees to purchase 10,000 shares
of 111 Corcoran Bond Fund (a portfolio of the 111 Corcoran Funds) at the
cost of $10.00 each. These shares are purchased for investment purposes
and Federated Administrative Services has no present intention of
redeeming these shares.
Very truly yours,
/s/ S. Elliott Cohan
S. Elliott Cohan
Assistant Secretary
Exhibit 15(ii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
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:/s/ E. C. Gonzales
President
Schedule for Computation Initial Exhibit 16(iii) under Form N-1A
of Fund Performance Data Invest of: $1,000 Exhibit 99 under Item 601/Reg. S-K
Offering
Corcoran Equity Fund Price/
Share= $10.47
Return Since Inception
ending 3/31/95 NAV= $10.00
FYE: May 31
DECLARED: QUARTERLY
PAID: QUARTERLY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Begin Capital Reinvest Ending Total
Reinvest Period Dividend Gain Price Period Ending Invest
Dates Shares /Share /Share /Share Shares Price Value
12/5/94 95.511 0.000000000 0.00000 $10.00 95.511 $9.99 $954.15
12/28/94 95.511 0.015000000 0.00000 $10.13 95.652 $10.13 $968.96
3/29/95 95.652 0.055000000 0.00000 $10.90 96.135 $10.90 $1,047.87
3/31/95 96.135 0.000000000 0.00000 $10.86 96.135 $10.86 $1,044.03
$1,000 (1+T) = End Value
T = 4.40%
</TABLE>
Corcoran Equity Fund Yield = 2{($12,508.82 - $6,162.24 )+1) 6-1}=
Computation of SEC Yield 556,962 * ($11.37 - 0.00120 )
As of: March 31, 1995
SEC Yield = 1.21%
Dividend and/or Interest
Inc for the 30 days ended $12,508.82
Net Expenses for $6,162.24
the Period
Avg Daily Shares
Outstanding and entitled
to receive dividends 556,962
Maxium offering price $11.37
per share as of 3-31-95
Undistributed net income 0.00120
Tax Equivalent Yield
(assumes individual
does not itemize
on Federal Return)
100 % minus the Federal
taxable % (100%-28%=72%)
30 SEC yield / by the tax
equiv % (0.00% / 72.0%)= 1.68%
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> 111 Corcoran Equity Fund
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> May-31-1995
<PERIOD-END> Mar-31-1995
<INVESTMENTS-AT-COST> 5,393,470
<INVESTMENTS-AT-VALUE> 5,849,329
<RECEIVABLES> 221,348
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,070,677
<PAYABLE-FOR-SECURITIES> 109,995
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34,710
<TOTAL-LIABILITIES> 144,705
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,473,815
<SHARES-COMMON-STOCK> 545,715
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 475
<ACCUMULATED-NET-GAINS> (3,227)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 455,859
<NET-ASSETS> 5,925,972
<DIVIDEND-INCOME> 34,594
<INTEREST-INCOME> 25,030
<OTHER-INCOME> 0
<EXPENSES-NET> 21,288
<NET-INVESTMENT-INCOME> 38,336
<REALIZED-GAINS-CURRENT> (3,227)
<APPREC-INCREASE-CURRENT> 455,859
<NET-CHANGE-FROM-OPS> 490,968
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 38,336
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 475
<NUMBER-OF-SHARES-SOLD> 597,014
<NUMBER-OF-SHARES-REDEEMED> 51,509
<SHARES-REINVESTED> 210
<NET-CHANGE-IN-ASSETS> 5,925,972
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14,476
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 65,705
<AVERAGE-NET-ASSETS> 4,553,346
<PER-SHARE-NAV-BEGIN> 10.000
<PER-SHARE-NII> 0.070
<PER-SHARE-GAIN-APPREC> 0.870
<PER-SHARE-DIVIDEND> 0.070
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.010
<PER-SHARE-NAV-END> 10.860
<EXPENSE-RATIO> 125
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
