1933 Act File No. 33-48907
1940 Act File No. 811-7047
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ....................
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Post-Effective Amendment No. 30 ................... X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 30 .................................. X
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MARSHALL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
1000 North Water Street
Milwaukee, Wisconsin 53202
(Address of Principal Executive Offices)
(414) 287-8555
(Registrant's Telephone Number)
Michael A. Hatfield, Esquire
770 North Water Street
Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)
(Notice should be sent to the Agent for Service)
It is proposed that this filing will become effective:
__ immediately upon filing pursuant to paragraph (b) on __________________
pursuant to paragraph (b) X 60 days after filing pursuant to paragraph (a)(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.
Copies to: Janet Olsen, Esquire
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
<TABLE>
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[MARSHALL FUNDS LOGO]]
Marshall Money Market Fund
Class I Shares
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Table of Contents
Risk/Return Profile.............................................. 2
Fees and Expenses of the Fund.................................... 3
The Main Risks of Investing in the Fund.......................... 4
Securities Descriptions.......................................... 5
How to Buy Shares................................................ 7
How to Redeem Shares............................................. 9
Account and Share Information....................................11
Marshall Funds, Inc. Information.................................12
Financial Information............................................13
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An investment in Marshall Money Market Fund is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
Prospectus
March 1, 2000
[GRAPHIC]
Risk/Return Profile
Marshall Money Market Fund
[Graphic]
Goal: To provide current income consistent with stability of principal.
Strategy: Fund assets are invested in high quality, short-term money market
instruments. In order to produce income which minimizes volatility, the Adviser
uses a "bottom-up" approach, which evaluates debt securities of individual
companies against the context of broader market factors such as the cyclical
trend in interest rates, the shape of the yield curve and debt security supply
factors.
Although the Fund seeks to preserve the value of your investment at $1 per
share, it is possible to lose money by investing in the Fund. In addition, the
Fund is subject to credit risks, interest rate risks, call risks, and liquidity
risks.
Annual Total Return (calendar
years 1993-1999)
The graphic presentation here displayed consists of a bar chart representing the
annual total returns of Marshall Money Market Fund (Fund) as of the calendar
year-end for each of seven years.
The "y" axis reflects the "% Total Return" beginning with "0.00%" and increasing
in increments of 1.00% up to 6.00%.
The "x" axis represents calculation periods from the earliest calendar year end
of the Fund's start of business through the calendar year ended December 31,
1999. The light gray shaded chart features seven distinct vertical bars, each
shaded in charcoal, and each visually representing by height the total return
percentages for the calendar year stated directly at its base. The calculated
total return percentage for the Fund which appears directly above each
respective bar, for the calendar years 1993 through 1999, are: 2.99%, 4.06%,
5.78%, 5.27%, 5.44%, 5.42%, and 5.04%.
Total Return
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Best quarter (2Q95) 1.45%
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Worst quarter (2Q93) 0.72%
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7-Day Net Yield
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7-Day Net Yield (as of 12/31/99)* 5.66%
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Average Annual Total Return through 12/31/99
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Since 11/23/92
1 Year 5 Year inception
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Fund 5.04% 5.39% 4.83%
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DMFA 4.61% 5.04% 4.50%
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*Investors may call the Fund to learn the current 7-day Net Yield at
1-800-236-FUND (3863).
As with all mutual funds, past performance does not necessarily predict future
performance. The table, bar chart and total return information are for the Class
Y Shares of the Fund which are not offered in this prospectus. Class I Share
returns would be substantially similar because the classes are invested in the
same portfolio of securities and the returns would differ only to the extent
that the classes do not have the same expenses. The average annual total returns
above are compared to the IBC/Donoghue's Money Fund Average (DMFA) over a period
of time.
[graphic]
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold
Class I Shares of the Fund.
Shareholder Fees (fees paid directly from your investment) None Annual Fund
Operating Expenses (Before Waivers)(1) (expenses deducted and expressed as a
percentage of the Fund's net assets) Management Fee 0.15% Distribution (12b-1)
Fee None Shareholder Services Fee None Other Expenses 0.14% Total Annual Fund
Operating Expenses 0.29%
(1) The Adviser expects to voluntarily waive a portion of the adviser fee. This
amount is shown below along with the net expenses the Fund expects to actually
pay for the fiscal year ending August 31, 2000. The Adviser may terminate this
voluntary waiver at any time.
Total Waivers of Fund Expenses 0.05% Total Actual Annual Fund Operating Expenses
(after waivers) 0.24% Example This Example is intended to help you compare the
cost of investing in the Fund's Class I Shares with the cost of investing in
other mutual funds. The Example assumes that you invest $10,000 in the Fund's
Class I Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund's Class I Shares operating expenses are
before waivers and reimbursement as shown in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
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Class I Shares
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1 Year $ 30
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3 Years $ 93
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5 Years $ 163
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10 Years $ 368
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[GRAPHIC]
The Main Risks of Investing in the Fund
As with all money market funds, the Fund is subject to certain risks,
which are described below.
Interest Rate Risks. Prices of fixed income securities rise and fall in response
to changes in the interest rate paid by similar securities. Generally,
when interest rates rise, prices of fixed income securities fall. However,
market factors, such as the demand for particular fixed income securities,
may cause the price of certain fixed income securities to fall while the
prices of other securities rise or remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity
of a fixed income security to changes in interest rates.
Credit Risks. Credit risk is the possibility that an issuer will default on a
security by failing to pay interest or principal when due. If an issuer
defaults, the Fund may lose money.
Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services
assign ratings to securities by assessing the likelihood of issuer
default. Lower credit ratings correspond to higher credit risk. If a
security has not received a rating, the Fund must rely entirely upon the
Adviser's credit assessment.
Fixed income securities generally compensate for greater credit risk by
paying interest at a higher rate. The difference between the yield of a
security and the yield of a U.S. Treasury security with a comparable
maturity (the spread) measures the additional interest paid for risk.
Spreads may increase generally in response to adverse economic or market
conditions. A security's spread may also increase if the security's rating
is lowered, or the security is perceived to have an increased credit risk.
An increase in the spread will cause the price of the security to decline.
Credit risk includes the possibility that a party to a transaction
involving the Fund will fail to meet its obligations. This could cause the
Fund to lose the benefit of the transaction or prevent the Fund from
selling or buying other securities to implement its investment strategy.
Call Risks. Some of the securities in which the Fund invests may be redeemed by
the issuer before maturity (or "called"). This will most likely happen
when interest rates are declining. If this occurs, the Fund may have to
reinvest the proceeds in securities that pay a lower interest rate, which
may decrease the Fund's yield.
Liquidity Risks. Trading opportunities are more limited for fixed income
securities that have not received any credit ratings, have received
ratings below investment grade or are not widely held.
These features may make it more difficult to sell or buy a security at a
favorable price or time. Consequently, the Fund may have to accept a lower
price to sell a security, sell other securities to raise cash or give up
an investment opportunity, any of which could have a negative effect on
the Fund's performance. Infrequent trading of securities may also lead to
an increase in their price volatility.
Liquidity risk also refers to the possibility that the Fund may not be
able to sell a security or close out a derivative contract when it wants
to. If this happens, the Fund will be required to continue to hold the
security or keep the position open, and the Fund could incur losses.
[GRAPHIC]
Securities Descriptions
Following is a description of the main securities in which the Fund
invests.
Commercial Paper. Commercial paper is an issuer's obligation with a maturity of
less than nine months. Companies typically issue commercial paper to pay
for current expenditures. Most issuers constantly reissue their commercial
paper and use the proceeds (or bank loans) to repay maturing paper. If the
issuer cannot continue to obtain liquidity in this fashion, its commercial
paper may default. The short maturity of commercial paper reduces both the
market and credit risks as compared to other debt securities of the same
issuer.
DemandInstruments. Demand instruments are corporate debt securities that the
issuer must repay upon demand. Other demand instruments require a third
party, such as a dealer or bank, to repurchase the security for its face
value upon demand. The Fund treats demand instruments as short-term
securities, even though their stated maturity may extend beyond one year.
Corporate Debt Securities. Corporate debt securities are fixed income securities
issued by businesses. Notes, bonds, debentures and commercial paper are
the most prevalent types of corporate debt securities. The credit risks of
corporate debt securities vary widely among issuers.
Bank Instruments. Bank instruments are unsecured interest bearing deposits with
banks. Bank instruments include bank accounts, time deposits, certificates
of deposit and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-U.S.
branches of U.S. or foreign banks.
Insurance Contracts. Insurance contracts include guaranteed investment
contracts, funding agreements and annuities. Funding Agreements
(Agreements) are investment instruments issued by U.S. insurance
companies. Pursuant to such Agreements, the Fund may make cash
contributions to a deposit fund of the insurance company's general or
separate accounts. The insurance company then credits guaranteed interest
to the Fund. The insurance company may assess periodic charges against an
Agreement for expense and service costs allocable to it, and the charges
will be deducted from the value of the deposit fund. The purchase price
paid for an Agreement becomes part of the general assets of the issuer,
and the Agreement is paid from the general assets of the issuer. The Fund
will only purchase Agreements from issuers that meet quality and credit
standards established by the Adviser. Generally, Agreements are not
assignable or transferable without the permission of the issuing insurance
companies, and an active secondary market in Agreements does not currently
exist. Also, the Fund may not have the right to receive the principal
amount of an Agreement from the insurance company on seven days' notice or
less. Therefore, Agreements are typically considered to be illiquid
investments.
Mortgage Backed Securities. Mortgage backed securities represent interests in
pools of mortgages. The mortgages that comprise a pool normally have
similar interest rates, maturities and other terms. Mortgages may have
fixed or adjustable interest rates. Interests in pools of adjustable rate
mortgages are known as ARMs.
Mortgage backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage backed securities are
pass-through certificates. An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer
deducts its fees and expenses and passes the balance of the payments onto
the certificate holders once a month. Holders of pass-through certificates
receive a pro rata share of all payments and prepayments from the
underlying mortgages. As a result, the holders assume all the prepayment
risks of the underlying mortgages.
Asset Backed Securities. Asset backed securities are payable from pools of
obligations other than mortgages. Most asset backed securities involve
consumer or commercial debts with maturities of less than ten years.
However, almost any type of fixed income assets (including other fixed
income securities) may be used to create an asset backed security. Asset
backed securities may take the form of commercial paper, notes, or pass-
through certificates. Asset backed securities have prepayment risks. Like
CMOs, asset backed securities may be structured like Floaters, Inverse
Floaters, IOs and POs.
AgencySecurities. Agency securities are issued or guaranteed by a federal
agency or other government sponsored entity acting under federal authority
(a GSE). The United States supports some GSEs with its full faith and
credit. Other GSEs receive support through federal subsidies, loans or
other benefits. A few GSEs have no explicit financial support, but are
regarded as having implied support because the federal government sponsors
their activities. Agency securities are generally regarded as having low
credit risks, but not as low as Treasury securities.
Treasury Securities. Treasury securities are direct obligations of the federal
government of the United States. Treasury securities are generally
regarded as having the lowest credit risks.
[GRAPHIC]
Securities Descriptions (continued)
[GRAPHIC]
How to Buy Shares
Who May Purchase Class I Shares? Class I Shares are for institutional
investors that are not natural persons, and that invest on their own
behalf. To open an account with the Fund, the first investment must be at
least $10 million. The minimum investment amount to add to your existing
account is $100,000. An account may be opened with a smaller amount as
long as the minimum is reached within 90 days. In special circumstances,
these minimums may be waived or lowered at the Fund's discretion.
What Do Shares Cost? You can buy Class I Shares of the Fund at net asset value
(NAV), without a sales charge, on any day the New York Stock Exchange
(NYSE) is open for business. When the Fund receives your transaction
request in proper form, it is processed at the next determined NAV. The
NAV for the Fund is determined twice daily at 12:00 Noon (Central Time)
and 3:00 p.m. (Central Time). In calculating NAV, the Fund's portfolio is
valued using market prices.
How Do I Purchase Shares? You may purchase shares directly from the Fund by
completing and mailing the Account Application and sending your payment to
the Fund by check or wire.
You may also purchase shares through a broker/dealer, investment
professional, or financial institution (Authorized Dealers). Some
Authorized Dealers may charge a transaction fee for this service. If you
purchase shares of the Fund through a program of services offered or
administered by an Authorized Dealer or other service provider, you should
read the program materials, including information relating to fees, in
conjunction with the Fund's prospectus. Certain features of the Fund may
not be available or may be modified in connection with the program of
services provided.
Your purchase order must be received by the Fund by 2:00 p.m. (Central
Time) to receive dividends on that day. The Fund reserves the right to
reject any purchase request. However, you are not the owner of Fund shares
(and therefore will not receive dividends) until payment for the shares is
received.
In order to purchase shares, you must reside in a jurisdiction where Fund
shares may lawfully be offered for sale. In addition, you must have a
federal tax identification number.
[GRAPHIC]
Fund Purchase Easy Reference Table
[GRAPHIC]
Wire
. If a new account, fax completed Account Application to: Marshall Funds
Investor Services at
1-414-287-8511.
. Mail a completed Account Application to the following address:
Marshall Funds Investor Services
P.O. Box 1348
Milwaukee, WI 53201-1348
. Notify MFIS at 1-800-236-FUND (3863) by 2:00 p.m. (Central Time).
. Then wire the money to:
M&I Marshall & Ilsley Bank
ABA Number 075000051
Credit to: Marshall Funds, Deposit Account, Account Number
27480;
Further credit to: Class I Shares Money Market Fund
Re: [Shareholder name and Account number].
. Your bank may charge a fee for wiring funds. Wire orders are accepted
only on days when the Fund and the Federal Reserve wire system are open for
business.
[GRAPHIC]
Phone
. Once you have opened an account and if you authorized telephone
privileges in your Account Application or by subsequently completing an
authorization form, you may purchase additional shares by calling MFIS at 1-800-
236-FUND (3863).
[GRAPHIC]
How to Redeem Shares
How Do I Redeem Shares? You may redeem your Fund shares by Telephone and by
Wire/Electronic Transfer. You should note that redemptions will be made
only on days when the Fund computes its NAV. When your redemption request
is received in proper form, it is processed at the next determined NAV.
Telephone or written requests for redemptions must be received in proper
form as described below and can be made through MFIS. Redemption requests
for the Fund must be received by 2:00 p.m. (Central Time) in order for
shares to be redeemed at that day's NAV. Redemption proceeds will normally
be wired the following business day, but in no event more than seven days,
after the request is made.
Fund Redemption Easy Reference Table
[GRAPHIC]
Phone
. If you have authorized the telephone redemption privilege in your Account
Application or by a subsequent authorization form, you may redeem shares by
telephone.
[GRAPHIC]
Wire/Electronic Transfer
. Upon written request, redemption proceeds can be directly deposited by
Electronic Funds Transfer or wired directly to a domestic commercial bank
previously designated by you in your Account Application or subsequent form.
. Wires of redemption proceeds will only be made on days on which the Fund
and the Federal Reserve wire system are open for business.
. Wire-transferred redemptions may be subject to an additional fee imposed
by the bank receiving the wire.
. Redemption requests for the Fund must be received by 2:00 p.m. (Central
Time) if you want the proceeds to be wired the same day.
[GRAPHIC]
Additional Conditions for Redemptions
Limitations on Redemption Proceeds. Redemption proceeds normally are wired
within one business day after receiving a request in proper form. However,
payment may be delayed up to seven days:
. during periods of market volatility; or
. when a shareholder's trade activity or amount adversely impacts the
Fund's ability to manage its assets.
Corporate Resolutions. Corporations, trusts and institutional organizations are
required to furnish evidence of the authority of persons designated on the
Account Application to effect transactions on behalf of the organization.
[GRAPHIC]
Account and Share Information
Confirmations and Account Statements. You will receive periodic statements
reporting all account activity, including dividends and capital gains paid, and
purchases and redemptions.
Dividends and Capital Gains. Dividends of the Fund are declared daily and paid
monthly. You will receive dividends declared subsequent to the issuance of
your Shares, through the day your Shares are redeemed.
The Fund does not expect to realize any capital gains or losses. If
capital gains or losses were to occur, they could result in an increase or
decrease in dividends. The Fund pays any capital gains at least annually.
Your dividends and capital gains distributions will be automatically
reinvested in additional Shares without a sales charge, unless you elect
cash payments.
Multiple Classes. The Marshall Funds have adopted a plan that permits the Fund
to offer more than one class of shares. All shares of the Fund or class
have equal voting rights and will generally vote in the aggregate and not
by class. There may be circumstances, however, when shareholders of a
particular Marshall Fund or class are entitled to vote on matters
affecting that Fund or class. Share classes may have different sales
charges and other expenses, which will affect performance.
Tax Information
Federal Income Tax. The Fund sends an annual statement of your account activity
to assist you in completing your federal, state and local tax returns.
Fund distributions of dividends and capital gains are taxable to you
whether paid in cash or reinvested in the Fund. Dividends are taxable as
ordinary income; capital gains are taxable at different rates depending
upon the length of time the Fund holds its assets.
Fund distributions are expected to be primarily dividends.
Redemptions are taxable sales. Please consult your tax adviser regarding
your federal, state, and local tax liability.
[GRAPHIC]
Marshall Funds, Inc. Information
Management of the Marshall Funds. The Board of Directors governs the Fund. The
Board selects and oversees the Adviser, M&I Investment Management Corp.
The Adviser manages the Fund's assets, including buying and selling
portfolio securities. The Adviser's address is 1000 North Water Street,
Milwaukee, Wisconsin, 53202.
Adviser's Background. M&I Investment Management Corp. is a registered investment
adviser and a wholly owned subsidiary of Marshall & Ilsley Corp., a
registered bank holding company headquartered in Milwaukee, Wisconsin. As
of December 31, 1999, the Adviser had approximately $11 billion in assets
under management, of which $5 billion is in Marshall Funds assets, and has
managed investments for individuals and institutions since 1973. The
Adviser has managed the Funds since 1992 and managed the Newton Funds
(predecessors to some of the Marshall Funds) since 1985.
Portfolio Manager. The Fund is managed by Richard M. Rokus, who is a vice
president of the Adviser. Mr.Rokus has managed the Fund since January 1,
1994, and has been employed by the Adviser since January 1993. Mr.Rokus is
a Chartered Financial Analyst and holds a B.B.A. in Finance from the
University of Wisconsin-Whitewater.
Advisory Fees. The Adviser is entitled to receive an annual investment advisory
fee equal to 0.15% of the Fund's average daily net assets.
The Adviser has the discretion to voluntarily waive a portion of its fee.
However, any waivers by the Adviser are voluntary and may be terminated at
any time in its sole discretion.
Affiliate Services and Fees. Marshall & Ilsley Trust Company, an affiliate of
the Adviser, is custodian of the assets and securities of the Marshall
Funds and provides shareholder support, sub-transfer agency and other
administrative services to shareholders directly and through its division,
Marshall Funds Investor Services. The annual custody fees of the Fund are
0.02% of the first $250 million of assets held plus 0.01% of assets
exceeding $250 million, calculated on the Fund's average daily net assets.
The annual administrative services fees of the Fund are 0.15% on the first
$250 million of assets, 0.125% on the next $250 million of assets, 0.100%
on the next $250 million of assets, and 0.075% on assets over $750
million, calculated on the average daily net assets of the Marshall Funds.
Marshall & Ilsley Trust Company receives an annual per-account fee for sub-
transfer agency services to trust and institutional accounts maintained on
its trust accounting system.
[GRAPHIC]
Financial Information
The Fund has a fiscal year end of August 31. As this is the first fiscal year
for the Fund's Class I Shares, financial information is not yet available.
A Statement of Additional Information (SAI) dated March 1, 2000, is incorporated
by reference into this prospectus. Additional information about the Fund's
investments is contained in the Fund's SAI and Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report's Management Discussion
& Analysis discusses market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. To
obtain the SAI, the Annual Report, Semi-Annual Report and other information
without charge, and make inquiries, write to or call Marshall Funds Investor
Services at 1-414-287-8555 or 1-800-236-FUND (3863).
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for
information on the Public Reference Room's operations and copying fees.
Marshall Funds Investor Services
P.O. Box 1348
Milwaukee, Wisconsin 53201-1348
414-287-8555 or 800-236-FUND (3863)
Internet address: http://www.marshallfunds.com
TDD: Speech and Hearing Impaired Services 1-800-209-3520
Federated Securities Corp.
Distributor
Cusip _______________
25147 (3/00)
Investment Company Act File No. 811-7047
STATEMENT OF ADDITIONAL INFORMATION
MARSHALL MONEY MARKET FUND
A Portfolio of Marshall Funds, Inc.
CLASS I SHARES
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for the Marshall Money Market Fund Class
I Shares, dated March 1, 2000. This SAI incorporates by reference the Fund's
Annual Report. You may obtain the prospectus or Annual Report without charge by
calling Marshall Funds Investor Services at 414-287-8555 or 1-800-236-FUND
(3863), or you can visit the Marshall Funds' Internet site on the World Wide Web
at (http://www.marshallfunds.com).
P.O. BOX 1348
MILWAUKEE, WISCONSIN 53201-1348
March 1, 2000
CONTENTS
How are the Marshall Funds Organized? 1
Securities in Which the Fund Invests 1
Securities Descriptions, Techniques and Risks 2
Investment Limitations 6
Determining Market Value of Securities 7
What Do Shares Cost? 8
How is the Fund Sold? 8
How to Buy Shares 9
Account and Share Information 9
What are the Tax Consequences? 10
Who Manages the Fund? 10
How Does the Fund Measure Performance? 13
Performance Comparisons 14
Economic and Market Information 15
Financial Statements 15
Addresses 16
000000-00 (3/00)
CUSIP _____________
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS, INC.
HOW ARE THE MARSHALL FUNDS ORGANIZED?
Marshall Funds, Inc. (Corporation) is an open-end, management investment
company that was established as a Wisconsin corporation on July 31, 1992.
The Fund is a diversified portfolio of the Corporation. The Corporation may
offer separate series of shares representing interests in separate portfolios of
securities, and the shares in any one portfolio may be offered in separate
classes. This Statement contains additional information about the Corporation
and the Fund. This Statement uses the same terms as defined in the prospectus.
The definitions of the terms series and class in the Wisconsin Business
Corporation Law, Chapter 180 of the Wisconsin Statutes (WBCL) differ from the
meanings assigned to those terms in the prospectus and this Statement of
Additional Information. The Articles of Incorporation of the Corporation
reconcile this inconsistency in terminology, and provide that the prospectus and
Statement of Additional Information may define these terms consistently with the
use of those terms under the WBCL and the Internal Revenue Code.
SECURITIES IN WHICH THE FUND INVESTS
Following is a table that indicates which types of securities are a: o P =
PRINCIPAL investment of the Fund (shaded in chart); or o A = ACCEPTABLE (but not
principal) investment of the Fund
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SECURITIES MONEY MARKET FUND
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ASSET-BACKED SECURITIES 1 A
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BANK INSTRUMENTS 2 P
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BORROWING A
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DEBT OBLIGATIONS P
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DEMAND MASTER NOTES P
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DERIVATIVE CONTRACTS AND A
SECURITIES
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FIXED RATE DEBT OBLIGATIONS A
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FLOATING RATE DEBT OBLIGATIONS P
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FORWARD COMMITMENTS, A
WHEN-ISSUED AND DELAYED
DELIVERY TRANSACTIONS
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FUNDING AGREEMENTS A
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GUARANTEED INVESTMENT CONTRACTS A
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ILLIQUID AND RESTRICTED A
SECURITIES 3
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LENDING OF PORTFOLIO SECURITIES A
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MORTGAGE-BACKED SECURITIES A
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PRIME COMMERCIAL PAPER 4 P
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- ---------------------------------------------------
REPURCHASE AGREEMENTS P
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REVERSE REPURCHASE AGREEMENTS 5 A
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SECURITIES OF OTHER INVESTMENT A
COMPANIES
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U.S. GOVERNMENT SECURITIES A
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VARIABLE RATE DEMAND NOTES A
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1. The Fund will invest in only the short-term tranches, which will generally
have a maturity not exceeding 397 days.
2. The Fund may purchase foreign Bank Instruments to 5% of total assets.
3. The Fund may invest up to 10% of its assets in illiquid securities.
4. The Fund may purchase commercial paper rated in the two highest rating
categories by a nationally recognized statistical rating organization or,
if unrated, determined by the Adviser to be of comparable quality.
5. During the period any reverse repurchase agreements are outstanding, but
only to the extent necessary to assure completion of the reverse repurchase
agreements, the Fund will restrict the purchase of portfolio instruments to
money market instruments maturing on or before the expiration date of the
reverse repurchase agreement.
SECURITIES DESCRIPTIONS, TECHNIQUES AND RISKS
ASSET-BACKED SECURITIES are issued by non-governmental entities and carry no
direct or indirect government guarantee. Asset-Backed Securities represent an
interest in a pool of assets such as car loans and credit card receivables.
Almost any type of fixed income asset (including other fixed income securities)
may be used to create an asset backed security. However, most asset-backed
securities involve consumer or commercial debts with maturities of less than ten
years. Asset-backed securities may take the form of commercial paper or notes,
in addition to pass through certificates or asset-backed bonds. Asset backed
securities may also resemble some types of CMOs. Payments on asset-backed
securities depend upon assets held by the issuer and collections of the
underlying loans. The value of these securities depends on many factors,
including changing interest rates, the availability of information about the
pool and its structure, the credit quality of the underlying assets, the
market's perception of the servicer of the pool, and any credit enhancement
provided. Also, these securities may be subject to prepayment risk.
BANK INSTRUMENTS. Bank Instruments are unsecured interest bearing deposits
with banks. Bank Instruments include bank accounts, time deposits, certificates
of deposit and banker's acceptances. Instruments denominated in U.S. dollars and
issued by non-U.S. branches of U.S. or foreign banks are commonly referred to as
Eurodollar instruments. Instruments denominated in U.S. dollars and issued by
U.S. branches of foreign banks are referred to as Yankee dollar instruments.
The Fund will invest in bank instruments that have been issued by banks and
savings and loans that have capital, surplus and undivided profits of over $100
million or whose principal amount is insured by the Bank Insurance Fund or the
Savings Association Insurance Fund, which are administered by the Federal
Deposit Insurance Corporation. Securities that are credit-enhanced with a bank's
irrevocable letter of credit or unconditional guaranty will also be treated as
Bank Instruments.
FOREIGN BANK INSTRUMENTS. Eurodollar Certificates of Deposit (ECDs), Yankee
dollar Certificates of Deposit (YCDs) and Eurodollar Time Deposits (ETDs)
are all U.S. dollar denominated certificates of deposit. ECDs are issued
by, and ETDs are deposits of, foreign banks or foreign branches of U.S.
banks. YCDs are issued in the U.S. by branches and agencies of foreign
banks.
ECDs, ETDs, YCDs, and Europaper have many of the same risks of other
foreign securities. Examples of these risks include economic and political
developments, that may adversely affect the payment of principal or
interest, foreign withholding or other taxes on interest income,
difficulties in obtaining or enforcing a judgment against the issuing bank
and the possible impact of interruptions in the flow of international
currency transactions. Also, the issuing banks or their branches are not
necessarily subject to the same regulatory requirements that apply to
domestic banks, such as reserve requirements, loan limitations,
examinations, accounting, auditing, and recordkeeping, and the public
availability of information. These factors will be carefully considered by
the Adviser in selecting these investments.
BORROWING. The Fund may borrow money from banks or through reverse repurchase
agreements in amounts up to one-third of net assets, and pledge some assets as
collateral. When the Fund borrows it will pay interest on borrowed money and may
incur other transaction costs. These expenses could exceed the income received
or capital appreciation realized by the Fund from any securities purchased with
borrowed money. With respect to borrowings, the Fund is required to maintain
continuous asset coverage EQUAL to 300% of the amount borrowed. If the coverage
declines to less than 300%, the Fund must sell sufficient portfolio securities
to restore the coverage even if it must sell the securities at a loss.
CORPORATE DEBT SECURITIES are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most common types of
corporate debt securities. The credit risks of corporate debt securities vary
widely among issuers.
CREDIT ENHANCEMENT. Certain acceptable investments may be credit-enhanced by a
guaranty, letter of credit, or insurance. The Adviser may evaluate a security
based, in whole or in part, upon the financial condition of the party providing
the credit enhancement (the credit enhancer). The bankruptcy, receivership or
default of the credit enhancer will adversely affect the quality and
marketability of the underlying security.
For diversification purposes, credit-enhanced securities will not be treated as
having been issued by the credit enhancer, unless the Fund has invested more
than 10% of its assets in securities issued, guaranteed or otherwise
credit-enhanced by the credit enhancer. In such cases, the securities will be
treated as having been issued both by the issuer and the credit enhancer.
CREDIT QUALITY. The fixed income securities in which a Fund invest will be rated
at least investment grade by a nationally recognized statistical ratings
organization (NRSRO). Investment grade securities have received one of an
NRSRO's four highest ratings. Securities receiving the fourth highest rating
(Baa by Moody's or BBB by S&P or Fitch) have speculative characteristics and
changes in the market or the economy are more likely to affect the ability of
the issuer to repay its obligations when due. The Adviser will evaluate
downgraded securities and will sell any security determined not to be an
acceptable investment. The Fund is subject to Rule 2a-7 under the Investment
Company Act of 1940, and will follow the credit quality requirements of the
Rule.
COMMERCIAL PAPER AND RESTRICTED AND ILLIQUID SECURITIES. Commercial paper is an
issuer's draft or note with a maturity of less than nine months. Companies
typically issue commercial paper to fund current expenditures. Most issuers
constantly reissue their commercial paper and use the proceeds (or bank loans)
to repay maturing paper. Commercial paper may default if the issuer cannot
continue to obtain financing in this fashion. The short maturity of commercial
paper reduces both the market and credit risk as compared to other debt
securities of the same issuer.
The Fund may invest in commercial paper issued under Section 4(2) of the
Securities Act of 1933. By law, the sale of Section 4(2) commercial paper is
restricted and is generally sold only to institutional investors, such as the
Fund. A Fund purchasing Section 4(2) commercial paper must agree to purchase the
paper for investment purposes only and not with a view to public distribution.
Section 4(2) commercial paper is normally resold to other institutional
investors through investment dealers who make a market in Section 4(2)
commercial paper, thus providing liquidity. The Fund believes that Section 4(2)
commercial paper and certain other restricted securities which meet the
Directors' criteria for liquidity are quite liquid. Section 4(2) commercial
paper and restricted securities which are deemed liquid, will not be subject to
the investment limitation. In addition, because Section 4(2) commercial paper is
liquid, the Fund intends to not subject such paper to the limitation applicable
to restricted securities.
DEMAND FEATURES. The Fund may purchase securities subject to a demand feature,
which may take the form of a put or standby commitment. Demand features permit a
fund to demand payment of the value of the security (plus an accrued interest)
from either the issuer of the security or a third-party. Demand features help
make a security more liquid, although an adverse change in the financial health
of the provider of a demand feature (such as bankruptcy), will negatively affect
the liquidity of the security. Other events may also terminate a demand feature,
in which case liquidity is also affected.
DEMAND MASTER NOTES. Demand master notes are short-term borrowing arrangements
between a corporation or government agency and an institutional lender (such as
the Fund) payable upon demand by either party. A party may demand full or
partial payment and the notice period for demand typically ranges from one to
seven days. Many master notes give the Fund the option of increasing or
decreasing the principal amount of the master note on a daily or weekly basis
within certain limits. Demand master notes usually provide for floating or
variable rates of interest.
DERIVATIVE CONTRACTS. Derivative contracts are financial instruments that
require payments based upon changes in the values of designated (or underlying)
securities, currencies, commodities, financial indices or other assets. Some
derivative contracts (such as futures, forwards and options) require payments
relating to a future trade involving the underlying asset. Other derivative
contracts (such as swaps) require payments relating to the income or returns
from the underlying asset. The other party to a derivative contract is referred
to as a counterparty. Many derivative contracts are traded on securities or
commodities exchanges. In this case, the exchange sets all the terms of the
contract except for the price. Investors make payments due under their contracts
through the exchange. Most exchanges require investors to maintain margin
accounts through their brokers to cover their potential obligations to the
exchange. Parties to the contract make (or collect) daily payments to the margin
accounts to reflect losses (or gains) in the value of their contracts. This
protects investors against potential defaults by the counterparty.
Trading contracts on an exchange also allows investors to close out their
contracts by entering into offsetting contracts. For example, the Fund could
close out an open contract to buy an asset at a future date by entering into an
offsetting contract to sell the same asset on the same date. If the offsetting
sale price is more than the original purchase price, the Fund realizes a gain;
if it is less, the Fund realizes a loss. Exchanges may limit the amount of open
contracts permitted at any one time. Such limits may prevent the Fund from
closing out a position. If this happens, the Fund will be required to keep the
contract open (even if it is losing money on the contract), and to make any
payments required under the contract (even if it has to sell portfolio
securities at unfavorable prices to do so). Inability to close out a contract
could also harm the Fund by preventing it from disposing of or trading any
assets it has been using to secure its obligations under the contract. The Fund
may also trade derivative contracts over-the-counter (OTC) in transactions
negotiated directly between the Fund and the counterparty. OTC contracts do not
necessarily have standard terms, so they cannot be directly offset with other
OTC contracts. In addition, OTC contracts with more specialized terms may be
more difficult to price than exchange traded contracts.
Depending upon how the Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the underlying asset,
derivative contracts may increase or decrease the Fund's exposure to market and
currency risks, and may also expose the Fund to liquidity and leverage risks.
OTC contracts also expose the Fund to credit risks in the event that a
counterparty defaults on the contract.
FIXED INCOME SECURITIES. Fixed income securities generally pay interest at
either a fixed or floating rate and provide more regular income than equity
securities. However, the returns on fixed income securities are limited and
normally do not increase with the issuer's earnings. This limits the potential
appreciation of fixed income securities as compared to equity securities. Fixed
rate securities and floating rate securities react differently as prevailing
interest rates change.
FIXED RATE DEBT SECURITIES. Debt securities that pay a fixed interest rate
over the life of the security and have a long-term maturity may have many
characteristics of short-term debt. For example, the market may treat fixed
rate/long-term securities as short-term debt when a security's market price
is close to the call or redemption price, or if the security is approaching
its maturity date when the issuer is more likely to call or redeem the
debt.
As interest rates change, the market prices of fixed rate debt securities
are generally more volatile than the prices of floating rate debt
securities. As interest rates rise, the prices of fixed rate debt
securities fall, and as interest rates fall, the prices of fixed rate debt
securities rise. For example, a bond that pays a fixed interest rate of 10%
is more valuable to investors when prevailing interest rates are lower;
therefore, this value is reflected in higher price, or a premium.
Conversely, if interest rates are over 10%, the bond is less attractive to
investors, and sells at a lower price, or a discount.
FLOATING RATE DEBT SECURITIES. The interest rate paid on floating rate debt
securities is reset periodically (e.g., every 90 days) to a predetermined
index rate. Commonly used indices include: 90-day or 180-day Treasury bill
rate; one month or three month London Interbank Offered Rate (LIBOR);
commercial paper rates; or the prime rate of interest of a bank. The prices
of floating rate debt securities are not as sensitive to changes in
interest rates as fixed rate debt securities because they behave like
shorter-term securities and their interest rate is reset periodically.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend portfolio securities. When the Fund lends portfolio securities, it
will receive either cash or liquid securities as collateral from the borrower.
The Fund will reinvest cash collateral in short-term liquid securities that
qualify as an otherwise acceptable investment for the Fund. If the market value
of the loaned securities increases, 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 a securities lending agent or broker. The Fund
currently lends its portfolio securities through Marshall & Ilsley Trust Company
(M&I Trust Company), as agent, and reimburse M&I Trust Company for its costs.
The Fund and M&I Trust Company have applied to the Securities and Exchange
Commission for an order that would permit M&I Trust Company to charge, and the
Fund to pay, market-based compensation for M&I Trust Company's services.
SECURITIES LENDING RISKS. When the Fund lends its portfolio securities, it may
not be able to get them back from the borrower on a timely basis. If this
occurs, the Fund may lose certain investment opportunities. The Fund is also
subject to the risks associated with the investments of cash collateral, usually
fixed-income securities risk.
MORTGAGE-BACKED SECURITIES represent interests in pools of mortgages. The
underlying mortgages normally have similar interest rates, maturities and other
terms. Mortgages may have fixed or adjustable interest rates. Interests in pools
of adjustable rate mortgages are known as ARMs.
Mortgage-backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage-backed securities is a
"pass-through certificate." Holders of pass-through certificates receive a pro
rata share of the payments from the underlying mortgages. Holders also receive a
pro rata share of any prepayments, so they assume all the prepayment risk of the
underlying mortgages. Collateralized mortgage obligations (CMOs) are complicated
instruments that allocate payments and prepayments from an underlying
pass-through certificate among holders of different classes of mortgage-backed
securities. This creates different prepayment and market risks for each CMO
class.
In addition, CMOs may allocate interest payments to one class (IOs) and
principal payments to another class (POs). POs increase in value when prepayment
rates increase. In contrast, IOs decrease in value when prepayments increase,
because the underlying mortgages generate less interest payments. However, IOs
prices tend to increase when interest rates rise (and prepayments fall), making
IOs a useful hedge against market risk.
Generally, homeowners have the option to prepay their mortgages at any time
without penalty. Homeowners frequently refinance high rate mortgages when
mortgage rates fall. This results in the prepayment of mortgage-backed
securities, which deprives holders of the securities of the higher yields.
Conversely, when mortgage rates increase, prepayments due to refinancings
decline. This extends the life of mortgage-backed securities with lower yields.
As a result, increases in prepayments of premium mortgage-backed securities, or
decreases in prepayments of discount mortgage-backed securities, may reduce
their yield and price. This relationship between interest rates and mortgage
prepayments makes the price of mortgage-backed securities more volatile than
most other types of fixed income securities with comparable credit risks.
Mortgage-backed securities tend to pay higher yields to compensate for this
volatility.
CMOs may include planned amortization classes (PACs) and targeted amortization
classes (TACs). PACs and TACs are issued with companion classes. PACs and TACs
receive principal payments and prepayments at a specified rate. The companion
classes receive principal payments and any prepayments in excess of this rate.
In addition, PACs will receive the companion classes' share of principal
payments if necessary to cover a shortfall in the prepayment rate. This helps
PACs and TACs to control prepayment risk by increasing the risk to their
companion classes. Another variant allocates interest payments between two
classes of CMOs. One class (Floaters) receives a share of interest payments
based upon a market index such as LIBOR. The other class (Inverse Floaters)
receives any remaining interest payments from the underlying mortgages. Floater
classes receive more interest (and Inverse Floater classes receive
correspondingly less interest) as interest rates rise. This shifts prepayment
and market risks from the Floater to the Inverse Floater class, reducing the
price volatility of Floater class and increasing the price volatility of the
Inverse Floater class.
CMOs must allocate all payments received from the underlying mortgages to some
class. To capture any unallocated payments, CMOs generally have an accrual (Z)
class. Z classes do not receive any payments from the underlying mortgages until
all other CMO classes have been paid off. Once this happens, holders of Z class
CMOs receive all payments and prepayments. Similarly, real estate mortgage
investment conduits (REMICs) (offerings of multiple class mortgage backed
securities which qualify and elect treatment as such under provisions of the
Internal Revenue Code) have residual interests that receive any mortgage
payments not allocated to another REMIC class. The degree of increased or
decreased prepayment risk depends upon the structure of the CMOs. Z classes,
IOs, POs, and Inverse Floaters are among the most volatile investment grade
fixed income securities currently traded in the United States. However, the
actual returns on any type of mortgage backed security depends upon the
performance of the underlying pool of mortgages, which no one can predict and
will vary among pools.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. A repurchase agreement
is a transaction in which the Fund buys a security from a dealer or bank and
agrees to sell the security back at a mutually agreed upon time and price. The
repurchase price exceeds the sale price, reflecting an agreed upon interest rate
effective for the period the buyer owns the security subject to repurchase. The
agreed upon interest rate is unrelated to the interest rate on that security.
The Adviser will continually monitor the value of the underlying security to
ensure that the value of the security always equals or exceeds the repurchase
price. The Fund's custodian is required to take possession of the securities
subject to repurchase agreements. These securities are marked to market daily.
To the extent that the original seller defaults and 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 files
for bankruptcy or becomes insolvent, disposition of such securities by the Fund
might be delayed pending court action. The Fund believes that, under the
procedures normally in effect for custody of the 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 Adviser to be
creditworthy. Reverse repurchase agreement transactions are similar to borrowing
cash. In a reverse repurchase agreement, the Fund sells a portfolio security 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 at a price
equal to the original sale price plus interest. The Fund may use reverse
repurchase agreements for liquidity and may enable the Fund to avoid selling
portfolio instruments at a time when a sale may be deemed to be disadvantageous.
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 maintained until the transaction is settled.
TREASURY SECURITIES are direct obligations of the federal government of the
United States. Investors regard treasury securities as having the lowest credit
risk.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. These transactions are made to
secure what is considered to be an advantageous price or yield. 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. Other than
normal transaction costs, no fees or expenses are incurred. However, liquid
assets of the Fund are segregated on the Fund's records at the trade date in an
amount sufficient to make payment for the securities to be purchased. These
assets are marked to market daily and are maintained until the transaction has
been settled.
INVESTMENT LIMITATIONS
FUNDAMENTAL LIMITATIONS
The following investment limitations are fundamental and cannot be changed for
the Fund unless authorized by the "majority of the outstanding voting
securities" of the Fund, as defined by the Investment Company Act.
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin, 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, forward
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 net assets including the amounts borrowed; and except to the extent that
the Fund is permitted to enter into futures contracts, options or forward
contracts. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of its 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 any 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. In those cases, the Fund may pledge assets having a market
value not exceeding the lesser of the dollar amounts borrowed or 15% of the
value of its total assets at the time of the pledge. For purposes of this
limitation, the following are not deemed to be pledges: margin deposits for the
purchase and sale of futures contracts and related options; and segregation of
collateral arrangements made in connection with options activities, forward
contracts or the purchase of securities on a when-issued basis.
LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except portfolio securities. Loans may
not exceed one-third of the value of the Fund's total assets. This shall not
prevent the Fund from purchasing or holding U.S. government obligations, money
market instruments, variable rate demand notes, bonds, debentures, notes,
certificates of indebtedness, or other debt securities, entering into repurchase
agreements, or engaging in other transactions where permitted by the Fund's
investment goal, policies, and limitations.
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts. INVESTING IN REAL ESTATE The Fund will not purchase
or sell real estate, including limited partnership interests, although the Fund
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
which represent interests in real estate.
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 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 such issuer.
CONCENTRATION OF INVESTMENTS
The Fund will not invest 25% or more of its total assets in any one industry.
However, investing in U.S. government securities and domestic bank instruments
shall not be considered investments in any one industry.
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 restricted securities which the Fund may purchase pursuant to its
investment goal, policies and limitations.
NON-FUNDAMENTAL LIMITATIONS
The following investment limitations are non-fundamental and, therefore, may be
changed by the Directors without shareholder approval. Shareholders will be
notified before any material change in these limitations becomes effective.
INVESTING IN ILLIQUID AND RESTRICTED SECURITIES The Fund will not invest more
than 10% 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, guaranteed investment contracts, and certain
restricted securities not determined by the Directors to be liquid (including
certain municipal leases).
PURCHASING SECURITIES TO EXERCISE CONTROL
The Fund will not purchase securities of a company for the purpose of exercising
control or management. 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 total assets in any one investment company, and will invest no
more than 10% of its total assets in investment companies in general, unless
permitted to exceed these limits by an exemptive order of the SEC. 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. The Fund will limit its
investments in other investment companies to those of money market funds having
investment objectives and policies similar to its own.
INVESTING IN OPTIONS
Except for bona fide hedging purposes, the Fund may not invest more than 5% of
the value of its net assets in the sum of (a) premiums on open option positions
on futures contracts, plus (b) initial margin deposits on futures contracts. The
Fund will not purchase put options or 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 has segregated liquid
assets in the amount of any further payment.
The Fund will not write call options in excess of 25% of the value of its total
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. For purposes of its policies and limitations, the Fund
considers instruments (such as 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.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this statement of additional information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7 under the Act, which regulates money
market mutual funds. For example, Rule 2a-7 generally prohibits the investment
of more than 5% of the Fund's total assets in the securities of any one issuer,
although the Fund's fundamental investment limitation only requires such 5%
diversification with respect to 75% of its assets. The Fund will also determine
the effective maturity of its investments, as well as its ability to consider a
security as having received the requisite short-term ratings by nationally
recognized statistical ratings organizations (NRSROs), according to Rule 2a-7.
The Fund may change these operational policies to reflect changes in the laws
and regulations without shareholder approval.
DETERMINING MARKET VALUE OF SECURITIES
USE OF THE AMORTIZED COST METHOD
The Directors have decided that the best method for determining the value of
portfolio instruments for the Fund is amortized cost. Under this method,
portfolio instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at current
market value. The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with the provisions of Rule 2a-7 (the
Rule) promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Directors must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Fund's investment goal.
Under the Rule, the Fund is permitted to purchase instruments which are subject
to demand features or standby commitments. As defined by the Rule, a demand
feature entitles the Fund to receive the principal amount of the instrument from
the issuer or a third party on (1) no more than 30 days' notice or (2) at
specified intervals not exceeding 397 days on no more than 30 days' notice. A
standby commitment entitles the Fund to achieve same-day settlement and to
receive an exercise price equal to the amortized cost of the underlying
instrument plus accrued interest at the time of exercise.
The Fund acquires instruments subject to demand features and standby commitments
to enhance the instrument's liquidity. The Fund treats demand features and
standby commitments as part of the underlying instruments, because the Fund does
not acquire them for speculative purposes and cannot transfer them separately
from the underlying instruments. Therefore, although the Fund defines demand
features and standby commitments as puts, the Fund does not consider them to be
corporate investments for purposes of its investment policies.
MONITORING PROCEDURES. The Directors' procedures include monitoring the
relationship between the amortized cost value per share and the net asset value
per share based upon available indications of market value. The Directors will
decide what, if any, steps should be taken if there is a difference of more than
0.5 of 1% between the two values. The Directors will take any steps they
consider appropriate (such as redemption in kind or shortening the average
portfolio maturity) to minimize any material dilution or other unfair results
arising from differences between the two methods of determining net asset value.
INVESTMENT RESTRICTIONS. The Rule requires that the Fund limit its investments
to instruments that, in the opinion of the Directors, present minimal credit
risks and have received the requisite rating from one or more NRSROs. If the
instruments are not rated, the Directors must determine that they are of
comparable quality. The Rule also requires the Fund to maintain a
dollar-weighted average portfolio maturity (not more than 90 days) appropriate
to the objective of maintaining a stable net asset value of $1.00 per share. In
addition, no instrument with a remaining maturity of more than 397 days can be
purchased by the Fund.
Should the disposition of a portfolio security result in a dollar-weighted
average portfolio maturity of more than 90 days, the Fund will invest its
available cash to reduce the average maturity to 90 days or less as soon as
possible. Shares of investment companies purchased by the Fund will meet these
same criteria and will have investment policies consistent with Rule 2a-7.
Under the amortized cost method of valuation, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates, the
indicated daily yield on shares of the Fund, computed based upon amortized cost
valuation, may tend to be higher than a similar computation made by using a
method of valuation based upon market prices and estimates. In periods of rising
interest rates, the indicated daily yield on shares of the Fund computed the
same way may tend to be lower than a similar computation made by using a method
of calculation based upon market prices and estimates.
WHAT DO SHARES COST?
Except under certain circumstances described in the prospectus, shares are sold
at their net asset value on days the New York Stock Exchange is open for
business. The procedure for purchasing shares is explained in the prospectus
under "How to Buy Shares" and "What Do Shares Cost?" HOW IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.), located at Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, PA 15222-3779, offers shares on a continuous, best-efforts basis.
Texas residents must purchase shares of the Fund through M&I Brokerage Services,
Inc. at 1-800-236-FUND (3863), or through any authorized broker/dealer.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or M&I Trust Company (but not out of Fund assets). The Distributor and/or
M&I Trust Company may be reimbursed by the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related
services such as sponsoring sales, providing sales literature, conducting
training seminars for employees, and engineering sales-related computer software
programs and systems. Also, Authorized Dealers or financial institutions may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of shares the Authorized Dealer or
financial institution sells or may sell and/or upon the type and nature of sales
or marketing support furnished by the Authorized Dealer or financial
institution.
HOW TO BUY SHARES
EXCHANGING SECURITIES FOR SHARES
You may contact the Distributor to request a purchase of shares in an exchange
for securities you own. The Fund reserves the right to determine whether to
accept your securities and the minimum market value to accept. The Fund will
value your securities in the same manner as it values its assets. This exchange
is treated as a sale of your securities for federal tax purposes.
REDEMPTION IN KIND
Although the Fund intends to pay share redemptions in cash, the Fund reserves
the right, as described below, to pay the redemption price in whole or in part
by a distribution of the Fund's portfolio securities.
Because the Corporation has elected to be governed by Rule 18f-1 under the
Investment Company Act of 1940, the Fund is obligated to pay share redemptions
to any one shareholder in cash only up to the lesser of $250,000 or 1% of the
Fund's net assets represented by such share class during any 90-day period.
Any share redemption payment greater than this amount will also be in cash
unless the Fund's Directors determine that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its net
asset value. The portfolio securities will be selected in a manner that the
Fund's Directors deem fair and equitable and, to the extent available, such
securities will be readily marketable. Redemption in kind is not as liquid as a
cash redemption. If redemption is made in kind, shareholders would incur
transaction costs in selling the portfolio securities received, and the proceeds
of such sales, when made, may be more or less than the value on the redemption
date.
ACCOUNT AND SHARE INFORMATION
VOTING RIGHTS
Shareholders of the Fund are entitled: (i) to one vote per full share of Common
Stock; (ii) to distributions declared by Directors; and (iii) upon liquidation
of the Corporation, to participate ratably in the assets of the Fund available
for distribution. Each share of the Fund gives the shareholder one vote in the
election of Directors and other matters submitted to shareholders for vote. All
shares of each portfolio or class in the Corporation have equal voting rights,
except that only shares of a particular portfolio or class are entitled to vote
on matters affecting that portfolio or class. Consequently, the holders of more
than 50% of the Corporation's shares of common stock voting for the election of
Directors can elect the entire Board of Directors, and, in such event, the
holders of the Corporation's remaining shares voting for the election of
Directors will not be able to elect any person or persons to the Board of
Directors.
The Wisconsin Business Corporation Law (the WBCL) permits registered investment
companies, such as the Corporation, to operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not required
by the Act. The Corporation has adopted the appropriate provisions in its
By-laws and does not anticipate holding an annual meeting of shareholders to
elect Directors unless otherwise required by the Act. Directors may be removed
by the shareholders at a special meeting. A special meeting of the shareholders
may be called by the Directors upon written request of shareholders owning at
least 10% of the Corporation's outstanding voting shares.
The shares are redeemable and are transferable. All shares issued and sold by
the Corporation will be fully paid and nonassessable except as provided in WBCL
Section 180.0622(2)(b). Fractional shares of common stock entitle the holder to
the same rights as whole shares of common stock except the right to receive a
certificate evidencing such fractional shares.
As of February __, 2000, the following shareholders owned of record 5% or more
of the Fund's outstanding Class Y Shares: As of February __, 2000, the following
shareholder owned of record 5% or more of the Fund's outstanding Class A Shares:
[To be filed by amendment] WHAT ARE THE TAX CONSEQUENCES?
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code (Code) applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. If these requirements are not met, it will not receive
special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Corporation's other portfolios will be separate from those realized by the Fund.
The Fund is entitled to a loss carry-forward, which may reduce the taxable
income or gain that the Fund would realize, and to which the shareholder would
be subject, in the future.
The dividends received deduction and any short-term capital gains are taxable as
ordinary income. No portion of any income dividends paid by the Fund is eligible
for the dividends received deduction available to corporations. These dividends,
and any short-term capital gains, are taxable as ordinary income.
STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from income taxes of any state or local
taxing authority. State laws differ on this issue, and you should consult your
tax adviser for specific details regarding the status of your account under
state and local tax laws, including treatment of distributions as income or
return of capital.
CAPITAL GAINS
Capital gains, when realized by the Fund, could result in an increase in
distributions. Capital losses could result in a decrease in distributions. When
the Fund realizes net long-term capital gains, it will distribute them at least
once every 12 months.
WHO MANAGES THE FUND?
OFFICERS AND DIRECTORS
The Board is responsible for managing the Corporation's business affairs and for
exercising all the Corporation's powers except those reserved for the
shareholders. Information about each Board member is provided below and includes
each person's: name, address, birthdate, present position(s) held with the
Corporation, principal occupations for the past five years, and total
compensation received as a Director from the Corporation for its most recent
fiscal year ended August 31, 1999. The Corporation is comprised of eleven funds
and is the only investment company in the Fund Complex.
As of February __, 2000, the Fund's Board and Officers as a group owned
[approximately (insert # of shares) (__%)] [less than 1%] of the Fund's
outstanding shares.
A plus sign (+) denotes a Director who is deemed to be an interested person as
defined in the Investment Company Act of 1940.
NAME AGGREGATE
BIRTHDATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS FROM
POSITION WITH FOR PAST 5 YEARS CORPORATION
CORPORATION
JOHN DEVINCENTIS Independent Financial Consultant; $15,000
Age: 65 Retired, formerly, Senior Vice
c/o Marshall Funds President of Finance, In-Sink-Erator
1000 North Water Division of Emerson Electric.
Street
Milwaukee, WI
DIRECTOR
JAMES MITCHELL** Group Vice President, Citation $15,000
Age: 52 Corporation; President and Chief
c/o Marshall Funds Executive Officer, Interstate Forging
1000 North Water Industries; Chairman, Ayrshire
Street Precision Engineering.
Milwaukee, WI
DIRECTOR
DUANE E. DINGMANN** Retired; formerly President and $15,000
Age: 68 owner, Trubilt Auto Body, Inc. and
c/o Marshall Funds Telephone Specialists, Inc.; formerly
1000 North Water Class B (nonbanking) Director, Ninth
Street Federal Reserve District,
Milwaukee, WI Minneapolis, MN.
DIRECTOR
BARBARA J. POPE** President, Barbara J. Pope, P.C., a $15,000
Age: 51 financial consulting firm; President,
c/o Marshall Funds Sedgwick Street Partners LLC; general
1000 North Water partner of a private investment
Street partnership.
Milwaukee, WI
DIRECTOR
JOHN M. BLASER**+ Vice President, M&I Trust Company; $0
Age: 42 formerly, Partner and Chief Financial
1000 North Water Officer, Artisan Partners Limited
Street Partnership; formerly, Chief
Milwaukee, WI Financial Officer and Principal
PRESIDENT and Administrative and Finance Officer,
DIRECTOR Artisan Funds, Inc.; formerly, Senior
Vice President, Kemper Securities.
DAVID W. SCHULZ**+ President and Director, M&I $0
Age: 41 Investment Management Corp.; Vice
1000 North Water President, M&I Trust Company.
Street
Milwaukee, WI 53202
DIRECTOR
JO A. DALES Vice President, M&I Trust Company; $0
Age: 38 formerly, Senior Audit Manager of
1000 North Water Marshall & Ilsley Corporation and
Street Operations Specialist for Firstar
Milwaukee, WI Trust Company.
VICE PRESIDENT
ANN K. PEIRICK Assistant Vice President, M&I Trust $0
Age: 45 Company; formerly, Senior Financial
1000 North Water Analyst - Community Bank Finance and
Street Manager of Corporate Financial
Milwaukee, WI Analysis, Bank One, Wisconsin.
TREASURER
BROOKE J. BILLICK Vice President and Securities $0
Age: 45 Counsel, M&I Trust Company, M&I
1000 North Water Investment Management Corp.;
Street formerly, shareholder, Gibbs, Roper,
Milwaukee, WI Loots & Williams SC.
SECRETARY
** Elected as a Director on May 24, 1999.
ADVISER TO THE FUND
The Adviser conducts investment research and makes investment decisions for the
Fund. The Fund's investment adviser is M&I Investment Management Corp.
(Adviser), a wholly owned subsidiary of M&I Corporation. The Adviser shall not
be liable to the Corporation, the Fund or any shareholder of the Fund for any
losses that may be sustained in the purchase, holding, 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 Corporation. Because of the
internal controls maintained by the Adviser's affiliates to restrict the flow of
non-public information, Fund investments are typically made without any
knowledge of the lending relationships affiliates of the Adviser with an issuer.
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 management investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from issuing, underwriting, 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. M&I Corp. is subject to such banking laws
and regulations.
M&I Corp. believes, based on the advice of its counsel, that M&I Investment
Management Corp. may perform the services contemplated by the investment
advisory agreement with the Corporation 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 present or future statutes
and regulations, could prevent M&I Investment Management Corp. or M&I Corp. from
continuing to perform all or a part of the services described in the prospectus
for its customers and/or the Fund. If M&I Investment Management Corp. and M&I
Corp. were prohibited from engaging in these activities, the Directors 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 M&I Investment Management Corp.
and M&I Brokerage Services or MFIS. It is not expected that existing
shareholders would suffer any adverse financial consequences if another adviser
with equivalent abilities to M&I Investment Management Corp. is found as a
result of any of these occurrences.
BROKERAGE TRANSACTIONS
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or 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 and dealers
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, or their affiliates might otherwise have paid, it would tend to reduce
their expenses.
Aggregate total commissions with brokers that provided research were $845,012 on
transactions with an aggregate principal value of $542,732,676 during the fiscal
year ended August 31, 1999.
ADMINISTRATOR
M&I Trust Company provides administrative personnel and services to the Fund for
a fee at an annual rate as specified below:
AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE CORPORATION
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least $50,000
per Fund. M&I Trust Company may choose voluntarily to reimburse a portion of its
fee at any time.
Federated Services Company is Sub-Administrator to the Fund and is paid by M&I
Trust Company.
The functions performed by M&I Trust Company as administrator include, but are
not limited to the following:
o preparation, filing and maintenance of the Corporation's governing
documents, minutes of Directors' meetings and shareholder meetings;
o preparation and filing with the SEC and state regulatory authorities the
Corporation's registration statement and all amendments, and any other
documents required for the Fund to make a continuous offering of its
shares;
o preparation, negotiation and administration of contracts on behalf of the
Fund;
o supervision of the preparation of financial reports;
o preparation and filing of federal and state tax returns;
o assistance with the design, development and operation of the Fund; and
providing advice to the Fund's and Corporation's Directors.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, Pittsburgh, Pennsylvania, through its registered
transfer agent, Federated Shareholder Services Company, maintains all necessary
shareholder records. For its services, the transfer agent receives a fee based
on the size, type and number of accounts and transactions made by shareholders.
The fee is based on the level of the Fund's average net assets for the period
plus out-of-pocket expenses. The transfer agent may employ third parties,
including M&I Trust Company, to provide sub-accounting and sub-transfer agency
services. In exchange for these services, the transfer agent may pay such
third-party providers a per account fee and out-of-pocket expenses.
CUSTODIAN
M&I Trust Company (M&I Trust Company), Milwaukee, Wisconsin, a subsidiary of M&I
Corp., is custodian for the securities and cash of the Fund. For its services as
custodian, M&I Trust Company receives an annual fee, payable monthly, based on a
percentage of the Fund's average aggregate daily net assets.
INDEPENDENT AUDITORS
The independent auditor for the Fund, Ernst & Young LLP, plans and performs its
audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUND FOR SERVICES
- ------------------------------------------------------------------------------
ADVISORY FEE PAID/ BROKERAGE COMMISSIONS ADMINISTRATIVE FEE PAID*
ADVISORY FEE WAIVED PAID
--------------------------------------------------
- ------------------------------------------------------------------------------
FOR THE FISCAL YEAR ENDED FOR THE FISCAL YEAR FOR THE FISCAL YEAR ENDED
AUGUST 31 ENDED AUGUST 31
AUGUST 31
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------------------------------------------------------------------------
$8,873,537$7,729,52$6,354,00N/A N/A N/A $1,477,38$1,302,76$1,105,666
$4,436,304$3,846,38$3,304,082
- ------------------------------------------------------------------------------
* For the fiscal years ended August 31, 1999, 1998 and 1997, the Administrator
to the Fund was Federated Administrative Services.
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund may advertise the Fund's share performance by using the Securities and
Exchange Commission's (SEC) standard method for calculating performance
applicable to all mutual funds. The SEC also permits this standard performance
information to be accompanied by non-standard performance information.
Unless otherwise stated, any quoted share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. The performance of shares depends upon such
variables as: portfolio quality; average portfolio maturity; type and value of
portfolio securities; changes in interest rates; changes or differences in the
Fund's or any class of shares' expenses; and various other factors.
Share 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.
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Fund shares 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 net asset value 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, adjusted over the period by any additional
shares, assuming the quarterly reinvestment of any dividends and distributions.
YIELD
The Fund calculates the yield for Class I Shares daily, based upon the seven
days ending on the day of the calculation, called the base period. This yield is
computed by:
o determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares;
o dividing the net change in the account's value by the value of the account
at the beginning of the base period to determine the base period return;
and
o multiplying the base period return by 365/7.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the
Fund's shares, the Fund's shares performance is lower for shareholders paying
those fees.
EFFECTIVE YIELD
The Fund's effective yield for Class I Shares is computed by compounding the
unannualized base period return by: adding 1 to the base period return; raising
the sum to the 365/7th power; and subtracting 1 from the result.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
o references to ratings, rankings, and financial publications and/or
performance comparisons of the Fund's shares to certain indices;
o charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
o discussions of economic, financial and political developments and their
impact on the securities market, including the portfolio manager's views on
how such developments could impact the Fund; and
o information about the mutual fund industry from sources such as the
Investment Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from sources the Fund believes is reliable
regarding individual countries and regions, world stock exchanges, and economic
and demographic statistics.
You may use financial publications and/or indices to obtain a more complete view
of share performance. When comparing performance, you should consider all
relevant factors such as the composition of the 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:
LIPPER, 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 net asset value over a specific period of time.
From time to time, the Fund will quote its Lipper ranking in advertising
and sales literature.
CONSUMER PRICE INDEX is generally considered to be a measure of inflation.
DOW JONES INDUSTRIAL AVERAGE (DJIA) is an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by the Dow Jones & Company, it is
cited as a principal indicator of market conditions.
STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS, a composite
index of common stocks in industry, transportation, financial, and public
utility companies. The Standard & Poor's index assumes reinvestment of all
dividends paid by stocks listed on the index. Taxes due on any of these
distributions are not included, nor are brokerage or other fees calculated
in the Standard & Poor's figures.
o 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.
o BANK RATE MONITOR NATIONAL INDEX, Miami Beach, Florida, is a financial
reporting service which publishes weekly average rates of 50 leading bank
and thrift institution money market deposit accounts. The rates published
in the index are an average of the personal account rates offered on the
Wednesday prior to the date of publication by ten of the largest banks and
thrifts in each of the five largest Standard Metropolitan Statistical
Areas. Account minimums range upward from $2,500 in each institution and
compounding methods vary. If more than one rate is offered, the lowest rate
is used. Rates are subject to change at any time specified by the
institution.
DONOGHUE'S MONEY FUND REPORT publishes annualized yields of over 300
taxable money market funds on a weekly basis and through its MONEY MARKET
INSIGHT publication reports monthly and 12 month-to-date investment
results for the same money funds.
Investors may also consult the fund evaluation consulting universes listed
below. Consulting universes may be composed of pension, profit sharing,
commingled, endowment/foundation, and mutual funds.
FIDUCIARY CONSULTING GRID UNIVERSE, for example, is composed of over 1,000
funds, representing 350 different investment managers, divided into
subcategories based on asset mix. The funds are ranked quarterly based on
performance and risk characteristics.
SEI DATA BASE for equity funds includes approximately 900 funds,
representing 361 money managers, divided into fund types based on
investor groups and asset mix. The funds are ranked every three, six, and
twelve months.
o MERCER MEIDINGER, INC. compiles a universe of approximately 600 equity
funds, representing about 500 investment managers, and updates their
rankings each calendar quarter as well as on a one, three, and five year
basis.
ECONOMIC AND MARKET INFORMATION
Advertising and sales literature for the Fund may include discussions of
economic, financial and political developments and their effect on the
securities market. Such discussions may take the form of commentary on these
developments by Fund portfolio managers and their views and analysis on how such
developments could affect the Fund. In addition, advertising and sales
literature may quote statistics and give general information about mutual fund
industry, including the growth of the industry, from sources such as the
Investment Company Institute (ICI). For example, according to the ICI,
thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 mutual funds available.
FINANCIAL STATEMENTS
[Financial Statements to be filed by amendment]
ADDRESSES
MARSHALL MONEY MARKET FUND P.O. Box 1348
Milwaukee, Wisconsin 53201-1348
DISTRIBUTOR
Federated Securities Corp. Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
ADVISER
M&I Investment Management Corp. 1000 North Water Street
Milwaukee, Wisconsin 53202
CUSTODIAN
Marshall & Ilsley Trust Company 1000 North Water Street
Milwaukee, Wisconsin 53202
TRANSFER AGENT, DIVIDEND DISBURSING AGENT
AND PORTFOLIO ACCOUNTING SERVICES
Federated Services Company Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
LEGAL COUNSEL Bell, Boyd & Lloyd
Three First National Plaza 70 West Madison Street, Suite
3300 Chicago, IL 60602-4207
INDEPENDENT AUDITORS
Ernst & Young LLP 200 Clarendon Street
Boston, MA 02116-5072
Marshall Funds Investor Services Internet address: http://www.marshallfunds.com
P.O. Box 1348 TDD: Speech and Hearing Impaired Services
1-800-236-209-3520
Milwaukee, Wisconsin 53201-1348
414-287-8555 or 800-236-FUND (3863)
PART C. OTHER INFORMATION.
Item 23. EXHIBITS:
--------
(a) (i) Conformed copy of Articles of Incorporation of the
Registrant; (8)
(ii) Conformed copy of Amendment No. 1 to the Articles of
Incorporation; (8)
(iii) Conformed copy of Amendment No. 2 to the Articles of
Incorporation; (8)
(iv) Conformed copy of Amendment No. 3 to the Articles of
Incorporation; (8)
(v) Conformed copy of Amendment No. 4 to the Articles of
Incorporation; (6)
(vi) Conformed copy of Amendment No. 5 to the Articles of
Incorporation; (8)
(vii) Conformed copy of Amendment No. 6 to the Articles of
Incorporation; (12)
(viii) Conformed copy of Amendment No. 7 to the Articles of
Incorporation; (14)
(ix) Conformed copy of Amendment No. 8 to the Articles of
Incorporation; (18)
(x) Conformed copy of Amendment No. 9 to the Articles of
Incorporation; (21)
(xi) Conformed copy of Amendment No. 10 to the Articles of
Incorporation; (23)
(b) (i) Copy of By-Laws of the Registrant; (8)
(ii) Copy of Amendment No. 1 to the By-Laws of the Registrant;
(19)
(iii) Copy of Amendment No. 2 to the By-Laws of the Registrant;
(19)
(c) Copy of Specimen Certificates for Shares of Capital Stock of the
Marshall Mid-Cap Growth Fund, Marshall Large-Cap Growth & Income
Fund, Marshall Mid-Cap Value Fund, and Marshall Small-Cap Growth
Fund; (16)
- ------------------------
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed December 28, 1993. (File Nos. 33-48907
and 811-7047).
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed October 21, 1994. (File Nos. 33-48907
and 811-7047).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed June 17, 1996. (File Nos. 33-48907 and
811-7047).
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed August 30, 1996. (File Nos. 33-48907
and 811-7047).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed August 26, 1997. (File Nos. 33-48907
and 811-7047).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed October 21, 1998. (File Nos. 33-48907
and 811-7047).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed August 19, 1999. (File Nos. 33-48907
and 811-7047).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 27 on Form N-1A filed August 27, 1999. (File Nos. 33-48907
and 811-7047).
23. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed October 29, 1999. (File Nos. 33-48907
and 811-7047).
(d) (i) Conformed copy of Investment Advisory Contract of the
Registrant; (4)
(ii) Conformed copy of Exhibit G of the Investment Advisory
Contract of the Registrant; (5)
(iii) Conformed copy of Exhibit H of the Investment Advisory
Contract of the Registrant; (5)
(iv) Conformed copy of Exhibit I of the Investment Advisory
Contract of the Registrant; (5)
(v) Conformed copy of Exhibit J of the Investment Advisory
Contract of the Registrant; (5)
(vi) Conformed copy of Exhibit K of the Investment Advisory
Contract of the Registrant; (7)
(vii) Conformed copy of Exhibit L of the Investment Advisory
Contract of the Registrant; (7)
(viii) Conformed copy of Exhibit M of the Investment Advisory
Contract of the Registrant; (12)
(ix) Form of Amendment No. 1 to Exhibit A of the Investment
Advisory Contract; +
(x) Conformed copy of Federated Management Sub-Advisory
Agreement with the Registrant; (7)
(xi) Conformed copy of Templeton Investment Counsel, Inc.,
Sub-Advisory Agreement with the M & I Investment
Management, Inc.; (9)
(xii) Conformed copy of Exhibit N to the Investment Advisory
Contract of the Registrant; (14)
(xiii) Conformed copy of Subadvisory Contract between M&I
Investment Management Corp. and BPI Global Asset Management
LLP dated March 29, 1999 (20)
(e) (i) Conformed copy of Distributor's Contract of the Registrant,
including conformed copies of Exhibits A through J; (12)
(ii) Conformed copy of Exhibit K of the Distributor's Contract of
the Registrant; (15)
(iii) Conformed copy of Exhibit L of the Distributor's Contract
of the Registrant; (21)
- ------------------------
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 23, 1993. (File Nos. 33-48907 and
811-7047).
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed October 29, 1993. (File Nos. 33-48907
and 811-7047).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed July 1, 1994. (File Nos. 33-48907 and
811-7047).
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed December 21, 1994. (File Nos. 33-48907
and 811-7047).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed June 17, 1996. (File Nos. 33- 48907 and
811-7047).
14. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed August 30, 1996. (File Nos. 33-48907
and 811-7047).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed December 18, 1996. (File Nos. 33-48907
and 811-7047).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed July 23, 1999. (File Nos. 33-48907 and
811-7047).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 27 on Form N-1A filed August 27, 1999. (File Nos. 33-48907
and 811-7047).
(iv) Conformed copy of Exhibit M of the Distributor's Contract
of the Registrant; (19)
(v) Conformed copy of Exhibit N to the Distributor's Contract;
(23)
(vi) Form of Exhibit O to the Distributor's Contract; +
(f) Not applicable;
(g) (i) Conformed copy of Custodian Contract of the Registrant; (7)
(ii) Copy of Amendment No. 1 to Schedule A of the Sub-Custodian
Agreement of the Registrant; (16)
(iii) Copy of Amendment No. 2 to Schedule A of the Sub-Custodian
Agreement of the Registrant; (16)
(iv) Copy of Amendment No. 3 to Schedule A of the Sub-Custodian
Agreement of the Registrant; (17)
(v) Conformed copy of Sub-Transfer Agency and Services
Agreement of the Registrant; (10)
(h) (i) Conformed copy of Fund Accounting and Shareholder
Recordkeeping Agreement of the Registrant; (11)
(ii) Conformed copy of Amendment No. 1 to Schedule A of the
Fund Accounting and Shareholder Recordkeeping
Agreement of the Registrant; (15)
(iii) Conformed copy of Amendment No. 2 to Schedule A of the
Fund Accounting and Shareholder Recordkeeping
Agreement of the Registrant; (16)
(iv) Conformed copy of Amendment No. 1 to Schedule C of the
Fund Accounting and Shareholder Recordkeeping
Agreement of the Registrant; (15)
(v) Conformed copy of Annex 1 to Amendment No. 2 to
Schedule C of the Fund Accounting and Shareholder
Recordkeeping Agreement of the Registrant; (16)
(vi) Conformed copy of Administrative Services Agreement of the
Registrant; (7)
- ------------------------
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed July 1, 1994. (File Nos. 33-48907 and
811-7047).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed April 3, 1995. (File Nos. 33-48907 and
811-7047).
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed December 26, 1995. (File Nos. 33-48907
and 811-7047).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed December 18, 1996. (File Nos. 33-48907
and 811-7047).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed August 26, 1997. (File Nos. 33-48907
and 811-7047).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 21 on Form N-1A filed October 24, 1997. (File Nos. 33-48907
and 811-7047).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed August 19, 1999. (File Nos. 33-48907
and 811-7047).
23. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed October 29, 1999. (File Nos. 33-48907
and 811-7047).
(vii) Conformed copy of Amendment No. 1 to the Administrative
Services Agreement of the Registrant; (15)
(viii) Conformed copy of Amendment No. 2 to the Administrative
Services Agreement of the Registrant; (16)
(ix) Conformed copy of Sub-Administrative Services Agreement of
the Registrant; +
(x) Conformed copy of Shareholder Services Agreement
of the Registrant on behalf of Marshall Equity
Income Fund, Marshall Government Income Fund,
Marshall Intermediate Bond Fund, Marshall
Intermediate Tax-Free Fund, Marshall
International Stock Fund, Marshall Mid-Cap Stock
Fund, Marshall Money Market Fund, Marshall
Short-Term Income Fund, Marshall Short-Term
Tax-Free Fund, Marshall Stock Fund, and Marshall
Value Equity Fund; (4)
(xi) Conformed copy of Amendment No. 1 to Schedule A of the
Shareholder Services Agreement of the Registrant; (6)
(xii) Conformed copy of Amendment No. 2 to Schedule A of the
Shareholder Services Agreement of the Registrant; (7)
(xiii) Conformed copy of Amendment No. 3 to Schedule A of the
Shareholder Services Agreement of the Registrant; (12)
(xiv) Copy of Amendment No. 1 to Schedule B of the Shareholder
Services Agreement of the Registrant; (11)
(xv) Conformed copy of Marshall Funds, Inc. Multiple Class Plan
(Marshall Money Market Fund Class A Shares and Class B
Shares); (11)
(xvi) Form of Amendment No. 1 to Exhibit E to the Multiple Class
Plan (Marshall International Stock Fund Class I Shares and
Marshall Money Market Fund Class I Shares); +
- -------------------
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 23, 1993. (File Nos. 33-48907 and
811-7047).
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed December 28, 1993. (File Nos.33-48907
and 811-7047).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed July 1, 1994. (File Nos. 33-48907 and
811-7047).
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed December 26, 1995. (File Nos. 33-48907
and 811-7047).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed June 17, 1996. (File Nos. 33-48907 and
811-7047).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed December 18, 1996. (File Nos. 33-48907
and 811-7047).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed August 26, 1997. (File Nos. 33-48907
and 811-7047).
(xvii) Conformed copy of new Shareholder Services
Agreement between the Registrant and Marshall &
Ilsley Trust Company on behalf of Marshall Equity
Income Fund, Marshall Government Income Fund,
Marshall Intermediate Bond Fund, Marshall
Intermediate Tax-Free Fund, Marshall
International Stock Fund, Marshall Mid-Cap Stock
Fund, Marshall Short-Term Income Fund, Marshall
Small-Cap Stock Fund, Marshall Stock Fund, and
Marshall Value Equity Fund; (15)
(xviii)Conformed copy of Amendment No.1 to Exhibit 1 of
Shareholder Services Agreement of the Registrant; (21)
(xix) Conformed copy of new Shareholder Services
Agreement between the Registrant and Marshall &
Ilsley Trust Company on behalf of Marshall
Short-Term Income Fund, Marshall Government
Income Fund, Marshall Intermediate Bond Fund,
Marshall Intermediate Tax-Free Fund, Marshall
Equity Income Fund, Marshall Large-Cap Growth &
Income Fund, Marshall Mid-Cap Growth Fund,
Marshall Mid-Cap Value Fund, Marshall
International Stock Fund, Marshall Small-Cap
Growth Fund, and Marshall Money Market Fund; (23)
(xx) Form of Amendment No. 1 to Exhibit 1 of Shareholder
Services Agreement; +
(xxi) Conformed copy of Sub-Shareholder Services Agreement of the
Registrant; (23)
(xxii) Conformed copy of Mutual Funds Service Agreement of the
Registrant; (19)
(i) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered; (4)
(j) Conformed Copy of Consent of Independent Auditors; (23)
(k) Not applicable;
(l) Conformed copy of Initial Capital
Understanding; (11)
(m) (i) Conformed copy of Distribution Plan of the Registrant;
(4)
(ii) Conformed copy of Exhibit A of the Distribution Plan of the
Registrant; (11)
(iii) Conformed copy of Exhibit B of the Distribution Plan of the
Registrant; (9)
- -------------------
+ All exhibits filed electronically.
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed April 23, 1993. (File Nos. 33-48907 and
811-7047).
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed December 21, 1994. (File Nos. 33-48907
and 811-7047).
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed December 26, 1995. (File Nos. 33-48907
and 811-7047).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed December 18, 1996. (File Nos. 33-48907
and 811-7047).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed August 19, 1999. (File Nos. 33-48907
and 811-7047).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 27 on Form N-1A filed August 27, 1999. (File Nos. 33-48907
and 811-7047).
23. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 30 on Form N-1A filed October 29, 1999. (File Nos. 33-48907
and 811-7047).
(iv) Conformed copy of Exhibit C to the Distribution Plan of the
Registrant; (15)
(v) Conformed copy of Exhibit D of the Distribution Plan of the
Registrant; (21)
(vi) Form of 12b-1 Agreement of the Registrant; (23)
(vii) Copy of Exhibit A to the 12b-1 Agreement of the Registrant;
(19)
(viii) Copy of Exhibit B to the 12b-1 Agreement of the Registrant;
(11)
(ix) Copy of Exhibit C to the Rule 12b-1 Agreement of the
Registrant; (13)
(x) Copy of Exhibit D to the 12b-1 Agreement of the
Registrant; (21)
(n) Conformed copy of Multiple Class Plan of the Registrant
including Exhibits A through D; (19)
(o) (i) Conformed copy of Power of Attorney; (11)
(ii) Conformed copy of Power of Attorney dated December 27,
1993 with respect to James F. Duca, II, President of
the Corporation; (6)
(iii) Conformed copy of Power of Attorney; (22)
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND:
------------------------------------------------------------
None
Item 25. INDEMNIFICATION: (5)
---------------
Item 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER:
--------------------------------------------------------
M&I INVESTMENT MANAGEMENT CORP.
(a) M&I Investment Management Corp. is a registered investment
adviser and wholly-owned subsidiary of Marshall & Ilsley
Corporation, a registered bank holding company headquartered in
Milwaukee, Wisconsin. As of December 31, 1999, M&I Investment
Management Corp. had approximately $11 billion in assets under
management, of which $5 billion is in Marshall Funds assets,
and has managed investments for individuals and institutions
since its inception in 1973.
- -------------------
+ All Exhibits filed electronically.
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed October 29, 1993. (File Nos. 33-48907
and 811-7047).
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed December 28, 1993. (File Nos.33-48907
and 811-7047).
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 on Form N-1A filed December 26, 1995. (File Nos. 33-48907
and 811-7047).
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed July 9, 1996. (File Nos. 33-48907 and
811-7047).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed December 18, 1996. (File Nos. 33-48907
and 811-7047).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed August 19, 1999. (File Nos. 33-48907
and 811-7047).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 27 on Form N-1A filed August 27, 1999. (File Nos. 33-48907
and 811-7047).
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed September 2, 1999. (File Nos. 33-48907
and 811-7047).
M&I Investment Management Corp. served as investment adviser to Newton
Money Fund, Newton Income Fund and Newton Growth Fund.
For further information about M & I Investment Mangagement
Corp., its officers and directors, response is incorporated by
reference to M & I Investment Management Corp.'s Form ADV, File
No. 801-9118, dated March 4, 1996 as amended.
BPI Global Asset Management, LLP
(b) BPI Global Asset Management, LLP ("BPI") is a registered
investment adviser and provides management services for
investment companies, corporations, trusts, estates, pension
and profit sharing plans, individuals and other institutions
located in both Canada and the United States. As of August 31,
1999, BPI had approximately $2.3 billion of total assets under
management. BPI's address is Tower Place at the Summit, 1900
Summit Tower Boulevard, Suite 450, Orlando, Florida 32810. For
a list of the officers and directors of BPI and for further
information about BPI, any other business, vocation or
employment of a substantial nature in which a director or
officer of BPI is, or at any time in the past two fiscal years
has been, engaged for his or her own account or in the capacity
of director, officer, employee, partner or trustee, response is
incorporated by reference to BPI's Form ADV, File No.
801-53972, dated ___________________.
Item 27. PRINCIPAL UNDERWRITERS:
----------------------
(a)...Federated Securities Corp. the Distributor for shares of the
Registrant, acts as principal underwriter for the following open-end
investment companies, including the Registrant:
Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund,
Inc.; Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; Fixed Income
Securities, Inc.; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Managed Series Trust; Marshall Funds, Inc.; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
SouthTrust Funds; Tax-Free Instruments Trust; The Planters Funds; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; World
Investment Series, Inc.; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
DG Investor Series; High Yield Cash Trust; Investment Series Trust; Star Funds;
Targeted Duration Trust; The Virtus Funds; and Trust for Financial Institutions.
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 DISTRIBUTOR WITH REGISTRANT
Richard B. Fisher Chairman, Chief Executive --
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Arthur L. Cherry Director, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Treasurer,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ronald M. Petnuch Senior Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Amy Michalisyn Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas A. Peter III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Donald C. Edwards Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kirk A. Montgomery Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy S. Johnson Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Victor R. Siclari Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Denis McAuley III Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 28. LOCATION OF ACCOUNTS AND RECORDS:
--------------------------------
MARSHALL FUNDS, INC........... 770 North Water Street
--------------------
Milwaukee, Wisconsin 53202
(Notices should be sent to
the Agent for Service at the
address above)
1000 North Water Street
Milwaukee, WI 53202
FEDERATED SHAREHOLDER SERVICES Federated Investors Tower
COMPANY 1001 Liberty Avenue
-------
("Transfer Agent, Dividend Pittsburgh, PA 15222-3779
Disbursing Agent, and Portfolio
Accounting Services")
FEDERATED ADMINISTRATIVE SERVICES Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
M & I INVESTMENT MANAGEMENT CORP. 1000 North Water Street
---------------------------------
("Adviser") Milwaukee, WI 53202
MARSHALL & ILSLEY TRUST COMPANY 1000 North Water Street
-------------------------------
("Custodian") Milwaukee, WI 53202
BPI GLOBAL ASSET MANAGEMENT, LLP 1900 Summit Tower Blvd.
--------------------------------
("Sub-Adviser") Suite 450
Orlando, Florida 32810
Item 29. MANAGEMENT SERVICES: Not applicable.
-------------------
Item 30. 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 shareholders meetings by
shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MARSHALL FUNDS, INC. 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 9th day of February, 2000.
MARSHALL FUNDS, INC.
BY: /s/ Brooke J. Billick
Secretary
Attorney in Fact for John M. Blaser
February 9, 2000
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/ Brooke J. Billick
Brooke J. Billick Attorney In Fact February 9, 2000
SECRETARY For the Persons
Listed Below
NAME TITLE
John M. Blaser* President and Director
Ann K. Peirick* Treasurer (Principal
Financial and
Accounting Officer)
John DeVincentis* Director
Duane E. Dingmann* Director
James Mitchell* Director
Barbara J. Pope* Director
David W. Schulz* Director
* By Power of Attorney
Exhibit (d)(ix) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AMENDMENT #1 TO EXHIBIT A
To the
Investment Advisory Contract
MARSHALL MONEY MARKET FUND
Effective as of May 1, 2000, for all services rendered by Adviser
hereunder, the above-named Portfolio(s) of the Fund shall pay to Adviser and
Adviser agrees to accept as full compensation for all services rendered
hereunder, an annual investment advisory fee equal to .15 or 1% of the average
daily net assets of the Portfolio(s).
The portion of the fee based upon the average daily net assets of the
Portfolio(s) shall be accrued daily at the rate of 1/365th of .15 of 1% applied
to the daily net assets of the Portfolio(s).
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this __day of January, 2000.
Attest: M&I INVESTMENT MANAGEMENT CORP.
Secretary President
Attest: MARSHALL FUNDS, INC.
Secretary President
EXHIBIT (E)(VI) UNDER FORM N-1A
EXHIBIT 1 UNDER ITEM 601/REG. S-K
EXHIBIT O
To the
Distributor's Contract
MARSHALL FUNDS, INC.
MARSHALL MONEY MARKET FUND
CLASS I SHARES
In consideration of the mutual covenants set forth in the Distributor's
Contract dated October 1, 1992 between Marshall Funds, Inc. and Federated
Securities Corp., Marshall Funds, Inc. executes and delivers this Exhibit on
behalf of the Portfolios, and with respect to the separate Classes of Shares
thereof, first set forth in this Exhibit.
Witness the due execution hereof this __ day of January, 2000.
MARSHALL FUNDS, INC.
By:
Name:
Title:
FEDERATED SECURITIES CORP.
By:
Name:
Title:
Exhibit (h)(ix) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
SUB-ADMINISTRATIVE SERVICES AGREEMENT
This Sub-Administrative Services Agreement is made as of this 1st day of
January, 2000, between MARSHALL & ILSLEY TRUST COMPANY, a Wisconsin trust
company bank ("M&I"), and FEDERATED SERVICES COMPANY, a Pennsylvania corporation
(herein called "FSC").
WHEREAS, M&I has entered into an Administration Agreement dated January 1,
2000 with The Marshall Funds, Inc. (the "Corporation"), pursuant to which M&I
provides certain administrative services to the Corporation;
WHEREAS, the Corporation is a Wisconsin corporation consisting of one or
more portfolios, which operates as an open-end management investment company and
is registered under the Investment Company Act of 1940; and
WHEREAS, M&I desires to retain FSC as Sub-Administrator to provide it with
Sub-Administrative Services through its affiliate Federated Administrative
Services ("FAS"), and FSC is willing to render such services with respect to
each of the Corporation's current portfolios listed on Schedule A hereto and any
future portfolios of the Corporation which may be created from time to time
(each a "Fund" and collectively, the "Funds");
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF SUB-ADMINISTRATOR. M&I hereby appoints FSC as
its Sub-Administrator on the terms and conditions set forth in this Agreement;
and FSC hereby accepts such appointment and agrees to perform the services and
duties set forth in this Agreement in consideration of the compensation provided
for herein.
SECTION 2. SERVICES AND DUTIES. As Sub-Administrator, FSC will provide
facilities, equipment, and personnel to provide and carry out the
sub-administrative services listed on Exhibit A hereto (the "Sub-Administrative
Services") on behalf of M&I, for the operation of the business and affairs of
the Corporation and its portfolios. Sub-Administrative Services shall not
include any duties, functions, or services to be performed for the Corporation
by the Corporation's investment adviser, distributor, custodian, fund accountant
(recordkeeper), or transfer agent pursuant to their respective contracts with
M&I or the Corporation.
SECTION 3. RECORDS. FSC shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act and the
rules thereunder, as the same may be amended from time to time, pertaining to
the Sub-Administrative Services performed by it and not otherwise created and
maintained by another party pursuant to agreement with the Corporation. Where
applicable, such records shall be maintained by FSC for the periods and in the
places required by Rule 31a-2 under the 1940 Act. The books and records
pertaining to the Corporation which are in the possession of FSC shall be the
property of the Corporation. The Corporation, or the Corporation's authorized
representatives, shall have access to such books and records at all times during
FSC's normal business hours. Upon the reasonable request of the Corporation,
copies of any such books and records shall be provided promptly by FSC to M&I,
the Corporation, or the Corporation's authorized representatives.
SECTION 4. DUTIES OF THE FUNDS. Except as provided in Section 7 hereof,
the Corporation and each of its portfolios assumes full responsibility for
complying with all applicable requirements of the 1940 Act, the Internal Revenue
Code, and any other laws, rules and regulations of governmental authorities
having jurisdiction over the Funds.
SECTION 5. EXPENSES. FSC shall be responsible for expenses incurred in
providing office space, equipment, and personnel as may be necessary or
convenient to provide the Sub-Administrative Services, including the
compensation of FSC employees who serve as Directors or officers of the
Corporation. The Corporation shall be responsible for all other expenses
incurred by FSC on behalf of the Corporation, including without limitation
postage and courier expenses, printing expenses, travel expenses, registration
fees, filing fees, fees of outside counsel and independent auditors or other
professional services, insurance premiums, fees payable to persons who are not
FSC employees, trade association dues, and other out-of-pocket or other expenses
properly payable by the Corporation and its portfolios.
SECTION 6. COMPENSATION. For the Sub-Administrative Services provided, M&I
hereby agrees to pay and FSC hereby agrees to accept as full compensation for
the Sub-Administrative Services rendered hereunder an fee as specified in
Exhibit B hereto, such Exhibit to be signed by a duly authorized officer of M&I
and a duly authorized officer of FSC.
The compensation and out-of-pocket expenses attributable to the Funds
shall be accrued by each Fund and paid to FSC no less frequently than monthly.
FSC will maintain detailed information about the compensation and out-of-pocket
expenses of each Fund.
SECTION 7. RESPONSIBILITY OF SUB-ADMINISTRATOR.
(a) FSC shall not be liable for any error of judgment or mistake of law or
for any loss suffered by M&I or the Corporation in connection with the matters
to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. FSC shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Corporation) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
Any person, even though also an officer, trustee, partner, employee or agent of
FSC, who may be or become an officer, director, employee or agent of the
Corporation, shall be deemed, when rendering services to the Corporation or
acting on any business of the Corporation (other than services or business in
connection with the duties of FSC hereunder) to be rendering such services to or
acting solely for the Corporation and not as an officer, trustee, partner,
employee or agent or one under the control or direction of FSC even though paid
by FSC.
(b) FSC shall be kept indemnified by M&I and be without liability for any
action taken or thing done by it in performing the Sub-Administrative Services
in accordance with the above standards; provided, however, that the M&I will not
indemnify FSC for the portion of any loss or claim caused, directly or
indirectly, by the gross negligence of FSC. In order that the indemnification
provisions contained in this Section 7 shall apply, however, it is understood
that if in any case M&I may be asked to indemnify or save FSC harmless, M&I
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that FSC will use all
reasonable care to identify and notify M&I promptly concerning any situation
which presents or appears likely to present the probability of such a claim for
indemnification against M&I. M&I shall have the option to defend FSC against any
claim which may be the subject of this indemnification. In the event that M&I so
elects, it will so notify FSC and thereupon M&I shall take over complete defense
of the claim, and FSC shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this Section. FSC shall
in no case confess any claim or make any compromise in any case in which M&I
will be asked to indemnify FSC except with M&I's written consent.
SECTION 8. DURATION AND TERMINATION.
(a) The term of this Agreement shall commence on the date hereof, and
extend for a period of three (3) years (the "Contract Term"). Each one-year
period during the Contract Term shall be referred to as a "Contract
Anniversary".
(b) During the Contract Term, this Agreement shall be automatically
renewed each Contract Anniversary for an additional term of one year, unless
notice of termination has been delivered by either party to the other no less
than ninety (90) days before the start of any subsequent Contract Anniversary.
(c) This Agreement shall be automatically renewed each year after the
expiration of the Contract Term for an additional term of one year ("Additional
Terms") under the same terms and conditions of the Contract Anniversary ending
on December 31, 2002, unless notice of termination has been delivered by either
party to the other no less than ninety (90) days before the expiration of the
Contract Anniversary ending on December 31, 2002, or any subsequent Additional
Term.
(d) In the event the Corporation exercises its right to terminate this
Agreement pursuant to this Section 8, all out-of pocket expenses associated with
the movement of records and materials will be borne by the Corporation or
appropriate portfolio. Additionally, the Sub-Administrator reserves the right to
charge for any other reasonable expenses associated with such termination. The
provisions of Section 8 shall survive the termination of this Agreement
SECTION 9. AMENDMENT. This Agreement may be amended or modified only by a
written agreement executed by both parties.
SECTION 10. LIMITATIONS OF LIABILITY OF TRUSTEES OF FSC. The execution and
delivery of this Agreement has been signed by an authorized officer of FSC,
acting as such, and such execution and delivery by such officer shall not be
deemed to have been made by any of the Board members of FSC or such officer
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the members of the
Board or officers of FSC, but bind only the corporate property of FSC as
provided in the Articles of Incorporation of FSC.
SECTION 11. NOTICES. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if delivered
to M&I at: 1000 North Water Street, Milwaukee, WI, Attention: John M. Blaser,
President, facsimile number 414-287-8523, with a copy to M&I's Legal Department,
facsimile number 414-287-7025; and if delivered to FSC at Federated Investors
Tower, Pittsburgh, PA 15222-3779, Attention: President, facsimile number
412-288-8141.
SECTION 12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court or
regulatory agency decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Subject to the provisions of Sections
6, 7, and 8, hereof, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. The
Sub-Administrator shall have no liability for cessation of services hereunder or
any damages to the Corporation as a result of work stoppage, power or other
mechanical failure, natural disaster, government action, communication
disruption or other impossibility of performance. The services of FSC to M&I
and/or the Corporation hereunder shall not be deemed exclusive and FSC shall be
free to render similar or other services to others.
SECTION 13. COUNTERPARTS. This Agreement may be executed by different
parties on separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
SECTION 14. MERGER. This Agreement constitutes the entire agreement between
the parties hereto and supercedes any prior agreement with respect to the
subject hereof whether oral or written.
SECTION 15. INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the
operation of this Agreement, M&I and FSC 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 Corporation's Articles of
Incorporation. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
SECTION 16. 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 all of or a substantial portion of its business to
a successor, or to a party controlling, controlled by, or under common control
with such party. Nothing in this Section 16 shall prevent FSC from delegating
its responsibilities to another entity to the extent provided herein.
SECTION 17. GOVERNING LAW AND VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to the conflict of laws principles thereof. The parties hereto
irrevocably consent to the jurisdiction and venue of any federal or state court
in Allegheny County in the Commonwealth of Pennsylvania, in connection with any
action or proceeding arising out of or in connection with this Agreement, and
the parties hereto irrevocably waive the right to object to the venue of any
such court on the ground of forum non conveniens.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
MARSHALL & ILSLEY TRUST COMPANY FEDERATED SERVICES COMPANY
By: /S/ DAVE W. SCHULZ By: /S/ PETER J. GERMAIN
-------------------------- ----------------------
Name: Dave W. Schulz Name: Peter J. Germain
Title: Vice President Title: Senior Vice President
By: /S/ BROOKE J. BILLICK
Name: Brooke J. Billick
Title: Vice President & Securities General
EXHIBIT A
TO
SUB-ADMINISTRATIVE SERVICES AGREEMENT
Pursuant to Section 2 of the Agreement, FSC agrees to perform the following
Sub-Administrative Services:
A. review of the Corporation's governing documents and any amendments thereto,
including its Articles of Incorporation ("Charter"), its By-laws, and
minutes of meetings of the Board and Shareholders;
B. review drafts of, and file with the Securities and Exchange Commission
("SEC") and the appropriate state securities authorities, the registration
statements for the Corporation and the Corporation's Shares and all
amendments thereto, reports to regulatory authorities and shareholders,
Prospectus(es), routine proxy statements (other than combined
registration/proxy statements on Form N-14 for which FSC would review), and
such other documents all as may be necessary to enable the Corporation to
make a continuous offering of its Shares;
D monitor expenses, calculate the per share dividend and capital gains or
losses, if any, for declaration and payment in the manner determined from
time to time by the Corporation's Board, and monitor compliance with the
distribution requirements of a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended;
E. review performance data of the Corporation for dissemination to information
services covering the investment company industry;
F. prepare the Corporation's tax returns;
G. coordinate the layout and printing of publicly disseminated Prospectus(es)
and reports;
H. perform internal audit examinations in accordance with a charter to be
adopted by M&I and the Corporation, and coordinate and facilitate external
audits by the Corporation's independent auditors and regulatory
examinations of the Corporation;
I. assist with the design, development, and operation of the Corporation and
its portfolios;
J. obtain CUSIPS, NASDAQ symbols, and IRS tax identification numbers for the
Corporation;
K. consult with and advise the Corporation and its Officers and Board on
matters concerning the Corporation and its affairs;
L. assist in obtaining acceptable fidelity bond and directors &
officers/errors & omissions insurance policies pursuant to Rules 17g-1 and
17d-1 under the 1940 Act;
M. supervise the preparation of the Funds' financial statements, including
oversight of expense accruals and payments;
N. provide, upon request, market research and, as available, white papers on
industry topics and products; and
O. perform such other and further services as may be mutually agreed upon in
writing between M&I and FSC.
EXHIBIT B
TO
SUB-ADMINISTRATIVE SERVICES AGREEMENT
Pursuant to Section 4 of the Agreement, M&I agrees to pay Federated a
sub-administration fee using the following schedule: Fees are based upon the
aggregate average daily net assets (ADNA) of the Corporation.
- --------------------------------------------------------------------------------
CONTRACT TERM
----------------------------------------------
----------------------------------------------
FEE SCHEDULE 1/1/2000 1/1/2001 1/1/2002
THROUGH THROUGH THROUGH
12/31/2000 12/31/2001 12/31/2002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
First $5,000,000,000 of ADNA 5.5 bp 5.0 bp 4.5 bp
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Next $5,000,000,000 of ADNA 5.0 bp 4.5 bp 4.0 bp
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Next $5,000,000,000 of ADNA 4.5 bp 4.0 bp 3.5 bp
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Next $5,000,000,000 of ADNA 4.0 bp 3.5 bp 3.0 bp
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Over $20,000,000,000 of ADNA 3.5 bp 3.0 bp 2.5 bp
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MINIMUM FEES:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Sub-Administration (per $40,000 $35,000 $30,000
portfolio)
- --------------------------------------------------------------------------------
Each Additional Class (per $12,000 $10,000 $8,000
portfolio)
- --------------------------------------------------------------------------------
Federated Services Company
Mutual Fund Services
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
###-##-#### Phone
www.federatedinvestors.com
December 10, 1999
Mr. John M. Blaser
Vice President
Marshall & Ilsley Trust Company
1000 North Water Street
Milwaukee, Wisconsin 53202
Dear John,
The purpose of this letter is to confirm our understanding of the terms agreed
to by you and I during our telephone conversations, regarding the
sub-administration agreement between M&I Trust Company and affiliates of
Federated Services Corporation.
In recognition of M&I Trust Company retaining Federated Services
Corporation as sub-administrator and Federated Securities Corporation as
distributor of the Marshall Funds, Federated has agreed to the following for the
calendar year 2000: 1. Federated will waive $110,000 of Sub-Administrative Fee
2. Federated and M&I will review the proposed waiver of sub-administration fee
minimums for new funds or classes as new Funds are created.
We both understand the waiver of sub-administration fee would discontinue under
any of the following circumstances:
1. Notification that M&I is to be acquired by a company that advises a mutual
fund family with a servicing arrangement with any service provider other
than Federated;
2. M&I provides notice of sub-administration contract termination; or
3. Notice that The Marshall Funds are to be liquidated, dissolved, or acquired
by another investment company.
For your information, Federated has agreed to make available certain service
fees on qualified assets invested in the Federated Max-Cap Fund, as discussed in
a letter to Morry Birnbaum from Jim Getz, dated December 10, 1999. Call me if
you would like a copy of the letter.
I have enclosed two originals of this letter. Please date and sign and return
one original to me, along with a copy of the executed sub-administration
agreement, in the space provided below if the terms outlined in this letter are
acceptable.
Sincerely,
By: /S/ PETER J. GERMAIN
Peter J. Germain
Senior Vice President
AGREED and ACCEPTED
this 15th day of December, 1999
By: /S/ JOHN M. BLASER
John M. Blaser
Vice President, Marshall & Ilsley
Trust Company
Exhibit (h)(xvi) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AMENDMENT #1 TO EXHIBIT E
to the
Multiple Class Plan
MARSHALL FUNDS, INC.
CLASS I SHARES
Marshall International Stock Fund
Marshall Money Market Fund
This Exhibit to the Multiple Class Plan (the "Plan") is hereby adopted by
the above-listed portfolios of the Corporation ("International Fund" and "Money
Market Fund", individually, and "Funds", collectively) on whose behalf it is
executed as of the date stated below, pursuant to Sections 2, 3, 4, and 5 of the
Plan with regard to the Class I Shares of the Funds.
1. SEPARATE ARRANGEMENTS
CHANNEL/TARGET CUSTOMERS
Class I Shares of the International Fund are designed for sale to
institutional investors. Class I Shares of the Money Market Fund are
designed for sale to institutional investors that are not natural persons.
SALES LOAD
None.
DISTRIBUTION FEES
None.
SHAREHOLDER SERVICES FEES
None.
MINIMUM INVESTMENTS
The minimum initial investment in Class I Shares of the International Fund
is $1 million. The minimum initial investment in Class I Shares of the
Money Market Fund is $10 million. Subsequent investments in the Class I
Shares of either Fund must be in amounts of at least $100,000.
VOTING RIGHTS
Each Class I Share gives the shareholder one vote in Director elections and
other matters submitted to shareholders of the entire Corporation for vote.
All shares of each portfolio or class in the Funds have equal voting
rights, except that only shares of a particular portfolio or class are
entitled to vote in matters affecting that portfolio or class.
2. EXPENSE ALLOCATION
DISTRIBUTION FEES
None.
SHAREHOLDER SERVICE FEES
None.
3. CONVERSION FEATURES
Class I Shares are not convertible into shares of any other class.
4. EXCHANGE FEATURES
Class I Shares of any portfolio may be exchanged for Shares of other Funds
of the Corporation pursuant to the conditions described in the appropriate
prospectus.
IN WITNESS WHEREOF, this Class Exhibit has been executed on behalf
of the above-listed portfolios of the Corporation by their duly-authorized
officers(s) as of the date(s) set forth below.
By:
Title:
Date:
Exhibit (h)(xx) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AMENDMENT #1 TO EXHIBIT 1
SHAREHOLDER SERVICES AGREEMENT
Pursuant to Section 2 of the Agreement, MFIS agrees to accept as full
compensation for its services rendered hereunder a fee at an annual rate,
calculated daily and payable monthly, equal to an amount up to the percentage of
average net assets of each Fund, as set forth below.
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Fund/Class Shareholder Effective Date
Services Fee
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Marshall Short-Term Income Fund - 0.25% September 1, 1999
Class A Shares
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Marshall Short-Term Income Fund - 0.25% September 1, 1999
Class Y Shares
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Marshall Government Income Fund - 0.25% September 1, 1999
Class A Shares
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Marshall Government Income Fund - 0.25% September 1, 1999
Class Y Shares
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Marshall Intermediate Bond Fund - 0.25% September 1, 1999
Class A Shares
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Marshall Intermediate Bond Fund - 0.25% September 1, 1999
Class Y Shares
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Marshall Intermediate Tax-Free Fund - 0.25% September 1, 1999
Class A Shares
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Marshall Intermediate Tax-Free Fund - 0.25% September 1, 1999
Class Y Shares
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Marshall Equity Income Fund - Class A 0.25% September 1, 1999
Shares
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Marshall Equity Income Fund - Class Y 0.25% September 1, 1999
Shares
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Marshall Large Cap Growth & Income 0.25% September 1, 1999
Fund - Class A Shares
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Marshall Large Cap Growth & Income 0.25% September 1, 1999
Fund - Class Y Shares
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Marshall Mid-Cap Growth Fund - Class 0.25% September 1, 1999
A Shares
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Marshall Mid-Cap Growth Fund - Class 0.25% September 1, 1999
Y Shares
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Marshall Mid-Cap Value Fund - Class A 0.25% September 1, 1999
Shares
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Marshall Mid-Cap Value Fund - Class Y 0.25% September 1, 1999
Shares
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Marshall International Stock Fund - 0.25% September 1, 1999
Class A Shares
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Marshall International Stock Fund - 0.25% September 1, 1999
Class Y Shares
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Marshall Small-Cap Growth Fund - 0.25% September 1, 1999
Class A Shares
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Marshall Small-Cap Growth Fund - 0.25% September 1, 1999
Class Y Shares
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Marshall Money Market Fund - Class A 0.25% September 1, 1999
Shares
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Marshall Money Market Fund - Class Y 0.25% May 1, 2000
Shares
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Amended as of this ___ day of January, 2000.
MARSHALL FUNDS, INC., MARSHALL & ILSLEY TRUST COMPANY on behalf of its
portfolios listed above on behalf of its division, Marshall Funds Investor
Services
By: By:
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Title: Title:
