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SUBJECT TO COMPLETION - APRIL 16, 1996
CT&T FUNDS
MONTAG & CALDWELL GROWTH FUND
FOR INSTITUTIONAL SHAREHOLDERS
CLASS I SHARES
1100 Atlanta Financial Center
Atlanta, Georgia 30326-1450
PROSPECTUS
June , 1996
CT&T FUNDS (the "Company") is a no-load, open-end management investment
company which consists of eight separate diversified investment series
(collectively referred to as the "Funds") designed to offer investors a variety
of investment opportunities. This Prospectus pertains only to the Class I
shares of the Montag & Caldwell Growth Fund (the "Fund").
MONTAG & CALDWELL GROWTH FUND seeks long-term capital appreciation
consistent with investments primarily in a combination of equity, convertible,
fixed income, and short-term securities. Capital appreciation is emphasized,
and generation of income is secondary. The Fund's Investment Advisor is Montag
& Caldwell, Inc. ("Montag & Caldwell").
The shares of the Fund may be purchased or redeemed without any purchase or
redemption charge imposed by the Company, although institutions may charge their
customers for services provided in connection with their investments.
This Prospectus sets forth concisely the information a prospective investor
should know before investing. Investors should read and retain this Prospectus
for future reference. Additional information about the Fund is contained in the
Statement of Additional Information dated June , 1996, which has been filed
with the Securities and Exchange Commission ("SEC") and is available upon
request and without charge from the Company, at the addresses and telephone
numbers below. The Statement of Additional Information is incorporated by
reference into this Prospectus.
.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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CT&T Funds: Underwriter: Investment Advisor:
- ----------- ------------ -------------------
<S> <C> <C>
171 North Clark Street Fund/Plan Broker Services, Inc. Montag & Caldwell, Inc.
Chicago, IL 60601-3294 #2 West Elm Street 1100 Atlanta Financial Center
(800) 992-8151 Conshohocken, PA 19428-0874 3343 Peachtree Road, NE
Atlanta, GA 30326-1450 Atlanta, GA 30326-1450
(800) 992-8151
</TABLE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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TABLE OF CONTENTS
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Page
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PROSPECTUS SUMMARY........................................................
EXPENSE INFORMATION.......................................................
INVESTMENT OBJECTIVE AND POLICIES.........................................
INVESTMENT STRATEGIES AND RISK CONSIDERATIONS.............................
MANAGEMENT OF THE FUND....................................................
PORTFOLIO MANAGEMENT METHODS..............................................
ADMINISTRATION OF THE FUND................................................
PURCHASE OF SHARES........................................................
REDEMPTION OF SHARES......................................................
NET ASSET VALUE...........................................................
DIVIDENDS AND TAXES.......................................................
PERFORMANCE OF THE FUND...................................................
GENERAL INFORMATION.......................................................
APPENDIX
--------
Debt Ratings..............................................................
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUNDS TO MAKE
SUCH AN OFFER OR SOLICITATION. NO SALES REPRESENTATIVE, DEALER, OR OTHER
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.
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PROSPECTUS SUMMARY
------------------
THE FUND
- --------
The Company is an open-end, management investment company commonly known as
a mutual fund. The Company was established as a Delaware Business Trust on
September 10, 1993. The Company currently offers eight separate series of
shares, (collectively referred to as "Funds"). This Prospectus offers only Class
I shares of MONTAG & CALDWELL GROWTH FUND (the "Fund").
INVESTMENT DEFINITIONS
- ----------------------
EQUITY SECURITIES -- The term "equity securities" as used herein typically
refers to common stock or preferred stock, which represent a stockholder's
equity or ownership of shares in a company.
DEBT SECURITIES -- Examples of "debt securities" are bills, notes and
bonds, each representing a promise by the issuer to re-pay a debt which is
generally secured by the assets of such issuer. Also in this investment category
are debentures, which are bonds or promissory notes that are backed by the
general credit of the issuer, but not secured by specific assets of such issuer.
CONVERTIBLE FEATURES -- Equity or debt securities purchased by the Fund may
have "convertible" features, whereby they can be exchanged for another class of
securities, according to the terms of their respective issuers.
SHORT-TERM INSTRUMENTS -- "Short-term (or money market) instruments" are
generally private or Government obligations with maturities of one year or less
and may include (but are not limited to) certificates of deposit, bankers'
acceptances, corporate commercial paper, and Government obligations.
DERIVATIVE INVESTMENTS -- the term "derivatives" has been used to identify
a range and variety of financial categories. In general, a derivative is
commonly defined as a financial instrument whose performance is derived, at
least in part, from the performance of an underlying asset, such as a specific
security or an index of securities. Derivatives which may be used from time to
time by the Fund, including the investment risks associated with such
instruments, are discussed in detail under "INVESTMENT STRATEGIES AND RISK
CONSIDERATIONS".
INVESTMENT OBJECTIVE OF THE FUND
- --------------------------------
The Fund seeks long-term capital appreciation consistent with investments
primarily in a combination of equity, convertible, fixed income, and short-term
securities. Capital appreciation is emphasized, and generation of income is
secondary.
HOW TO PURCHASE SHARES
- ----------------------
The minimum initial investment for Class I shares is $40 million. Class I
shares of the Fund do not impose any sales load, redemption or exchange fees or
have a Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "1940 Act"). The public offering price is the net asset
value per share next determined after receipt of a purchase order in proper
form. See "PURCHASE OF SHARES."
HOW TO REDEEM SHARES
- --------------------
Shares may be redeemed at the net asset value per share of Class I shares
of the Fund next determined after receipt by the Transfer Agent of a redemption
request in proper form. Signature guarantees may be required. See "REDEMPTION OF
SHARES."
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DIVIDENDS
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The Fund intends to distribute substantially all of its net investment
income and net realized capital gains, if any, to shareowners. Distributions of
net capital gains, if any, will be made annually. All distributions are
reinvested at net asset value, in additional full and fractional shares of the
Fund unless and until the shareowner notifies the Transfer Agent in writing
requesting payments in cash. The Fund declares and pay dividends quarterly. See
"DIVIDENDS AND TAXES".
MANAGEMENT OF THE FUND
- ----------------------
Montag & Caldwell, Inc. ("Montag & Caldwell"), 1100 Atlanta Financial
Center, 3343 Peachtree Road, NE, Atlanta, Georgia 30326-1450, a registered
investment advisor, is the Investment Advisor for the Fund.
As of December 31, 1995, Montag & Caldwell managed over $5.2 billion in
assets primarily for employee benefit, endowment, charitable and other
institutional clients, mutual funds, and high net worth individuals.
Fund/Plan Broker Services, Inc., #2 West Elm Street, Conshohocken,
Pennsylvania 19428-0874 serves as the Fund's Underwriter. UMB Bank, n.a., 928
Grand Avenue, Kansas City, Missouri 64106 serves as the Custodian of the Fund'
assets. The Chicago Trust Company serves as the Fund's Administrator. Fund/Plan
Services, Inc., #2 West Elm Street, P.O. Box 874, Conshohocken, Pennsylvania
19428-0874 serves as the Fund's Sub-Administrator, Transfer Agent, and
Accounting/Pricing Agent.
EXPENSE INFORMATION
-------------------
SHAREOWNER TRANSACTION EXPENSES OF THE FUND:
- -------------------------------------------
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<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).............. 0.00%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)... 0.00%
Deferred Sales Load (as a percentage of original purchase price)......................... 0.00%
Redemption Fees (as a percentage of amount redeemed)..................................... 0.00%
Exchange Fees (as a percentage of amount exchanged)...................................... 0.00%
If you want to redeem shares by wire transfer, the Fund's Transfer
Agent charges a fee, currently $20.00 for each wire redemption. Institutions may
independently charge fees for shareowner transactions or for advisory services;
please see their materials for details.
ANNUAL FUND OPERATING EXPENSES AS A PERCENTAGE OF AVERAGE NET ASSETS:
- --------------------------------------------------------------------
Investment Advisory Fees After Voluntary Fee Waiver...................................... 0.76%
12b-1 Fees............................................................................... 0.00%
Other Expenses........................................................................... 0.22%
-----
Net Expense Ratio After Advisors Voluntary Fee Waivers and Reimbursements................ 0.98%
=====
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The purpose of this table is to assist the investor in understanding
the various expenses that an investor in the Fund will bear directly or
indirectly. The Fund expects to commence operations of Class I shares on or
about June 28, 1996 and has no operating history. Therefore, for the purpose of
the table above, "other expenses" is based on estimated amounts for the current
fiscal year. The above table reflects the Advisor's voluntary undertaking to
waive a portion of its investment advisory fees to limit expenses to the limits
shown. Absent such fee waivers, the investment advisory fees and total operating
expenses are estimated to be 0.80% and 1.02%, respectively.
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EXAMPLE:
Based on the level of expenses listed above after reimbursement, the total
expenses relating to an investment of $1,000 would be as follows assuming a 5%
annual return and redemption at the end of each time period.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
$10 $31 $54 $119
The foregoing tables are designed to assist the investor in understanding
the various costs and expenses that a shareowner will bear directly or
indirectly. While the example assumes a 5% annual return, the Fund's actual
performance will vary and may result in actual returns greater or less than 5%.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES
AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The Fund offers two classes of shares that invest in the same portfolio of
securities. Shareowners of Class N are subject to a 12b-1 Plan, and the
shareowners of Class I are not; therefore, expenses and performance figures will
vary between the classes. The information set forth in the foregoing tables and
example relates only to the Class I shares. See "GENERAL INFORMATION."
FINANCIAL HIGHLIGHTS
--------------------
Since the Class I shares of the Fund had not commenced operations as of the
date hereof, it did not yet have financial statements.
PERFORMANCE MEASURES
- --------------------
From time to time, the Fund may advertise performance measures as set forth
under "PERFORMANCE OF THE FUNDS."
Performance measures will be based on historical earnings and are not
intended to indicate future performance. Management's detailed discussion of the
Company's performance data will be found in the most recent Annual Report to
Shareowners, which will be available upon request and without charge, by calling
(800) 992-8151.
PORTFOLIO TURNOVER
- ------------------
The portfolio turnover rate for the Fund is calculated by dividing the
lesser of purchases or sales of portfolio investments for the reporting period
by the monthly average value of the portfolio investments owned during the
reporting period. The calculation excludes all securities, including options,
whose maturities or expiration dates at the time of acquisition are one year or
less. Portfolio turnover may vary greatly from year to year as well as within a
particular year, and may be affected by cash requirements for redemption of
units and by requirements which enable the Fund to receive a favorable tax
treatment. In any event, portfolio turnover is generally not expected to exceed
100% in the Fund. A high rate of portfolio turnover (i.e., over 100%) may result
in the realization of substantial capital gains and involves correspondingly
greater transaction costs.
INVESTMENT OBJECTIVE AND POLICIES
----------------------------------
The investment objective of the Fund is fundamental and may not be changed
without a vote of the holders of the majority of the voting securities of the
Fund. Unless otherwise stated in this Prospectus or the Statement of Additional
Information, the Fund's investment policies are not fundamental and may be
changed without shareowner approval. While a non-fundamental policy or
restriction may be changed by the Trustees of
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the Company without shareowner approval, the Fund intends to notify shareowners
before making any change in any such policy or restriction. Fundamental
policies may not be changed without shareowner approval.
The Fund strives to attain its investment objectives, but there can, of
course, be no assurance that it will do so. Additional investment policies and
restrictions are described in the Statement of Additional Information.
The Fund seeks long-term capital appreciation consistent with investments
primarily in a combination of convertible and non-convertible equity securities,
convertible and non-convertible debt securities, and short-term instruments.
Capital appreciation is emphasized, and generation of income is secondary.
Montag & Caldwell selects equity securities that it believes are undervalued
based upon the issuer's estimated earning power and ability to produce strong
earnings growth over the next twelve to eighteen months. Issuers include, but
are not limited to, established companies with a history of growth and companies
that are expected to enter periods of earnings growth. Montag & Caldwell may
purchase securities of companies which do not pay dividends, but which are
believed to have superior growth potential. The Fund may invest in securities
listed on a stock exchange as well as those traded over-the-counter.
While it is this Fund's policy to remain substantially invested in common
stock or securities convertible into common stock, it may invest in non-
convertible preferred stock and non-convertible debt securities. When Montag &
Caldwell has determined that adverse market and economic conditions warrant, the
Fund may invest all or part of its assets in high-quality money market
securities and repurchase agreements for temporary defensive purposes. The Fund
may invest up to 30% of its total assets in foreign securities in the form of
American Depository Receipts ("ADRs") and European Depository Receipts ("EDRs"),
although it has no current intention of investing in unsponsored ADRs or EDRs.
The Fund may also engage in futures and options transactions for hedging
purposes. Such investments are generally considered to be derivative securities.
These and other applicable investment activities with respect to this Fund are
more fully described in the next section of this Prospectus.
Debt securities consist of obligations of the U.S. Government, its agencies
or instrumentalities, obligations of U.S. companies and of U.S. banks such as
bonds, debentures, zero coupon bonds, and convertible debentures. The Fund will
invest only in investment-grade debt securities which include those securities
that are rated "Baa3" or better by Moody's Investors Service, Inc. ("Moody's")
or "BBB-" or better by Standard & Poor's Corporation ("S&P"), or if not rated,
of comparable quality in the opinion of Montag & Caldwell. The dollar weighted
average quality of the debt securities rated by Moody's will be "A3" or better,
the dollar weighted average quality of the investment-grade debt securities
rated by S&P will be "A" or better, and the dollar weighted average quality of
unrated debt securities will be comparable, as determined by Montag & Caldwell.
The Appendix contains an explanation of Moody's and S&P ratings. In the event a
rated security held by the Fund is downgraded below an investment-grade rating
by Moody's or S&P, the Investment Advisor shall promptly reassess the risks
involved and take such actions as it determines will be in the best interests of
the Fund and its shareowners.
Please refer to the policies and risk disclosures more fully described
under "Foreign Securities", "Options" and "Futures Contracts and Related
Options", as well as the other specified practices with respect to this Fund, in
the section of this Prospectus titled "INVESTMENT STRATEGIES AND RISK
CONSIDERATIONS".
INVESTMENT STRATEGIES AND RISK CONSIDERATIONS
---------------------------------------------
IN GENERAL
- ----------
Shareowners should understand that all investments involve risk and there
can be no guarantee against loss resulting from an investment in the Fund, nor
can there be any assurance that the Fund's investment objectives will be
attained. Unless otherwise indicated, all percentage limitations governing the
investments of the Fund applies only at the time of transaction. Accordingly, if
a percentage restriction is adhered to at the time of
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investment, a later increase or decrease in the percentage represented by such
investment which results from a relative change in values or from a change in
the Fund's total assets will not be considered a violation.
GOVERNMENT OBLIGATIONS
- ----------------------
The Fund may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities to the extent described above.
Obligations of certain agencies and instrumentalities of the U.S. Government,
such as the Government National Mortgage Association ("GNMA"), are supported by
the full faith and credit of the U.S. Treasury; others, such as those of Federal
Home Loan Banks, are supported by the right of the issuer to borrow from the
Treasury; others, such as those of the Federal National Mortgage Association
("FNMA"), are supported by the discretionary authority of the U.S. Government to
purchase the agency's obligations; still others, such as those of the Student
Loan Marketing Association, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government would
provide financial support to U.S. Government-sponsored instrumentalities if it
is not obligated to do so by law. Some Government obligations may be issued as
variable or floating-rate instruments.
Securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities have historically involved little risk of loss of principal.
However, due to fluctuations in interest rates, the market value of such
securities may vary during the period of time the shareowner owns shares of the
Fund.
MONEY MARKET SECURITIES
- -----------------------
The Fund may invest in money market securities, including bank obligations
and commercial paper. Bank obligations may include bankers' acceptances,
negotiable certificates of deposit, and non-negotiable time deposits earning a
specified return, issued for a definite period of time by a U.S. bank that is a
member of the Federal Reserve System or is insured by the Federal Deposit
Insurance Corporation, or by a savings and loan association or savings bank that
is insured by the Federal Deposit Insurance Corporation. Bank obligations also
include U.S. dollar-denominated obligations of foreign branches of U.S. banks or
of U.S. branches of foreign banks, all of the same type as domestic bank
obligations. Investments in bank obligations are limited to the obligations of
financial institutions having more than $1 billion in total assets at the time
of purchase.
Domestic and foreign banks are subject to extensive but different
government regulations which may limit the amount and types of their loans and
the interest rates that may be charged. In addition, the profitability of the
banking industry is largely dependent upon the availability and cost of funds to
finance lending operations and the quality of underlying bank assets.
Investments in obligations of foreign branches of U.S. banks and of U.S.
branches of foreign banks may subject the Fund to additional investment risks,
including future political and economic developments, the possible imposition of
withholding taxes on interest income, possible seizure or nationalization of
foreign deposits, the possible establishment of exchange controls, or the
adoption of other foreign governmental restrictions which might adversely affect
the payment of principal and interest on such obligations. In addition, foreign
branches of U.S. banks and U.S. branches of foreign banks may be subject to less
stringent reserve requirements and to different accounting, auditing, reporting,
and record keeping standards than those applicable to domestic branches of U.S.
banks. Investments in the obligations of U.S. branches of foreign banks or
foreign branches of U.S. banks will be made only when the Investment Advisor
believes that the credit risk with respect to the investment is minimal.
Commercial paper may include variable and floating-rate instruments, which
are unsecured instruments that permit the interest on indebtedness thereunder to
vary. Variable-rate instruments provide for periodic adjustments in the interest
rate. Floating-rate instruments provide for automatic adjustment of the interest
rate whenever some other specified interest rate changes. Some variable and
floating-rate obligations are direct lending arrangements between the purchaser
and the issuer and there may be no active secondary market. However, in the case
of variable and floating- rate obligations with the demand feature, the Fund may
demand payment of principal and accrued interest at a time specified in the
instrument or may resell the instrument to a third party. In the event an issuer
of a variable or floating-rate obligation defaulted on its payment obligation,
the
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Fund might be unable to dispose of the note because of the absence of a
secondary market and could, for this or other reasons, suffer a loss to the
extent of the default. Substantial holdings of variable and floating-rate
instruments could reduce portfolio liquidity.
BORROWING
- ---------
The Fund may not borrow money or issue senior securities, except that the
Fund may borrow from banks or enter into reverse repurchase agreements for
temporary purposes in amounts up to 10% of the value of its total assets. The
Fund may not mortgage, pledge, or hypothecate any assets, except that the Fund
may mortgage, pledge, or hypothecate its assets in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of the total assets of the Fund. The Fund will not
purchase securities while its borrowings (including reverse repurchase
agreements) exceed 5% of its total assets. The Fund may borrow money as a
temporary measure for extraordinary purposes or to facilitate redemptions. The
Fund will not borrow money in excess of 25% of the value of its total assets.
The Fund has no intention of increasing its net income through borrowing. Any
borrowing will be done from a bank with the required asset coverage of at least
300%. In the event that such asset coverage shall at any time fall below 300%,
the Fund shall, within three days thereafter (not including Sundays or holidays)
or such longer period as the SEC may prescribe by rules and regulations, reduce
the amount of its borrowings to such an extent that the asset coverage of such
borrowings shall be at least 300%.
ILLIQUID SECURITIES
- -------------------
The Fund may invest up to 15% of its respective net assets in securities
which are illiquid. Illiquid securities will generally include, but are not
limited to: repurchase agreements and time deposits with notice/termination
dates in excess of seven days; unlisted over-the-counter options; interest rate,
currency and mortgage swap agreements; interest rate caps, floors and collars;
and certain securities which are subject to trading restrictions because they
are not registered under the Securities Act of 1933 (the "1933 Act").
REPURCHASE AGREEMENTS
- ---------------------
The Fund may enter into repurchase agreements pursuant to which the Fund
purchases portfolio assets from a bank or broker-dealer concurrently with an
agreement by the seller to repurchase the same assets from the Fund at a later
date at a fixed price. Repurchase agreements are considered, under the 1940 Act,
to be collateralized loans by the Fund to the seller secured by the securities
transferred to the Fund. Repurchase agreements will be fully collateralized by
securities in which the Fund may invest directly. Such collateral will be
marked-to-market daily. If the seller of the underlying security under the
repurchase agreement should default on its obligation to repurchase the
underlying security, the Fund may experience delay or difficulty in exercising
its right to realize upon the security and, in addition, may incur a loss if the
value of the security should decline, as well as disposition costs in
liquidating the security. No more than 15% of the Fund's net assets will be
invested in illiquid securities, including repurchase agreements which have a
maturity of longer than seven days. The Fund must treat each repurchase
agreement as a security for tax diversification purposes and not as cash, a cash
equivalent or receivable.
REVERSE REPURCHASE AGREEMENTS
- -----------------------------
The Fund may enter into reverse repurchase agreements with banks and
broker-dealers. Reverse repurchase agreements involve sales by the Fund of
portfolio assets concurrently with an agreement by the Fund to repurchase the
same assets at a later date at a fixed price. During the reverse repurchase
agreement period, the Fund continues to receive principal and interest payments
on these securities. During the time a reverse repurchase agreement is
outstanding, the Fund will maintain a segregated custodial account consisting of
cash, U.S. Government securities or other high-grade liquid debt obligations
having a value at least equal to the repurchase price. Reverse repurchase
agreements are considered to be borrowings by the Fund, and as such are subject
to the investment limitations discussed above under the sub-section titled
"Borrowing".
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RULE 144A SECURITIES
- --------------------
The Fund may purchase securities which are not registered under the 1933
Act but which can be sold to "qualified institutional buyers" in accordance with
Rule 144A under the 1933 Act. Any such security will not be considered illiquid
so long as it is determined by the Investment Advisor under guidelines approved
by the Company's Board of Trustees, that an adequate trading market exists for
that security. This investment practice could have the effect of increasing the
level of illiquidity in the Fund during any period that qualified institutional
buyers become uninterested in purchasing these restricted securities. The
ability to sell to qualified institutional buyers under Rule 144A is a recent
development, and it is not possible to predict how this market will develop.
SECURITIES LENDING
- ------------------
The Fund may seek additional income from time to time by lending their
respective portfolio securities on a short-term basis to banks, brokers and
dealers under agreements. Loans of portfolio securities by the Fund will be
collateralized by cash held in non-interest bearing demand accounts, letters of
credit or securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities which will be maintained at all times in an amount equal to
the current market value of the loaned securities. The Fund may not make such
loans in excess of 25% of the value of its total assets. The major risk to which
the Fund would be exposed on a loan transaction is the risk that the borrower
would become bankrupt at a time when the value of the security goes up.
Therefore, the Fund will only enter into loan arrangements after a review by the
Investment Advisor, subject to overall supervision by the Board of Trustees,
including a review of the creditworthiness of the borrowing broker-dealer or
other institution and then only if the consideration to be received from such
loans would justify the risk. Creditworthiness will be monitored on an ongoing
basis by the Investment Advisor.
SECURITIES OF OTHER INVESTMENT COMPANIES
- ----------------------------------------
The Fund may invest in securities issued by other investment companies
which invest in securities in which the Fund is permitted to invest and which
determine their net asset value per share based on the amortized cost or penny-
rounding method. In addition, the Fund may invest in securities of other
investment companies within the limits prescribed by the 1940 Act, which include
limits to its investments in securities issued by other investment companies so
that, as determined immediately after a purchase of such securities is made: (i)
not more than 5% of the value of the Fund's total assets will be invested in the
securities of any one investment company; (ii) not more than 10% of its total
assets will be invested in the aggregate in securities of investment companies
as a group; and (iii) not more than 3% of the outstanding voting stock of any
one investment company will be owned by the Fund. The Fund is subject to
additional limitations in these purchases as described under "INVESTMENT
RESTRICTIONS" in the Statement of Additional Information. As a shareowner of
another investment company, the Fund would bear, along with other shareowners,
its pro rata portion of the such investment company's expenses, including
advisory fees. These expenses would be in addition to the advisory and other
expenses that the Fund bears directly in connection with its own operations.
SHORT-TERM TRADING
- ------------------
The Fund may engage in short-term trading. Securities may be sold in
anticipation of a market decline or purchased in anticipation of a market rise
and later sold. In addition, a security may be sold and another purchased at
approximately the same time to take advantage of what the Fund believes to be a
temporary disparity in the normal yield relationship between the two securities.
Such trading may be expected to increase the Fund's portfolio turnover rate and
the expenses incurred in connection with such trading. The Fund anticipates that
its annual portfolio turnover rate will generally not exceed 100%.
FOREIGN SECURITIES
- ------------------
The Fund may invest in foreign securities. Investment in foreign securities
is subject to special investment risks that differ in some respects from those
related to investments in securities of U.S. domestic issuers. Such risks
include: political, social or economic instability in the country of the issuer;
the difficulty of predicting international trade patterns; the possibility of
the imposition of exchange controls; expropriation; limits
9
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on removal of currency or other assets; nationalization of assets; foreign
withholding and income taxation; and foreign trading practices (including higher
trading commissions, custodial charges and delayed settlements). Such securities
may be subject to greater fluctuations in price than securities issued by U.S.
corporations or issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. The markets on which such securities trade may have less
volume and liquidity, and may be more volatile, than securities markets in the
U.S. In addition, there may be less publicly available information about a
foreign company than about a U.S. domiciled company. Foreign companies generally
are not subject to uniform accounting, auditing and financial reporting
standards comparable to those applicable to U.S. domestic companies. There is
generally less government regulation of securities exchanges, brokers and listed
companies abroad than in the U.S. Confiscatory taxation or diplomatic
developments could also affect investment in those countries.
In addition, foreign branches of U.S. banks, foreign banks and foreign
issuers may be subject to less stringent reserve requirements and to different
accounting, auditing, reporting, and record keeping standards than those
applicable to domestic branches of U.S. banks and U.S. domestic issuers.
For many foreign securities, U.S. dollar-denominated American Depository
Receipts, or ADRs, which are traded in the United States on exchanges or over-
the-counter, are issued by domestic banks. ADRs represent the right to receive
securities of foreign issuers deposited in a domestic bank or a correspondent
bank. ADRs do not eliminate the risk inherent in investing in the securities of
foreign issuers. However, by investing in ADRs rather than directly in stock of
foreign issuers, the Fund can avoid currency risks during the settlement period
for either purchases or sales. In general, there is a large, liquid market in
the United States for many ADRs. The information available for ADRs is subject
to the accounting, auditing and financial reporting standards of the domestic
market or exchange on which they are traded, which standards are more uniform
and more exacting than those to which many foreign issuers may be subject. The
Fund may also invest in European Depository Receipts, or EDRs, which are
receipts evidencing an arrangement with a European bank similar to that for ADRs
and are designed for use in the European securities markets.
Certain ADRs and EDRs, typically those denominated as unsponsored, require
the holders thereof to bear most of the costs of such facilities while issuers
of sponsored facilities normally pay more of the costs thereof. The depository
of an unsponsored facility frequently is under no obligation to distribute
shareowner communications received from the issuer of the deposited securities
or to pass through the voting rights to facility holders in respect to the
deposited securities, whereas the depository of a sponsored facility typically
distributes shareowner communications and passes through the voting rights.
DERIVATIVE INVESTMENTS
- ----------------------
The term "derivatives" has been used to identify a range and variety of
financial instruments. In general, a derivative is commonly defined as a
financial instrument whose performance and value are derived, at least in part,
from another source, such as the performance of an underlying asset, or a
specific security, or an index of securities. As is the case with other types of
investments, the Fund's derivative instruments may entail various types and
degrees of risk, depending upon the characteristics of a derivative instrument
and the Fund's overall portfolio.
The Fund may engage in such practices for hedging purposes, or to maintain
liquidity, or in anticipation of changes in the composition of its portfolio
holdings. The Fund will not engage in derivative investments purely for
speculative purposes. The Fund will invest in one or more derivatives only to
the extent that the instrument under consideration is judged by the Investment
Advisor to be consistent with the Fund's overall investment objective and
policies. In making such judgment, the potential benefits and risks will be
considered in relation to the Fund's other portfolio investments.
Where not specified, investment limitations with respect to the Fund's
derivative instruments will be consistent with the Fund's existing percentage
limitations with respect its overall investment policies and restrictions. While
not a fundamental policy, the total of all instruments deemed derivative in
nature by the Investment Advisor will generally not exceed 20% of total assets
for the Fund which is permitted the use of such instruments; however, as this
policy is not fundamental, it may be changed from time to time when deemed
10
<PAGE>
appropriate by the Board of Trustees. Listed below, including risks and policies
with respect thereto, are the types of securities in which the Fund is permitted
to invest which is considered by the Investment Advisor to be derivative in
nature.
1. OPTIONS:
The Fund may engage in options, including those described below.
A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or may take advantage of
a rise in a particular index. The Fund will only purchase call options to the
extent premiums paid on all outstanding call options do not exceed 20% of the
Fund's total assets. The Fund will only sell or write call options on a covered
basis (e.g. on securities it holds in its portfolio).
A put option enables the purchaser of the option, in return for the premium
paid, to sell the security underlying the option to the writer at the exercise
price during the option period, and the writer of the option has the obligation
to purchase the security from the purchaser of the option. The advantage is that
the purchaser can be protected should the market value of the security decline
or should a particular index decline. The Fund will only purchase put options to
the extent that the premiums on all outstanding put options do not exceed 20% of
the Fund's total assets. The Fund will only purchase put options on a covered
basis and write put options on a secured basis. Cash or other collateral will be
held in a segregated account for such options. The Fund will receive premium
income from writing put options, although it may be required, when the put is
exercised, to purchase securities at higher prices than the current market
price. At the time of purchase, the Fund will receive premium income from
writing call options, which may offset the cost of purchasing put options and
may also contribute to the Fund's total return. The Fund may lose potential
market appreciation if the judgment of its Investment Advisor is incorrect with
respect to interest rates, security prices or the movement of indices.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive cash from the seller equal to
the difference between the closing price of the index and the exercise price of
the option.
Closing transactions essentially let the Fund offset put options or call
options prior to exercise or expiration. If the Fund cannot effect a closing
transaction, it may have to hold a security it would otherwise sell or deliver a
security it might want to hold.
The Fund may use options traded on U.S. exchanges, and to the extent
permitted by law, options traded over-the-counter. It is the position of the
Securities and Exchange Commission ("SEC") that over-the-counter options are
illiquid. Accordingly, the Fund will invest in such options only to the extent
consistent with its 15% limit on investments in illiquid securities. Please see
"General Risk Factors" below and refer to the Statement of Additional
Information for a more detailed discussion of the applicable risk
considerations.
2. FORWARD COMMITMENTS, WHEN-ISSUED SECURITIES, AND DELAYED-DELIVERY
TRANSACTIONS:
The Fund may purchase or sell securities on a when-issued or delayed-
delivery basis and make contracts to purchase or sell securities for a fixed
price at a future date beyond customary settlement time. Securities purchased or
sold on a when-issued, delayed-delivery, or forward commitment basis involve a
risk of loss if the value of the security to be purchased declines prior to the
settlement date. Although the Fund would generally purchase securities on a
when-issued, delayed-delivery, or forward commitment basis with the intention of
acquiring the securities, the Fund may dispose of such securities prior to
settlement if its Investment Advisor deems it appropriate to do so. Please see
"General Risk Factors" below and refer to the Statement of Additional
Information for a more detailed discussion of the applicable risk
considerations.
11
<PAGE>
3. FUTURES CONTRACTS AND RELATED OPTIONS:
The Fund may engage in futures contracts and options on futures contracts
for hedging purposes or to maintain liquidity. However, the Fund may not
purchase or sell a futures contract unless immediately after any such
transaction the sum of the aggregate amount of margin deposits on its existing
futures positions and the amount of premiums paid for related options is 5% or
less of its total assets, after taking into account unrealized profits and
unrealized losses on any such contracts. At maturity, a futures contract
obligates the Fund to take or make delivery of certain securities or the cash
value of a securities index. The Fund may sell a futures contract in order to
offset a decrease in the market value of its portfolio securities that might
otherwise result from a market decline. The Fund may do so either to hedge the
value of its portfolio of securities as a whole, or to protect against declines,
occurring prior to sales of securities, in the value of the securities to be
sold. Conversely, the Fund may purchase a futures contract in anticipation of
purchases of securities. In addition, the Fund may utilize futures contracts in
anticipation of changes in the composition of its portfolio holdings.
Any gain derived by the Fund from the use of such instruments will be
treated as a combination of short-term and long-term capital gain and, if not
offset by realized capital losses incurred by the Fund, will be distributed to
shareowners and will be taxable to shareowners as a combination of ordinary
income and long-term capital gain.
The Fund may purchase and sell call and put options on futures contracts
traded on an exchange or board of trade. When the Fund purchases an option on a
futures contract, it has the right to assume a position as a purchaser or seller
of a futures contract at a specified exercise price at any time during the
option period. When the Fund sells an option on a futures contract, it becomes
obligated to purchase or sell a futures contract if the option is exercised. In
anticipation of a market advance, the Fund may purchase call options on futures
contracts as a substitute for the purchase of futures contracts to hedge against
a possible increase in the price of securities which the Fund intends to
purchase. Similarly, if the market is expected to decline, the Fund might
purchase put options or sell call options on futures contracts rather than sell
futures contracts. In connection with the Fund's position in a futures contract
or option thereon, the Fund will create a segregated account of liquid assets,
such as cash, U.S. Government securities or other liquid high-grade debt
obligations, or will otherwise cover its position in accordance with applicable
requirements of the SEC. Please see "General Risk Factors" below and refer to
the Statement of Additional Information for a more detailed discussion of the
applicable risk considerations.
GENERAL RISK FACTORS
- --------------------
1. OPTIONS, FUTURES, AND FORWARD CONTRACTS:
The Fund may engage in such investment practices. The primary risks
associated with the use of futures contracts and options are: (i) imperfect
correlation between the change in market value of the securities held by the
Fund and the price of futures contracts and options; (ii) possible lack of a
liquid secondary market for a futures contract and the resulting inability to
close a futures contract when desired; (iii) losses, which are potentially
unlimited, due to unanticipated market movements; and (iv) the Investment
Advisor's inability to predict correctly the direction of security prices,
interest rates and other economic factors. For a further discussion, see
"INVESTMENT POLICIES AND RISK CONSIDERATIONS" in the Statement of Additional
Information.
2. FIXED INCOME INVESTING:
The Fund may engage in fixed income investment practices. There are two
principal types of risks associated with investing in debt securities: (1)
market (or interest rate) risk and (2) credit risk.
Market risk relates to the change in market value caused by fluctuations in
prevailing rates, while credit risk relates to the ability of the issuer to make
timely interest payments and to repay the principal upon maturity. The value of
debt securities will normally increase in periods of falling interest rates;
conversely, the value of these instruments will normally decline in periods of
rising interest rates.
12
<PAGE>
In an effort to obtain maximum income consistent with its investment
objective, the Fund may, at times, change the average maturity of its investment
portfolio, consistent with a three- to ten-year weighted average maturity range,
by investing a larger portion of its assets in relatively longer-term
obligations when periods of declining interest rates are anticipated and,
conversely, emphasizing shorter- and intermediate-term maturities when a rise in
interest rates is indicated.
Credit risk refers to the possibility that a bond issuer will fail to make
timely payments of interest or principal. The ability of an issuer to make such
payments could be affected by general economic conditions, litigation,
legislation or other events including the bankruptcy of the issuer. For a
further discussion, see "INVESTMENT POLICIES AND RISK CONSIDERATIONS" in the
Statement of Additional Information.
MANAGEMENT OF THE FUND
----------------------
THE BOARD OF TRUSTEES
- ---------------------
Under Delaware law, the business and affairs of the Company are managed
under the direction of the Board of Trustees. The Statement of Additional
Information contains the name of each Trustee and background information
regarding the Trustees.
MONTAG & CALDWELL, INC.
- -----------------------
The Investment Advisor for the Fund is Montag & Caldwell, Inc., a
registered investment advisor located at 1100 Atlanta Financial Center, 3343
Peachtree Road, NE, Atlanta, Georgia 30326-1450. As of December 31, 1995,
Montag & Caldwell managed over $5.2 billion in assets, primarily for employee
benefit, endowment, charitable and other institutional clients, as well as high
net worth individuals. Montag & Caldwell was founded in 1945 and was purchased
in 1994 as a wholly-owned subsidiary of the Alleghany Corporation, Park Avenue
Plaza, New York, New York 10055. Montag & Caldwell is a subsidiary of Alleghany
Asset Management, Inc., which is a subsidiary of Allegheny Corporation.
Pursuant to Investment Advisory Agreements with the Company, Montag &
Caldwell provides an investment program for the Fund in accordance with its
investment policies, limitations and restrictions, and The Chicago Trust Company
furnishes executive, administrative and clerical services required for the
transaction of the Fund's business.
For providing investment advisory services, the Fund has agreed to pay
Montag & Caldwell a monthly fee at the following annual rate of 0.80% based on
the Fund's average daily net assets, which is higher than the advisory fees paid
by most other funds; however, this fee is comparable with those of other mutual
funds with similar investment objectives.
Montag & Caldwell has voluntarily undertaken to reimburse the Fund for
total operating expenses in excess of 0.98%. Such fee reimbursements may be
terminated at the discretion of Montag & Caldwell. Montag & Caldwell has also
agreed to waive that portion of its advisory fee equal to the total expenses of
the Fund for any fiscal year which exceeds the permissible limits applicable to
the Fund in any state in which its shares are then qualified for sale.
PORTFOLIO MANAGEMENT METHODS
----------------------------
INVESTMENT MANAGEMENT TEAM
- --------------------------
Investment decisions for the Fund are made by an investment management team
at Montag & Caldwell. No member of the investment management team is primarily
responsible for making recommendations for portfolio purchases.
13
<PAGE>
The Montag & Caldwell equity performance objective is to produce solid
returns over the long-term. Equity portfolios are managed with a fundamental
selection process in which valuation of the long-term earning power of the
company is interrelated with expected rate of growth in short-term reported
earnings for that company. Among the factors important in the valuation process
are: the estimated per share earning power of the company's assets; return on
equity; long-term estimated reported earnings growth rate; financial strength;
capital structure; competitive position; and quality of management. Securities
are selected based upon extensive research and seasoned judgement of experienced
professionals. Industry group weightings and asset allocation are incorporated
in the selection process.
ADMINISTRATION OF THE FUND
--------------------------
THE UNDERWRITER
- ---------------
Fund/Plan Broker Services, Inc. ("FPBS"), #2 West Elm Street, Conshohocken,
Pennsylvania 19428-0874, was engaged pursuant to an Underwriting Agreement,
dated November 30, 1993, for the limited purpose of acting as Underwriter to
facilitate the registration of shares of the Fund under state securities laws
and to assist in the sale of shares.
THE ADMINISTRATOR AND SUB-ADMINISTRATOR
- ---------------------------------------
Chicago Trust acts as the Company's Administrator pursuant to an
Administration Agreement with the Company. For services provided as
Administrator, Chicago Trust receives a fee at the annual rate of: 0.09% of the
first $200 million of average daily net assets of the Company; 0.05% of the next
$300 million of such average daily net assets; and 0.03% on assets in excess of
$500 million.
Pursuant to a Sub-Administration Agreement, Fund/Plan Services, Inc.
("Fund/Plan"), #2 West Elm Street, Conshohocken, Pennsylvania 19428-0874, acts
as Sub-Administrator and receives a fee equal to the annual rate paid to Chicago
Trust as Administrator.
The services provided to the Fund under these Agreements include: the
coordination and monitoring of any third parties furnishing services to the
Fund; providing the necessary office space, equipment and personnel to perform
administrative and clerical functions for the Fund; preparing, filing and
distributing proxy materials, periodic reports to shareowners, registration
statements and other documents; and responding to shareowner inquiries.
THE TRANSFER AGENT AND FUND ACCOUNTING/PRICING AGENT
- ----------------------------------------------------
Fund/Plan also performs the following duties in its capacity as Transfer
Agent to the Fund: maintains the records of shareowner's accounts; answers
shareowner inquiries concerning accounts; processes purchases and redemptions of
Fund shares; acts as dividend and distribution disbursing agent; and performs
other shareowner service functions. Shareowner inquiries should be addressed to
the Transfer Agent at (800) 992-8151.
Fund/Plan also performs certain accounting and pricing services for the
Fund, including the daily calculation of the Fund's net asset value.
THE CUSTODIAN
- -------------
UMB Bank, n.a., 928 Grand Avenue, Kansas City, Missouri 64106, is Custodian
for the cash and securities of the Fund.
EXPENSES
- --------
Expenses attributable to the Company, but not to a particular Fund thereof,
will be allocated to each Fund thereof on the basis of relative net assets, or
by other methods deemed fair and appropriate by management.
14
<PAGE>
Similarly, expenses attributable to a particular Fund, but not to a particular
class thereof, will be allocated to each class thereof on the basis of relative
net assets unless determined to be class-specific. General Company expenses may
include but are not limited to: insurance premiums; Trustee fees; expenses of
maintaining the Company's legal existence; and fees of industry organizations.
General Fund expenses may include but are not limited to: audit fees;
brokerage commissions; registration and qualification of Fund shares for sale
with the SEC and with various state securities commissions; fees of the Fund's
Custodian, Administrator, Sub-Administrator and Transfer Agent or other "service
providers"; costs of obtaining quotations of portfolio securities; and pricing
of Fund shares.
Class-specific expenses relating to distribution fee payments associated
with a Rule 12b-1 plan for a particular class of shares and any other costs
relating to implementing or amending such plan (including obtaining shareowner
approval of such plan or any amendment thereto), will be borne solely by
shareowners of such class or classes. Other expense allocations which may
differ among classes, or which are determined by the Trustees to be class-
specific, may include but are not limited to: printing and postage expenses
related to preparing and distribution of required documents such as shareowner
reports, prospectuses, and proxy statements to current shareowners of a specific
class; SEC registration fees and state "blue sky" fees incurred by a specific
class; litigation or other legal expenses relating to a specific class; Trustee
fees or expenses incurred as a result of issues relating to a specific class;
and different transfer agency fees attributable to a specific class.
Notwithstanding the forgoing, the Investment Advisor or other service
manager may waive or reimburse the expenses of a specific class or classes to
the extent permitted under Rule 18f-2 under the 1940 Act. Expenses are
allocated between the various Funds (or classes) on an equitable basis
determined in the best judgement of management.
PURCHASE OF SHARES
------------------
IN GENERAL
- ----------
Shares of the Fund may be purchased directly from the Fund at the net asset
value next determined after receipt of the order in proper form by the Transfer
Agent. The minimum initial investment is $40 million, there is no minimum
subsequent investment. There is no sales load or charge in connection with the
purchase of shares. The Company reserves the right to reject any purchase order
and to suspend the offering of shares of the Fund. The Fund also reserves the
right to vary the initial and subsequent investment minimums, or to waive the
minimum investment requirements for any investor.
Purchase orders for shares of the Fund which are received by Fund/Plan in
proper form, including money order, check or bank draft by the closing of the
New York Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern time) is open for
trading will be purchased at such Fund's net asset value determined that day. If
you invest by check, or non-federal funds wire, allow one business day after
receipt for conversion into federal funds. If you wire money in the form of
federal funds, your money will be invested at the share price next determined
after receipt of the wire. Orders for shares received in proper form after 4:00
p.m. will be priced at the net asset value determined on the next day that the
NYSE is open for trading.
MONTAG & CALDWELL GROWTH FUND offers two classes of shares. Only the Class
I shares may be purchased under this prospectus.
The Fund may accept telephone orders from broker-dealers or service
organizations which have been previously approved by the Fund. It is the
responsibility of such broker-dealers or service organizations to promptly
forward purchase orders and payments for same to the Company. Shares of the Fund
may be purchased through broker-dealers, banks, and bank trust departments which
may charge the investor a transaction fee or other fee for their services at the
time of purchase. Such fees would not otherwise be charged if the shares were
purchased directly from the Company.
15
<PAGE>
Purchases may be made in one of the following ways:
INITIAL PURCHASES BY MAIL
- -------------------------
Shares of the Fund may be purchased initially by completing the application
accompanying this Prospectus and mailing it to the Transfer Agent, together with
a check payable to "CT&T FUNDS", c/o Fund/Plan Services, Inc., #2 West Elm
Street, P.O. Box 874, Conshohocken, Pennsylvania 19428-0874.
INITIAL PURCHASES BY WIRE
- -------------------------
An investor desiring to purchase shares of the Fund by wire should call
Fund/Plan first at (800) 992-8151 and request an account number and furnish the
Fund with your tax identification number. Following such notification to
Fund/Plan, federal funds and registration instructions should be wired through
the Federal Reserve System to:
UMB BANK KC NA
ABA # 10-10-00695
FOR: FUND/PLAN SERVICES, INC.
A/C 98-7037-071-9
FBO "MONTAG & CALDWELL GROWTH FUND - CLASS I SHARES"
"SHAREOWNER NAME AND ACCOUNT NUMBER"
A completed application with signature(s) of registrant(s) must be filed
with the Transfer Agent immediately subsequent to the initial wire. Investors
should be aware that some banks may impose a wire service fee.
SUBSEQUENT INVESTMENTS
- ----------------------
Once an account has been opened, subsequent purchases may be made by mail,
bank wire, or by telephone. When making additional investments by mail, simply
return the remittance portion of a previous confirmation with your investment in
the envelope provided. Your check should be made payable to "MONTAG & CALDWELL
GROWTH FUND - CLASS I SHARES" and mailed to the CT&T Funds, c/o Fund/Plan
Services, Inc., P.O. Box 412797, Kansas City, MO 64141-2797.
All investments must be made in U.S. dollars, and, to avoid fees and
delays, checks must be drawn only on banks located in the U.S. A charge ($20
minimum) will be imposed if any check used for the purchase of shares is
returned. The Fund and Fund/Plan each reserve the right to reject any purchase
order in whole or in part.
REDEMPTION OF SHARES
--------------------
IN GENERAL
- ----------
Shares of the Fund may be redeemed without charge on any business day that
the NYSE is open for business. Redemptions will be effective at the net asset
value per share next determined after the receipt by the Transfer Agent of a
redemption request meeting the requirements described below. The Fund normally
sends redemption proceeds on the next business day, but in any event redemption
proceeds are sent within seven calendar days of receipt of a redemption request
in proper form. Payment may also be made by wire directly to any bank previously
designated by the shareowner in a shareowner account application. A shareowner
will be charged $20 for redemptions by wire. Also, please note that the
shareowner's bank may impose a fee for this wire service.
Except as noted below, redemption requests received in proper form by the
Transfer Agent prior to the close of regular trading hours on the NYSE on any
business day that the Fund calculates its per share net asset value are
effective that day.
16
<PAGE>
Redemption requests received after the close of the NYSE are effective as
of the time the net asset value per share is next determined. No redemption will
be processed until the Transfer Agent has received a completed application with
respect to the account.
The Fund will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of the Board of
Trustees, result in the necessity of the Fund to sell assets under
disadvantageous conditions or to the detriment of the remaining shareowners of
the Fund. Pursuant to the Company's Declaration of Trust, payment for shares
redeemed may be made either in cash or in-kind, or partly in cash and partly in-
kind. However, the Company has elected pursuant to Rule 18f-1 under the 1940 Act
to redeem its shares solely in cash up to the lesser of $250,000 or 1% of the
net asset value of the Fund, during any ninety-day period for any one
shareowner. Payments in excess of this limit by the Fund will also be made
wholly in cash unless the Board of Trustees believes that economic conditions
exist which would make such a practice detrimental to the best interests of the
Fund. Any portfolio securities paid or distributed in-kind would be valued as
described under "NET ASSET VALUE". In the event that an in-kind distribution is
made, a shareowner may incur additional expenses, such as the payment of
brokerage commissions, on the sale or other disposition of the securities
received from the Fund. In-kind payments need not constitute a cross-section of
the Fund's portfolio.
Shares may be redeemed in one of the following ways:
REDEMPTIONS BY MAIL
- -------------------
Shareowners may submit a written request for redemption to: CT&T Funds, c/o
Fund/Plan Services, Inc., #2 West Elm Street, P.O. Box 874, Conshohocken,
Pennsylvania 19428-0874. The request must be in good order which means that it
must: (i) identify the shareowner's account name and account number; (ii) state
the fund name, (iii) state the number of shares to be redeemed; and (iv) be
signed by each registered owner exactly as the shares are registered.
To prevent fraudulent redemptions, a signature guarantee for the signature
of each person in whose name the account is registered is required on all
written redemption requests over $10,000. A guarantee may be obtained from any
commercial bank, trust company, savings and loan association, federal savings
bank, a member firm of a national securities exchange or other eligible
financial institution. Credit unions must be authorized to issue signature
guarantees; notary public endorsements will not be accepted. The Transfer Agent
may require additional supporting documents for redemptions made by
corporations, executors, administrators, trustees, guardians, and retirement
plans.
A redemption request will not be deemed to be properly received until the
Transfer Agent receives all required documents in proper form. Questions with
respect to the proper form for redemption requests should be directed to the
Transfer Agent at (800) 992-8151.
REDEMPTIONS BY TELEPHONE
- ------------------------
Shareowners who have so indicated on the application, or have subsequently
arranged in writing to do so, may redeem shares by instructing the Transfer
Agent by telephone at (800) 992-8151.
In order to arrange for redemption by wire or telephone after an account
has been opened, or to change the bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent at the
address listed under "Redemptions by Mail" above. Such requests must be signed
by the shareowner, with signatures guaranteed (see "Redemptions by Mail" for
details regarding signature guarantees). Further documentation may be requested
from corporations, executors, administrators, trustees, or guardians.
The Fund reserves the right to refuse a wire or telephone redemption if it
is believed advisable to do so. Procedures for redeeming Fund shares by wire or
telephone may be modified or terminated at any time by the Fund. Neither the
Fund nor any of their service contractors will be liable for any loss or expense
in acting upon telephone instructions that are reasonably believed to be
genuine. In attempting to confirm that telephone instructions are genuine, the
Fund will use such procedures as are considered reasonable, including requesting
a
17
<PAGE>
shareowner to correctly state its Fund account number, the name in which its
account is registered, its tax identification number, banking institution, bank
account number, and the name in which its bank account is registered. To the
extent that the Fund fails to use reasonable procedures to verify the
genuineness of telephone instructions, it and/or its service contractors may be
liable for any such instructions that prove to be fraudulent or unauthorized.
Shares of the Fund may be redeemed through certain broker-dealers, banks
and bank trust departments who may charge the investor a transaction fee or
other fee for their services at the time of redemption. Such fees would not
otherwise be charged if the shares were redeemed from the Company.
NET ASSET VALUE
---------------
The net asset value per share of each Fund is computed as of the close of
regular trading on the NYSE on each day the NYSE is open for trading. The NYSE
is closed on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas.
The net asset value per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any liabilities
(expenses and fees are accrued daily) and dividing by the number of shares
outstanding. The portfolio securities of the Fund listed or traded on a stock
exchange are valued at the latest sale price. If no sale price is reported, the
mean of the latest bid and asked prices is used. Securities traded over-the-
counter are priced at the mean of the latest bid and asked prices. When market
quotations are not readily available, securities and other assets are valued at
fair value as determined in good faith by the Board of Trustees.
Bonds are valued through valuations obtained from a commercial pricing
service or at the most recent mean of the bid and asked prices provided by
investment dealers in accordance with procedures established by the Board of
Trustees. Options, futures and options on futures are valued at the settlement
price as determined by the appropriate clearing corporation.
DIVIDENDS AND TAXES
-------------------
DIVIDENDS
- ---------
Dividends, if any, from the Fund's net investment income will be declared
and paid quarterly. Aggregate net profits, if any, realized from the sale of
portfolio securities, are distributed at least once each year unless they are
used to offset losses carried forward from prior years, in which case no such
gain will be distributed.
Income dividends and capital gain distributions are reinvested
automatically in additional shares at net asset value, unless you elect to
receive them in cash. Distribution options may be changed at any time by
requesting a change in writing. Any check in payment of dividends or other
distributions which cannot be delivered by the Post Office or which remains
uncashed for a period of more than one year may be reinvested in the
shareowner's account at the then current net asset value and the dividend option
may be changed from cash to reinvest. Dividends are reinvested on the
ex-dividend date (the "ex-date") at the net asset value determined at the close
of business on that date. Please note that shares purchased shortly before the
record date for a dividend or distribution may have the effect of returning
capital although such dividends and distributions are subject to taxes.
Dividends paid by the Fund with respect to Class I shares are calculated in
the same manner and at the same time. Both Class N and Class I shares of the
Fund will share proportionately in the investment income and expenses of the
Fund, except that the per share dividends of Class N shares will differ from the
per share dividends of Class I shares as a result of additional distribution
expenses applicable to Class N shares.
18
<PAGE>
TAXES
- -----
The Fund intends to continue to qualify as a "regulated investment company"
under the Internal Revenue Code ("the Code"). Such qualification relieves the
Fund of liability for Federal income taxes to the extent the Fund's earnings are
distributed in accordance with the Code. The Fund is treated as a separate
entity for Federal tax purposes. Distributions of any net investment income and
of any net realized short-term capital gains are taxable to shareowners as
ordinary income. All distributions may be subject to state and local taxes.
Distributions of net capital gain (the excess of net long-term capital gain over
net short-term capital loss) are taxable to shareowners as long-term capital
gain regardless of how long a shareowner may have held shares of the Fund. The
tax treatment of distributions of ordinary income or capital gains will be the
same whether the shareowner reinvests the distributions or elects to receive
them in cash. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared in October, November or December with a
record date in such a month and paid during January of the following calendar
year. Such distributions will be taxable to shareowners in the calendar year in
which the distributions are declared, rather than the calendar year in which the
distributions are received.
Shareowners will be advised annually of the source and tax status of all
distributions for Federal income tax purposes. Dividends and distributions may
be subject to state and local income taxes. Further information regarding the
tax consequences of investing in the Fund is included in the Statement of
Additional Information. The above discussion is intended for general information
only. Investors should consult their own tax advisors for more specific
information on the tax consequences of particular types of distributions.
Redemptions of Fund shares, and the exchange of shares between Funds of the
Company, are taxable events and, accordingly, shareowners may realize capital
gains or losses on these transactions.
Shareowners may be subject to back-up withholding on reportable dividend
and redemption payments ("back-up withholding") if a certified taxpayer
identification number is not on file with the Fund, or if, to the Fund's
knowledge, an incorrect number has been furnished. An individual's taxpayer
identification number is his/her social security number.
PERFORMANCE OF THE FUND
-----------------------
IN GENERAL
- ----------
Performance may be advertised to present or prospective shareowners. The
figures are based on historical performance and should not be considered
representative of future results. The value of an investment in the Fund will
fluctuate and an investor's shares, when redeemed, may be worth more or less
than their original cost. Performance information for the Fund may be compared
to various unmanaged indices such as the Dow Jones Industrial Averages and the
Standard & Poor's 500 Stock Index, and to the performance of other mutual funds
tracked by mutual fund rating services. Further information about the
performance of the Fund is included in the Statement of Additional Information,
which may be obtained without charge by contacting the Fund at (800) 992-8151.
TOTAL RETURN
- ------------
Total Return is defined as the change in value of an investment in the Fund
over a particular period, assuming that all distributions have been reinvested.
Thus, total return reflects not only income earned, but also variations in share
prices at the beginning and end of the period. Average annual total return is
determined by computing the annual compound return over a stated period of time
that would have produced the Fund's cumulative total return over the same period
if the Fund's performance had remained constant throughout.
19
<PAGE>
GENERAL INFORMATION
-------------------
ORGANIZATION
- ------------
The Fund is a separate, diversified, series of CT&T Funds (the "Company"),
a Delaware Business Trust organized pursuant to a Trust Instrument dated
September 10, 1993. The Company is registered under the 1940 Act as an open-end
management investment company, commonly known as a mutual fund. The Trustees of
the Company may establish additional series or classes of shares without the
approval of shareowners. The assets of each series belong only to that series,
and the liabilities of each series are borne solely by that series and no other.
DESCRIPTION OF SHARES
- ---------------------
The Fund is authorized to issue an unlimited number of shares of beneficial
interest without par value. Shares of the Fund represent equal proportionate
interests in the assets of the Fund only and have identical voting, dividend,
redemption, liquidation, and other rights. All shares issued are fully paid and
non-assessable, and shareowners have no preemptive or other right to subscribe
to any additional shares and no conversion rights. Currently, there is only one
class of shares issued by the Funds of the Company, except for MONTAG & CALDWELL
GROWTH FUND. That Fund offers two classes of shares: Class I shares which are
offered by this Prospectus, and Class N shares. Class N shares are offered to
retail investors. Information about Class N shares is available by calling (800)
992-8151. As of March 22, 1996, Chicago Trust was a control person of the
Company. Pursuant to the Investment Company Act , a control person possesses the
ability to control the outcome of matters submitted for shareowner vote. See
"PRINCIPAL HOLDERS OF SECURITIES" in the Statement of Additional Information.
VOTING RIGHTS
- -------------
Each issued and outstanding full and fractional share of the Fund is
entitled to one full and fractional vote in the Fund and all shares of the Fund
participate equally in regard to dividends, distributions, and liquidations
except that Class I shares have no voting rights with respect to the
distribution plan. Shareowners do not have cumulative voting rights. On any
matter submitted to a vote of shareowners, shares of the Fund or class will vote
separately except when a vote of shareowners in the aggregate is required by
law, or when the Trustees have determined that the matter affects the interests
of the Fund, in which case the shareowners of the Fund shall be entitled to vote
thereon.
SHAREOWNER MEETINGS
- -------------------
The Trustees of the Company do not intend to hold annual meetings of
shareowners of the Fund. The Trustees have undertaken to the SEC, however, that
they will promptly call a meeting for the purpose of voting upon the question of
removal of any Trustee when requested to do so by not less than 10% of the
outstanding shareowners of the Fund. In addition, subject to certain conditions,
shareowners of the Fund may apply to the Fund to communicate with other
shareowners to request a shareowners' meeting to vote upon the removal of a
Trustee or Trustees.
CERTAIN PROVISIONS OF TRUST INSTRUMENT
- --------------------------------------
Under Delaware law, the shareowners of the Fund will not be personally
liable for the obligations of the Fund; a shareowner is entitled to the same
limitation of personal liability extended to shareowners of corporations. To
guard against the risk that the Delaware law might not be applied in other
states, the Trust Instrument requires that every written obligation of the
Company or the Fund contain a statement that such obligation may only be
enforced against the assets of the Company or Fund and provides for
indemnification out of Company or Fund property of any shareowner nevertheless
held personally liable for Company or Fund obligations.
20
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
- ------------------------------------------------
The Fund will attempt to obtain the best overall price and most favorable
execution of transactions in portfolio securities. However, subject to policies
established by the Board of Trustees of the Company, the Fund may pay a broker-
dealer a commission for effecting a portfolio transaction for the Fund in excess
of the amount of commission another broker-dealer would have charged if Montag &
Caldwell determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such broker-dealer,
viewed in terms of that particular transaction or such firm's overall
responsibilities with respect to the clients, including the Fund, as to which it
exercises investment discretion. In selecting and monitoring broker-dealers and
negotiating commissions, consideration will be given to a broker-dealer's
reliability, the quality of its execution services on a continuing basis and its
financial condition.
Subject to the foregoing considerations, preference may be given in
executing portfolio transactions for the Fund to brokers which have sold shares
of the Fund.
SHAREOWNER REPORTS AND INQUIRIES
- --------------------------------
Shareowners will receive Semi-Annual Reports showing portfolio investments
and other information as of April 30 and Annual Reports audited by independent
accountants as of October 31. Shareowners with inquiries should call the Fund at
(800) 992-8151 or write to CT&T Funds, P.O. Box 874, Conshohocken, Pennsylvania
19428.
21
<PAGE>
APPENDIX
--------
DEBT RATINGS
- ------------
MOODY'S INVESTORS SERVICE, INC. describes classifications of corporate bonds as
follows:
"Aaa" -- These bonds which are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt-
edged". Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Aa" -- These bonds are judged to be of high-quality by all standards. They are
rated lower than the best bonds because margins of protection may not be as
large as in "Aaa" securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in "Aaa" securities.
"A" -- These bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" -- These bonds considered as medium-grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
"Ba" -- These bonds are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
"B" -- These bonds generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
"Caa" -- These bonds are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
"Ca" -- These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
"C" -- These bonds are the lowest-rated class of bonds and issues so rated can
be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody's may modify a rating of "Aa", "A" OR "Baa" by adding numerical modifiers
1, 2, 3 to show relative standing within these categories.
22
<PAGE>
STANDARD & POOR'S CORPORATION describes classifications of corporate and
municipal debt as follows:
"AAA" -- This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
"AA" -- These bonds also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from the "AAA" issues only in small degree.
"A" -- These bonds have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
"BBB" -- These bonds are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the "A" category.
"BB", "B", "CCC", "CC", OR "C" -- These bonds are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. "BB"
indicates the lowest degree of speculation and "C" the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. Debt rated "B" has a greater vulnerability to
default but currently has the capacity to meet interest payments and principal
repayments. Debt rated "CCC" has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payments of interest and repayment of principal. The
rating "CC" is typically applied to debt subordinated to senior debt which is
assigned an actual or implied "CCC" rating. The rating "C" is typically applied
to debt subordinated to senior debt which is assigned an actual or implied
"CCC-" debt rating.
"CI" -- This rating is reserved for income bonds on which no interest is being
paid.
"D" -- Debt is in default, and payment of interest and/or repayment of principal
is in arrears.
PLUS (+) OR MINUS (-) -- The ratings from "AA" through "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
23
<PAGE>
INVESTMENT ADVISOR
------------------
Montag & Caldwell, Inc.
1100 Atlanta Financial Center
3343 Peachtree Road, NE
Atlanta, GA 30326-1450
UNDERWRITER
-----------
Fund/Plan Broker Services, Inc.
#2 West Elm Street
Conshohocken, PA 19428-0874
ADMINISTRATOR
-------------
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601-3294
SUB-ADMINISTRATOR AND SHAREOWNER SERVICES
-----------------------------------------
Fund/Plan Services, Inc.
#2 West Elm Street
P.O. Box 874
Conshohocken, PA 19428-0874
CUSTODIAN
---------
UMB Bank, n.a.
928 Grand Avenue
Kansas City, MO 64141
FOR ADDITIONAL INFORMATION ABOUT CT&T FUNDS, CALL: (800) 992-8151
24
