Registration Nos. 2-50843 & 811-2481
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933[ X ]
Pre-Effective Amendment No. _______ [ ]
Post-Effective Amendment No. 37 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [ X ]
Amendment No. 20 [ X ]
CAPITAL CASH MANAGEMENT TRUST
(Exact Name of Registrant as Specified in Charter)
380 Madison Avenue, Suite 2300
New York, New York 10017
(Address of Principal Executive Offices)
(212) 697-6666
(Registrant's Telephone Number)
EDWARD M.W. HINES
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue, 27th Floor
New York, New York 10176
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
___
[___] immediately upon filing pursuant to paragraph (b)
[ X ] on October 31, 1996 pursuant to paragraph (b)
[___] 60 days after filing pursuant to paragraph (a)(i)
[___] on (date) pursuant to paragraph (a)(i)
[___] 75 days after filing pursuant to paragraph (a)(ii)
[___] on (date) pursuant to paragraph (a)(ii) of Rule 485.
[___] This post-effective amendment designates a new effec-
tive date for a previous post-effective amendment.
Registrant hereby declares, pursuant to Section (a)(1) of Rule
24f-2 under the Investment Company Act of 1940, that Registrant
has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to that Section and that the Rule
24f-2 Notice for Registrant's fiscal year ended June 30, 1996 was
filed in August 1996.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
CROSS REFERENCE SHEET
Part A of
Form N-1A
Item No. Prospectus Caption(s)
1..............Cover Page
2..............Table of Expenses
3..............Financial Highlights
4..............Introduction; Investment of the Trust's
Assets; Investment Restrictions; General
Information
5..............Management Arrangements
5A.............*
6..............General Information; Dividend and Tax Infor-
mation
7..............Net Asset Value per Share; How to Invest in
the Trust; Exchange Privilege
8..............How to Redeem Your Investment; Automatic
Withdrawal Plan; Exchange Privilege
9..............*
Part B of
Form N-1A Statement of Additional Information
Item No. or Prospectus Caption(s)
10.............Cover Page
11.............Cover Page
12.............*
13.............Investment of the Trust's Assets; Investment
Restrictions;Loans of Portfolio Securities
14.............Trustees and Officers
15.............General Information (Prospectus caption)
16.............Additional Information as to Management Ar-
rangements; General Information
17.............Investment of the Trust's Assets (Prospectus
caption)
18.............General Information
19.............Limitation of Redemptions in Kind; Amortized
Cost Valuation; Computation of Daily Divi-
dends; Automatic Withdrawal Plan
20.............*
21.............How to Invest in the Trust (Prospectus cap-
tion); Distribution Plan; General Informa-
tion
22.............Yield Information; Financial Highlights (Pro-
spectus caption)
*Not applicable or negative answer
<PAGE>
Capital Cash Management Trust
380 Madison Avenue
Suite 2300
New York, NY 10017
212-697-6666
Prospectus
October 31, 1996
The Trust's objective is the best obtainable yields on
"money market" securities consistent with low capital risk. The
Trust seeks to achieve this objective by investing in a portfolio
of "money market" securities meeting specific quality standards.
Shares of the Trust may be purchased and redeemed at their
next determined net asset value, which is normally the constant
price of $1.00 per share; see "Net Asset Value Per Share."
Purchases are made without any sales charge through Aquila
Distributors, Inc., which is the exclusive Distributor of the
Trust's shares. See "How to Invest in the Trust" and "How to
Redeem Your Investment."
This Prospectus concisely states information about the
Trust that you should know before investing. A Statement of
Additional Information about the Trust dated October 31, 1996
(the "Additional Statement") has been filed with the Securities
and Exchange Commission and is available without charge upon
written request to Administrative Data Management Corp., the
Trust's Shareholder Servicing Agent, at the address given below,
or by calling the telephone number(s) given below. The Additional
Statement contains information about the Trust and its management
not included in the Prospectus. The Additional Statement is
incorporated by reference in its entirety in the Prospectus. Only
when you have read both the Prospectus and the Additional
Statement are all the material facts about the Trust available to
you.
An investment in the Trust is neither insured nor guaranteed
by the U.S. Government. There can be no assurance that the Trust
will be able to maintain a stable net asset value of $1.00 per
share.
Shares of the Trust are not deposits in, obligations of
or guaranteed or endorsed by any bank. Shares of the Trust are
not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other governmental
agency or government sponsored agency of the Federal Government
or any State.
An investment in the Trust involves investment risks,
including possible loss of principal amount invested.
For Purchase, Redemption or Account Inquiries Contact
The Trust's Shareholder Servicing Agent:
Administrative Data Management Corp.
581 Main Street, Woodbridge, NJ 07095-1198
Call 800-952-6666 toll Free or 908-855-5731
For General Inquiries & Yield Information, Call 212-697-6666
This Prospectus Should Be Read and Retained For Future Reference
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.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
TABLE OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<S>
<C>
Maximum Sales Load Imposed on Purchases. . . . . . . . . . . . . . . . . . .0%
Maximum Sales Load Imposed on Reinvested Dividend. . . . . . . . . . . . . .0%
Deferred Sales Load. . . . . . . . . . . . . . . . . . . . . . . . . . . . .0%
Redemption Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0%
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0%
ANNUAL TRUST OPERATING EXPENSES*
(as a percentage of average net assets)
Investment Advisory Fee After Waiver + . . . . . . . . . . . . . . . . . . 0%
12b-1 Fee ++ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0%
Total Other Expenses After Expense Reimbursement and
Fee Waiver +. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40%
Administration Fee After Waiver + . . . . . . . . . . . 0.00%
Other Expenses After Expense Reimbursement + . . . . . . 0.40%
Total Trust Operating Expenses After Expense Reimbursement
and Fee Waivers + . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40%
<S> <C> <C> <C> <C>
Example** 1 year 3 years 5 years 10 years
You would pay the following
expenses on a $1,000
investment, assuming (1) 5%
annual return and (2)
redemption at the end of
each time period $4 $13 $22 $51
<FN>
*Based upon amounts incurred during the most recent fiscal year of the Trust.
</FN>
<FN>
+Absent fee waiver, investment advisory fees would have been incurred at the
rate of 0.20% of average net assets. Also absent administration fee waiver,
administration fees would have been incurred at the rate of 0.15% of average
net assets and other expenses would have included those fees. Absent any fee
waiver or expense reimbursement, total Trust operating expenses for the year
would have been incurred at the annual rate of 5.75%. In general, operating
expense ratios decrease substantially as Trust asset size increases.
</FN>
<FN>
++ The 12b-1 Plan of the Trust does not involve payments out of the assets or
income of the Trust designed to recognize sales of shares of the Trust or to
pay advertising expenses.
</FN>
<FN>
** The expense example is based upon an amount at the beginning of each year
which includes the prior year's assumed results. A year's results consist of
an assumed 5% annual return less expenses at a 0.40% annual rate; the expense
ratio was applied to an assumed average balance (the year's starting
investment plus one-half the year's results). Each column represents the
cumulative expenses so determined for the period specified.
</FN>
</TABLE>
THE EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
SECURITIES AND EXCHANGE COMMISSION SPECIFIES THAT ALL MUTUAL FUNDS USE THE 5%
ANNUAL RATE OF RETURN FOR PURPOSES OF PREPARING THE ABOVE EXAMPLE.
The purpose of the above table is to assist the investor in understanding the
various costs and expenses that an investor in the Trust will bear directly
or indirectly. The Administrator of the Trust has undertaken to waive fees
and reimburse the Trust to the extent that annual expenses exceed 0.60 of 1%
of average annual net assets in any fiscal year. Although not obligated to do
so, in addition to complying with the requirements of applicable agreements,
those entitled to invest advisory and administration fees may continue to
waive a portion or all of those fees and may continue to reimburse the Trust
for various expenses; the above table reflects one such possible arrangement
and should not be understood as a commitment or prediction that any fees, or
that any particular portion of fees, will be waived, or that any particular
expenses will be reimbursed. (See "Management Arrangements" for a more
complete description of the various management fees.) Nor should the assumed
5% annual return be interpreted as a prediction of an actual return, which
may be higher or lower.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
(FORMERLY CENTENNIAL CAPITAL CASH MANAGEMENT TRUST)
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following table of Financial Highlights as it relates to the five
years ended June 30, 1996 has been audited by KPMG Peat Marwick LLP,
independent auditors, whose report thereon is included in the Trust's
financial statements contained in its Annual Report, which are incorporated
by reference into the Additional Statement. The information provided in the
table should be read in conjunction with the financial statements and related
notes.++
Year ended June 30,
1996 1995* 1994* 1993*
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Year $1.0000 $1.0000 $1.0000 $1.0000
Income from
Investment Operations:
Net investment
income 0.0518 0.0497 0.0309 0.0310
Less Distributions:
Dividends from net
investment income (0.0518) (0.0497) (0.0309) (0.0310)
Net Asset Value,
End of Year........... $1.0000 $1.0000 $1.0000 $1.0000
Total Return 5.29% 5.09% 3.14% 3.14%
Ratios/Supplemental
Data
Net Assets,
End of Year (in
thousands) $1,765 $1,660 $1,713 $1,744
Ratio of Expenses
to Average Net
Assets 0.40% 0.40% 0.28% 0.09%
Ratio of Net
Investment
Income to Average
Net Assets........... 5.17% 5.00% 3.08% 3.11%
* Net investment income per share and the ratios of income and expenses to
average net assets without the Adviser's and Administrator's voluntary waiver
of fees, the Administrator's voluntary expense reimbursement and the
reimbursement by the former sub-adviser and administrator for the cost of a
security that was sold before maturity in 1989 would have been:
Net Investment
Income (loss) ($0.0018) $0.0038 ($0.0137) ($0.0221)
Ratio of Expenses
to Average Net
Assets 5.75% 5.02% 4.73% 5.41%
Ratio of Net
Investment Income
to Average Net
Assets................ (0.18%) 0.38% (1.37%) (2.21%)
<CAPTION>
1992* 1991* 1990* 1989* 1988 1987
<C> <C> <C> <C> <C> <C>
$1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
0.0448 0.0684 0.0806 0.0823 0.0632 0.0574
(0.0448) (0.0684) (0.0806) (0.0823) (0.0632) (0.0574)
$1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
4.57% 7.06% 8.36% 8.54% 6.50% 5.89%
$2,088 $2,403 $2,305 $2,977 $129,796 $101,333
0.10% 0.24 0.34% 0.61% 0.70% 0.69%
4.52% $6.85 8.07% 7.39% 6.32% 5.75%
(0.0104) $0.0320 $0.0449 $0.0746
5.68% 3.89% 3.92%+ 1.30%
(1.05%) 3.20% 4.50%+ 6.68%
<FN>
+ Restated to eliminate certain excess portfolio management and record-
keeping expenses.
</FN>
<FN>
++ On August 1, 1988, STCM Management Company, Inc. assumed portfolio
management functions, replacing HT Investors, Inc.
</FN>
The Trust's "current yield" for the seven days ended June 30, 1996 was 4.92%
and its "compounded effective yield" for that period was 5.04%; see the
Additional Statement for the methods of calculating these yields.
</TABLE>
<PAGE>
INTRODUCTION
The Trust is an open-end diversified investment company
organized in 1976 as a Massachusetts business trust, designed to
suit the cash management needs of individuals, corporations,
institutions and fiduciaries.
Cash of investors may be invested in shares of the Trust as
an alternative to idle funds, direct investments in savings
deposits, or short-term debt securities. The Trust offers the
opportunity to keep cash reserves fully invested and provides you
with a professionally managed portfolio of money market
instruments which may be more diversified, higher yielding, more
stable and more liquid than you might be able to obtain on an
individual basis. Through the convenience of a single security
consisting of shares of the Trust, you are also relieved of the
inconvenience of making direct investments, including the
selection, purchasing and handling of securities.
INVESTMENT OF THE TRUST'S ASSETS
The objective of the Trust is to achieve the best obtainable
yields on "money market" securities consistent with low capital
risk. There is no assurance that the Trust will achieve this
objective, which is a fundamental policy of the Trust.
In addition to the requirements of the Trust's management
policies, all obligations and instruments purchased by the Trust
must meet the requirements of Rule 2a-7 (the "Rule") of the
Securities and Exchange Commission under the Investment Company
Act of 1940 (the "1940 Act"). The provisions of the Rule that
affect portfolio management are summarized under "Effect of the
Rule on Portfolio Management," below. In brief, the Rule's
provisions for quality, diversity and maturity require the Trust
to limit its investments to those instruments which the Trust's
investment adviser (the "Adviser") determines (pursuant to
procedures approved by the Board of Trustees) present minimal
credit risks, and which at the time of purchase are Eligible
Securities. In general, the Rule defines as Eligible Securities
those that at the time of purchase are rated in the two highest
rating categories for short-term securities by any two of the
nationally recognized statistical rating organizations ("NRSROs")
or unrated securities determined by the Board of Trustees to be
of comparable quality. See Appendix A to the Additional Statement
for a description of the NRSROs and the factors considered by
them in determining ratings. Eligible Securities so rated in the
highest rating category (or unrated securities of comparable
quality) are called "First Tier Securities"; all other Eligible
Securities are called "Second Tier Securities." The Rule also
requires that the dollar-weighted average maturity of the Trust's
portfolio cannot exceed 90 days and that the Trust cannot
purchase any security having a remaining maturity in excess of
397 days. The Rule also contains limits on the percentage of the
Trust's assets that can be invested in the securities of any
issuer. See "Effect of the Rule on Portfolio Management," below.
Management Policies
The Trust seeks to achieve its investment objective through
investments in the types of instruments described in the
management policies listed below. Under the current management
policies, the Trust invests only in the following types of
obligations:
(1) U.S. Government Securities: Obligations issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities; these obligations are referred to in the
Prospectus as "U.S. Government Securities"; see "Information On
U.S. Government Securities" below.
(2) Bank Obligations and Instruments Secured by Them: Bank
obligations that are First Tier Securities including time
deposits, certificates of deposit, bankers' acceptances and other
bank (see below for definition) obligations, and which are (i)
obligations of banks subject to regulation by the U.S. Government
having total assets of at least $1.5 billion, which may be
obligations issued by domestic banks, by foreign branches of such
banks or by U.S. subsidiaries of foreign banks; (ii) obligations
of any foreign bank having total assets equivalent to at least
$1.5 billion; or (iii) obligations ("insured bank obligations")
if such obligations are fully insured as to principal by the
Federal Deposit Insurance Corporation; (see "Information on
Insured Bank Obligations" in the Additional Statement); the Trust
may also invest in obligations secured by any obligations set
forth in (i) or (ii) above if such investment meets the
requirements of (6) below. (In the Prospectus and in the
Additional Statement, a bank includes commercial banks, savings
banks and savings and loan associations.)
(3) Commercial Paper Obligations: Commercial paper
obligations that are First Tier Securities; see "Effect of the
Rule on Portfolio Management," below.
(4) Corporate Debt Obligations: Corporate debt obligations
(for example, bonds and debentures) which are First Tier
Securities and which at the time of purchase have a remaining
maturity of not more than 397 days. See "Effect of the Rule on
Portfolio Management." See Appendix A to the Additional Statement
for information about bond ratings.
(5) Variable Amount and Master Demand Notes: Variable amount
master demand notes that are First Tier Securities and which are
redeemable (and thus repayable by the borrower) at principal
amount, plus accrued interest, at any time. Variable amount
master demand notes may or may not be backed by bank letters of
credit. (Because variable amount master demand notes are direct
lending arrangements between the lender and borrower, it is not
generally contemplated that they will be traded, and there is no
secondary market for them; see the Additional Statement for
further information on these notes.)
(6) Certain Other Obligations: Obligations other than those
listed in 1 through 5 above only if such other obligations are
guaranteed as to principal and interest by either a bank in whose
obligations the Trust may invest (see 2 above) or a corporation
in whose commercial paper the Trust may invest (see 3 above). See
"Effect of the Rule on Portfolio Management." If the Trust
invests more than 5% of its net assets in such other obligations,
the Prospectus will be supplemented to describe them. See the
Additional Statement.
(7) Repurchase Agreements: The Trust may purchase securities
subject to repurchase agreements provided that such securities
consist entirely of U.S. Government securities or securities
that, at the time the repurchase agreement is entered into, are
rated in the highest rating category by the requisite NRSROs.
Repurchase agreements may be entered into only with commercial
banks or broker-dealers. Subject to the control of the Board of
Trustees, the Adviser will regularly review the financial
strength of all parties to repurchase agreements with the Trust.
See "Information about Repurchase Agreements," below.
(8) When-Issued or Delayed Delivery Securities: The Trust
may buy securities on a when-issued or delayed delivery basis;
the securities so purchased are subject to market fluctuation and
no interest accrues to the Trust until delivery and payment take
place; their value at the delivery date may be less than the
purchase price. The Trust may not enter into when-issued
commitments exceeding in the aggregate 15% of the market value of
the Trust's total assets, less liabilities other than the
obligations created by when-issued commitments. See the
Additional Statement for further information.
Shareholder approval is not required to change any of the
foregoing management policies.
Information On U.S. Government Securities
U.S. Government Securities (i.e., obligations issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities) include securities issued by the U.S.
Government, which in turn include Treasury Bills (which mature
within one year of the date they are issued) and Treasury Notes
and Bonds (which are issued with longer maturities). All Treasury
securities are backed by the full faith and credit of the United
States.
U.S. Government agencies and instrumentalities that issue or
guarantee securities include, but are not limited to, the
Export-Import Bank of the United States, Farmers Home
Administration, Federal Farm Credit System, Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation, Federal Housing
Administration, Federal National Mortgage Association, Government
National Mortgage Association, Small Business Administration,
Student Loan Marketing Association and the Tennessee Valley
Authority.
Securities issued or guaranteed by U.S. Government agencies
and instrumentalities are not always supported by the full faith
and credit of the United States. Some, such as securities issued
by the Federal Home Loan Banks, are backed by the right of the
agency or instrumentality to borrow from the U.S. Treasury.
Others, such as securities issued by the Federal National
Mortgage Association, are supported only by the credit of the
instrumentality and not by the U.S. Treasury. If the securities
are not backed by the full faith and credit of the United States,
the owner of the securities must look principally to the agency
issuing the obligation for repayment and may not be able to
assert a claim against the United States in the event that the
agency or instrumentality does not meet its commitment. The Trust
will invest in government securities, including securities of
agencies and instrumentalities, only if the Adviser (pursuant to
procedures approved by the Board of Trustees) is satisfied that
these obligations present minimal credit risks. See "Effect of
the Rule on Portfolio Management," below, for a discussion of the
determination of minimal credit risks in connection with the
purchase of portfolio securities.
Repurchase Agreements
Under a repurchase agreement, at the time the Trust
purchases a security, the Trust also resells it to the seller and
must deliver the security (or securities substituted for it) to
the seller on an agreed-upon date in the future. (The securities
so resold or substituted are referred to herein as the "Resold
Securities.") The resale price is in excess of the purchase price
in that it reflects an agreed-upon market interest rate effective
for the period of time during which the Trust's money is invested
in the Resold Securities. The majority of these transactions run
from day to day, and the delivery pursuant to the resale
typically will occur within one to five days of the purchase.
Repurchase agreements can be considered as loans
"collateralized" by the Resold Securities, such agreements being
defined as "loans" in the 1940 Act. The return on such
"collateral" may be more or less than that from the repurchase
agreement. The Resold Securities under any repurchase agreement
will be marked to market every business day so that the value of
the "collateral" is at least equal to the resale price provided
in the agreement, including the accrued interest earned thereon,
plus sufficient additional market value as is considered
necessary to provide a margin of safety. During the term of the
repurchase agreement, the Trust or its custodian either has
actual physical possession of the Resold Securities or, in the
case of a security registered in book entry system, the book
entry is maintained in the name of the Trust or its custodian.
The Trust retains an unqualified right to possess and sell the
Resold Securities in the event of a default by the other party.
In the event of bankruptcy or other default by the other
party, there may be possible delays and expenses in liquidating
the Resold Securities, decline in their value and loss of
interest. If the maturity of the Resold Securities is such that
they cannot be owned by the Trust under the applicable provisions
of the Rule they will have to be sold, which could result in a
loss. See "Effect of the Rule on Portfolio Management."
Information On Insured Bank Obligations
The Federal Deposit Insurance Corporation ("FDIC") insures
the deposits of Federally insured banks, and effective August 9,
1989, savings institutions (collectively, herein, "banks") up to
$100,000. On that date, the FDIC assumed the insurance functions
of the Federal Savings and Loan Insurance Corporation, which was
abolished. The Trust may purchase bank obligations which are
fully insured as to principal by the FDIC. To remain fully
insured as to principal, these investments must currently be
limited to $100,000 per bank; if the principal amount and accrued
interest together exceed $100,000, then the excess accrued
interest will not be insured. Insured bank obligations may have
limited marketability; unless the Board of Trustees determines
that a readily available market exists for such obligations, the
Trust will invest in them only within the 10% limit mentioned
below unless such obligations are payable at principal amount
plus accrued interest on demand or within seven days after
demand.
Information On Foreign Obligations
Investments, which must be denominated in U.S. dollars, in
foreign banks and foreign branches of United States banks involve
certain risks. While domestic banks are required to maintain
certain reserves and are subject to other regulations, such
requirements and regulations may not apply to foreign branches.
Investments in foreign banks and foreign branches of domestic
banks may also be subject to other risks, including future
political and economic developments, less available information,
the possible imposition of withholding taxes on interest income,
the seizure or nationalization of foreign deposits and the
establishment of exchange controls or other restrictions.
Limitation to 10% as to Certain Investments
Due to their possible limited liquidity, the Trust may not
make certain investments if thereafter more than 10% of its net
assets would consist of such investments. The investments
included in this 10% limit are (i) repurchase agreements maturing
in more than seven days; (ii) fixed time deposits subject to
withdrawal penalties other than overnight deposits; (iii)
restricted securities, i.e., securities which cannot freely be
sold for legal reasons (which the Trust does not expect to own);
(iv) securities for which market quotations are not readily
available; and (v) insured bank obligations unless the Board of
Trustees determines that a readily available market exists for
such obligations. However, this 10% limit does not include any
obligations payable at principal amount plus accrued interest on
demand or within seven days after demand.
Factors Which May Affect the Value of
the Trust's Investments and Their Yields
The value of the obligations and instruments in which the
Trust invests will fluctuate depending in large part on changes
in prevailing interest rates. If the prevailing interest rates go
up after the Trust buys a security, the value of the security may
go down; if these rates go down, the value of the security may go
up. Changes in value and yield based on changes in prevailing
interest rates may have different effects on short-term
obligations than on long-term obligations. Long-term obligations
(which often have higher yields) may fluctuate in value more than
short-term ones.
Portfolio Transactions
The Trust will seek to obtain the best net price and the
most favorable execution of orders. Purchases will be made
directly from issuers or from underwriters, dealers or banks
which specialize in the types of securities invested in by the
Trust. As most purchases made by the Trust are principal
transactions at net prices, the Trust incurs little or no
brokerage costs. Purchases from underwriters will include a
commission or concession paid by the issuer to the underwriter
and purchases from dealers may include the spread between the bid
and the asked price. If the execution and price offered by more
than one dealer are comparable, the order may be allocated to a
dealer which has provided research advice such as information on
particular companies and industries and market, economic and
institutional activity. By allocating transactions to obtain
research services, the Trust enables the Adviser to supplement
its own research and analyses with the views and information of
other securities firms. Such research services, whether or not
useful to the Trust, may be useful to other accounts managed by
the Adviser or its affiliates.
Effect of the Rule on Portfolio Management
As a money market fund, the Trust operates under the Rule,
which allows the Trust to use the "amortized cost" method of
valuing its securities and which contains certain risk limiting
provisions, including requirements as to maturity, quality and
diversification of the Trust's portfolio. Some of the most
important aspects of the Rule are described below.
Under the Rule, the Trust must limit its investments to
those instruments which are denominated in U.S. dollars, which
are determined by the Board of Trustees to present minimal credit
risks, and which, at the time of purchase, are Eligible
Securities. In accordance with the Rule, the Board of Trustees
has adopted investment procedures and has approved investment
policies pursuant to which all investment determinations have
been delegated to the Adviser, under the direction and control of
the Board of Trustees, except for those matters for which the
Rule requires Board determination.
In general, the Rule defines as Eligible Securities those
that at the time of purchase are rated in the two highest rating
categories for short-term securities by any two of the NRSROs, or
if unrated are determined by the Board of Trustees to be of
comparable quality. Eligible Securities so rated in the highest
rating category (and unrated securities determined by the Board
of Trustees to be of comparable quality) are called "First Tier
Securities"; all other Eligible Securities are called "Second
Tier Securities." Eligible Securities can in some cases include
securities rated by only one NRSRO and unrated obligations that
are determined by the Board of Trustees to be of comparable
quality to rated securities. A security that was long-term when
issued must at the time of purchase by the Trust have either a
short-term rating such that it is an Eligible Security, be
comparable in priority and security with a rated short-term
obligation of the same issuer that is an Eligible Security or if
it has no short-term rating (and does not have a long-term rating
from any NRSRO below the highest rating) if it is determined by
the Board of Trustees to be of comparable quality to rated
securities the Trust could purchase. Purchase of any security
rated by only one NRSRO and purchase of any unrated security
(except U.S. Government Securities) must be ratified by the Board
of Trustees.
The Rule requires (with limited exceptions) that immediately
after purchase of any security, the Trust have invested not more
than 5% of its assets in the securities of any one issuer.
Moreover, the Rule provides that the Trust cannot have more than
5% of its assets in the aggregate invested in Second Tier
Securities, nor more than the greater of 1% of its assets or
$1,000,000 invested in Second Tier Securities of any single
issuer. In general, the Trust does not intend to own Second Tier
Securities. The Rule has specific provisions relating to
determinations of the eligibility of certain types of instruments
such as repurchase agreements and instruments subject to a demand
feature. It also has specific provisions for determining the
issuer of a security for purposes of compliance with the
diversification requirements.
Generally, under the Rule, the maturity of an instrument is
considered to be its stated maturity (or in the case of an
instrument called for redemption, the date on which the
redemption payment must be made). There are special rules for
determining the maturity of certain kinds of instruments. The
Rule contains provisions as to the maturity of variable rate and
floating rate instruments. Repurchase agreements and securities
loan agreements are, in general, treated as having a maturity
equal to the period remaining until they can be executed.
The Rule has provisions requiring specific actions whenever
the rating of a portfolio security is downgraded. Generally,
these actions include a prompt reassessment by the Board of
Trustees of the credit risks associated with such a security. In
general, the Rule mandates prompt sale or other disposition,
e.g., by exercising a demand for payment, in certain cases, such
as when a security ceases to be an Eligible Security, no longer
presents minimal credit risks or suffers a financial default.
INVESTMENT RESTRICTIONS
The Trust has a number of policies about what it can and
cannot do. Certain of these policies, identified in the
Prospectus and Additional Statement as "fundamental policies,"
cannot be changed unless the holders of a "majority," as defined
in the 1940 Act, of the Trust's outstanding shares vote to change
them. (See the Additional Statement for a definition of such a
majority.) All other policies can be changed from time to time
without shareholder approval. Some of the more important of the
Trust's fundamental policies, not otherwise identified in the
Prospectus are set forth below; others are listed in the
Additional Statement.
1. The Trust has diversification and anti-concentration
requirements.
The Trust cannot buy the securities of any issuer if it
would then own more than 10% of the total value of all of the
issuer's outstanding securities.
The Trust cannot buy the securities (not including U.S.
Government Securities) of any issuer if more than 5% of its total
assets (valued at market value) would then be invested in
securities of that issuer. In addition, the Rule limits
investment in Second Tier Securities to 5% of the Trust's assets
in the aggregate, and to no more than the greater of 1% of the
Trust's assets or $1,000,000 in the securities of any one issuer.
The Trust cannot buy the securities of issuers in any one
industry if more than 25% of its total assets would then be
invested in securities of issuers in that industry (see the
Additional Statement); U.S. Government Securities and those
domestic bank obligations and instruments of domestic banks which
the Trust may purchase (see "Investment of the Trust's Assets")
are considered as not included in this limit; however,
obligations of foreign banks and of foreign branches of domestic
banks are considered as included in this limit.
2. The Trust can make loans only by lending securities or
entering into repurchase agreements.
The Trust can buy those debt securities which it is
permitted to buy (see "Investment of the Trust's Assets"); this
is investing, not making a loan. The Trust can lend its portfolio
securities on a collateralized basis up to 10% of the value of
its total assets (see the Additional Statement) and enter into
repurchase agreements (see "Repurchase Agreements" above). While
the Trust can lend up to 10% of its portfolio, it does not
currently foresee lending more than 5% of its portfolio. The
Trust will not purchase any securities subject to a repurchase
agreement if thereafter more than 10% of its total assets would
be invested in such securities subject to repurchase agreements
calling for delivery in more than seven days. The Trust may be
considered as the beneficial owner of the loaned securities in
that any gain or loss in their market price during the loan
inures to the Trust and its shareholders; thus, when the loan is
terminated, the value of the securities may be more or less than
their value at the beginning of the loan.
3. The Trust can borrow only in limited amounts for special
purposes.
The Trust can borrow from banks for temporary or emergency
purposes but only up to 10% of its total assets. It can mortgage
or pledge its assets only in connection with such borrowing and
in amounts not in excess of 15% of its assets at the time of such
borrowing. Interest on borrowings would reduce the Trust's
income. Except in connection with borrowings, the Trust will not
issue senior securities.
NET ASSET VALUE PER SHARE
The Trust's net asset value per share is determined as of
4:00 p.m. New York time on each day that the New York Stock
Exchange is open by dividing the value of the net assets of the
Trust (i.e., the value of the assets less liabilities, exclusive
of surplus) by the total number of shares outstanding.
The net asset value per share will normally remain constant
at $1.00 per share except under extraordinary circumstances; see
the Additional Statement for a discussion of the extraordinary
circumstances which could result in a change in this fixed share
value. The net asset value per share is based on a valuation of
the Trust's investments at amortized cost; see the Additional
Statement.
HOW TO INVEST IN THE TRUST
The Trust's shares are sold on a continuous basis at the net
asset value next determined after an order is entered and deemed
effective. There is no sales charge. The minimum initial
investment is $1,000. Subsequent investments may be in any
amount. Aquila Distributors, Inc. (the "Distributor") is the
exclusive Distributor of the Trust's shares. The Distributor
sells shares only for purchase orders received.
Opening an Account
To open a new account you must send a properly completed
Application to Administrative Data Management Corp. (the
"Agent"). Redemption of shares purchased by wire payment will not
be honored until a properly completed Application has been
received by the Agent. Initial investments may be made in any of
these three ways:
1. By Mail. Payment may be made by check, money order,
Federal Reserve Draft, or other negotiable bank draft drawn
in United States dollars on a United States commercial or
savings bank or credit union (each of which is a "Financial
Institution") payable to the order of Capital Cash
Management Trust and mailed to:
Capital Cash Management Trust
Administrative Data Management Corp.
Attn: Aquilasm Group of Funds
581 Main Street
Woodbridge, NJ 07095-1198
2. By Wire. Payment may be wired in Federal funds (monies
credited to a bank's account with a Federal Reserve Bank) to
Bank One Trust Company, N.A. (the "Custodian"), which serves
as custodian of the Trust's assets.
To insure prompt and proper crediting to your account, if
you choose this method of payment, you should first telephone the
Agent (800-952-6666 toll free or 908-855-5731) and then instruct
your bank to wire funds as indicated below:
Bank One, Columbus
ABA No. 044000037
CR A/C 04-01787
For further credit to
Capital Cash Management Trust
A/C 6801358000
Account Name and Number (if an existing account)
The name in which the investment is to be registered
(if a new account).
Your bank may impose a charge for wiring funds.
3. Through Brokers. You may invest in the Trust by
purchasing shares through registered broker-dealers.
There is no sales or service charge imposed by the Trust,
although broker-dealers may make reasonable charges to their
customers for their services. The services to be provided and the
fees therefor are established by each broker-dealer acting
independently; broker-dealers may also determine to establish, as
to accounts serviced by them, higher initial or subsequent
investment requirements than those required by the Trust.
Broker-dealers are responsible for prompt transmission of orders
placed through them.
Additional Investments
You may make additional investments in any amount after an
account has been established by mailing directly to the Agent a
check, money order or other negotiable bank draft made payable to
Capital Cash Management Trust, or by wiring funds as described
above. In each case you should indicate your name and account
number to insure prompt and proper crediting of your account. The
pre-printed stub attached to the Trust's confirmations is
provided as a convenient identification method to accompany
additional investments made by mail. You may also make subsequent
investments of $50 or more using electronic funds transfers from
your demand account at a Financial Institution if it is a member
of the Automated Clearing House and if the Agent has received a
completed Application designating this feature, or, after your
account has been opened, a Ready Access Features form available
from the Distributor or the Agent. A pre-determined amount can be
regularly transferred for investment ("Automatic Investment") or
single investments can be made upon receipt by the Agent of
telephone instructions from anyone ("Telephone Investment"). The
maximum amount of each Telephone Investment is $50,000. Upon 30
days' written notice to shareholders, the Trust may modify or
terminate these investment methods at any time or charge a
service fee, although no such fee is currently contemplated.
When Shares Are Issued and Dividends Are Declared On Them
There are three methods as to when shares are issued. Under
each method, shares are issued at the net asset value per share
next determined after the purchase order is effective, as
discussed below. Under each method, the Application must be
properly completed and have been received and accepted by the
Agent; the Trust or the Distributor may also reject any purchase
order. Under each method, Federal funds (see above) must either
be available to the Trust or the payment thereof must be
guaranteed to the Trust so that the Trust can be as fully
invested as practicable.
The first method under which shares are issued involves
ordinary investments. Under this method, payments transmitted by
wire in Federal funds and payments made by Federal Reserve Draft
received by the Custodian prior to 4:00 p.m. New York time on any
day on which the New York Stock Exchange is open will be invested
(i.e., the purchase order will be effective) at the net asset
value per share determined as of 4:00 p.m. on that day; if either
such type of payment is received after that time, the purchase
order will be effective as of 4:00 p.m. on the next day that the
exchange is open. Wire payments not in Federal funds will
normally be converted into Federal funds on the next day such
exchange is open and the purchase order will be effective as of
4:00 p.m. on such next day. Payments transmitted by check will
normally be converted to Federal funds by the Agent, as your
agent, within two business days for checks drawn on a member bank
of the Federal Reserve System, and longer for most other checks,
and the purchase orders will be effective as of 4:00 p.m. on that
day if the exchange is open and otherwise at 4:00 p.m. on the
next day the exchange is open after such conversion. All checks
are accepted subject to collection at full face value in United
States funds and must be drawn in United States dollars on a
United States bank; if not, shares will not be issued. Purchases
by Automatic Investment and Telephone Investment will be executed
on the first day on which that exchange is open occurring on or
after the date an order is considered received by the Agent at
the net asset value determined on that day. In the case of
Automatic Investment the order will be executed on the date you
specified for investment at the price determined on that day,
unless it is not a day on which that exchange is open, in which
case the order will be executed at the net asset value determined
on the next day on which that exchange is open. In the case of
Telephone Investment the order will be filled at the next
determined net asset value, which for orders placed after the
time for determining the net asset value of the Trust's shares
for any day will be the price determined on the following day on
which the exchange is open. Dividends on shares issued under this
first investment method are declared starting on the day (whether
or not a business day) after the purchase order is effective and
are declared on the day on which the shares are redeemed.
The second method under which shares are issued involves a
bank or broker-dealer making special arrangements with the Trust
under which (i) either (a) payment is made in Federal funds or by
check in New York Clearing House funds delivered to the Agent
prior to 5:00 p.m. New York time or (b) the Agent is advised
prior to that time of a dollar amount to be invested; (ii) the
Agent is advised prior to that time of the form of registration
of the shares to be issued; (iii) the bank or broker-dealer will,
prior to noon New York time on the next business day, wire
Federal funds to the Custodian (but in the case of prior payment
by check under (i)(a) above only if the check is not converted
into Federal funds in the normal course of the next business
day); and (iv) arrangements satisfactory to the Trust are made
between it and the bank or broker-dealer under which if Federal
funds are not so received by the Custodian, the Trust is
reimbursed for any costs or loss of income arising out of such
non-receipt. New York Clearing House funds are funds represented
by a check drawn on a bank which is a member of the New York
Clearing House. Under this second method, the purchase order is
effective on the day the check or the advice is received under
(i) above. Dividends on shares issued under this second method
are declared starting on the day (whether or not a business day)
after the purchase order is effective and are declared on the day
on which such shares are redeemed.
The third method under which shares are issued involves
broker-dealers or banks which have requested that this method be
used, to which request the Trust has consented. Under this third
method (i) the Agent must be advised prior to noon New York time
on any business day of a dollar amount to be invested; and (ii)
Federal funds must be wired to the Custodian on that day; under
this method, the purchase order is effective on that day.
Dividends on shares issued under this third investment method are
declared beginning on that day but not on the day such shares are
redeemed.
This third investment method is available for prospective
investors in Trust shares who wish to use it so that the
dividends on their shares will commence to be declared on the day
the purchase order is effective. Upon written or phone request to
the Trust by such a prospective investor, the Trust will advise
as to the broker-dealers or banks through which such purchases
may be made.
The Agent will maintain records as to which of your shares
were purchased under each of the three investment methods set
forth above. If you make a redemption request and have purchased
shares under methods (1) and/or (2) and other shares under method
(3), the Agent will, unless you otherwise request as to such
redemption, redeem those shares first purchased, regardless of
the method under which they were purchased.
Confirmations and Share Certificates
All purchases of shares will be confirmed and credited to
you in an account maintained for you by the Agent in full and
fractional shares of the Trust (rounded to the nearest 1/1000th
of a share). Share certificates will not be issued unless you so
request from the Agent in writing and declare a need for such
certificates, such as a pledge of shares or an estate situation.
If certificates are issued at your request, Expedited Redemption
Methods described below will not be available. In addition, you
may incur delay and expense if you lose the certificates.
Certificates will not be issued for fractional shares or if you
have elected Automatic Investment or Telephone Investment (see
"How to Invest in the Trust" above) or Expedited Redemption (see
"How to Redeem Your Investment" below).
The Trust and the Distributor reserve the right to reject
any order for the purchase of shares. In addition, the offering
of shares may be suspended at any time and resumed at any time
thereafter.
Distribution Plan
The Trust has adopted a Distribution Plan (the "Plan") under
Rule 12b-1 ("Rule 12b-1") under the 1940 Act. No payments are
made by the Trust under the Plan. Rule 12b-1 provides in
substance that an investment company may not engage directly or
indirectly in financing any activity which is primarily intended
to result in the sale of its shares except pursuant to a written
plan adopted under that rule. The first part of the Plan is
designed to protect against any claim against or involving the
Trust that some of the expenses which the Trust pays or may pay
come within the purview of Rule 12b-1. Another part of the Plan
authorizes Aquila Management Corporation, the Trust's
Administrator (the "Administrator"), not the Trust, to make
payments to a class of entities, including membership
organizations and associations of common interest which render
assistance in servicing of shareholder accounts or in consulting
or otherwise cooperating as to their members or others in their
area of interest at the annual rate of a maximum of 0.10 of 1% of
the average annual net assets of the Trust; see the Additional
Statement for further information.
The Trust's Plan is solely a defensive plan designed to
protect the Trust and its affiliates against any claim described
above. The Plan does not involve payments out of the assets or
income of the Trust designed to recognize sales of shares of the
Trust or to pay advertising expenses.
HOW TO REDEEM YOUR INVESTMENT
The Trust provides day-to-day liquidity. You may redeem all
or any part of your shares at any time at the net asset value
next determined after acceptance of your redemption request at
the Agent. Redemptions can be made by the various methods
described below. Except for shares recently purchased by check as
discussed below, there is no minimum time period for any
investment in the Trust. There are no redemption fees or
withdrawal penalties. If you purchase shares of the Trust through
broker-dealers, banks and other financial institutions which
serve as shareholders of record you must redeem through those
institutions, which are responsible for prompt transmission of
redemption requests. In all other cases, you may redeem directly,
but a completed purchase Application must have been received by
the Agent before redemption requests can be honored. A redemption
may result in a taxable transaction to you, but only if there has
been a change in the net asset value per share, which will occur
only under extraordinary circumstances.
For your convenience the Trust offers expedited redemption
to provide you with a high level of liquidity for your
investment.
Expedited Redemption Methods
(Non-Certificate Shares)
You have the flexibility of three expedited methods of
initiating redemptions. These are available as to shares not
represented by certificates.
1. By Telephone. The Agent will accept instructions by
telephone from anyone to redeem shares and make payments to
a Financial Institution account you have predesignated. See
"Redemption Payments," below for payment methods. Your name
and your account number must be supplied.
To redeem an investment by this method, telephone:
800-952-6666 toll-free or 908-855-5731
Note: The Trust, the Agent, and the Distributor will not be
responsible for any losses resulting for unauthorized telephone
transactions if the Agent follows reasonable procedures designed
to verify the identity of the caller. The Agent will request some
or all of the following information: account name and number;
name(s) and social security number registered to the account and
personal identification; the Agent may also record calls. You
should verify the accuracy of confirmation statements immediately
upon receipt.
2. By FAX or Mail. You may also request redemption payments
to a predesignated Financial Institution account by a letter
of instruction sent to: Administrative Data Management
Corp., Attn: Aquilasm Group of Funds, by FAX at 908-855-5730
or by mail at 581 Main Street, Woodbridge, NJ 07095-1198,
indicating account number, amount to be redeemed, and any
payment directions, signed by the registered holder(s).
Signature guarantees are not required. See "Redemption
Payments", below for payment methods.
If you wish to use the above procedures you should so elect
on the Expedited Redemption section of the Application or Ready
Access Features form and provide the required information
concerning the Financial Institution account number. The
Financial Institution account must be in the exclusive name(s) of
the shareholder(s) as registered with the Trust. You may change
the designated Financial Institution account at any time by
completing and returning a Ready Access Features form. For
protection of your assets, this form requires signature
guarantees and possible additional documentation.
3. By Check. The Agent will, upon request, provide you with
forms of drafts ("checks") drawn on the Custodian. This
feature is not available if your shares are represented by
certificates. These checks represent a further alternative
redemption means and you may make them payable to the order
of anyone in any amount of not less than $500. If you wish
to use this check writing redemption procedure you should
notify the Agent or so indicate on your Application. You
will be issued special checks to be drawn against the
Custodian for this purpose. You will be subject to the
Custodian's rules and regulations governing its checking
accounts. If the account is registered in more than one
name, each check must be signed by each account holder
exactly as the names appear on the account registration,
unless expressly stated otherwise on your Application.
There is no charge for the maintenance of this special check
writing privilege or for the clearance of any checks.
When such a check is presented to the Custodian for payment,
a sufficient number of full and fractional shares in your account
will be redeemed to cover the amount of the check. This check
writing redemption procedure enables you to continue receiving
dividends on those shares equaling the amount being redeemed by
check until such time as the check is actually presented to the
Custodian for payment.
As these checks are redemption drafts relating to Trust
shares, you should be certain that adequate shares for which
certificates have not been issued and which were not recently
purchased by check are in the account to cover the amount of the
check. See "Redemption Payments" below for more details as to
special problems as to Trust shares recently purchased by check.
If insufficient redeemable shares are in the account, the
redemption check will be returned marked "insufficient funds."
The fact that redemption checks are drafts may also permit a bank
in which they are deposited to delay crediting the account in
question until that bank has received payment funds for the
redemption check.
Checks may not be directly presented to any branch of the
Custodian. This does not affect checks used for the payment of
bills or cashed at other banks. You may not use checks to close
your account, since the number of shares in your account changes
daily through dividend payments which are automatically
reinvested in full and fractional shares. Consequently, you may
not present a check directly to the Custodian and request
redemption for all or substantially all shares held in your
account. Only expedited redemption to a predesignated bank
account or the regular redemption method (see below) may be used
when closing your account.
Multiple Redemption Services. You are not limited in choice
of redemption methods but may utilize all available forms.
However, when both redemption to a predesignated Financial
Institution account and check writing are desired, you must so
elect on your Application, or by proper completion of a Ready
Access Features form.
Regular Redemption Method
(Certificate and Non-Certificate Shares)
1. Certificate Shares. Certificates in blank (unsigned)
representing shares to be redeemed should be sent to:
Administrative Data Management Corp., the Trust's
Shareholder Servicing Agent, Attn: Aquilasm Group of Funds,
581 Main Street, Woodbridge, NJ 07095-1198, with payment
instructions. A stock assignment form signed by the
registered shareholder(s) exactly as the account is
registered must also be sent to the Shareholder Servicing
Agent.
For your own protection, it is essential that
certificates be mailed separately from signed redemption
documentation. Because of possible mail problems, it is also
recommended that certificates be sent by registered mail, return
receipt requested.
For the redemption request to be in "proper form," the
signature or signatures must be the same as in the registration
of the account. In a joint account, the signatures of both
shareholders are necessary. Additional documentation may be
required where shares are held by a corporation, a partnership,
trustee or executor, or if redemption is requested by other than
the shareholder of record. If redemption proceeds of less than
$50,000 are payable to the record holder and are to be sent to
the record address no signature guarantee is required. In all
other cases, signatures must be guaranteed by a member of a
national securities exchange, a U.S. bank or trust company, a
state-chartered savings bank, a federally chartered savings and
loan association, a foreign bank having a U.S. correspondent bank
or a participant in the Securities Transfer Association Medallion
Program (STAMP), the Stock Exchanges Medallion Program (SEMP) or
the New York Stock Exchange, Inc. Medallion Signature Program
(MSP). A notary public is not an acceptable signature
guarantor.
2. Non-Certificate Shares. If you own non-certificate shares
registered on the books of the Trust, and you have not
elected Expedited Redemption to a predesignated Financial
Institution account, you must use the Regular Redemption
Method. Under this redemption method you should send a
letter of instruction to: Administrative Data Management
Corp., Attn: Aquilasm Group of Funds, 581 Main Street,
Woodbridge, NJ 07095-1198, containing:
Account Name(s)
Account Number;
Dollar amount or number of shares to be redeemed or a
statement that all shares held in the account are to be
redeemed;
Payment instructions (normally redemption proceeds will
be mailed to your address as registered with the
Trust);
Signature(s) of the registered shareholder(s); and
Signature guarantee(s), if required, as indicated
above.
Redemption Payments
For redemptions other than by checks you have written,
redemption payments will ordinarily be mailed to you at your
address of record. If you so request and the amount of your
redemption proceeds is $1,000 or more, the proceeds will,
wherever possible, be wired or transferred through the facilities
of the Automated Clearing House to the Financial Institution
account specified in the Expedited Redemption section of your
Application or Ready Access Features form. The Trust may impose a
charge, not exceeding $5.00 per wire redemption, after written
notice to shareholders who have elected this redemption
procedure. The Trust has no present intention of making this
charge. Upon 30 days' written notice to shareholders, the Trust
may modify or terminate the use of the Automated Clearing House
to make redemption payments at any time or charge a service fee,
although no such fee is currently contemplated. If any such
changes are made, the Prospectus will be supplemented to reflect
them. If you use a dealer to arrange for a redemption, you may be
required to pay the dealer for this service.
Redemption proceeds on shares issued under the third method
under which shares are issued (see "When Shares Are Issued and
Dividends Are Declared on Them" under "How to Invest in the
Trust") will be wired in Federal funds on the date of redemption,
if practicable, and, if not practicable, as soon thereafter as
practicable, irrespective of amount. Redemption requests as to
such shares may be made by telephone.
Except as indicated above, the Trust will normally make
payment for all shares redeemed on the next business day
following receipt of request. Except as set forth below, in no
event will payment be made more than seven days after receipt of
a redemption request made in compliance with one of the
redemption methods specified above. However, the right of
redemption may be suspended or the date of payment postponed (i)
during periods when the New York Stock Exchange is closed for
other than weekends and holidays or when trading on such exchange
is restricted as determined by the Securities and Exchange
Commission by rule or regulation; (ii) during periods in which an
emergency, as determined by the Securities and Exchange
Commission, exists which causes disposal of, or valuation of the
net asset value of, the portfolio securities to be unreasonable
or impracticable; or (iii) for such other periods as the
Securities and Exchange Commission may permit. Payment for
redemption by any method (including redemption by check) of
shares recently purchased by check (irrespective of whether the
check is a regular check or a certified, cashier's or official
bank check) or by Automatic Investment or Telephone Investment
may be delayed up to 15 days or until (i) the purchase check or
Automatic Investment or Telephone Investment has been honored or
(ii) the Agent has received assurances by telephone or in writing
from the bank on which the purchase check was drawn or from which
the funds for Automatic Investment or Telephone Investment were
transferred, satisfactory to the Agent and the Trust, that the
purchase check or Automatic Investment or Telephone Investment
will be honored. Shares so purchased within the prior 15 days
will not be redeemed under the check writing redemption procedure
and a shareholder must not write a check if (i) it will be
presented to the Custodian for payment within 15 days of a share
purchase by check and (ii) the redemption check would cause the
redemption of some or all of those shares. Possible delays in
payment of redemption proceeds can be eliminated by using wire
payments or Federal Reserve drafts to pay for purchases.
If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders
of the Trust to make payment wholly or partly in cash, the Trust
may pay the redemption price in whole or in part by the
distribution in kind of securities from the portfolio of the
Trust, in lieu of cash, in conformity with applicable rules of
the Securities and Exchange Commission. See the Additional
Statement for details.
The Trust has the right to compel the redemption of shares
held in any account if the aggregate net asset value of such
shares is less than $500 due to shareholder redemptions. If the
Board of Trustees elects to do this, shareholders who are
affected will receive prior written notice and will be permitted
60 days to bring their accounts up to the minimum before this
redemption is processed.
AUTOMATIC WITHDRAWAL PLAN
If you own or purchase shares of the Trust having a net
asset value of at least $5,000 you may establish an Automatic
Withdrawal Plan under which you will receive a monthly or
quarterly check in a stated amount, not less than $50. If such a
plan is established, all dividends and distributions must be
reinvested in your shareholder's account. See the Automatic
Withdrawal Plan provisions of the Application included in the
Prospectus, the Additional Statement under "Automatic Withdrawal
Plan" and "Dividend and Tax Information" below.
MANAGEMENT ARRANGEMENTS
The Board of Trustees
The business and affairs of the Trust are managed under the
direction and control of its Board of Trustees. The Additional
Statement lists the Trust's Trustees and officers and provides
further information about them.
The Advisory Agreement
STCM Management Company, Inc. (the "Adviser") supervises the
investment program of the Trust and the composition of its
portfolio. The Adviser formerly acted as the Trust's sub-adviser.
See "Information as to the Adviser, the Administrator and the
Distributor," below.
The services of the Adviser are rendered under an Investment
Advisory Agreement (the "Advisory Agreement") which provides,
subject to the control of the Board of Trustees, for investment
supervision and for either keeping the accounting records of the
Trust, including the computation of the net asset value per share
and the dividends, or, at the Adviser's expense and
responsibility, delegating these accounting duties in whole or in
part to a company satisfactory to the Trust. The Advisory
Agreement states that the Adviser shall, at its expense, provide
to the Trust all office space and facilities, equipment and
clerical personnel necessary for the carrying out of the
Adviser's duties under the Advisory Agreement.
Under the Advisory Agreement, the Adviser pays all
compensation of those officers and employees of the Trust and of
those Trustees, if any, who are affiliated with the Adviser.
Under the Advisory Agreement, the Trust bears the cost of
preparing and setting in type its prospectuses, statements of
additional information, and reports to shareholders and the costs
of printing or otherwise producing and distributing those copies
of such prospectuses, statements of additional information and
reports as are sent to its shareholders. Under the Advisory
Agreement, all costs and expenses not expressly assumed by the
Adviser or by the Administrator under the Administration
Agreement or by the Trust's principal underwriter are paid by the
Trust. The Advisory Agreement lists examples of such expenses
borne by the Trust, the major categories of such expenses being:
legal and audit expenses, custodian and transfer agent, or
shareholder servicing agent fees and expenses, stock issuance and
redemption costs, certain printing costs, registration costs of
the Trust and its shares under Federal and State securities laws,
interest, taxes, and non-recurring expenses, including
litigation.
Under the Advisory Agreement, the Trust pays a fee payable
monthly and computed on the net asset value of the Trust as of
the close of business each business day at the annual rate of
0.20 of 1% of the Trust's average daily net assets; however, the
total fees which the Trust pays are at the annual rate of 0.35 of
1% of such net asset value, since the Administrator, under the
Administration Agreement, described below, also receives a fee
from the Trust at the annual rate of 0.15 of 1% of such net asset
value. The Administrator has undertaken to waive fees and
reimburse expenses in order to enable the Trust to maintain a
moderate expense ratio. In addition, these fees are subject to
expense limitations described below. It is currently anticipated
that most if not all of such fees will be waived to enable the
Trust to maintain a competitive yield.
The Adviser agrees that the above fee shall be reduced, but
not below zero, by an amount equal to its pro-rata portion
(hereafter described) of the amount, if any, by which the Trust's
total expenses in any fiscal year, exclusive of taxes, interest,
and brokerage fees, shall exceed the lesser of (i) 1.5% of the
first $30 million of the Trust's average annual net assets, plus
1% of the Trust's average annual net assets in excess of $30
million, or (ii) 25% of the Trust's total annual investment
income. The pro-rata portion, as between the Adviser and the
Administrator, is based on the aggregate of the fee of the
Adviser and the fee of the Administrator (exclusive of amounts
paid or to be paid out for the applicable period pursuant to the
Distribution Plan).
The Advisory Agreement contains provisions as to the
allocation of the portfolio transactions of the Trust; see the
Additional Statement. Under these provisions, the Adviser is
authorized to consider sales of the Trust's shares in making this
allocation.
The Administration Agreement
Under an Administration Agreement (the "Administration
Agreement"), Aquila Management Corporation as Administrator, at
its own expense, provides office space, personnel, facilities and
equipment for the performance of its functions thereunder and as
is necessary in connection with the maintenance of the
headquarters of the Trust and pays all compensation of the
Trust's Trustees, officers and employees who are affiliated
persons of the Administrator.
Under the Administration Agreement, subject to the control
of the Trust's Board of Trustees, the Administrator provides all
administrative services to the Trust other than those relating to
its investment portfolio and the maintenance of its accounting
books and records. Such administrative services include but are
not limited to maintaining books and records (other than
accounting books and records) of the Trust, and overseeing all
relationships between the Trust and its transfer agent,
custodian, legal counsel, auditors and principal underwriter,
including the negotiation of agreements in relation thereto, the
supervision and coordination of the performance of such
agreements, and the overseeing of all administrative matters
which are necessary or desirable for effective operation of the
Trust and for the sale, servicing or redemption of the Trust's
shares. See the Additional Statement for a further description of
functions listed in the Administration Agreement as part of such
duties.
Under the Administration Agreement, the Trust pays a fee
payable monthly and computed on the net asset value of the Trust
at the end of each business day at the annual rate of 0.15 of 1%
of such net asset value. The Administrator has agreed that the
above fee shall be reduced, but not below zero, by an amount
equal to its pro-rata portion (hereafter described) of the
amount, if any, by which the Trust's total expenses in any fiscal
year, exclusive of taxes, interest, and brokerage fees, shall
exceed the lesser of (i) 1.5% of the first $30 million of the
Trust's average annual net assets, plus 1% of the Trust's average
annual net assets in excess of $30 million, or (ii) 25% of the
Trust's total annual investment income. The pro-rata portion, as
between the Adviser and the Administrator, is based on the
aggregate of the fee of the Adviser and the fee of the
Administrator (exclusive of amounts paid or to be paid out for
the applicable period pursuant to the Distribution Plan).
In addition to the foregoing expense limitation, the
Administration Agreement contains provision under which the
Administrator agrees to waive fees and reimburse expenses to the
Trust as required so that the total expenses of the Trust in any
fiscal year shall not exceed 0.60 of 1% of its average annual net
assets. The payment of any fee under the Administration Agreement
to the Administrator at the end of any month will be reduced or
postponed as may be required by reason of the expense guarantee,
subject to readjustment during the year. Any reimbursement of
expense to the Trust with respect to a fiscal year will be made
during or at the end of that fiscal year, and any reimbursements
made during the fiscal year will be subject to readjustment
during the year. The expense guarantee continues until June 30,
1995, and for three years thereafter; it continues from year to
year thereafter, provided, however, that upon at least six
months' written notice to the Trust, the Administrator may cancel
its obligation under this expense guarantee. Upon the expiration
of the expense guarantee, any amount then outstanding thereunder
shall be paid, and thereupon neither party shall have any further
liability to the other thereunder. The expense guarantee and any
outstanding obligation thereunder shall survive the termination
of the Administration Agreement. During the fiscal year ended
June 30, 1996, the Administrator reimbursed the Trust $73,338 to
comply with the expense limitation, $14,519 pursuant to the
agreement regarding total expenses of the Trust and $3,635
voluntarily, totaling $91,492.
Information as to the Adviser,
the Administrator and the Distributor
From August 1, 1988 until February 28, 1992, when the
Advisory Agreement became effective, the Adviser performed
portfolio management functions and the keeping of the accounting
records of the Trust, including the computation of the net asset
value and the dividends, on a basis not exceeding its cost. These
services replaced those performed by HT Investors, Inc., under an
Investment Advisory Agreement in effect until August 1, 1988. The
Adviser continued to act as Sub-Adviser and Administrator of the
Trust during that period under a sub-advisory agreement which
terminated on February 28, 1992.
The Administrator has agreed that it will provide funding to
the Adviser as necessary to cover operating expenses and other
financial commitments and will make available personnel, office
space and equipment support to the Adviser at no charge. As a
result of these arrangements, the Adviser currently incurs no
costs for salaries, rent or equipment. It is anticipated that
these arrangements will remain in place until the Trust achieves
sufficient size so that it is no longer necessary for the Adviser
to waive its fees or for the Trust's expenses to be reimbursed.
If these arrangements are discontinued, the Prospectus will be
supplemented. Certain officers of the Administrator are also
officers of the Adviser. (See "Additional Information as to
Management Arrangements" in the Additional Statement.)
The Board of Trustees in approving the Advisory Agreement
considered all of the foregoing matters as well as the
performance of the Adviser as interim adviser. The Board
determined that the Adviser has all the capabilities and
resources needed to perform its functions for the Trust.
During the fiscal year ended June 30, 1996, the Trust
accrued $3,673 in favor of the Adviser under the Advisory
Agreement and $2,775 in favor of the Administrator under the
Administration Agreement. All such fees were waived. The expense
limitation provisions in the Advisory and Administration
Agreements in effect, would in any event have precluded any of
such fees during the last fiscal year. For the fiscal year ended
June 30, 1996, the Administrator reimbursed the Trust for
expenses in the amounts described above.
The Trust's Administrator is administrator to the
Aquilasm Group of Funds which consists of money-market funds,
tax-free municipal bond funds and two equity funds. As of June
30, 1996, these funds had aggregate assets of approximately $2.7
billion, of which approximately $800 million consisted of assets
of money market Funds. The Administrator, which was founded in
1984, is controlled by Mr. Lacy B. Herrmann (directly, through a
trust and through share ownership by his wife). See the
Additional Statement for information on Mr. Herrmann.
The Adviser has outstanding 7,000 shares of voting common
stock. The only persons owning 10% or more of such shares are as
follows: 1,745 shares are owned by Mrs. Elizabeth B. Herrmann
(wife of the President of the Adviser), 1,005 shares by Mrs.
Carol W. Mason (wife of Theodore T. Mason), 805 shares by William
C. Wallace, 805 shares by Marvin J. Price, and 1,565 shares by
Rose F. Marotta. The Adviser also has outstanding a class of
preferred stock and a class of non-voting common stock.
The Distributor currently handles the distribution of the
shares of fourteen funds (five money market funds, seven tax-free
municipal bond funds and two equity funds) including the Trust.
Under the Distribution Agreement, the Distributor is responsible
for the payment of certain printing and distribution costs
relating to prospectuses and reports as well as the costs of
supplemental sales literature, advertising and other promotional
activities. At the date of the Prospectus, there is a proposed
transaction whereby all of the shares of the Distributor, which
are currently owned by Mr. Herrmann, will be owned by certain
officers and/or directors of the Distributor and/or the
Administrator including Mr. Herrmann.
DIVIDEND AND TAX INFORMATION
All of the Trust's net income for dividend purposes (see
below) will be declared daily as dividends; see "When Shares Are
Issued and Dividends Are Declared on Them" under "How to Invest
in the Trust" for information as to when dividends are declared.
Dividends are paid within a week before or after the end of each
month and invested in additional shares at net asset value on the
payable date, or, at your election, paid in cash by check. This
election may be made in the Application or by subsequent written
notice to the Agent. You may also elect to have dividends
deposited without charge by electronic funds transfers into an
account at a Financial Institution which is a member of the
Automated Clearing House by completing a Ready Access Features
form. If you redeem all of your shares you will be credited on
the redemption payment date with the amount of all dividends
declared for the month through the date of redemption, or through
the day preceding the date of redemption in the case of shares on
which income dividends were declared on the same day on which the
shares were issued.
You will receive monthly a summary of your account,
including information as to dividends paid during the month and
the shares credited to your account through reinvestment of
dividends.
Daily dividends will be calculated as follows: the net
income for dividend purposes will be calculated immediately prior
to the calculation of net asset value and will include accrued
interest and original issue and market discount earned since the
last valuation, less the estimated expenses of the Trust and
amortized original issue and market premium for the period.
However, the calculation of the dividend could change under
certain circumstances under the procedures adopted by the Board
of Trustees relating to "amortized cost" valuation; see the
Additional Statement.
Dividends so paid will be taxable to you as ordinary income,
even though reinvested, unless the net income, computed as above,
exceeds "earnings and profits," as determined for tax purposes;
this could occur because net income as so determined will include
certain unrealized appreciation and discount which is not
included for tax purposes. If dividends exceed your ratable share
of "earnings and profits," the excess will reduce the cost or
other tax basis for your shares; any reduction which would
otherwise result in a negative basis will cause the basis to be
reduced to zero, with any remaining amount being taxed as capital
gain. The dividends paid by the Trust will not be eligible for
the 70% dividends received deduction for corporations. Statements
as to the tax status of your dividends will be mailed annually.
It is possible but unlikely that the Trust may have realized
long-term capital gains or losses in a year. If it has any net
long-term gains realized through October 31st of a year, it will
pay a capital gains distribution after that date. It may also pay
a supplemental distribution after the end of its fiscal year. Any
capital gains distribution will be taxed at the same rate as
ordinary income, except that for individuals, trusts and estates
the maximum tax rate on capital gains distributions is 28% even
if the applicable rate on ordinary income for such taxpayers is
higher than 28%.
If you have not filed with the Trust a correct Taxpayer
Identification Number, certified when required, the Trust will be
required to withhold on dividends paid or credited to you and on
redemption proceeds, subject to certain exemptions, at a rate of
31%.
The Trust, during its last fiscal year, qualified and
intends to continue to qualify under subchapter M of the Internal
Revenue Code; if so qualified it will not be liable for Federal
income taxes on amounts distributed by it.
EXCHANGE PRIVILEGE
There is an exchange privilege as set forth below among
this Trust and tax-free municipal bond funds and two equity funds
(the "Bond or Equity Funds") and certain money-market Funds (the
"Money-Market Funds"), all of which are sponsored by Aquila
Management Corporation and Aquila Distributors, Inc., and have
the same Administrator and Distributor as the Trust. All
exchanges are subject to certain conditions described below. As
of the date of the Prospectus, the Aquila Bond or Equity Funds
are Aquila Rocky Mountain Equity Fund, Aquila Cascadia Equity
Fund, Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona,
Tax-Free Trust of Oregon, Tax-Free Fund of Colorado, Churchill
Tax-Free Fund of Kentucky, Tax-Free Fund For Utah and
Narragansett Insured Tax-Free Income Fund; the Aquila
Money-Market Funds are this Trust, Pacific Capital Cash Assets
Trust (Original Shares), Pacific Capital Tax-Free Cash Assets
Trust (Original Shares), Pacific Capital U.S. Treasuries Cash
Assets Trust (Original Shares) and Churchill Cash Reserves
Trust.
Each of the Aquila Bond and Equity Funds offers three
Classes of Shares: Class A Shares ("Front-Payment Shares") and
Class C Shares ("Level-Payment Shares") which can be purchased by
anyone and Class Y Shares ("Institutional Class Shares"), which
are offered only to institutions acting for investors in a
fiduciary, advisory, agency, custodial or similar capacity, and
are not offered directly to retail customers. The Exchange
Privilege has different provisions for exchanges for each
class.
Class A Shares Exchange Privilege
Under the Class A Shares exchange privilege, once any
applicable sales charge has been paid on Class A Shares of any
Bond and Equity Fund, those shares (and any shares acquired as a
result of reinvestment of dividends and/or distributions) may be
exchanged any number of times between Money-Market Funds and Bond
or Equity Funds without the payment of any additional sales
charge.
CDSC Class A Shares of an Bond or Equity Fund, which are
issued in purchases of $1 Million or more and when certain
special dealer arrangements are in effect, can be exchanged for
CDSC Class A Shares of a Bond or Equity Fund or into a
Money-Market Fund. The CDSC Class A Shares will not be subject to
a contingent deferred sales charge at the time of exchange, but
the contingent deferred sales charge will be payable upon a
redemption which occurs before the expiration of the applicable
holding period of the CDSC Class A Shares or any shares of a
Money-Market Fund received on exchange for the CDSC Class A
Shares. (The contingent deferred sales charge does not apply to
any shares acquired as a result of reinvestment of dividends
and/or distributions.) For purposes of computing the time period
for the applicable contingent deferred sales charge, the length
of time of ownership of CDSC Class A Shares will be determined by
the time of original purchase and not by the time of the
exchange. Any period of 30 days or more during which Money-Market
shares received in exchange for CDSC Class A Shares are held is
not counted in computing the period of ownership of CDSC Class A
Shares.
Class C Shares Exchange Privilege
Under the Class C Shares exchange privilege, Class C
Shares (and any shares acquired as a result of reinvestment of
dividends and/or distributions) may be exchanged any number of
times for shares of Money-Market Funds and for Class C Shares of
the Bond or Equity Funds. Class C Shares will not be subject to a
contingent deferred sales charge at the time of exchange, but the
contingent deferred sales charge will be payable upon a
redemption which occurs before the expiration of the applicable
holding period of the Class C Shares or any shares of a
Money-Market Fund received in exchange for the Class C Shares.
(The contingent deferred sales charge does not apply to any
shares acquired as a result of reinvestment of dividends and/or
distributions.) For purposes of computing the time period for the
applicable contingent deferred sales charge or for the conversion
of Class C Shares into Class A Shares, the length of time of
ownership of Class C shares will be determined by the time of
original purchase and not by the time of the exchange. Any period
of 30 days or more during which Money-Market shares received in
exchange for Class C Shares are held is not counted in computing
the period of ownership of Class C Shares.
The Class Y Shares Exchange Privilege
Class Y Shares of an Bond or Equity Fund may be exchanged
only for Class Y Shares of another Bond or Equity Funds or for
shares of a Money-Market Fund. Under the Class Y exchange
privilege, once Class Y Shares of any Bond or Equity Fund have
been purchased, those shares (and any shares acquired as a result
of reinvestment of dividends and/or distributions) may be
exchanged any number of times for shares of Money-Market Funds
and Class Y Shares of the Bond or Equity Funds without the
payment of any sales charge. Shares of a Money-Market Fund not
acquired in exchange for Class Y Eligible Shares of a Bond or
Equity Fund can be exchanged for Class Y Shares of a Bond or
Equity Fund only by persons eligible to make an initial purchase
of Class Y Shares.
Eligible Shares
The "Class A Eligible Shares" of any Bond or Equity Fund
are those Class A Shares which were (a) acquired by direct
purchase with payment of any applicable sales charge, or which
were received in exchange for shares of another Bond or Equity
Fund on which any applicable sales charge was paid; (b) acquired
by exchange for shares of a Money-Market Fund with payment of the
applicable sales charge; (c) acquired in one or more exchanges
between Money-Market Funds and the Bond and Equity Funds so long
as shares of a Bond or Equity Fund were originally purchased as
set forth in (a) or (b); (d) acquired on conversion of Class C
Shares or (e) acquired as a result of reinvestment of dividends
and/or distributions on otherwise Class A Eligible Shares.
The "CDSC Class A Eligible Shares" of any Bond or Equity
Fund are those CDSC Class A Shares which were (a) acquired by
direct purchase in the amount of $1 million or more without a
sales charge or in certain purchases when special dealer
arrangements are in effect or which were received in exchange for
CDSC Class A Shares of another Bond or Equity Fund acquired under
the same conditions; (b) acquired by exchange for shares of a
Money-Market Fund under the same conditions; (c) acquired in one
or more exchanges between the Money-Market Funds and the Bond and
Equity Funds so long as shares of a Bond or Equity Fund were
originally purchased as set forth in (a) or (b); or (d) acquired
as a result of reinvestment of dividends and/or distributions on
otherwise CDSC Class A Eligible Shares.
The "Class C Eligible Shares" of any Bond or Equity Fund
are those shares which were (a) acquired by direct purchase or by
exchange from a Money-Market Fund, or were received in exchange
for Class C Shares of another Bond or Equity Fund ; or (b)
acquired as a result of reinvestment of dividends and/or
distributions on otherwise Class C Eligible Shares.
The "Class Y Eligible Shares" of any Bond or Equity Fund
are those shares which were (a) acquired by direct purchase, by
exchange from a Money-Market Fund, or which were received in
exchange for Class Y Shares of another Bond or Equity Fund; or
(b) acquired as a result of reinvestment of dividends and/or
distributions on otherwise Class Y Eligible Shares. Shares of a
Money-Market Fund not acquired in exchange for Class Y Eligible
Shares of a Bond or Equity Fund can be exchanged for Class Y
Shares of a Bond or Equity Fund only by persons eligible to make
an initial purchase of Class Y Shares.
If you own Class A, CDSC Class A or Class C Eligible
Shares of any Bond or Equity Fund, you may exchange them for
shares of any Money-Market Fund or the Class A, CDSC Class A or
Class C Shares, respectively, of any other Bond or Equity Fund
without payment of any sales charge or CDSC. The shares received
will continue to be Class A, CDSC Class A or Class C Eligible
shares.
If you own Class Y Shares of any Bond or Equity Fund or
shares of any Money-Market Fund received in exchange for Class Y
Shares of a Bond or Equity Fund you may exchange them for shares
of any Money-Market Fund or the Class Y Shares of any other Bond
or Equity Fund without payment of any sales charge or CDSC. The
shares received will continue to be Class Y Eligible shares.
If you own shares of a Money-Market Fund which you have
acquired by exchange for Class A Eligible Shares of any Bond or
Equity Fund, you may exchange these shares, and any shares
acquired as a result of reinvestment of dividends and/or
distributions on these shares, for Class A Shares of any Bond or
Equity Fund without payment of any sales charge.
If you own shares of a Money-Market Fund which you have
acquired by exchange for CDSC Class A Eligible Shares of any Bond
or Equity Fund, you may exchange these shares, and any shares
acquired as a result of reinvestment of dividends and/or
distributions on these shares, for CDSC Class A shares of any
Bond or Equity Fund but you will be required to pay the
applicable contingent deferred sales charge if you redeem such
shares before you have held CDSC Class A Shares for four years.
You will also be required to pay the applicable contingent
deferred sales charge if you redeem such shares of a Money-Market
Fund before you have held CDSC Class A Shares for four years. The
running of the four-year period is suspended during the period
you hold shares of a Money-Market Fund received in exchange for
CDSC Class A Shares.
If you own shares of a Money-Market Fund which you have
acquired by exchange for Class C Eligible Shares of any Bond or
Equity Fund, you may exchange these shares, and any shares
acquired as a result of reinvestment of dividends and/or
distributions on these shares, for Class C Shares of any Bond or
Equity Fund, but you will be required to pay the applicable
contingent deferred sales charge if you redeem such Class C
shares before you have held Class C Shares for 12 months. You
will also be required to pay the applicable contingent deferred
sales charge if you redeem such shares of a Money-Market Fund
before you have held Class C Shares for 12 months. The running of
the 12-month CDSC period and the six-year conversion period for
Class C Shares is suspended during the period you hold shares of
a Money-Market Fund received in exchange for Class C Shares.
Shares of a Money-Market Fund may be exchanged for shares
of another Money-Market Fund or for Class A Shares, CDSC Class A
Shares or Class C Shares of an Bond or Equity Fund, and, for
eligible purchasers, for Class Y Shares; however, if the shares
of a Money-Market Fund were not acquired by exchange of Eligible
Shares of a Bond or Equity Fund or of shares of a Money-Market
Fund acquired in such an exchange, they may be exchanged for
Class A Shares of a Bond or Equity Fund only upon payment of the
applicable sales charge. Shares of a Money-Market Fund not
acquired in exchange for Class Y Eligible Shares of a Bond or
Equity Fund can be exchanged for Class Y Shares of a Bond or
Equity Fund only by persons eligible to make an initial purchase
of Class Y Shares.
The Trust, as well as the other Money-Market Funds and Bond
or Equity Funds, reserves the right to reject any exchange into
its shares, if shares of the fund into which exchange is desired
are not available for sale in your state of residence. The Trust
may also modify or terminate this exchange privilege at any time.
In the case of termination, the Prospectus will be appropriately
supplemented. No such modification or termination shall take
effect on less than 60 days' written notice to shareholders.
All exercises of the exchange privilege are subject to the
conditions that (i) the shares being acquired are available for
sale in your state of residence; and (ii) the aggregate net asset
value of the shares surrendered for exchange are at least equal
to the minimum investment requirements of the investment company
whose shares are being acquired.
To effect an exchange, you must complete a form which is
available from the Distributor, unless you have elected the
Telephone Exchange feature on the Application. The exchange will
be effected at the relative exchange prices of the shares being
exchanged next determined after receipt by the Distributor of a
properly completed form or Telephone Exchange request. The
exchange prices will be the respective net asset values of the
shares (unless a sales charge is to be deducted in connection
with an exchange of shares as described above, in which case the
exchange price of shares of the Bond or Equity Fund will be its
public offering price).
An exchange is treated for Federal tax purposes as a
redemption and purchase of shares and may result in the
realization of a capital gain or loss, depending on the cost or
other tax basis of the shares exchanged and the holding period
(see the Additional Statement); no representation is made as to
the deductibility of any such loss should such occur.
Dividends paid by the Money-Market Funds are taxable,
except to the extent that dividends paid by Pacific Capital
Tax-Free Cash Assets Trust (a tax-free Money-Market Fund) are
exempt from regular Federal income tax, and to the extent that
dividends paid by Pacific Capital U.S. Treasuries Cash Assets
Trust (which invests in U.S. Treasury obligations) are exempt
from state income taxes. Dividends paid by Aquila Rocky Mountain
Equity Fund and Aquila Cascadia Equity Fund are taxable. If your
state of residence is not the same as that of the issuers of
obligations in which a Bond or Equity Fund or a tax-free
Money-Market Fund invests, the dividends from that fund may be
subject to income tax of the state in which you reside.
Accordingly, you should consult your tax adviser before acquiring
shares of such a Bond or Equity Fund or a tax-free Money-Market
Fund under the exchange privilege arrangement.
If you are considering an exchange into one of the funds
listed above, you should send for and carefully read its
Prospectus.
GENERAL INFORMATION
Description of Shares
The Declaration of Trust permits the Board of Trustees to
issue an unlimited number of full and fractional shares and to
divide or combine the shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial
interests in the Trust. Each share represents an equal
proportionate interest in the Trust with each other share. Upon
liquidation of the Trust, shareholders are entitled to share
pro-rata in the net assets of the Trust available for
distribution to shareholders. All shares are of the same class;
however, if the Trust should become subject to reserve or similar
requirements, one or two additional classes of shares may be
issued (subject to rules and regulations of the Securities and
Exchange Commission or by exemptive order). If more than one
class of shares were to be outstanding, all shares of each class
would be treated for all purposes other than as to dividends as
if all shares were shares of one class and each share of each
class would be identical to each share of each other class other
than as to dividends.
Voting Rights
Shareholders are entitled to one vote for each full share
held (and fractional votes for fractional shares held) and will
vote in the election of Trustees and on other matters submitted
to the vote of shareholders. No amendment may be made to the
Declaration of Trust without the affirmative vote of the holders
of a majority of the outstanding shares of the Trust. The holders
of shares have no pre-emptive or conversion rights. Shares are
fully paid and non-assessable, except as set forth under the
caption "General Information" in the Additional Statement. The
Trust may be terminated (i) upon the sale of its assets to
another issuer, if approved by the vote of the holders of a
majority of the outstanding shares of the Trust; or (ii) upon
liquidation and distribution of the assets of the Trust, if
approved by the vote of the holders of a majority of the
outstanding shares of the Trust. The Trust will continue
indefinitely unless it is terminated (i) upon the sale of its
assets to another issuer; or (ii) upon liquidation and
distribution of the assets of the Trust; in either case, if
approved by the vote of the holders of a majority of the
outstanding shares of the Trust.
<PAGE>
[LOGO] Application for Capital Cash Management Trust
Please complete steps 1 through 4 and mail to:
ADM, Attn: Aquilasm Group of Funds
581 Main Street, Woodbridge, NJ 07095-1198
1-800-952-6666
STEP 1 ACCOUNT REGISTRATION
___Individual Use line 1
___Joint Account Use lines 1&2
___For a Minor Use line 3
___For Trust, Corporation,
Other Organization or
any Fiduciary capacity
Use line 4
* Joint Accounts will be Joint
Tenants with rights of survivorship
unless otherwise specified.
**Uniformed Gifts/Transfers to Minors
Act.
Please type or print name exactly as account is to be registered
1._____________________________________________________________________
First Name Middle Initial Last Name Social Security Number
2._____________________________________________________________________
First Name Middle Initial Last Name Social Security Number
3._____________________________________________________________________
Custodians First Name Middle Initial Last Name
Custodian for_________________________________________________________
Minors First Name Middle Initial Last Name
Under the________________ UGTMA**_____________________________________
Name of State Minors Social Security Number
4._____________________________________________________________________
_____________________________________________________________________
(Name of Corporation or Organization. If a Trust, include the name(s)
of Trustees in which account will be registered and the name and date
of the Trust Instrument. Account for a Pension or Profit Sharing Plan
or Trust may be registered in the name of the Plan or Trust itself.)
______________________________________________________________________
Tax I.D. Number Authorized Individual Title
B. MAILING ADDRESS AND TELEPHONE NUMBER
______________________________________________________________________
Street or PO Box City
_________________________________ (____)__________________________
State Zip Daytime Phone Number
Occupation:______________________ Employer:_______________________
Employers Address:___________________________________________________
Street Address: City State Zip
Citizen or resident of: ___ U.S. Other___ ______ Check here ___ if you are
a non-U.S. Citizen or resident and not subject to back-up withholding (See
certification in Step 4, Section B, below.)
C. INVESTMENT DEALER OR BROKER:
(Important - to be completed
by Dealer or Broker)
________________________________ _________________________________
Dealer Name Branch Number
________________________________ _________________________________
Street Address Rep.Number/Name
________________________________ (_______)________________________
City State Zip Area Code Telephone
STEP 2 PURCHASES OF SHARES
A. INITIAL INVESTMENT
1) ___ By Check
2) ___ By Wire
1) By Check: Make check payable to: CAPITAL CASH MANAGEMENT TRUST
Amount of investment $ ________________ Minimum initial investment $1,000
2) By Wire: OR
$_________________________________ From_______________________________
Name of Financial Institution
_________________________________ ___________________________________
Financial Institution Account No. Branch, Street or Box#
On_______________________________ ___________________________________
(Date) City State Zip
*NOTE: If investing by wiring of funds, instruct your Financial
Institution to wire funds to:
Bank One, Columbus Account of: (Account name and number,
ABA No. 044000037 or name in which investment is to be
CR A/C 04-01787 registered if new account)
For further credit to Capital Cash Management Trust A/C 6801373500
(A FINANCIAL INSTITUTION IS A COMMERCIAL BANK, SAVINGS
BANK OR CREDIT UNION.)
B. DIVIDENDS
ALL INCOME DIVIDENDS ARE AUTOMATICALLY REINVESTED IN ADDITIONAL SHARES
AT NET ASSET VALUE UNLESS OTHERWISE INDICATED BELOW.
Dividends are to be:___ Reinvested or ___Paid in cash*
* FOR CASH DIVIDENDS, PLEASE CHOOSE ONE OF THE FOLLOWING OPTIONS:
___Deposit directly into my/our Financial Institution account.
ATTACHED IS A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK
showing the Financial Institution account where I/we would like you to
deposit the dividend.
___ Mail check to my/our address listed in Step 1.
STEP 3 SPECIAL FEATURES
A. AUTOMATIC INVESTMENT PROGRAM
(Check appropriate box)
___ Yes ___No
This option provides you with a convenient way to have amounts
automatically drawn on your Financial Institution account and invested
in your account. To establish this program, please complete Step 4,
Sections A & B of this Application.
I/We wish to make regular monthly investments of $________ (minimum $50)
on the ___ 1st day or ___ 16th day of the month (or on the first
business day after that date).
(YOU MUST ATTACH A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK)
B. TELEPHONE INVESTMENT
(Check appropriate box)
___ Yes ___No
This option provides you with a convenient way to add to your account
(minimum $50 and maximum $50,000) at any time you wish by simply calling
ADMINISTRATIVE DATA MANAGEMENT CORP. (THE AGENT) toll-free at
1-800-952-6666. To establish this program, please complete Step 4,
Sections A & B of this Application.
(YOU MUST ATTACH A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK)
C. AUTOMATIC WITHDRAWAL PLAN
(Minimum investment $5,000)
Application must be received
in good order at least 2 weeks
prior to 1st actual liquidation
date.
(Check appropriate box)
___ Yes ___No
Please establish an Automatic Withdrawal Plan for this account, subject
to the terms of the Automatic Withdrawal Plan Provisions set forth below.
To realize the amount stated below, the Agent is authorized to redeem
sufficient shares from this account at the then current Net Asset Value,
in accordance with the terms below:
Dollar Amount of each withdrawal $____________ beginning_______________
Minimum:$50 Month/Year
Payments to be made: ___ Monthly or ___ Quarterly
Checks should be made payable as indicated below. If check is
payable to a Financial Institution for your account, indicate Financial
Institution name, address and your account number.
______________________________________ ____________________________
First Name Middle Initial Last Name Financial Institution Name
______________________________________ ____________________________
Street Financial Institution Street
______________________________________ _____________________________
City State Zip City State Zip
_____________________________
Financial Institution Account Number
D. TELEPHONE EXCHANGE
(Check appropriate box)
___ Yes ___ No
This option allows you to effect
exchanges among accounts in your
name within the Aquilasm Group of
Funds by telephone.
TO MAKE A TELEPHONE EXCHANGE, CALL
THE AGENT AT 1-800-952-6666
The Agent is authorized to accept and act upon my/our or any other
persons telephone instructions to execute the exchange of shares with
identical shareholder registration in the manner described in the
Prospectus. Except for gross negligence in acting upon such telephone
instructions to execute an exchange, and subject to the conditions set
forth herein, I/we understand and agree to hold harmless the Agent, each of
the Aquila Funds and their respective officers, directors,trustees,
employees, agents and affiliates against any liability, damage, expense,
claim or loss, including reasonable costs and attorneys fees, resulting
from acceptance of, or acting or failure to act upon, this Authorization.
E. EXPEDITED REDEMPTION
(Check appropriate box)
___Yes ___ No
The proceeds will be deposited
to your Financial Institution
account listed.
TO MAKE AN EXPEDITED REDEMPTION,
CALL THE AGENT AT 1-800-952-6666
Cash proceeds in any amount from the redemption of shares will be mailed
or wired, whenever possible, upon request, if in an amount of $1,000 or
more to my/our account at a Financial Institution. The Financial
Institution account must be in the same name(s) as this Trust account is
registered.
(YOU MUST ATTACH A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK).
________________________________ ___________________________________
Account Registration Financial Institution Account Number
________________________________ ___________________________________
Financial Institution Name Financial Institution Transit/Routing
Number
________________________________ ___________________________________
Street City State Zip
F. CHECKING ACCOUNT SERVICE
(Check appropriate box)
___ Yes ___ No
Please open a redemption checking account at Bank One Trust Company,
N.A., in my (our) name(s) as registered and send me (us) a supply of
checks. I (we) understand that this checking account will be subject to
the
rules and regulations of Bank One Trust Company, N.A., pertaining thereto
and as amended from time to time. For joint account: Check here whether
either owner ___ is authorized, or all owners ___ are required to sign
checks. IF NO BOX IS CHECKED, TWO SIGNATURES WILL BE REQUIRED ON JOINT
ACCOUNTS.
<PAGE>
STEP 4 Section A DEPOSITORS AUTHORIZATION TO HONOR DEBITS
IF YOU SELECTED AUTOMATIC INVESTMENT OR TELEPHONE INVESTMENT
YOU MUST ALSO COMPLETE STEP 4, SECTIONS A & B.
I/We authorize the Financial Institution listed below to charge to my/our
account any drafts or debits drawn on my/our account initiated by the
Agent, Administrative Data Management Corp., and to pay such sums in
accordance therewith, provided my/our account has sufficient funds to cover
such drafts or debits. I/We further agree that your treatment of such
orders will be the same as if I/we personally signed or initiated the
drafts or debits.
I/We understand that this authority will remain in effect until you receive
my/our written instructions to cancel this service. I/We also agree that if
any such drafts or debits are dishonored, for any reason, you shall have no
liabilities.
Financial Institution Account Number______________________________________
Name and Address
where my/our account Name of Financial Institution____________________
is maintained Street Address___________________________________
City______________________State_____ Zip_________
Name(s) and
Signature(s)of ________________________________
Depositor(s) as they (Please Print)
appear where account X_______________________________ __________
is registered (Signature) (Date)
________________________________
(Please Print)
X_______________________________ __________
(Signature) (Date)
INDEMNIFICATION AGREEMENT
To: Financial Institution Named Above
So that you may comply with your depositors request, Aquila Distributors,
Inc. (the Distributor) agrees:
1 Electronic Funds Transfer debit and credit items transmitted pursuant to
the above authorization shall be subject to the provisions of the
Operating Rules of the National Automated Clearing House Association.
2 To indemnify and hold you harmless from any loss you may suffer in
connection with the execution and issuance of any electronic debit in the
normal course of business initiated by the Agent (except any loss due to
your payment of any amount drawn against insufficient or uncollected
funds), provided that you promptly notify us in writing of any claim
against you with respect to the same, and further provided that you will
not settle or pay or agree to settle or pay any such claim without the
written permission of the Distributor.
3 To indemnify you for any loss including your reasonable costs and expenses
in the event that you dishonor, with or without cause, any such electronic
debit.
<PAGE>
STEP 4 Section B SHAREHOLDER AUTHORIZATION/SIGNATURE(S) REQUIRED
.. The undersigned warrants that he/she has full authority and is of legal
age to purchase shares of the Trust and has received and read a current
Prospectus of the Trust and agrees to its terms.
.. I/We authorize the Trust and its agents to act upon these instructions
for the features that have been checked.
.. I/We acknowledge that in connection with an Automatic Investment or
Telephone Investment, if my/our account at the Financial Institution has
insufficient funds, the Trust and its agents may cancel the purchase
transaction and are authorized to liquidate other shares or fractions
thereof held in my/our Trust account to make up any deficiency resulting
from any decline in the net asset value of shares so purchased and any
dividends paid on those shares. I/We authorize the Trust and its agents to
correct any transfer error by a debit or credit to my/our Financial
Institution account and/or Trust account and to charge the account for any
related charges.
.. The Trust, the Agent and the Distributor and their Trustees, directors,
employees and agents will not be liable for acting upon instructions
believed to be genuine, and will not be responsible for any losses
resulting from unauthorized telephone transactions if the Agent follows
reasonable procedures designed to verify the identity of the caller. The
Agent will request some or all of the following information: account name
and number; name(s) and social security number registered to the account
and personal identification; the Agent may also record calls. Shareholders
should verify the accuracy of confirmation statements immediately upon
receipt. Under penalties of perjury, the undersigned whose Social Security
(Tax I.D.) Number is shown above certifies (i) that Number is my correct
taxpayer identification number and (ii) currently I am not under IRS
notification that I am subject to backup withholding (line out (ii) if
under
notification). If no such Number is shown, the undersigned further
certifies, under penalties of perjury, that either (a) no such Number has
been issued, and a Number has been or will soon be applied for; if a Number
is not provided to you within sixty days, the undersigned understands that
all payments (including liquidations) are subject to 31% withholding under
federal tax law, until a Number is provided and the undersigned may be
subject to a $50 I.R.S. penalty; or (b) that the undersigned is not a
citizen or resident of the U.S.; and either does not expect to be in the
U.S. for more than 183 days during each calendar year and does not conduct
a
business in the U.S. which would receive any gain from the Trust, or is
exempt under an income tax treaty.
NOTE: ALL REGISTERED OWNERS OF THE ACCOUNT MUST SIGN BELOW. FOR A TRUST, ALL
TRUSTEES MUST SIGN.*
________________________________ _______________________ __________
Individual (or Custodian) Joint Registrant, if any Date
_______________________________ ___________________ __________
Corporate Officer, Partner, Trustee, etc. Title Date
* For Trust, Corporations or Associations, this form must be accompanied by
proof of authority to sign, such as a certified copy of the corporate
resolution or a certificate of incumbency under the trust instrument.
SPECIAL INFORMATION
.. Certain features (Automatic Investment, Telephone Investment, Expedited
Redemption and Direct Deposit of Dividends) are effective 15 days after
this form is received in good order by the Trust's Agent.
.. You may cancel any feature at any time, effective 3 days after the Agent
receives written notice from you.
.. Either the Trust or the Agent may cancel any feature, without prior
notice, if in its judgment your use of any feature involves unusual
effort or difficulty in the administration of your account.
.. The Trust reserves the right to alter, amend or terminate any or all
features or to charge a service fee upon 30 days written notice to
shareholders except if additional notice is specifically required by the
terms of the Prospectus.
BANKING INFORMATION
.. If your Financial Institution account changes, you must complete a Ready
Access features form which may be obtained from Aquila Distributors at
1-800-228-7496 and send it to the Agent together with a "voided" check or
pre-printed deposit slip from the new account. The new Financial
Institution change is effective in 15 days after this form is
received in good order by the Trust's Agent.
<PAGE>
INVESTMENT ADVISER
STCM Management Company Inc.
380 Madison Avenue, Suite 2300
New York, NY 10017
ADMINISTRATOR
AQUILA MANAGEMENT CORPORATION
380 Madison Avenue, Suite 2300
New York, New York 10017
DISTRIBUTOR
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
TRUSTEES
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice Chairman
Paul Y. Clinton
Robert L. Krakoff
Anne J. Mills
Cornelius T. Ryan
OFFICERS
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President and Assistant Secretary
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
Patricia A. Craven, Assistant Secretary
TRANSFER AND SHAREHOLDER SERVICING AGENT
ADMINISTRATIVE DATA MANAGEMENT CORP.
581 Main Street
Woodbridge, New Jersey 07095-1198
CUSTODIAN
BANK ONE TRUST COMPANY, N.A.
100 East Broad Street
Columbus, Ohio 43271
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
345 Park Avenue
New York, New York 10154
COUNSEL
HOLLYER BRADY SMITH TROXELL
BARRETT ROCKETT HINES & MONE LLP
551 Fifth Avenue
New York, New York 10176
TABLE OF CONTENTS
Table of Expenses
Financial Highlights
Introduction
Investment Of The Trust's Assets
Investment Restrictions
Net Asset Value Per Share
How To Invest In The Trust
How To Redeem Your Investment
Automatic Withdrawal Plan
Management Arrangements
Dividend And Tax Information
Exchange Privilege
General Information
Application
CAPITAL CASH
MANAGEMENT TRUST
A cash
management
investment
[LOGO]
PROSPECTUS
[LOGO]
One of the
AQUILASM Group of Funds
<PAGE>
Capital Cash Management Trust
380 Madison Avenue
Suite 2300
New York, NY 10017
212-697-6666
Statement of Additional Information
October 31, 1996
This Statement of Additional Information (the "Additional
Statement") is not a Prospectus. The Additional Statement should
be read in conjunction with the Prospectus (the "Prospectus")
dated October 31, 1996, of Capital Cash Management Trust (the
"Trust"), which may be obtained from the Trust's Shareholder
Servicing Agent, Administrative Data Management Corp., by writing
to 581 Main Street, Woodbridge, NJ 07095-1198, or by calling the
following numbers:
800-952-6666 toll free or 908-855-5731
or from Aquila Distributors, Inc., the Trust's Distributor, by
writing to 380 Madison Avenue, Suite 2300, New York, New York
10017; or by calling:
212-697-6666
The Annual Report of the Trust for the fiscal year ended
June 30, 1996, will be delivered with the Additional
Statement.
Table of Contents
Investment of the Trust's Assets . . . . . . . . . . . . . . . .
Yield Information. . . . . . . . . . . . . . . . . . . . . . . .
Investment Restrictions. . . . . . . . . . . . . . . . . . . . .
Loans of Portfolio Securities. . . . . . . . . . . . . . . . . .
Distribution Plan. . . . . . . . . . . . . . . . . . . . . . . .
Limitation of Redemptions in Kind. . . . . . . . . . . . . . . .
Trustees and Officers. . . . . . . . . . . . . . . . . . . . . .
Additional Information as to Management Arrangements . . . . . .
Amortized Cost Valuation . . . . . . . . . . . . . . . . . . . .
Computation of Daily Dividends . . . . . . . . . . . . . . . . .
Automatic Withdrawal Plan. . . . . . . . . . . . . . . . . . . .
General Information. . . . . . . . . . . . . . . . . . . . . . .
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
INVESTMENT OF THE TRUST'S ASSETS
The Prospectus contains information as to the purchase and
redemption of the Trust's shares. The investment objective and
policies of the Trust are also described in the Prospectus, which
refers to the investments and investment methods described below.
Information on Variable Amount Master Demand Notes
The Trust may buy variable amount master demand notes. The
nature and terms of these obligations are as follows. They permit
the investment of fluctuating amounts by the Trust at varying
rates of interest pursuant to direct arrangements between the
Trust, as lender, and the borrower. They permit daily changes in
the amounts borrowed. The Trust has the right to increase the
amount under the note at any time up to the full amount provided
by the note agreement, or to decrease the amount, and the
borrower may prepay up to the full amount of the note without
penalty. Because these notes are direct lending arrangements
between the lender and borrower, it is not generally contemplated
that they will be traded, and there is no secondary market for
them, although they are redeemable (and thus repayable by the
borrower) at principal amount, plus accrued interest, at any
time. The Trust has no limitations on the amount of its assets
invested in such notes. There is no limitation on the type of
issuer from which these notes will be purchased; however, all
such notes must be First Tier Securities and in connection with
such purchases and on an ongoing basis, STCM Management Company,
Inc. (the "Adviser") must determine that they present minimal
credit risks. In addition, the Adviser will consider the earning
power, cash flow and other liquidity ratios of the issuer, and
its ability to pay principal and interest on demand, including a
situation in which all holders of such notes make demand
simultaneously. Master demand notes, as such, are not typically
rated by credit rating agencies, and if not so rated the Trust
may, under its minimum rating standards, invest in them only if
at the time of an investment they are determined to be comparable
in quality to rated issues in which the Trust can invest.
Information On Insured Bank Obligations
The Federal Deposit Insurance Corporation ("FDIC") insures
the deposits of Federally insured banks and, effective August 9,
1989, savings institutions (collectively, herein, "banks") up to
$100,000. On that date, the FDIC assumed the insurance functions
of the Federal Savings and Loan Insurance Corporation, which was
abolished. The Trust may purchase bank obligations which are
fully insured as to principal by the FDIC. To remain fully
insured as to principal, these investments must currently be
limited to $100,000 per bank; if the principal amount and accrued
interest together exceed $100,000 then the excess accrued
interest will not be insured. Insured bank obligations may have
limited marketability; unless the Board of Trustees determines
that a readily available market exists for such obligations, the
Trust will invest in them only within the 10% limit mentioned in
the Prospectus unless such obligations are payable at principal
amount plus accrued interest on demand or within seven days after
demand.
Information about Certain Other Obligations
The Trust may purchase obligations other than those listed
in categories 1 through 5 under "Investment of the Trust's
Assets," in the Prospectus, but only if such other obligations
are guaranteed as to principal and interest by either a bank in
whose obligations the Trust may invest or a corporation in whose
commercial paper the Trust may invest. If any such guarantee is
unconditional and is itself a First Tier Security, the obligation
may be purchased based on the guarantee; if any such guarantee is
not unconditional, purchase of the obligation can only be made if
the underlying obligation is a First Tier Security and meets all
other applicable requirements of the Rule 2a-7 (the "Rule") of
the Securities and Exchange Commission. See "Effect of the Rule
on Portfolio Management" in the Prospectus. As of the date of
this Additional Statement, the Trust does not own any such
obligations and has no present intention of purchasing any. Such
obligations can be any obligation of any kind so guaranteed,
including, for example, obligations created by "securitizing"
various kinds of assets such as credit card receivables or
mortgages. If the Trust invests in these assets, they will be
identified in the Trust's Prospectus and described in the
Additional Statement.
Turnover
In general, the Trust will purchase securities with the
expectation of holding them to maturity. However, the Trust may
to some degree engage in short-term trading to attempt to take
advantage of short-term market variations. The Trust may also
sell securities prior to maturity to meet redemptions or as a
result of a revised management evaluation of the issuer. The
Trust will have a high portfolio turnover due to the short
maturities of the securities held, but this should not affect net
asset value or income, as brokerage commissions are not usually
paid on the securities in which the Trust invests. (In the usual
calculation of portfolio turnover, securities of the type in
which the Trust invests are excluded; consequently, the high
turnover which the Trust will have is not comparable to the
turnover of non-Money Market investment companies.)
When-Issued and Delayed Delivery Securities
The Trust may purchase securities on a when-issued or
delayed delivery basis. For example, delivery and payment may
take place a month or more after the date of the transaction. The
purchase price and the interest rate payable on the securities
are fixed on the transaction date. At the time the Trust makes
the commitment to purchase securities on a when-issued or delayed
delivery basis, it will record the transaction and thereafter
reflect the value of such securities each day in determining its
net asset value. The Trust will make commitments for such
when-issued transactions only when it has the intention of
actually acquiring the securities. The Trust will maintain with
the Custodian and mark to market every business day a separate
account with portfolio securities in an amount at least equal to
such commitments. On delivery dates for such transactions, the
Trust will meet its obligations from maturities or sales of the
securities held in the separate account and/or from cash flow. If
the Trust chooses to dispose of the right to acquire a
when-issued security prior to its acquisition, it could, as with
the disposition of any other portfolio obligation, incur a gain
or loss due to market fluctuation.
Diversification and Certain Industry Requirements
The Trust has a rule, set forth in the Prospectus, under
which it cannot buy the securities of issuers in any one industry
if more than 25% of its total assets would then be invested in
securities of issuers of that industry. In applying this rule to
commercial paper issued by finance subsidiaries or affiliates of
operating companies, if the business of the issuer consists
primarily of financing the activities of the related operating
company, the Trust considers the industry of the issuer to be
that of the related operating company.
YIELD INFORMATION
There are two methods by which the Trust's yield for a
specified period of time is calculated.
The first method, which results in an amount referred to as
the "current yield," assumes an account containing exactly one
share at the beginning of the period. (The net asset value of
this share will be $1.00 except under extraordinary
circumstances.) The net change in the value of the account during
the period is then determined by subtracting this beginning value
from the value of the account at the end of the period; however,
excluded from the calculation are capital changes, i.e., realized
gains and losses from the sale of securities and unrealized
appreciation and depreciation.
This net change in the account value is then divided by the
value of the account at the beginning of the period (i.e.,
normally $1.00 as discussed above) and the resulting figure
(referred to as the "base period return") is then annualized by
multiplying it by 365 and dividing it by the number of days in
the period; the result is the "current yield." Normally a seven
day period will be used in determining yields (both the current
and the effective yield discussed below) in published or mailed
advertisements.
The second method results in an amount referred to as the
"compounded effective yield." This represents an annualization of
the current yield with dividends reinvested daily. This
compounded effective yield for a seven day period would be
computed by compounding the unannualized base period return by
adding one to the base period return, raising the sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.
Since calculations of both kinds of yields do not take into
consideration any realized or unrealized gains or losses on the
Trust's portfolio securities which may have an effect on
dividends, the dividends declared during a period may not be the
same on an annualized basis as either kind of yield for that
period.
Yield information may be useful to investors in reviewing
the Trust's performance. However, a number of factors should be
taken into account before using yield information as a basis for
comparison with alternative investments. An investment in the
Trust is not insured and its yields are not guaranteed. They
normally will fluctuate on a daily basis. The yields for any
given past period are not an indication or representation by the
Trust of future yields or rates of return on its shares and,
therefore, they cannot be compared to yields on savings accounts
or other investment alternatives which often provide a guaranteed
fixed yield for a stated period of time, and may be insured by a
government agency. In comparing the yields of one Money-Market
fund to another, consideration should be given to each fund's
investment policy, portfolio quality, portfolio maturity, type of
instruments held and operating expenses.
INVESTMENT RESTRICTIONS
The Trust has a number of policies concerning what it can
and cannot do. Those policies, which are called "fundamental
policies," may not be changed unless the holders of a majority,
as defined in the Investment Company Act of 1940 (the "1940 Act")
of the Trust's outstanding shares vote to change them. Under the
1940 Act, the vote of the holders of a majority of the
outstanding shares of the Trust means the vote of the holders of
the lesser of (a) 67% or more of the Trust's shares present at a
meeting or represented by proxy if the holders of more than 50%
of its shares are so present or represented, or (b) more than 50%
of its outstanding shares. Those fundamental policies not set
forth in the Prospectus are set forth below.
1. The Trust invests only in certain limited securities.
Since the Trust cannot buy any securities other than those
listed under "Investment of the Trust's Assets" in the
Prospectus, the Trust cannot buy any voting securities, any
commodities or commodity contracts, any mineral related programs
or leases, any shares of other investment companies or any
warrants, puts, calls or combinations thereof.
The Trust cannot purchase or hold the securities of any
issuer if, to its knowledge, Trustees, directors or officers of
the Trust or its Adviser individually owning beneficially more
than 0.5% of the securities of that issuer own in the aggregate
more than 5% of such securities.
The Trust cannot buy or sell real estate; however it may
purchase marketable securities issued by companies, including
real estate investment trusts, which invest in real estate or
interests therein.
2. Almost all of the Trust's assets must be in established
companies.
Only 5% of the Trust's total assets may be in issuers less
than three years old, that is, which have not been in continuous
operation for at least three years. This includes the operations
of predecessor companies.
3. The Trust does not buy for control.
The Trust cannot invest for the purpose of exercising
control or management of other companies.
4. The Trust does not sell securities it doesn't own or borrow
from brokers to buy securities.
Thus, it cannot sell short or buy on margin.
5. The Trust is not an underwriter.
The Trust cannot invest in securities for which there are
legal or contractual restrictions on resale or underwrite
securities of other issuers except insofar as it may technically
be deemed an underwriter under the Securities Act of 1933 in
selling portfolio securities.
LOANS OF PORTFOLIO SECURITIES
The Trust may, to increase its income, lend its securities
on a short- or long-term basis to broker-dealers, banks or
certain other financial institutions (see below) if (i) the loan
is collateralized in accordance with applicable regulatory
requirements (the "Guidelines") and if (ii) after any loan, the
value of the securities loaned does not exceed 10% of the value
of its total assets. As of the date of this Additional Statement,
the Trust does not foresee lending securities if after any loan
the value of loaned securities exceeds 5% of the value of its
total assets. The financial institutions other than
broker-dealers or banks to which the Trust can lend its
securities are limited to "accredited investors," as that term is
defined in Section 2(15) of the Securities Act of 1933. (In
general, such institutions are insurance companies, investment
companies and certain employee benefit plans.) Under the present
Guidelines (which are subject to change) the loan collateral
must, on each business day, at least equal the value of the
loaned securities and must consist of cash, bank letters of
credit or U.S. Government securities. To be acceptable as
collateral, a letter of credit must obligate a bank to pay
amounts demanded by the Trust if the demand meets the terms of
the letter. Such terms and the issuing banks would have to be
satisfactory to the Trust. Any loan might be secured by any one
or more of the three types of collateral. In addition, any such
investment must meet the applicable requirements of the Rule. See
"Effect of the Rule on Portfolio Management" in the Prospectus.
The Trust receives amounts equal to the interest or other
distributions on loaned securities and also receives one or more
of the negotiated loan fees, interest on securities used as
collateral or interest on the securities purchased with such
collateral, either of which types of interest may be shared with
the borrower. The Trust may also pay reasonable finder's,
custodian and administrative fees but only to persons not
affiliated with the Trust. The terms of the Trust's loans will
meet certain tests under the Internal Revenue Code and permit the
Trust to terminate the loan and thus reacquire loaned securities
on five days' notice.
DISTRIBUTION PLAN
The Trust has a Distribution Plan under Rule 12b-1 (the
"Rule") under the 1940 Act. The Rule provides in substance that
an investment company may not engage directly or indirectly in
financing any activity which is primarily intended to result in
the sale of its shares except pursuant to a plan adopted under
the Rule.
As used in the Plan, "Qualified Recipients" means (i) any
principal underwriter or underwriters of the Trust other than a
principal underwriter which is an affiliated person, or an
affiliated person of an affiliated person, of Aquila Management
Corporation (the "Administrator") and (ii) broker-dealers,
membership organizations, associations of common interest or
others selected by the Trust's administrator or sub-adviser with
which it has entered into written agreements ("Related
Agreements") contemplated by the Rule and which have rendered
assistance (whether direct, administrative or both) in the
distribution and/or retention of Trust shares, in the servicing
of shareholder accounts or in consulting or otherwise cooperating
as to its members or others in its area of interest. "Qualified
Holdings" means, as to any Qualified Recipient, all Trust shares
beneficially owned by such Qualified Recipient or by one or more
of its customers (brokerage or other), other contacts, investment
advisory clients, other clients, or its members, associates or
other persons within its area of interest, if the Qualified
Recipient was, in the sole judgment of the administrator or
sub-adviser, instrumental in the purchase and/or retention of
such Trust shares and/or in providing administrative, consulting
or other assistance in relation thereto.
The Plan permits the Administrator to make payments
("Permitted Payments") to Qualified Recipients. These Permitted
Payments are made by the Administrator and are not reimbursed by
the Trust to the Administrator. Permitted Payments may not
exceed, for any fiscal year of the Trust (pro-rated for any
fiscal year which is not a full fiscal year), 0.10 of 1% of the
average annual net assets of the Trust. The Administrator shall
have sole authority (i) as to the selection of any Qualified
Recipient or Recipients; (ii) not to select any Qualified
Recipient; and (iii) to determine the amount of Permitted
Payments, if any, to each Qualified Recipient, provided that the
total Permitted Payments to all Qualified Recipients do not
exceed the amount set forth above. The Administrator is
authorized, but not directed, to take into account, in addition
to any other factors deemed relevant by it, the following: (a)
the amount of the Qualified Holdings of the Qualified Recipient;
(b) the extent to which the Qualified Recipient has, at its
expense, taken steps in the shareholder servicing area; (c) the
consulting or other assistance provided by the Qualified
Recipient; and (d) the possibility that the Qualified Holdings of
the Qualified Recipient would be redeemed in the absence of its
selection or continuance as a Qualified Recipient.
Notwithstanding the foregoing two sentences, a majority of the
Independent Trustees may remove any person as a Qualified
Recipient.
The Plan recognizes that, in view of the Permitted Payments
and bearing by the Administrator of certain distribution
expenses, the profits, if any, of the Administrator are dependent
primarily on the administration fees paid by the Trust to the
Administrator and that its profits, if any, would be less, or
losses, if any, would be increased due to such Permitted Payments
and the bearing by it of such expenses. If and to the extent that
any such administration fees paid by the Trust might, in view of
the foregoing, be considered as indirectly financing any activity
which is primarily intended to result in the sale of shares
issued by the Trust, the payment of such fees is authorized by
the Plan.
The Plan also states that if and to the extent that any of
the payments listed below are considered by anyone to be
"primarily intended to result in the sale of" shares issued by
the Trust within the meaning of the Rule, such payments are
authorized under the Plan: (i) the costs of the preparation of
all reports and notices to shareholders and the costs of printing
and mailing such reports and notices to existing shareholders,
irrespective of whether such reports or notices contain or are
accompanied by material intended to result in the sale of shares
of the Trust or other funds or other investments; (ii) the costs
of the preparation and setting in type of all prospectuses and
statements of additional information and the costs of printing
and mailing all prospectuses and statements of additional
information to existing shareholders; (iii) the costs of
preparation, printing and mailing of any proxy statements and
proxies, irrespective of whether any such proxy statement
includes any item relating to, or directed toward, the sale of
the Trust's shares; (iv) all legal and accounting fees relating
to the preparation of any such reports, prospectuses, statements
of additional information, proxies and proxy statements; (v) all
fees and expenses relating to the qualification of the Trust
and/or its shares under the securities or "Blue-Sky" law of any
jurisdiction; (vi) all fees under the Securities Act of 1933 and
the 1940 Act, including fees in connection with any application
for exemption relating to or directed toward the sale of the
Trust's shares; (vii) all fees and assessments of the Investment
Company Institute or any successor organization, irrespective of
whether some of its activities are designed to provide sales
assistance; (viii) all costs of the preparation and mailing of
confirmations of shares sold or redeemed or share certificates,
and reports of share balances; and (ix) all costs of responding
to telephone or mail inquiries of investors or prospective
investors. The Plan states that whenever the Administrator bears
the costs, not borne by the Trust's Distributor, of printing and
distributing all copies of the Trust's prospectuses, statements
of additional information and reports to shareholders which are
not sent to the Trust's shareholders, or the costs of
supplemental sales literature and advertising, such payments are
authorized.
The Independent Trustees are those Trustees who are not
"interested persons" of the Trust as defined in the 1940 Act and
have no direct or indirect financial interest in the operation of
the Plan or in any agreements related to the Plan. The Plan
states that while it is in effect, the selection and nomination
of those Trustees of the Trust who are not "interested persons"
of the Trust shall be committed to the discretion of such
disinterested Trustees but that nothing in the Plan shall prevent
the involvement of others in such selection and nomination if the
final decision on any such selection and nomination is approved
by a majority of such disinterested Trustees.
The Plan states that while it is in effect, the Trust's
Administrator shall at least quarterly report to the Trust's
Trustees in writing for their review on the following matters:
(i) all Permitted Payments made to Qualified Recipients, the
identity of the Qualified Recipient of each Payment and the
purpose for which the amounts were expended; (ii) all costs of
each item specified in the second preceding paragraph (making
estimates of such costs where necessary or desirable) during the
preceding calendar or fiscal quarter; and (iii) all fees of the
Trust to the Administrator paid or accrued during such quarter.
The Plan went into effect upon approval by the shareholders
of the Trust on February 28, 1992, and unless terminated as
hereinafter provided, and continues from November 30 of each year
and year to year thereafter, but only so long as such continuance
is specifically approved at least annually by the vote of the
Trust's Board of Trustees and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such
continuance. In voting on the implementation or continuance of
the Plan, those Trustees who vote to approve such implementation
or continuance must conclude that there is a reasonable
likelihood that the Plan will benefit the Trust and its
shareholders. The Plan may be terminated at any time by a vote of
a majority of the Independent Trustees or by the vote of the
holders of a "majority" (as defined in the 1940 Act) of the
outstanding voting securities of the Trust. The Plan may not be
amended to increase materially the amount of payments to be made
without shareholder approval, and all amendments must be approved
by a vote of the Trustees of the Trust and of the Independent
Trustees, with votes cast in person at a meeting called for the
purpose of voting on the Plan.
The Plan states that in the case of a Qualified Recipient
which is a principal underwriter of the Trust, the Related
Agreement shall be the agreement contemplated by Section 15(b) of
the 1940 Act since each such agreement must be approved in
accordance with, and contain the provisions required by, the
Rule. The Plan also states that in the case of Qualified
Recipients which are not principal underwriters of the Trust, the
Related Agreements with them shall be approved in accordance
with, and contain the provisions required by, the Rule.
Under the Rule, all Related Agreements must be in writing
and must contain specified adoption and continuance requirements,
including a requirement that they terminate automatically on
their "assignment," as that term is defined in the 1940 Act. The
other adoption and continuance requirements as to Related
Agreements are the same as those described above as to the Plan
itself except that: (i) no shareholder action is required for the
approval of Related Agreements, and (ii) termination by Trustee
or shareholder action as there described may be on not more than
60 days' written notice.
The formula under which the payments described above may be
made under the Plan by the Administrator was arrived at by
considering a number of factors. One such factor is that such
payments are designed to provide incentives for Qualified
Recipients (i) in the case of Qualified Recipients which are
principal underwriters, to act as such and (ii) in the case of
all Qualified Recipients, to devote time, persons and effort to
activities which, although not sales activities themselves, may
be useful to the Distributor in its responsibilities as to the
sale of the shares of the Trust. Another factor is that such
payments by the Administrator to Qualified Recipients provide the
only incentive for Qualified Recipients to do so since there is
no sales charge on the sale of the Trust's shares.
LIMITATION OF REDEMPTIONS IN KIND
The Trust has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which the Trust is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1 percent
of the net asset value of the Trust during any 90-day period for
any one shareholder. Should redemptions by any shareholder exceed
such limitation, the Trust will have the option of redeeming the
excess in cash or in kind. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage costs in converting
the assets into cash. The method of valuing securities used to
make redemptions in kind will be the same as the method of
valuing portfolio securities described under "Net Asset Value Per
Share" in the Prospectus, and such valuation will be made as of
the same time the redemption price is determined.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust, their affiliations,
if any, with the Adviser and the Distributor, and their principal
occupations during at least the past five years are set forth
below. Messrs. Herrmann and Mason are "interested persons" of the
Trust as that term is defined in the 1940 Act as officers of the
Trust; in addition Mr. Herrmann is an officer, director and
shareholder of the Adviser and of the Distributor. They are so
designated by an asterisk. (See "General Information" for
information about shareholdings of Trustees and Officers).
Lacy B. Herrmann*, President and Chairman of the Board of
Trustees, 380 Madison Avenue, New York, New York 10017
Founder, President and Chairman of the Board of Aquila
Management Corporation since 1984, the sponsoring organization
and Administrator and/or Adviser or Sub-Adviser to the following
open-end investment companies, and Founder, Chairman of the Board
of Trustees, and President of each: Pacific Capital Cash Assets
Trust since 1984; Churchill Cash Reserves Trust since 1985;
Pacific Capital U.S. Treasuries Cash Assets Trust since 1988;
Pacific Capital Tax-Free Cash Assets Trust since 1988; each of
which is a Money-Market Fund, and together with this Trust are
called the Aquila Money-Market Funds; and Hawaiian Tax-Free Trust
since 1984; Tax-Free Trust of Arizona since 1986; Tax-Free Trust
of Oregon since 1986; Tax-Free Fund of Colorado since 1987 ;
Churchill Tax-Free Fund of Kentucky since 1987; Tax-Free Fund For
Utah since 1992; and Narragansett Insured Tax-Free Income Fund
since 1992; each of which is a tax-free municipal bond fund, and
two equity funds, Aquila Rocky Mountain Equity Fund since 1993
and Aquila Cascadia Equity Fund, since 1996, which, are called
the Aquila Bond and Equity Funds; Vice President, Director,
Secretary and formerly Treasurer of Aquila Distributors, Inc.
since 1981, distributor of the above funds; Chairman of the Board
of Trustees and President of Prime Cash Fund (which is inactive),
since 1982 and of Short Term Asset Reserves 1984-1996; President
and a Director of STCM Management Company, Inc., sponsor and
sub-adviser to CCMT; Chairman, President, and a Director since
1984, of InCap Management Corporation, formerly sub-adviser and
administrator of Prime Cash Fund and Short Term Asset Reserves,
and Founder and Chairman of several other Money-Market Funds;
Director or Trustee of OCC Cash Reserves, Inc., Oppenheimer Quest
Global Value Fund, Inc., Oppenheimer Quest Value Fund, Inc., and
Trustee of Quest For Value Accumulation Trust, The Saratoga
Advantage Trust, and of the Rochester Group of Funds, each of
which is an open-end investment company; Trustee of Brown
University , 1990-1996 and currently Trustee Emeritus; actively
involved for many years in leadership roles with university,
school and charitable organizations.
Theodore T. Mason, Vice Chairman of the Board of Trustees, 26
Circle Drive, Hastings-on-Hudson, New York 10706
Managing Director of EastWind Power Partners, Ltd. since 1994;
Director of Cogeneration Development of Willamette Industries,
Inc., a forest products company, 1991-1993; Vice President of
Corporate Development of Penntech Papers, Inc., 1978-1991; Vice
President of Capital Projects for the same company,
1977-1978;Director of STCM Management Company, Inc.; Vice
Chairman of the Board of Trustees and Trustee of Prime Cash Fund
(which is inactive) since 1982; Trustee of Short Term Asset
Reserves, 1984-1986 and 1989-1996, of Hawaiian Tax-Free Trust and
Pacific Capital Cash Assets Trust since 1984, of Churchill Cash
Reserves Trust since 1985, of Pacific Capital Tax-Free Cash
Assets Trust and Pacific Capital U.S. Treasuries Cash Assets
Trust since 1988 and of Churchill Tax-Free Fund of Kentucky since
1992; Vice President and Trustee of Oxford Cash Management Fund,
1983-1989; Vice President of Trinity Liquid Assets Trust,
1983-1985; President and Director of Ted Mason Venture
Associates, Inc., a venture capital consulting firm, 1972-1980;
Advisor to the Commander, U.S. Maritime Defense Zone Atlantic,
1984-1988; National Vice President, Surface/Subsurface, Naval
Reserve Association, 1985-1987; National Vice President, Budget
and Finance, for the same Association, 1983-1985; Commanding
Officer of four Naval Reserve Units, 1974-1985; Captain, USNR,
1978-1988.
Paul Y. Clinton, Trustee, 946 Morris Avenue, Bryn Mawr,
Pennsylvania 19010
Principal of Clinton Management Associates, a financial and
venture capital consulting firm; formerly Director of External
Affairs of Kravco Corporation, a national real estate owner and
developer, 1984-1995; formerly President of Essex Management
Corporation, a management and financial consulting company,
1979-1983; Trustee of Narragansett Insured Tax-Free Income Fund
since 1996 and of Prime Cash Fund (which is inactive), since
1993; Trustee of Short Term Asset Reserves 1984-1996; general
partner of Capital Growth Fund, a venture capital partnership,
1979-1982; President of Geneve Corp., a venture capital fund,
1970-1978; formerly Chairman of Woodland Capital Corp., a small
business investment company; formerly Vice President, W.R. Grace
& Co;Director or Trustee of OCC Cash Reserves, Inc., Oppenheimer
Quest Global Value Fund, Inc., Oppenheimer Quest Value Fund,
Inc., and Trustee of Quest For Value Accumulation Trust, and of
the Rochester Group of Funds, each of which is an open-end
investment company.
Robert L. Krakoff, Trustee, 257 Commonwealth Avenue, Boston,
Massachusetts 02116
Chairman and Chief Executive Officer of Advanstar Holdings,
Inc., since 1996. Chairman and Chief Executive Officer of Cahners
Publishing Company 1991-1996; President of Cahners Publishing
Company 1989-1991; Executive Vice President of that company,
1985-1989; President of Cahners Exposition Group, a division of
that company, 1979-1985; Vice President of that company,
1973-1985; Trustee of Narragansett Insured Tax-Free Income Fund
since 1992; Director of Centennial Capital Special Fund, Inc.
until 1979; Trustee of Trinity Liquid Assets Trust, 1982-1991;
Director of Reed Elsevier International PLC (an international
publishing firm) since 1990-1996; Director of Freedom
Communications, Inc. since 1996.
Anne J. Mills, Trustee, 167 Glengarry Place, Castle Pines
Village, Castle Rock, Colorado 80104
Vice President for Business Affairs of Ottawa University since
1992; Director of Customer Fulfillment, U.S. Marketing and
Services Group, IBM Corporation, 1990-1991; Director of Business
Requirements of that Group, 1988-1990; Director of Phase
Management of that Group, 1985-1988; Budget Review Officer of the
American Baptist Churches/USA since 1994; Director of the
American Baptist Foundation since 1985; Trustee of Brown
University; Trustee of Churchill Cash Reserves Trust since 1985,
of Tax-Free Trust of Arizona since 1986, of Churchill Tax-Free
Fund of Kentucky and Tax-Free Fund of Colorado since 1987 and of
Tax-Free Fund For Utah since 1994.
Cornelius T. Ryan, Trustee, c/o Oxford Partners, 315 Post Road
West, Westport, Connecticut , 06880
General Partner of Oxford Partners, a group of investment
venture capital partnerships; General Partner of Oxford
Bioscience Partners, and President of Oxford Venture Corporation,
an affiliated administrative company, since 1980; Trustee of
Prime Cash Fund (which is inactive) since 1983 and of Aquila
Rocky Mountain Equity Fund since 1996; President of AMR
International, Inc., a management training and publishing
company, 1978-1980; Director of Schuster Fund, Inc.,
1972-1980;President of GTE New Ventures Corporation, 1974-1978;
Vice President, Corporation Development, of GTE Corporation,
1974-1978; President and a founder of Randolph Computer
Corporation, 1965-1974; Director of Neuberger & Berman Equity
Funds, since 1988.
Diana P. Herrmann, Senior Vice President, 380 Madison Avenue, New
York, New York 10017
Senior Vice President and Secretary and formerly Vice
President of the Administrator since 1986 and Director since
1984; Trustee of Tax-Free Trust of Arizona and Tax-Free Trust of
Oregon since 1994 and of Churchill Tax-Free Fund of Kentucky and
Churchill Cash Reserves Trust since 1995; Vice President of InCap
Management Corporation since 1986 and Director since 1983; Senior
Vice President or Vice President and formerly Assistant Vice
President of the Money Funds since 1986; Vice-President of Prime
Cash Fund (which is inactive), since 1986, of Cascades Cash Fund
1989-1994, and of Short Term Asset Management Fund, 1986-1988;
Assistant Vice President of Oxford Cash Management Fund,
1986-1988; Assistant Vice President and formerly Loan Officer of
European American Bank, 1981-1986; daughter of the Trust's
President; Trustee of the Leopold Schepp Foundation (academic
scholarships) since 1995; actively involved in mutual fund and
trade associations and in college and other volunteer
organizations.
Charles E. Childs, III, Vice President, 380 Madison Avenue, New
York, New York 10017
Vice President - Administration and formerly Assistant Vice
President and Associate of the Administrator since 1987; Vice
President or Assistant Vice President of the Money Funds since
1988; Northeastern University, 1986-1987 (M.B.A., 1987);
Financial Analyst, Unisys Corporation, 1986; Associate Analyst at
National Economic Research Associates, Inc. (NERA), a
micro-economic consulting firm, 1979-1985.
John M. Herndon, Vice President, 380 Madison Avenue, New York,
New York 10017
Assistant Secretary of the +++Aquila Money-Market Funds and
the Aquila Bond and Equity Funds since 1995 and Vice President of
the Aquila Money-Market Funds since 1990; Vice President of the
Administrator since 1990; Investment Services Consultant and Bank
Services Executive of Wright Investors' Service, a registered
investment adviser, 1983-1989; Member of the American Finance
Association, the Western Finance Association and the Society of
Quantitative Analysts.
William C. Wallace, Vice President, 380 Madison Avenue, New York,
New York 10017
Vice President of Pacific Capital Cash Assets Trust since
1984; Senior Vice President of Hawaiian Tax-Free Trust since 1985
and Vice President, 1984-1985; Senior Vice President of Tax-Free
Trust of Arizona since 1989 and Vice President, 1986-1988; Vice
President of Tax-Free Trust of Oregon since 1986, of Churchill
Tax-Free Fund of Kentucky and Tax-Free Fund of Colorado since
1987, of Pacific Capital Tax-Free Cash Assets Trust and Pacific
Capital U.S. Treasuries Cash Assets Trust since 1988 and of
Narragansett Insured Tax-Free Income Fund since 1992; Secretary
and Director of STCM Management Company, Inc. since 1974;
President of the Distributor since 1995 and formerly Vice
President of the Distributor, 1986-1992; Member of the Panel of
Arbitrators, American Arbitration Association, since 1978;
Assistant Vice President, American Stock Exchange, Market
Development Division, and Director of Marketing, American Gold
Coin Exchange, a subsidiary of the American Stock Exchange,
1976-1984.
Rose F. Marotta, Chief Financial Officer, 380 Madison Avenue, New
York, New York 10017
Chief Financial Officer of the Aquila Money-Market Funds and
the Aquila Bond and Equity Funds since 1991 and Treasurer,
1981-1991; Treasurer and Director of STCM Management Company,
Inc., since 1974; Treasurer of Trinity Liquid Assets Trust,
1982-1986 and of Oxford Cash Management Fund, 1982-1988;
Treasurer of InCap Management Corporation since 1982, of the
Sub-Adviser since 1984 and of the Distributor since 1985.
Richard F. West, Treasurer, 380 Madison Avenue, New York, New
York 10017
Treasurer of the Aquila Money-Market Funds and the Aquila Bond
and Equity Funds and of Aquila Distributors, Inc. since 1992;
Associate Director of Furman Selz Incorporated, 1991-1992; Vice
President of Scudder, Stevens & Clark, Inc. and Treasurer of
Scudder Institutional Funds, 1989-1991; Vice President of Lazard
Freres Institutional Funds Group, Treasurer of Lazard Freres
Group of Investment Companies and HT Insight Funds, Inc.,
1986-1988; Vice President of Lehman Management Co., Inc. and
Assistant Treasurer of Lehman Money-Market Funds, 1981-1985;
Controller of Seligman Group of Investment Companies,
1960-1980.
Edward M. W. Hines, Secretary, 551 Fifth Avenue, New York, New
York 10176
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines &
Mone LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary
of the Aquila Money-Market Funds and the Aquila Bond and Equity
Funds since 1982; Secretary of Trinity Liquid Assets Trust,
1982-1985 and Trustee of that Trust, 1985-1986; Secretary of
Oxford Cash Management Fund, 1982-1988.
Patricia A. Craven, Assistant Secretary & Compliance Officer, 380
Madison Avenue, New York, New York 10017
Assistant Secretary of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1995; Counsel to the
Administrator and the Distributor since 1995; formerly a Legal
Associate for Oppenheimer Management Corporation, 1993-1995.
Compensation of Trustees
The Trust does not pay fees to Trustees affiliated with
the Administrator or to any of the Trust's officers. During the
fiscal year ended June 30, 1996, the Trust paid $25,452 in fees
and reimbursement of expenses to its other Trustees. The Trust is
one of the 14 funds in the Aquilasm Group of Funds, which consist
of tax-free municipal bond funds, money-market funds and two
equity funds. The following table lists the compensation of all
Trustees who received compensation from the Trust and the
compensation they received during the Trust's fiscal year from
other funds in the Aquilasm Group of Funds. None of such Trustees
has any pension or retirement benefits from the Trust or any of
the other funds in the Aquila group.
<TABLE>
<CAPTION>
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group now serves
<S> <C> <C> <C>
Paul Y.
Clinton $2,840 $7,996 3
Robert L.
Krakoff $1,450 $2,100 2
Theodore T.
Mason $938 $42,341 7
Anne J.
Mills $2,075 $30,364 6
Cornelius T.
Ryan $1,375 $5,650 2
</TABLE>
ADDITIONAL INFORMATION AS TO MANAGEMENT ARRANGEMENTS
Additional Information as to the Advisory Agreement
The Investment Advisory Agreement (the "Advisory Agreement")
between the Trust and STCM Management Company, Inc. (the
"Adviser") contains the provisions described below, in addition
to those described in the Prospectus.
In connection with its duties to arrange for the purchase
and sale of the Trust's portfolio securities, the Adviser shall
select such broker-dealers ("dealers") as shall, in the Adviser's
judgment, implement the policy of the Trust to achieve "best
execution," i.e., prompt, efficient, and reliable execution of
orders at the most favorable net price. The Adviser shall cause
the Trust to deal directly with the selling or purchasing
principal or market maker without incurring brokerage commissions
unless the Adviser determines that better price or execution may
be obtained by paying such commissions; the Trust expects that
most transactions will be principal transactions at net prices
and that the Trust will incur little or no brokerage costs. The
Trust understands that purchases from underwriters include a
commission or concession paid by the issuer to the underwriter
and that principal transactions placed through dealers include a
spread between the bid and asked prices. In allocating
transactions to dealers, the Adviser is authorized to consider,
in determining whether a particular dealer will provide best
execution, the dealer's reliability, integrity, financial
condition and risk in positioning the securities involved, as
well as the difficulty of the transaction in question, and thus
need not pay the lowest spread or commission available if the
Adviser determines in good faith that the amount of commission is
reasonable in relation to the value of the brokerage and research
services provided by the dealer, viewed either in terms of the
particular transaction or the Adviser's overall responsibilities
as to the accounts as to which it exercises investment
discretion. If, on the foregoing basis, the transaction in
question could be allocated to two or more dealers, the Adviser
is authorized, in making such allocation, to consider (i) whether
a dealer has provided research services, as further discussed
below; and (ii) whether a dealer has sold shares of the Trust or
any other investment company or companies having the Adviser as
its investment adviser or having the same sub-adviser,
administrator or principal underwriter as the Trust. Such
research may be in written form or through direct contact with
individuals and may include quotations on portfolio securities
and information on particular issuers and industries, as well as
on market, economic, or institutional activities. The Trust
recognizes that no dollar value can be placed on such research
services or on execution services, that such research services
may or may not be useful to the Trust and/or other accounts of
the Adviser, and that research received by such other accounts
may or may not be useful to the Trust.
The expense limitation referred to in the Prospectus, if in
effect, is implemented monthly so that at no time is there any
unpaid liability under the limitation, subject to readjustment
during the year.
The Advisory Agreement may be terminated by the Adviser at
any time without penalty upon giving the Trust sixty days'
written notice, and may be terminated by the Trust at any time
without penalty upon giving the Adviser sixty days' written
notice, provided that such termination by the Trust shall be
directed or approved by the vote of a majority of all its
Trustees in office at the time or by the vote of the holders of a
majority (as defined in the 1940 Act) of its voting securities at
the time outstanding and entitled to vote; it automatically
terminates in the event of its assignment (as so defined).
The Advisory Agreement provides that in the absence of
willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations thereunder, the Adviser is not
liable for any loss sustained by the adoption of any investment
policy or the purchase, sale or retention of any security and
permits the Adviser to act as investment adviser for any other
person, firm or corporation. The Trust agrees to indemnify the
Adviser to the full extent permitted under the Trust's
Declaration of Trust as presently in effect, and by the 1940 Act.
The Advisory Agreement states that it is agreed that the
Adviser shall have no responsibility or liability for the
accuracy or completeness of the Trust's Registration Statement
under the Securities Act of 1933 and the 1940 Act, except for the
information supplied by the Adviser for inclusion therein.
During the fiscal year ended June 30, 1996, the Trust
accrued $3,673 in favor of the Adviser under the Advisory
Agreement and $2,775 in favor of the Administrator under the
Administration Agreement. All such fees were waived. The expense
limitation provisions in the Advisory and Administration
Agreements in effect, would in any event have precluded any of
such fees during the last fiscal year. The Administrator also
reimbursed the Trust $73,338 to comply with the expense
limitation , $14,519 pursuant to the agreement regarding total
expenses of the Trust and $3,635 voluntarily, totaling $91,492.
During the fiscal year ended June 30, 1995, the Trust accrued
$3,924 in favor of the Adviser under the Advisory Agreement and
$2,943 in favor of the Administrator under the Administration
Agreement. All such fees were waived. The expense limitation
provisions in the Advisory and Administration Agreements in
effect would in any event have precluded any of such fees during
that fiscal year. In addition, the Administrator reimbursed the
Trust $64,713 to comply with the expense limitation described in
the Prospectus, $14,732 pursuant to the agreement regarding total
expenses of the Trust, described in the Prospectus and $3,960
voluntarily, totaling $83,405. During the fiscal year ended June
30, 1994, the Trust accrued $3,583 in favor of the Adviser under
the Advisory Agreement and $2,687 in favor of the Administrator
under the Administration Agreement. All such fees were waived.
The expense limitation provisions in the Advisory and
Administration Agreements would in any event have precluded any
of such fees during the last fiscal year. For the fiscal year
ended June 30, 1994, the Administrator reimbursed the Trust for
expenses in the amount of $73,123.
Additional Information as to the Administration Agreement
The Administration Agreement (the "Administration
Agreement") between Aquila Management Corporation, as
Administrator, and the Trust contains the provisions described
below in addition to those described in the Prospectus.
Subject to the control of the Trust's Board of Trustees, the
Administrator provides all administrative services to the Trust
other than those relating to the Trust's investment portfolio and
the maintenance of the Trust's accounting books and records (see
below for discussion); as part of such duties, the Administrator
(i) provides office space, personnel, facilities, and equipment
for the performance of the following functions and for the
maintenance of the Trust's headquarters; (ii) oversees all
relationships between the Trust and the Trust's transfer agent,
custodian, legal counsel, auditors and principal underwriter,
including the negotiation of agreements in relation thereto, the
supervision and coordination of the performance of such
agreements, and the overseeing of all administrative matters
which are necessary or desirable for the effective operation and
for the sale, servicing, or redemption of the Trust's shares;
(iii) provides to the Adviser and to the Trust statistical and
other factual information and advice regarding economic factors
and trends, but does not generally furnish advice or make
recommendations regarding the purchase or sale of securities;
(iv) maintains the Trust's books and records (other than
accounting books and records), and prepares (or assists counsel
and auditors in the preparation of) all required proxy
statements, reports to the Trust's shareholders and Trustees,
reports to and other filings with the Securities and Exchange
Commission and any other governmental agencies, and tax returns,
and oversees the Trust's insurance relationships; (v) prepares,
on the Trust's behalf, such applications and reports as may be
necessary to register or maintain the Trust's registration or
that of its shares under the securities or Blue-Sky laws of all
such jurisdictions as may be required from time to time; and (vi)
responds to any inquiries or other communications from the
Trust's shareholders and broker-dealers, or if any such inquiry
or communication is more properly to be responded to by the
Trust's shareholder servicing and transfer agent or distributor,
oversees such shareholder servicing and transfer agent's or
distributor's response thereto. Since the Trust pays its own
legal and audit expenses, to the extent that the Trust's counsel
and accountants prepare or assist in the preparation of
prospectuses, proxy statements and reports to shareholders, the
costs of such preparation or assistance are paid by the Trust.
The expense limitation referred to in the Prospectus, if in
effect, is implemented monthly so that at no time is there any
unpaid liability under the limitation, subject to readjustment
during the year.
The Administration Agreement may be terminated at any time
without penalty by the Administrator upon sixty days' written
notice to the Trust and the Adviser; it may be terminated by the
Trust at any time without penalty upon giving the Administrator
sixty days' written notice, provided that such termination by the
Trust shall be directed or approved by a vote of a majority of
the Trust's Trustees in office at the time, including a majority
of Independent Trustees. In either case the notice provision may
be waived.
The Administration Agreement provides that the Administrator
shall not be liable for any error in judgment or for any loss
suffered by the Trust in connection with the matters to which the
Administration Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence of the
Administrator in the performance of its duties, or from reckless
disregard by it of its obligations and duties under the
Administration Agreement. The Trust agrees to indemnify the
Administrator to the full extent permitted by the Trust's
Declaration of Trust and the 1940 Act.
AMORTIZED COST VALUATION
The Trust operates under Rule 2a-7 under the 1940 Act, which
permits it to value its portfolio on the basis of amortized cost.
The amortized cost method of valuation is accomplished by valuing
a security at its cost and thereafter assuming a constant
amortization rate to maturity of any discount or premium, and
does not reflect the impact of fluctuating interest rates on the
market value of the security. This method does not take into
account unrealized gains or losses.
While the amortized cost method provides certainty in
valuation, there may be periods during which value, as determined
by amortized cost, is higher or lower than the price the Trust
would receive if it sold the instrument. During periods of
declining interest rates, the daily yield on the Trust's shares
may tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon
market prices and estimates of market prices for all of its
portfolio instruments and changing its dividends based on these
changing prices. The converse would apply in a period of rising
interest rates.
Under the Rule, the Board of Trustees must establish, and
has established, procedures (the "Procedures") designed to
stabilize at $1.00, to the extent reasonably possible, the
Trust's price per share as computed for the purpose of sales and
redemptions. Such procedures must include review of the Trust's
portfolio holdings by the Board of Trustees at such intervals as
they may deem appropriate and at such intervals as are reasonable
in light of current market conditions to determine whether the
Trust's net asset value calculated by using available market
quotations deviates from the per share value based on amortized
cost. "Available market quotations" may include actual market
quotations (valued at the mean between bid and asked prices),
estimates of market value reflecting current market conditions
based on quotations or estimates of market value for individual
portfolio instruments or values obtained from yield data relating
to a directly comparable class of securities published by
reputable sources.
Under Rule 2a-7, if the extent of any deviation between the
net asset value per share based upon "available market
quotations" (see above) and the net asset value per share based
on amortized cost exceeds $0.005, the Board of Trustees must
promptly consider what action, if any, will be initiated. When
the Board of Trustees believes that the extent of any deviation
may result in material dilution or other unfair results to
investors or existing shareholders, it is required to take such
action as it deems appropriate to eliminate or reduce to the
extent reasonably practicable such dilution or unfair results.
Such actions could include the sale of portfolio securities prior
to maturity to realize capital gains or losses or to shorten
average portfolio maturity, withholding dividends or payment of
distributions from capital or capital gains, redemptions of
shares in kind, or establishing a net asset value per share using
available market quotations.
The Procedures include changes in the dividends payable by
the Trust under specified conditions, as described below under
"Computation of Daily Dividends." This portion of the Procedures
provides that actions that the Trustees would consider under
certain circumstances can be taken automatically.
COMPUTATION OF DAILY DIVIDENDS
Under the Procedures which the Trust's Board of Trustees has
adopted relating to "amortized cost" valuation, the calculation
of the Trust's daily dividends will change under certain
circumstances from that indicated in the Prospectus. If on any
day the deviation between net asset value determined on an
amortized cost basis and that determined using market quotations
is $0.003 or more, the amount of such deviation will be added to
or subtracted from the daily dividend to the extent necessary to
reduce such deviation to within $0.003.
If on any day there is insufficient net income to absorb any
such reduction, the Board of Trustees would be required under the
Rule to consider taking other action if the deviation, after
eliminating the dividend for that day, exceeds of $0.005. One of
the actions which the Board of Trustees might take could be the
elimination or reduction of dividends for more than one day.
AUTOMATIC WITHDRAWAL PLAN
You may establish an Automatic Withdrawal Plan under which
you will receive a monthly or quarterly check in a stated amount,
not less than $50, if you own or purchases shares of the Trust
having a net asset value of at least $5,000. Stock certificates
will not be issued for shares held under an Automatic Withdrawal
Plan. All dividends must be reinvested.
Shares will be redeemed on the last business day of the
month as may be necessary to meet withdrawal payments. Shares
acquired with reinvested dividends will be redeemed first to
provide such withdrawal payments and thereafter other shares will
be redeemed to the extent necessary, and, depending upon the
amount withdrawn, your principal may be depleted.
Redemption of shares for withdrawal purposes may reduce or
even liquidate your account. Monthly or quarterly payments paid
to shareholders may not be considered as a yield or income on
investment.
GENERAL INFORMATION
Background of the Trust
Capital Cash Management Trust is one of the oldest
Money-Market mutual funds in the United States. It has served a
wide range of investors for over 20 years, producing competitive
results for individuals, churches, endowments, schools, bank
trust departments and corporations.
Information about 5% shareholders
As of October 3, 1996 the following persons owned more
than 5% of the Trust's outstanding shares:
William J. Boyle and Margaret M. Boyle, JTWROS, 10
Canterbury Place, Cranford, NJ 07016, 99,923 shares (5.6%); In
addition, the Trustees and officers of the Trust owned 527,608
shares (29.6%), of which 378,069 shares (21.2%) are held as
follows: by Aquila Management Corp., 395 shares, by Aquila
Distributors, Inc., 81,357 shares, by Lacy B. Herrmann and
Elizabeth B. Herrmann, 196,461 shares and by Elizabeth B.
Herrmann 99,856 shares. See "Trustees and Officers" above for
information about Mr. Herrmann, and "Information as to the
Adviser, the Administrator and the Distributor" in the Prospectus
for information about Aquila Management Corporation.
Net Asset Value Per Share
As indicated in the Prospectus, the net asset value per
share of the Trust's shares will be determined on each day that
the New York Stock Exchange is open. That Exchange annually
announces the days on which it will not be open; the most recent
announcement indicates that it will not be open on the following
days: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
However, that Exchange may close on days not included in that
announcement.
Indemnification of Shareholders and Trustees
The Trust is an entity of the type commonly known as a
"Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be
held personally liable as partners for the obligations of the
Trust. The Declaration of Trust does, however, contain an express
disclaimer of shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or
executed by the Trust or the Trustees. The Declaration of Trust
provides for indemnification out of the Trust's property of any
shareholder held personally liable for the obligations of the
Trust. The Declaration of Trust also provides that the Trust
shall, upon request, assume the defense of any claim made against
any shareholder for any act or obligation of the Trust and
satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to the relatively remote circumstances in which the Trust
itself would be unable to meet its obligations.
The Declaration of Trust further provides that the Trustees
will not be liable for errors of judgment or mistakes of fact or
law; but nothing in the Declaration of Trust protects a Trustee
against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his
office.
Custodian and Auditors
The Trust's Custodian, Bank One Trust Company, N.A., is
responsible for holding the Trust's assets.
The Trust's auditors, KPMG Peat Marwick LLP, perform an
annual audit of the Trust's financial statements.
Financial Statements
The financial statements of the Trust for the fiscal year
ended June 30, 1996, which are contained in the Annual Report for
that fiscal year, are hereby incorporated by reference into the
Additional Statement. Those financial statements have been
audited by KPMG Peat Marwick LLP, independent auditors, whose
report thereon is incorporated herein by reference.
<PAGE>
APPENDIX A
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS
Bond Ratings
At the date of this Additional Statement there are six
organizations considered as Nationally Recognized Statistical
Rating Organizations ("NRSROs") for purposes of Rule 15c3-1 under
the Securities Exchange Act of 1934. Their names, a brief summary
of their respective rating systems, some of the factors
considered by each of them in issuing ratings and their
individual procedures are described below.
STANDARD AND POOR'S CORPORATION
Commercial paper consists of unsecured promissory notes
issued to raise short-term funds. An S&P commercial paper rating
is a current assessment of the likelihood of timely payment of
debt having an original maturity of no more than 365 days. S&P's
commercial paper ratings are graded into several categories from
"A-1" for the highest-quality obligations (which can also have a
plus (+) sign designation) to "D" for the lowest. The two highest
categories are:
A-1: This highest category indicates the degree of
safety regarding timely payment is strong. Those issues
determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign.
A-2: Capacity for timely payment on issues with this
designation is satisfactory. However, the relative
degree of safety is not as high for issues designated
A-1.
An S&P corporate debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific
obligation. The ratings are based, in varying degrees, on the
following considerations:
1) Likelihood of default -- capacity and willingness of
the obligor as to the timely payment of interest and
repayment of principal in accordance with the terms of
the obligations;
2) Nature of and provisions of the obligation; and
3) Protection afforded by, and relative position of,
the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of
bankruptcy and other
laws affecting creditors' rights.
The two highest categories are:
AAA: Capacity to pay interest and repay principal is
extremely strong.
AA: Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the
highest rated issues only in a degree.
MOODY'S INVESTORS SERVICE
Moody's short-term debt ratings are opinions of the ability
of issuers to repay punctually senior debt obligations which have
an original maturity not exceeding one year. Obligations relying
upon support mechanisms such as letters of credit and bonds of
indemnity are excluded unless explicitly rated. The two highest
categories are:
Prime-1: Issuers rated P-1 have a superior ability for
repayment of senior short-term debt obligations,
evidenced by the following characteristics:
* Leading market positions in well-
established industries.
* High rates of return on funds employed.
* Conservative capital structure with
moderate reliance on debt and ample asset
protection.
* Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
* Well-established access to a range of
markets and assured sources of alternative
liquidity.
Prime-2: Issuers rated P-2 have a strong ability for
repayment of senior short-term debt obligations,
evidenced by the above-mentioned characteristics, but
to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still
appropriate, may be more affected by external
conditions. Ample alternative liquidity is maintained.
Corporate bonds rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edged." Interest payments are
protected by large or exceptionally stable margin and principal
is secure. Corporate bonds rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what are generally known as high-grade bonds. Aa bonds
are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities, fluctuation of
protective elements may be of greater amplitude, or there may be
other elements present which make the long-term risk appear
somewhat greater than the Aaa securities.
DUFF & PHELPS, INC.
The ratings apply to all obligations with maturities of
under one year, including commercial paper, the unsecured portion
of certificates of deposit, unsecured bank loans, master notes,
bankers' acceptances, irrevocable letters of credit and current
maturities of long-term debt. The two highest categories are:
D-1+: Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or
access to alternative sources of funds is outstanding
and safety is just below risk-free U.S. Treasury short-
term obligations.
D-1: Very high certainty of timely payment. Liquidity
factors are excellent and supported by good fundamental
protection factors. Risk factors are minor.
D-1 -: High certainty of timely payment. Liquidity
factors are strong and supported by good fundamental
protection factors. Risk factors are very small.
D-2: Good certainty of timely payment. Liquidity
factors and company fundamentals are sound. Although
ongoing funding needs may enlarge total financing
requirements, access to capital markets is good. Risk
factors are very small.
Long-term debt rated AAA represents the highest credit
quality. The risk factors are negligible, being only slightly
more than for risk-free U.S. Treasury debt. Debt rated AA
represents high credit quality. Protection factors are strong.
Risk is modest but may vary slightly from time to time because of
economic conditions.
IBCA
In determining the creditworthiness of financial
institutions, IBCA assigns ratings within the following
categories: Legal, Individual, Short and Long Term. A legal
rating deals solely with the question of whether an institution
would receive support if it ran into difficulties and not whether
it is "good" or "bad". An individual rating looks purely at the
strength of a financial institution without receiving any
support. Short and long-term ratings assess the borrowing
capabilities and the capacity for timely repayment of debt
obligations. A short-term rating relates to debt which has a
maturity of less than one year, while a long-term rating applies
to a instrument of longer duration. The legal ratings are:
1: A bank for which there is a clear legal guarantee on
the part of its home state to provide any necessary
support or a bank of such importance both
internationally and domestically that support from the
state would be forthcoming, if necessary.
2: A bank for which there is no legal obligation on the
part of its sovereign entity to provide support but for
which state support would be forthcoming, for example,
because of its importance to the total economy or its
historic relationship with the government.
The individual ratings are:
A: A bank with a strong balance sheet, favorable
credit profile and a consistent record of above average
profitability.
B: A bank with a sound credit profile and without
significant problems. The bank's performance has
generally been in line with or better than that of its
peers.
The short-term ratings are:
A-1+: Obligations supported by the highest capacity for
timely repayment.
A-1: Obligations supported by a very strong capacity
for timely repayment.
A-2: Obligations supported by a very strong capacity
for timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or
financial conditions.
The long-term ratings are:
AAA: Obligations for which there is the lowest
expectation of investment risk. Capacity for timely
repayment of principal and interest is substantial,
such that adverse changes in business, economic or
financial conditions are unlikely to increase
investment risk.
AA: Obligations for which there is a very low
expectation of investment risk. Capacity for timely
repayment of principal and interest is substantial.
Adverse changes in business, economic or financial
conditions may increase investment risk albeit not
significantly.
Thomson BankWatch, Inc. (TBW)
The TBW short-term ratings apply to commercial paper, other
senior short-term obligations and deposit obligations of the
entities to which the rating has been assigned. TBW's two highest
short-term ratings are:
TBW-1: Indicates a very high degree of likelihood that
principal and interest will paid on a timely basis.
TBW-2: While the degree of safety regarding timely
repayment of principal and interest is strong, the
relative degree of safety is not as high as for issues
rated "TBW-1".
The TBW long-term rating specifically assess the likelihood
of an untimely repayment of principal or interest over the term
to maturity of the rated instrument. TBW's two highest long-term
ratings are:
AAA: Indicates ability to repay principal and interest
on a timely basis is very strong.
AA: Indicates a superior ability to repay principal
and interest on a timely basis with limited incremental
risk versus issues rated in the highest category.
Fitch Investors Service, Inc.
The Fitch short-term ratings apply to debt obligations that
are payable on demand which include commercial paper,
certificates of deposit, medium-term notes and municipal and
investment notes. Short-term ratings places greater emphasis than
long-term ratings on the existence of liquidity necessary to meet
the issuer's obligations in a timely manner. Fitch short-term
ratings are:
F-1+: Issues assigned this rating are regarded as
having the strongest degree of assurance for timely
payment.
F-1: Issues assigned this rating reflect an assurance
of timely payment only slightly less in degree than
issues rated "F-1+".
The Fitch long-term rating represents their assessment of
the issuer's ability to meet the obligations of a specific debt
issue or class of debt in a timely manner. The rating takes into
consideration special features of the issue, its relationship to
other obligations of the issuer, the current and prospective
financial and operating performance of the issuer and any
guarantor, as well as the economic and political environment that
might affect the issuer's future financial strength and credit
quality. The Fitch long-term rating are:
AAA: Bonds considered to be investment grade and of the
highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by
reasonably foreseeable events.
AA: Bonds considered to be investment grade and of
very high credit quality. The obligor's ability to pay
interest and repay principal is very strong.
DESCRIPTION OF MUNICIPAL BOND AND COMMERCIAL PAPER RATINGS
Municipal Bond Ratings
Standard & Poor's. A Standard & Poor's municipal obligation
rating is a current assessment of the creditworthiness of an
obligor with respect to a specific obligation. This assessment
may take into consideration obligors such as guarantors, insurers
or lessees.
The debt rating is not a recommendation to purchase, sell or
hold a security, inasmuch as it does not comment as to market
price or suitability for a particular investor.
The ratings are based on current information furnished by
the issuer or obtained by Standard & Poor's from other sources it
considers reliable. Standard & Poor's does not perform an audit
in connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default - capacity and willingness of the
obligor as to the timely payment of interest and
repayment of principal in accordance with the terms of
the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization
or other arrangement under the laws of bankruptcy and
other laws affecting creditors rights.
AAA Debt rated "AAA" has the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay
principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the
highest rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest
and repay principal although it is somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in
higher rated categories.
BBB Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas
it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category
than in higher rated categories.
Plus (+) or Minus (:): The ratings from "AA" to "B" may be
modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
Provisional Ratings: The letter "p" indicates that the
rating is provisional. A provisional rating assumes the
successful completion of the project being financed by the debt
being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the successful
and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the
project, makes no comment on the likelihood of, or the risk of
default upon failure of, such completion. The investor should
exercise his own judgment with respect to such likelihood and
risk.
Standard & Poor's ratings for municipal note issues are
designated SP in order to help investors distinguish more clearly
the credit quality of notes as compared to bonds. Notes bearing
the designation SP-1 are deemed very strong or to have strong
capacity to pay principal and interest. Those issues determined
to possess overwhelming safety characteristics will be given a
plus (+) designation. Notes bearing the designation SP-2 are
deemed to have a satisfactory capacity to pay principal and
interest.
Moody's Investors Service. A brief description of the
applicable Moody's Investors Service rating symbols and their
meanings follows:
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment
risk and are generally referred to as "gilt edge".
Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure.
While the various protective elements are likely to
change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group
they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat
larger than in Aaa securities.
A Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper
medium grade obligations. Factors giving security to
principal and interest are considered adequate, but
elements may be present which suggest a susceptibility
to impairment some time in the future.
Baa Bonds which are rated Baa are considered as medium
grade obligations; i.e., they are neither highly
protected nor poorly secured. Interest payments and
principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of
time. Such bonds lack outstanding investment
characteristics and in fact have speculative
characteristics as well.
Bonds in the Aa, A, Baa, Ba and B groups which Moody's
believes possess the strongest investment attributes are
designated by the symbols Aa1, A1, Baa1, Ba1 and B1.
Moody's Short Term Loan Ratings - There are four rating
categories for short-term obligations, all of which define an
investment grade situation. These are designated Moody's
Investment Grade as MIG 1 through MIG 4. In the case of variable
rate demand obligations (VRDOs), two ratings are assigned; one
representing an evaluation of the degree of risk associated with
scheduled principal and interest payments, and the other
representing an evaluation of the degree of risk associated with
the demand feature. The short-term rating assigned to the demand
feature of VRDOs is designated as VMIG. When no rating is applied
to the long or short-term aspect of a VRDO, it will be designated
NR. Issues or the features associated with MIG or VMIG ratings
are identified by date of issue, date of maturity or maturities
or rating expiration date and description to distinguish each
rating from other ratings. Each rating designation is unique with
no implication as to any other similar issue of the same obligor.
MIG ratings terminate at the retirement of the obligation while
VMIG rating expiration will be a function of each issuer's
specific structural or credit features.
MIG1/VMIG1 This designation denotes best quality. There
is present strong protection by established
cash flows, superior liquidity support or
demonstrated broad-based access to the market
for refinancing.
MIG2/VMIG2 This designation denotes high quality.
Margins of protection are ample although not
so large as in the preceding group.
MIG3/VMIG3 This designation denotes favorable quality.
All security elements are accounted for but
there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow
protection may be narrow and market access
for refinancing is likely to be less well
established.
MIG4/VMIG4 This designation denotes adequate quality.
Protection commonly regarded as required of
an investment security is present and
although not distinctly or predominantly
speculative, there is specific risk.
Commercial Paper Ratings
Moody's commercial paper ratings are opinions of the ability
of issuers to repay punctually promissory obligations. Moody's
employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of
rated issuers: Prime 1 -- Highest Quality; Prime 2 -- Higher
Quality; Prime 3 -- High Quality.
A Standard & Poor's commercial paper rating is a current
assessment of the likelihood of timely payment. Ratings are
graded into four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest.
Issues assigned the highest rating, A, are regarded as
having the greatest capacity for timely payment. Issues in this
category are designed with the numbers 1, 2 and 3 to indicate the
relative degree of safety. The designation A-1 indicates that the
degree of safety regarding timely payment is either overwhelming
or very strong. A "+" designation is applied to those issues
rated "A-1" which possess safety characteristics. Capacity for
timely payment on issues with the designation A-2 is strong.
However, the relative degree of safety is not as high as for
issues designated A-1. Issues carrying the designation A-3 have a
satisfactory capacity for timely payment. They are, however,
somewhat more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
<PAGE>
Investment Adviser
STCM MANAGEMENT COMPANY, INC.
380 Madison Avenue, Suite 2300
New York, NY 10017
Administrator
AQUILA MANAGEMENT CORPORATION
380 Madison Avenue, Suite 2300
New York, New York 10017
Distributor
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
Trustees
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice President
Paul Y. Clinton
Robert L. Krakoff
Anne J. Mills
Cornelius T. Ryan
Officers
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President & Assistant Secretary
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
Patricia A. Craven, Assistant Secretary
Transfer and Shareholder Servicing Agent
ADMINISTRATIVE DATA MANAGEMENT CORP.
581 Main Street
Woodbridge, New Jersey 07095-1198
Custodian
BANK ONE TRUST COMPANY, N.A.
100 East Broad Street
Columbus, Ohio 43271
Independent Auditors
KPMG PEAT MARWICK LLP
345 Park Avenue
New York, New York 10154
Legal Counsel
HOLLYER BRADY SMITH TROXELL
BARRETT ROCKETT HINES & MONE LLP
551 Fifth Avenue
New York, New York 10176
CAPITAL CASH
MANAGEMENT TRUST
A cash
management
investment
[LOGO]
STATEMENT OF
ADDITIONAL
INFORMATION
[LOGO]
One of the
Aquilasm Group of Funds
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
PART C: OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Financial Highlights
Incorporated by reference into Part B:
Report of Independent Auditors
Statement of Investments as of June 30, 1996
Statement of Assets and Liabilities as of
June 30, 1996
Statement of Operations for the year ended
June 30, 1996
Statement of Changes in Net Assets for the
years ended June 30, 1996 and 1995
Notes to Financial Statements
Included in Part C:
Consent of Independent Auditors
(b) Exhibits:
(1) Supplemental Declaration of Trust (iv)
(2) By-laws (iv)
(3) Not applicable
(4) Specimen share certificate (i)
(5) Investment Advisory Agreement (iv)
(6) Distribution Agreement (iv)
(7) Not applicable
(8) (a) Custody Agreement (vi)
(8) (b) Amendment to Custody Agreement (ii)
(9) (a) Transfer Agency Agreement (iii)
(9) (b) Administration Agreement (v)
(9) (c) Related Agreement (iv)
(10) Not applicable
(11) Not applicable
(12) Not applicable
(13) Not applicable
(14) Not applicable
(15) Distribution Plan (vi)
(16) Financial Data Schedule (vii)
(i) Filed as an exhibit to Registrant's Amendment No. 3
dated October 13, 1976 to its Form N-8B-1 and incor-
porated herein by reference.
(ii) Filed as an exhibit to Registrant's Post-Effective
Amendment No. 28 dated September 2, 1988 to its Form
N-1A and incorporated herein by reference.
(iii) Filed as an exhibit to Registrant's Post-Effective
Amendment No. 29 dated October 30, 1989 to its Form
N-1A and incorporated herein by reference.
(iv) Filed as an exhibit to Registrant's Post-Effective
Amendment No. 32 dated August 31, 1992 to its Form
N-1A and incorporated herein by reference.
(v) Filed as an exhibit to Registrant's Post-Effective
Amendment No. 33 dated October 29, 1993 to its Form
N-1A and incorporated herein by reference.
(vi) Filed as an exhibit to Registrant's Post-Effective
Amendment No. 35 dated October 26, 1995 to its Form
N-1A and incorporated herein by reference.
(vii) Filed herewith.
ITEM 25. Persons Controlled By or Under Common Control
With Registrant
None
ITEM 26. Number of Holders of Securities
As of September 30, 1996 Registrant had 150 hol-
ders of record of its shares.
ITEM 27. Indemnification
Subdivision (c) of Section 12 of Article SEVENTH of
Registrant's Supplemental Declaration of Trust,
filed as Exhibit 1 to Registrant's Post-Effective
Amendment No. 32 dated August 31, 1992 to its Form
N-1A, is incorporated herein by reference.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to Trustees, officers, and controlling persons of
Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in that Act and is, therefore, unenforce-
able. In the event that a claim for indemnifica-
tion against such liabilities (other than the pay-
ment by Registrant of expenses incurred or paid by
a Trustee, officer, or controlling person of Regis-
trant in the successful defense of any action,
suit, or proceeding) is asserted by such Trustee,
officer, or controlling person in connection with
the securities being registered, Registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of
whether such indemnification by it is against pub-
lic policy as expressed in the Act and will be go-
verned by the final adjudication of such issue.
ITEM 28. Business & Other Connections of Investment Adviser
STCM Management Company, Inc., Registrant's advi-
adviser, is a mutual funds adviser. For informa-
tion as to the business, profession, vocation, or
employment of a substantial nature of its Directors
and officers, reference is made to the Form ADV
filed by it under the Investment Advisers Act of
1940.
ITEM 29. Principal Underwriters
(a) Aquila Distributors, Inc. serves as principal un-
derwriter to Aquila Rocky Mountain Equity Fund,
Churchill Cash Reserves Trust, Churchill Tax-Free
Fund of Kentucky, Hawaiian Tax-Free Trust, Narra-
gansett Insured Tax-Free Income Fund, Pacific Capi-
tal Cash Assets Trust, Pacific Capital Tax-Free
Cash Assets Trust, Pacific Capital U.S. Treasuries
Cash Assets Trust, Prime Cash Fund, Short Term As-
set Reserves, Tax-Free Fund For Utah, Tax-Free Fund
of Colorado, Tax-Free Trust of Arizona, and Tax-
Free Trust of Oregon, in addition to serving as Re-
gistrant's principal underwriter.
(b) For information about the Directors and officers of
Aquila Distributors, Inc., reference is made to the
Form BD filed by it under the Securities Exchange
Act of 1934.
(c) Not applicable.
ITEM 30. Location of Accounts and Records
All such accounts, books, and other documents are
maintained by the adviser, the administrator, the
custodian, and the transfer agent, whose addresses
appear on the back cover pages of the Prospectus
and Statement of Additional Information.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable.
<PAGE>
Independent Auditors' Consent
To the Trustees and Shareholders of
Capital Cash Management Trust:
We consent to the use of our report dated August 9, 1996,
incorporated herein by reference and to the reference to our firm
under the heading "Financial Highlights" in the Prospectus.
/s/KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
New York, New York
October 25, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant certifies
that it meets all the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933, and has caused this Amendment
to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York
and State of New York, on the 29th day of October, 1996.
CAPITAL CASH MANAGEMENT TRUST
(Registrant)
/s/Lacy B. Herrmann
By __________________________
Lacy B. Herrmann, President
and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement or Amendment has been signed below by
the following persons in the capacities and on the date
indicated.
SIGNATURE TITLE DATE
/s/Lacy B. Herrmann 10/29/96
______________________ President, Chairman of ___________
Lacy B. Herrmann the Board and Trustee
(Principal Executive
Officer)
/s/Theodore T. Mason 10/29/96
______________________ Vice Chairman of the ___________
Theodore T. Mason Trustees and Trustee
/s/Paul Y. Clinton 10/29/96
______________________ Trustee ___________
Paul Y. Clinton
/s/Robert L. Krakoff 10/29/96
______________________ Trustee ___________
Robert L. Krakoff
/s/Anne J. Mills 10/29/96
______________________ Trustee ___________
Anne J. Mills
/s/Cornelius T. Ryan 10/29/96
______________________ Trustee ___________
Cornelius T. Ryan
/s/Rose F. Marotta 10/29/96
______________________ Chief Financial Officer ___________
Rose F. Marotta (Principal Financial and
Accounting Officer)
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
EXHIBIT INDEX
Exhibit Exhibit Page
Number Name Number
16 Financial Data Schedule
Correspondence
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S ANNUAL REPORT DATED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000093832
<NAME> CAPITAL CASH MANAGEMENT TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 1,749,130
<INVESTMENTS-AT-VALUE> 1,749,130
<RECEIVABLES> 33,267
<ASSETS-OTHER> 6,805
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,789,202
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24,267
<TOTAL-LIABILITIES> 24,267
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,764,935
<SHARES-COMMON-STOCK> 1,764,935
<SHARES-COMMON-PRIOR> 1,660,348
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 102,032
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<EXPENSES-NET> 7,354
<NET-INVESTMENT-INCOME> 94,678
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<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 94,678
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,744,925
<NUMBER-OF-SHARES-REDEEMED> 1,781,950
<SHARES-REINVESTED> 141,612
<NET-CHANGE-IN-ASSETS> 104,587
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 105,388
<AVERAGE-NET-ASSETS> 1,831,449
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .052
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .052
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
