CAPITAL CASH MANAGEMENT TRUST
Supplement to the Prospectus
Dated October 31, 1997
as Supplemented November 10, 1997
The Prospectus is amended as follows:
1. The Shareholders of the Trust have approved an amendment to the
Declaration of Trust to authorize multiple classes of shares for
the Trust. When additional classes of shares are implemented the
Prospectus will be further supplemented to describe them.
2. The first sentence of the second paragraph of Investment Restriction
No. 1 on page 10 of the Prospectus is replaced by the following:
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,
provided, however that the Trust may invest not more than 25% of its
total assets in the First Tier Securities (as defined in the Rule) of
a single issuer for a period up to three business days after the
purchase thereof, and provided further that the Trust may not make
more than one investment in accordance with the foregoing proviso at
any time.
These changes were approved by the shareholders of the Trust at the
annual meeting of the shareholders held December 10, 1997.
The date of this supplement is December 19, 1997.
<PAGE>
Capital Cash Management Trust
380 Madison Avenue
Suite 2300
New York, NY 10017
212-697-6666
Prospectus October 31, 1997
Supplemented November 10, 1997
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, 1997 (the
"Additional Statement") has been filed with the Securities and
Exchange Commission and is available without charge upon written
request to 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:
PFPC Inc.
400 Bellevue Parkway, Wilmington, DE 19809
Call 800-952-6666 toll free
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>
Maximum Sales Load Imposed on Purchases........................... 0%
Maximum Sales Load Imposed on Reinvested Dividends................ 0%
Deferred Sales Load............................................... 0%
Redemption Fees................................................... 0%
Exchange Fee ..................................................... 0%
ANNUAL FUND 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%
Example** 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
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 6.49%.
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% RATE 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 YEAR
The following table of Financial Highlights as it relates to the
five years ended June 30, 1997 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.++ A copy of these financial statements can be obtained
without charge by calling or writing the Shareholder Servicing Agent at
the address and telephone numbers on the cover of the Prospectus.
Year ended June 30,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Year.............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from
Investment Operations:
Net investment
income............... 0.0489 0.0518 0.0497 0.0309 0.0310
Less Distributions:
Dividends from net
investment income.... (0.0489) (0.0518) (0.0497) (0.0309) (0.0310)
Net Asset Value,
End of Year........... $1.00000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return(%)....... 5.00 5.29 5.09 3.14 3.14
Ratios/Supplemental
Data
Net Assets, End of Year
($ in thousands)..... 1.435 1.765 1,660 1,713 1,744
Ratio of Expenses
to Average Net
Assets (%)........... 0.40 0.40 0.40 0.28 0.09
Ratio of Net Investment
Income to Average
Net Assets........... 4.89 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)($)..... (0.0119) (0.0018) 0.0038 (0.0137) (0.0221)
Ratio of Expenses
to Average Net
Assets.(%)........... 6.49 5.75 5.02 4.73 5.41
Ratio of Net
Investment Income
to Average Net
Assets................ (1.19) (0.18) (0.38) (1.37) (2.21)
<CAPTION>
1992 1991 1990 1989 1988
<C> <C> <C> <C> <C>
$1.0000 $1.0000 $1.0000 $1.0000 $1.0000
0.0448 0.0684 0.0806 0.0823 0.0632
(0.0448) (0.0684) (0.0806) (0.0823) (0.0632)
$1.0000 $1.0000 $1.0000 $1.0000 $1.0000
4.57 7.06 8.36 8.54 6.50
2,088 2,403 2,305 2,977 129,796
0.10 0.24 0.34 0.61 0.70
4.52 6.85 8.07 7.39 6.32
(0.0104) 0.0320 0.0449 0.0746 0.0632
5.68 3.89 3.92+ 1.30 0.70
(1.05) 3.20 4.50+ 6.68 6.32
<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, 1997 was
4.97% and its "compounded effective yield" for that period was 5.09%;
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 PFPC Inc., the Trust's Shareholder Servicing Agent
(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
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Call 800-952-6666 toll free
2. By Wire. Payment may be wired in Federal funds (monies
credited to a bank's account with a Federal Reserve Bank) to
PNC Bank, NA, ("PNC Bank") using the wire information set
forth below.
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) and then instruct your bank to
wire funds as indicated below:
PNC BANK, NA
Philadelphia, PA
ABA No. 0310-0005-3
Account No. 85-0216-4765
FFC: Capital Cash Management Trust
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 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 Trust (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 , 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 Trust 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
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: PFPC Inc., 400 Bellevue Parkway,
Wilmington, DE 19809 or by fax at 302-791-1777. The letter
must provide account name(s), account number, amount to be
redeemed, and any payment directions and be 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 PNC Bank, NA (the
"Bank"). 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 $100. 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 Bank for this purpose. You will be subject to
the Bank'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 Bank 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
Bank 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
Bank. 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 Bank 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 representing shares to
be redeemed with payment instructions should be sent in
blank (unsigned) to the Trust's Shareholder Servicing Agent:
PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809. 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 the Trust's Shareholder Servicing
Agent: PFPC Inc., 400 Bellevue Parkway, Wilmington, DE
19809. The letter must contain:
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 Bank 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.
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, 1997, the Trust
accrued $3,423 in favor of the Adviser under the Advisory
Agreement and $2,568 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 $82,435 to comply with the expense
limitation, $12,390 pursuant to the agreement regarding total
expenses of the Trust and $3,296 voluntarily, totaling $98,121.
Of this amount, $46,723 was paid prior to June 30, 1997 and the
balance of $51,387 was paid in July and August, 1997.
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 August 31, 1997,
these funds had aggregate assets of approximately $2.8 billion,
of which approximately $900 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 75% by Mr. Herrmann and 25% by Diana P.
Herrmann, will be owned by certain officers and/or directors of
the Distributor and/or the Administrator including Mr. Herrmann
and Ms. 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.
The Aquila Bond and Equity Funds offer 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. Some Funds also offer Class
I Shares ("Financial Intermediary Class Shares"). The Exchange
Privilege has different provisions for exchanges for each class.
(1) Originally purchased Money Market Fund shares. Shares
of a Money Market Fund (and any shares acquired as a result of
reinvestment of dividends and/or distributions on these shares)
acquired directly in a purchase (or in exchange for Money Market
Fund shares that were themselves directly purchased), rather than
in exchange for shares of a Bond or Equity Fund, may be exchanged
for shares of any class of any Bond or Equity Fund that the
investor is otherwise qualified to purchase, but the shares
received in such an exchange will be subject to the same sales
charge, if any, that they would have been subject to had they
been purchased rather than acquired in exchange for Money Market
Fund shares. If the shares received in exchange are shares that
would be subject to a CDSC if purchased directly, the holding
period governing the CDSC will run from the date of the exchange,
not from the date of the purchase of Money Market Shares.
(2) CDSCs upon redemptions of shares acquired through
exchanges. If you exchange shares of the following categories, no
contingent deferred sales charge ("CDSC") will be imposed at the
time of exchange, but the shares you receive in exchange for them
will be subject to the applicable CDSC if you redeem them before
the requisite holding period (extended, if required) has expired:
-CDSC Class A Shares;
-Class C Shares: and
-Shares of a Money Market Fund that were received in
exchange for CDSC Class A Shares or Class C Shares.
If the shares you redeem would have incurred a CDSC if you
had not made any exchanges, then the same CDSC will be imposed
upon the redemption regardless the exchanges that have taken
place since the original purchase.
(3) Extension of Holding Periods by owning Money-Market
Funds Any period of 30 days or more during which Money-Market
shares received on an exchange of CDSC Class A Shares or Class C
Shares are held is not counted in computing the applicable
holding period for CDSC Class A Shares or Class C 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 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>
APPLICATION FOR CAPITAL CASH MANAGEMENT TRUST
Please complete steps 1 through 4 and mail to:
After November 8, 1997: PFPC Inc., Attn: Aquilasm Group of Funds
400 Bellevue Parkway Wilmington, DE 19809
Tel.# 1-800-952-6666
STEP 1
A. ACCOUNT REGISTRATION
___Individual Use line 1
___Joint Account* Use lines 1&2
___For a Minor Use line 3
___For Trust, Corporation, Partnership or other Entity 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.______________________________________________________________________
Custodian's First Name Middle Initial Last Name
Custodian for __________________________________________________________
Minor's First Name Middle Initial Last Name
Under the ___________UGTMA** ___________________________________________
Name of State Minor's Social Security Number
4. _____________________________________________________________________
_____________________________________________________________________
(Name of Corporation or Partnership. 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:____________________________
Employer's 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
OR
2) By Wire:
$________________________________ 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:
PNC Bank, NA Account of: (Account name and
ABA No. 0310-9095-3 number, or name in which
Account No. 85-0216-4765 investment is to be registered
FFC: Capital Cash Management Trust if new account)
(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
the Trust's Shareholder Servicing Agent (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 Address
____________________________________ _________________________________
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
person's 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 attorney's 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 PNC Bank, NA, 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.
STEP 4 Section A
DEPOSITOR'S 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, 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 is maintained
Name of Financial Institution__________________________________________
Street Address_________________________________________________________
City_______________________________State _________________ Zip ________
Name(s) and Signature(s) of Depositor(s) as they appear where account
is registered
_________________________________________________
(Please Print)
X________________________________________________ ____________________
(Signature) (Date)
_________________________________________________
(Please Print)
X________________________________________________ ____________________
(Signature) (Date)
INDEMNIFICATION AGREEMENT
To: Financial Institution Named Above
So that you may comply with your depositor's 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.
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 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, Title Date
Trustee, etc.
* 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
Diana P. Herrmann
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
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
Bank One Trust Company, N.A.
100 East Broad Street
Columbus, OH 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
CAPITAL CASH
MANAGEMENT TRUST
A cash management
investment
[LOGO]
stability*liquidity*yield
PROSPECTUS
One of the
Aquilasm Group of Funds
