Registration Nos. 2-50843 & 811-2481
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933[ X ]
Pre-Effective Amendment No. _______ [ ]
Post-Effective Amendment No. 38 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [ X ]
Amendment No. 21 [ X ]
CAPITAL CASH MANAGEMENT TRUST
(Exact Name of Registrant as Specified in Charter)
380 Madison Avenue, Suite 2300
New York, New York 10017
(Address of Principal Executive Offices)
(212) 697-6666
(Registrant's Telephone Number)
EDWARD M.W. HINES
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue, 27th Floor
New York, New York 10176
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
___
[___] immediately upon filing pursuant to paragraph (b)
[ X ] on October 31, 1997 pursuant to paragraph (b)
[___] 60 days after filing pursuant to paragraph (a)(i)
[___] on (date) pursuant to paragraph (a)(i)
[___] 75 days after filing pursuant to paragraph (a)(ii)
[___] on (date) pursuant to paragraph (a)(ii) of Rule 485.
[___] This post-effective amendment designates a new effec-
tive date for a previous post-effective amendment.
Registrant hereby declares, pursuant to Section (a)(1) of Rule
24f-2 under the Investment Company Act of 1940, that Registrant
has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to that Section and that the Rule
24f-2 Notice for Registrant's fiscal year ended June 30, 1997 was
filed in August 1997.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
CROSS REFERENCE SHEET
Part A of
Form N-1A
Item No. Prospectus Caption(s)
1..............Cover Page
2..............Table of Expenses
3..............Financial Highlights
4..............Introduction; Investment of the Trust's
Assets; Investment Restrictions; General
Information
5..............Management Arrangements
5A.............*
6..............General Information; Dividend and Tax
Information
7..............Net Asset Value per Share; How to Invest in
the Trust; Exchange Privilege
8..............How to Redeem Your Investment; Automatic
Withdrawal Plan; Exchange Privilege
9..............*
Part B of
Form N-1A Statement of Additional Information
Item No. or Prospectus Caption(s)
10.............Cover Page
11.............Cover Page
12.............*
13.............Investment of the Trust's Assets; Investment
Restrictions;Loans of Portfolio Securities
14.............Trustees and Officers
15.............General Information
16.............Additional Information as to Management
Arrangements; General Information
17.............Investment of the Trust's Assets (Prospectus
caption)
18.............General Information
19.............Limitation of Redemptions in Kind; Amortized
Cost Valuation; Computation of Daily
Dividends; Automatic Withdrawal Plan
20.............*
21.............How to Invest in the Trust (Prospectus
caption); Distribution Plan; General
Information
22.............Yield Information; Financial Highlights
(Prospectus caption)
*Not applicable or negative answer
<PAGE>
Capital Cash Management Trust
380 Madison Avenue
Suite 2300
New York, NY 10017
212-697-6666
Prospectus October 31, 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: after November 8, 1997:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Call 800-952-6666 toll free
Before November 8, 1997:
Administrative Data Management Corp.
581 Main Street, Woodbridge, NJ 07095-1198
Call 800-952-6666 toll free or 732-855-5731
For General Inquiries & Yield Information, Call 212-697-6666
This Prospectus Should Be Read and Retained For Future Reference
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
TABLE OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<S>
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 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:
After November 8, 1997:
Capital Cash Management Trust
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Call 800-952-6666 toll free
Before November 8, 1997:
Capital Cash Management Trust
Administrative Data Management Corp.
Attn: Aquilasm Group of Funds
581 Main Street
Woodbridge, NJ 07095-1198
2. By Wire. Payment may be wired in Federal funds (monies
credited to a bank's account with a Federal Reserve Bank)
(before November 8, 1997) to Bank One Trust Company, N.A. (the
"Custodian"), which serves as custodian of the Trust's assets;
after November 8, 1997 to PNC Bank, NA, in each case, 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:
After November 8, 1997:
PNC BANK, NA
Philadelphia, PA
ABA No. 310-0005-3
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).
Before November 8, 1997 wire:
Bank One, Columbus
ABA No. 044000037
CR A/C 04-01787
For further credit to
Capital Cash Management Trust
A/C 6801358000
Account Name and Number (if an existing account)
The name in which the investment is to be registered (if a new
account).
Your bank may impose a charge for wiring funds.
3. Through Brokers. You may invest in the Trust by purchasing
shares through registered broker-dealers.
There is no sales or service charge imposed by the Trust,
although broker-dealers may make reasonable charges to their
customers for their services. The services to be provided and the
fees therefor are established by each broker-dealer acting
independently; broker-dealers may also determine to establish, as
to accounts serviced by them, higher initial or subsequent
investment requirements than those required by the Trust.
Broker-dealers are responsible for prompt transmission of orders
placed through them.
Additional Investments
You may make additional investments in any amount after an
account has been established by mailing directly to the Agent a
check, money order or other negotiable bank draft made payable to
Capital Cash Management Trust, or by wiring funds as described
above. In each case you should indicate your name and account
number to insure prompt and proper crediting of your account. The
pre-printed stub attached to the Trust's confirmations is provided
as a convenient identification method to accompany additional
investments made by mail. You may also make subsequent investments
of $50 or more using electronic funds transfers from your demand
account at a Financial Institution if it is a member of the
Automated Clearing House and if the Agent has received a completed
Application designating this feature, or, after your account has
been opened, a Ready Access Features form available from the
Distributor or the Agent. A pre-determined amount can be regularly
transferred for investment ("Automatic Investment") or single
investments can be made upon receipt by the Agent of telephone
instructions from anyone ("Telephone Investment"). The maximum
amount of each Telephone Investment is $50,000. Upon 30 days'
written notice to shareholders, the Trust may modify or terminate
these investment methods at any time or charge a service fee,
although no such fee is currently contemplated.
When Shares Are Issued and Dividends Are Declared On Them
There are three methods as to when shares are issued. Under
each method, shares are issued at the net asset value per share
next determined after the purchase order is effective, as discussed
below. Under each method, the Application must be properly
completed and have been received and accepted by the Agent; the
Trust or the Distributor may also reject any purchase order. Under
each method, Federal funds (see above) must either be available to
the Trust or the payment thereof must be guaranteed to the Trust so
that the Trust can be as fully invested as practicable.
The first method under which shares are issued involves
ordinary investments. Under this method, payments transmitted by
wire in Federal funds and payments made by Federal Reserve Draft
received 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 after November 8, 1997 to: PFPC Inc., 400
Bellevue Parkway, Wilmington, DE 19809. Before November 8,
1997 send your letter of instructions to Administrative Data
Management Corp., Attn: Aquilasm Group of Funds, by FAX at
732-855-5730 or by mail at 581 Main Street, Woodbridge, NJ
07095-1198. 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 the Custodian. This
feature is not available if your shares are represented by
certificates. These checks represent a further alternative
redemption means and you may make them payable to the order of
anyone in any amount of not less than $500. If you wish to use
this check writing redemption procedure you should notify the
Agent or so indicate on your Application. You will be issued
special checks to be drawn against the Custodian for this
purpose. You will be subject to the Custodian's rules and
regulations governing its checking accounts. If the account is
registered in more than one name, each check must be signed by
each account holder exactly as the names appear on the account
registration, unless expressly stated otherwise on your
Application.
There is no charge for the maintenance of this special check
writing privilege or for the clearance of any checks.
When such a check is presented to the Custodian for payment,
a sufficient number of full and fractional shares in your account
will be redeemed to cover the amount of the check. This check
writing redemption procedure enables you to continue receiving
dividends on those shares equaling the amount being redeemed by
check until such time as the check is actually presented to the
Custodian for payment.
As these checks are redemption drafts relating to Trust
shares, you should be certain that adequate shares for which
certificates have not been issued and which were not recently
purchased by check are in the account to cover the amount of the
check. See "Redemption Payments" below for more details as to
special problems as to Trust shares recently purchased by check. If
insufficient redeemable shares are in the account, the redemption
check will be returned marked "insufficient funds." The fact that
redemption checks are drafts may also permit a bank in which they
are deposited to delay crediting the account in question until that
bank has received payment funds for the redemption check.
Checks may not be directly presented to any branch of the
Custodian. This does not affect checks used for the payment of
bills or cashed at other banks. You may not use checks to close
your account, since the number of shares in your account changes
daily through dividend payments which are automatically reinvested
in full and fractional shares. Consequently, you may not present a
check directly to the Custodian and request redemption for all or
substantially all shares held in your account. Only expedited
redemption to a predesignated bank account or the regular
redemption method (see below) may be used when closing your
account.
Multiple Redemption Services. You are not limited in choice of
redemption methods but may utilize all available forms. However,
when both redemption to a predesignated Financial Institution
account and check writing are desired, you must so elect on your
Application, or by proper completion of a Ready Access Features
form.
Regular Redemption Method
(Certificate and Non-Certificate Shares)
1. Certificate Shares. Certificates representing shares to
be redeemed with payment instructions should be sent (after
November 8, 1997) in blank (unsigned) to the Trust's
Shareholder Servicing Agent: PFPC Inc., 400 Bellevue Parkway,
Wilmington, DE 19809. Before November 8, 1997 send your
certificates to Administrative Data Management Corp., Attn:
Aquilasm Group of Funds, 581 Main Street, Woodbridge, NJ
07095-1198. 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 (after November 8, 1997) to the Trust's
Shareholder Servicing Agent: PFPC Inc., 400 Bellevue Parkway,
Wilmington, DE 19809. Before November 8, 1997 send your letter
to Administrative Data Management Corp., Attn: Aquilasm Group
of Funds, 581 Main Street, Woodbridge, NJ 07095-1198. 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 Custodian for payment within 15 days of a share
purchase by check and (ii) the redemption check would cause the
redemption of some or all of those shares. Possible delays in
payment of redemption proceeds can be eliminated by using wire
payments or Federal Reserve drafts to pay for purchases.
If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders of
the Trust to make payment wholly or partly in cash, the Trust may
pay the redemption price in whole or in part by the distribution in
kind of securities from the portfolio of the Trust, in lieu of
cash, in conformity with applicable rules of the Securities and
Exchange Commission. See the Additional Statement for details.
The Trust has the right to compel the redemption of shares
held in any account if the aggregate net asset value of such shares
is less than $500 due to shareholder redemptions. If the Board of
Trustees elects to do this, shareholders who are affected will
receive prior written notice and will be permitted 60 days to bring
their accounts up to the minimum before this redemption is
processed.
AUTOMATIC WITHDRAWAL PLAN
If you own or purchase shares of the Trust having a net asset
value of at least $5,000 you may establish an Automatic Withdrawal
Plan under which you will receive a monthly or quarterly check in
a stated amount, not less than $50. If such a plan is established,
all dividends and distributions must be reinvested in your
shareholder's account. See the Automatic Withdrawal Plan provisions
of the Application included in the Prospectus, the Additional
Statement under "Automatic Withdrawal Plan" and "Dividend and Tax
Information" below.
MANAGEMENT ARRANGEMENTS
The Board of Trustees
The business and affairs of the Trust are managed under the
direction and control of its Board of Trustees. The Additional
Statement lists the Trust's Trustees and officers and provides
further information about them.
The Advisory Agreement
STCM Management Company, Inc. (the "Adviser") supervises the
investment program of the Trust and the composition of its
portfolio. The Adviser formerly acted as the Trust's sub-adviser.
See "Information as to the Adviser, the Administrator and the
Distributor," below.
The services of the Adviser are rendered under an Investment
Advisory Agreement (the "Advisory Agreement") which provides,
subject to the control of the Board of Trustees, for investment
supervision and for either keeping the accounting records of the
Trust, including the computation of the net asset value per share
and the dividends, or, at the Adviser's expense and responsibility,
delegating these accounting duties in whole or in part to a company
satisfactory to the Trust. The Advisory Agreement states that the
Adviser shall, at its expense, provide to the Trust all office
space and facilities, equipment and clerical personnel necessary
for the carrying out of the Adviser's duties under the Advisory
Agreement.
Under the Advisory Agreement, the Adviser pays all
compensation of those officers and employees of the Trust and of
those Trustees, if any, who are affiliated with the Adviser. Under
the Advisory Agreement, the Trust bears the cost of preparing and
setting in type its prospectuses, statements of additional
information, and reports to shareholders and the costs of printing
or otherwise producing and distributing those copies of such
prospectuses, statements of additional information and reports as
are sent to its shareholders. Under the Advisory Agreement, all
costs and expenses not expressly assumed by the Adviser or by the
Administrator under the Administration Agreement or by the Trust's
principal underwriter are paid by the Trust. The Advisory Agreement
lists examples of such expenses borne by the Trust, the major
categories of such expenses being: legal and audit expenses,
custodian and transfer agent, or shareholder servicing agent fees
and expenses, stock issuance and redemption costs, certain printing
costs, registration costs of the Trust and its shares under Federal
and State securities laws, interest, taxes, and non-recurring
expenses, including litigation.
Under the Advisory Agreement, the Trust pays a fee payable
monthly and computed on the net asset value of the Trust as of the
close of business each business day at the annual rate of 0.20 of
1% of the Trust's average daily net assets; however, the total fees
which the Trust pays are at the annual rate of 0.35 of 1% of such
net asset value, since the Administrator, under the Administration
Agreement, described below, also receives a fee from the Trust at
the annual rate of 0.15 of 1% of such net asset value. The
Administrator has undertaken to waive fees and reimburse expenses
in order to enable the Trust to maintain a moderate expense ratio.
In addition, these fees are subject to expense limitations
described below. It is currently anticipated that most if not all
of such fees will be waived to enable the Trust to maintain a
competitive yield.
The Adviser agrees that the above fee shall be reduced, but
not below zero, by an amount equal to its pro-rata portion
(hereafter described) of the amount, if any, by which the Trust's
total expenses in any fiscal year, exclusive of taxes, interest,
and brokerage fees, shall exceed the lesser of (i) 1.5% of the
first $30 million of the Trust's average annual net assets, plus 1%
of the Trust's average annual net assets in excess of $30 million,
or (ii) 25% of the Trust's total annual investment income. The
pro-rata portion, as between the Adviser and the Administrator, is
based on the aggregate of the fee of the Adviser and the fee of the
Administrator (exclusive of amounts paid or to be paid out for the
applicable period pursuant to the Distribution Plan).
The Advisory Agreement contains provisions as to the
allocation of the portfolio transactions of the Trust; see the
Additional Statement. Under these provisions, the Adviser is
authorized to consider sales of the Trust's shares in making this
allocation.
The Administration Agreement
Under an Administration Agreement (the "Administration
Agreement"), Aquila Management Corporation as Administrator, at its
own expense, provides office space, personnel, facilities and
equipment for the performance of its functions thereunder and as is
necessary in connection with the maintenance of the headquarters of
the Trust and pays all compensation of the Trust's Trustees,
officers and employees who are affiliated persons of the
Administrator.
Under the Administration Agreement, subject to the control of
the Trust's Board of Trustees, the Administrator provides all
administrative services to the Trust other than those relating to
its investment portfolio and the maintenance of its accounting
books and records. Such administrative services include but are not
limited to maintaining books and records (other than accounting
books and records) of the Trust, and overseeing all relationships
between the Trust and its transfer agent, custodian, legal counsel,
auditors and principal underwriter, including the negotiation of
agreements in relation thereto, the supervision and coordination of
the performance of such agreements, and the overseeing of all
administrative matters which are necessary or desirable for
effective operation of the Trust and for the sale, servicing or
redemption of the Trust's shares. See the Additional Statement for
a further description of functions listed in the Administration
Agreement as part of such duties.
Under the Administration Agreement, the Trust pays a fee
payable monthly and computed on the net asset value of the Trust at
the end of each business day at the annual rate of 0.15 of 1% of
such net asset value. The Administrator has agreed that the above
fee shall be reduced, but not below zero, by an amount equal to its
pro-rata portion (hereafter described) of the amount, if any, by
which the Trust's total expenses in any fiscal year, exclusive of
taxes, interest, and brokerage fees, shall exceed the lesser of (i)
1.5% of the first $30 million of the Trust's average annual net
assets, plus 1% of the Trust's average annual net assets in excess
of $30 million, or (ii) 25% of the Trust's total annual investment
income. The pro-rata portion, as between the Adviser and the
Administrator, is based on the aggregate of the fee of the Adviser
and the fee of the Administrator (exclusive of amounts paid or to
be paid out for the applicable period pursuant to the Distribution
Plan).
In addition to the foregoing expense limitation, the
Administration Agreement contains provision under which the
Administrator agrees to waive fees and reimburse expenses to the
Trust as required so that the total expenses of the Trust in any
fiscal year shall not exceed 0.60 of 1% of its average annual net
assets. The payment of any fee under the Administration Agreement
to the Administrator at the end of any month will be reduced or
postponed as may be required by reason of the expense guarantee,
subject to readjustment during the year. Any reimbursement of
expense to the Trust with respect to a fiscal year will be made
during or at the end of that fiscal year, and any reimbursements
made during the fiscal year will be subject to readjustment during
the year. The expense guarantee continues until June 30, 1995, and
for three years thereafter; it continues from year to year
thereafter, provided, however, that upon at least six months'
written notice to the Trust, the Administrator may cancel its
obligation under this expense guarantee. Upon the expiration of the
expense guarantee, any amount then outstanding thereunder shall be
paid, and thereupon neither party shall have any further liability
to the other thereunder. The expense guarantee and any outstanding
obligation thereunder shall survive the termination of the
Administration Agreement.
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
Before November 8, 1997: ADM, Attn: Aquilasm Group of Funds
581 Main Street, Woodbridge, NJ 07095-1198 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:
Before November 11, 1997:
Bank One, Columbus Account of: (Account name and number,
ABA No. 044000037 or name in which investment is to be
CR A/C 04-01787 registered if new account)
For further credit to Capital Cash Management Trust A/C 6801358000
After November 11, 1997:
PNC Bank NA
Philadelphia PA
ABA No. 310-0005-3
Account No. 85-0216-4765
FFC: Capital Cash Management Trust
(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 Bank One Trust Company,
N.A., in my (our) name(s) as registered and send me (us) a supply of
checks. I (we) understand that this checking account will be subject to
the rules and regulations of Bank One Trust Company, N.A., pertaining
thereto and as amended from time to time. For joint account: Check here
whether either owner ___ is authorized, or all owners ___ are required to
sign checks. IF NO BOX IS CHECKED, TWO SIGNATURES WILL BE REQUIRED ON
JOINT ACCOUNTS.
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
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
After November 8, 1997:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Before November 8, 1997:
Administrative Data Management Corp.
581 Main Street
Woodbridge, New Jersey 07095-1198
CUSTODIAN
Bank One Trust Company, N.A.
100 East Broad Street
Columbus, Ohio 43271
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154
COUNSEL
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue
New York, New York 10176
TABLE OF CONTENTS
Table of Expenses
Financial Highlights
Introduction
Investment Of The Trust's Assets
Investment Restrictions
Net Asset Value Per Share
How To Invest In The Trust
How To Redeem Your Investment
Automatic Withdrawal Plan
Management Arrangements
Dividend And Tax Information
Exchange Privilege
General Information
Application
CAPITAL CASH
MANAGEMENT TRUST
A cash management
investment
[LOGO]
stability*liquidity*yield
PROSPECTUS
One of the
Aquilasm Group of Funds
<PAGE>
Capital Cash Management Trust
380 Madison Avenue
Suite 2300
New York, NY 10017
212-697-6666
Statement of Additional Information
October 31, 1997
This Statement of Additional Information (the "Additional
Statement") is not a Prospectus. The Additional Statement should be
read in conjunction with the Prospectus (the "Prospectus") dated
October 31, 1997, of Capital Cash Management Trust (the "Trust"),
which may be obtained from the Trust's Shareholder Servicing
Agent, after November 8, 1997:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Call 800-952-6666 toll free
For General Inquiries & Yield Information,
Call 800-437-1020 toll free or 212-986-8826
Before November 8, 1997:
Administrative Data Management Corp. by writing to 581 Main Street,
Woodbridge, NJ 07095-1198, or by calling the following numbers:
800-952-6666 toll free or 908-855-5731
or from Aquila Distributors, Inc., the Trust's Distributor, by
writing to 380 Madison Avenue, Suite 2300, New York, New York
10017; or by calling:
212-697-6666
The Annual Report of the Trust for the fiscal year ended
June 30, 1997, will be delivered with the Additional Statement.
Table of Contents
Investment of the Trust's Assets . . . . . . . . . . . . . . . .2
Performance Information. . . . . . . . . . . . . . . . . . . . .4
Investment Restrictions. . . . . . . . . . . . . . . . . . . . .5
Loans of Portfolio Securities. . . . . . . . . . . . . . . . . .6
Distribution Plan. . . . . . . . . . . . . . . . . . . . . . . .6
Limitation of Redemptions in Kind. . . . . . . . . . . . . . . .9
Trustees and Officers. . . . . . . . . . . . . . . . . . . . . 10
Additional Information as to Management Arrangements . . . . . 15
Amortized Cost Valuation . . . . . . . . . . . . . . . . . . . 18
Computation of Daily Dividends . . . . . . . . . . . . . . . . 19
Automatic Withdrawal Plan. . . . . . . . . . . . . . . . . . . 19
General Information. . . . . . . . . . . . . . . . . . . . . . 20
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . 22
<PAGE>
INVESTMENT OF THE TRUST'S ASSETS
The Prospectus contains information as to the purchase and
redemption of the Trust's shares. The investment objective and
policies of the Trust are also described in the Prospectus, which
refers to the investments and investment methods described below.
Information on Variable Amount Master Demand Notes
The Trust may buy variable amount master demand notes. The
nature and terms of these obligations are as follows. They permit
the investment of fluctuating amounts by the Trust at varying rates
of interest pursuant to direct arrangements between the Trust, as
lender, and the borrower. They permit daily changes in the amounts
borrowed. The Trust has the right to increase the amount under the
note at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may prepay
up to the full amount of the note without penalty. Because these
notes are direct lending arrangements between the lender and
borrower, it is not generally contemplated that they will be
traded, and there is no secondary market for them, although they
are redeemable (and thus repayable by the borrower) at principal
amount, plus accrued interest, at any time. The Trust has no
limitations on the amount of its assets invested in such notes.
There is no limitation on the type of issuer from which these notes
will be purchased; however, all such notes must be First Tier
Securities and in connection with such purchases and on an ongoing
basis, STCM Management Company, Inc. (the "Adviser") must determine
that they present minimal credit risks. In addition, the Adviser
will consider the earning power, cash flow and other liquidity
ratios of the issuer, and its ability to pay principal and interest
on demand, including a situation in which all holders of such notes
make demand simultaneously. Master demand notes, as such, are not
typically rated by credit rating agencies, and if not so rated the
Trust may, under its minimum rating standards, invest in them only
if at the time of an investment they are determined to be
comparable in quality to rated issues in which the Trust can
invest.
Information On Insured Bank Obligations
The Federal Deposit Insurance Corporation ("FDIC") insures the
deposits of Federally insured banks and, effective August 9, 1989,
savings institutions (collectively, herein, "banks") up to
$100,000. On that date, the FDIC assumed the insurance functions of
the Federal Savings and Loan Insurance Corporation, which was
abolished. The Trust may purchase bank obligations which are fully
insured as to principal by the FDIC. To remain fully insured as to
principal, these investments must currently be limited to $100,000
per bank; if the principal amount and accrued interest together
exceed $100,000 then the excess accrued interest will not be
insured. Insured bank obligations may have limited marketability;
unless the Board of Trustees determines that a readily available
market exists for such obligations, the Trust will invest in them
only within the 10% limit mentioned in the Prospectus unless such
obligations are payable at principal amount plus accrued interest
on demand or within seven days after demand.
Information about Certain Other Obligations
The Trust may purchase obligations other than those listed in
categories 1 through 5 under "Investment of the Trust's Assets," in
the Prospectus, but only if such other obligations are guaranteed
as to principal and interest by either a bank in whose obligations
the Trust may invest or a corporation in whose commercial paper the
Trust may invest. If any such guarantee is unconditional and is
itself a First Tier Security, the obligation may be purchased based
on the guarantee; if any such guarantee is not unconditional,
purchase of the obligation can only be made if the underlying
obligation is a First Tier Security and meets all other applicable
requirements of the Rule 2a-7 (the "Rule") of the Securities and
Exchange Commission. See "Effect of the Rule on Portfolio
Management" in the Prospectus. As of the date of this Additional
Statement, the Trust does not own any such obligations and has no
present intention of purchasing any. Such obligations can be any
obligation of any kind so guaranteed, including, for example,
obligations created by "securitizing" various kinds of assets such
as credit card receivables or mortgages. If the Trust invests in
these assets, they will be identified in the Trust's Prospectus and
described in the Additional Statement.
Turnover
In general, the Trust will purchase securities with the
expectation of holding them to maturity. However, the Trust may to
some degree engage in short-term trading to attempt to take
advantage of short-term market variations. The Trust may also sell
securities prior to maturity to meet redemptions or as a result of
a revised management evaluation of the issuer. The Trust will have
a high portfolio turnover due to the short maturities of the
securities held, but this should not affect net asset value or
income, as brokerage commissions are not usually paid on the
securities in which the Trust invests. (In the usual calculation of
portfolio turnover, securities of the type in which the Trust
invests are excluded; consequently, the high turnover which the
Trust will have is not comparable to the turnover of non-Money
Market investment companies.)
When-Issued and Delayed Delivery Securities
The Trust may purchase securities on a when-issued or delayed
delivery basis. For example, delivery and payment may take place a
month or more after the date of the transaction. The purchase price
and the interest rate payable on the securities are fixed on the
transaction date. At the time the Trust makes the commitment to
purchase securities on a when-issued or delayed delivery basis, it
will record the transaction and thereafter reflect the value of
such securities each day in determining its net asset value. The
Trust will make commitments for such when-issued transactions only
when it has the intention of actually acquiring the securities. The
Trust will maintain with the Custodian and mark to market every
business day a separate account with portfolio securities in an
amount at least equal to such commitments. On delivery dates for
such transactions, the Trust will meet its obligations from
maturities or sales of the securities held in the separate account
and/or from cash flow. If the Trust chooses to dispose of the right
to acquire a when-issued security prior to its acquisition, it
could, as with the disposition of any other portfolio obligation,
incur a gain or loss due to market fluctuation.
Diversification and Certain Industry Requirements
The Trust has a rule, set forth in the Prospectus, under which
it cannot buy the securities of issuers in any one industry if more
than 25% of its total assets would then be invested in securities
of issuers of that industry. In applying this rule to commercial
paper issued by finance subsidiaries or affiliates of operating
companies, if the business of the issuer consists primarily of
financing the activities of the related operating company, the
Trust considers the industry of the issuer to be that of the
related operating company.
PERFORMANCE INFORMATION
From time to time, the Trust may advertise its "current
yield" and its "effective yield" (also referred to as "effective
compound yield"). Both yield figures are based on historical
earnings and are not intended to indicate future performance. The
current yield of a Trust refers to the net income generated by an
investment in that Trust over a stated seven-day period. This
income is then "annualized". That is, the amount of income
generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a
percentage of the investment. The Trust may also advertise or quote
its effective yield, which is calculated similarly, but, when
annualized, the income earned by an investment in the Trust is
assumed to be reinvested. The effective yield will be slightly
higher than the current yield because of the compounding effect of
this assumed reinvestment.
In addition, the Trust may also compare its performance to
other income-producing securities such as (i) money market funds;
(ii) various bank products, including both those that are insured
(e.g., deposit obligations) and those that are not (e.g.,
investment instruments offered by affiliates of banks); and (iii)
U.S. Treasury Bills or Notes. There are differences between these
income-producing alternatives and the Trust other than their
yields, some of which are summarized below.
The yield of the Trust is not fixed and will fluctuate. In
addition, your investment is not insured and its yield is not
guaranteed. There can be no assurance that the Trust will be able
to maintain a stable net asset value of $1.00 per share. Although
the yields of bank money market deposit accounts and NOW accounts
will fluctuate, principal will not fluctuate and is insured by the
Federal Deposit Insurance Corporation up to $100,000. Bank passbook
savings accounts normally offer a fixed rate of interest, and their
principal and interest are also guaranteed and insured. Bank
certificates of deposit offer fixed or variable rates for a set
term. Principal and fixed rates are guaranteed and insured. There
is no fluctuation in principal value. Withdrawal of these deposits
prior to maturity will normally be subject to a penalty. Investment
instruments, such as Repurchase Agreements and Commercial Paper,
offered by affiliates of banks are not insured by the Federal
Deposit Insurance Corporation. In comparing the yields of one money
market fund to another, consideration should be given to each
fund's investment policy, portfolio quality, portfolio maturity,
type of instruments held and operating expenses.
INVESTMENT RESTRICTIONS
The Trust has a number of policies concerning what it can and
cannot do. Those policies, which are called "fundamental policies,"
may not be changed unless the holders of a majority, as defined in
the Investment Company Act of 1940 (the "1940 Act") of the Trust's
outstanding shares vote to change them. Under the 1940 Act, the
vote of the holders of a majority of the outstanding shares of the
Trust means the vote of the holders of the lesser of (a) 67% or
more of the Trust's shares present at a meeting or represented by
proxy if the holders of more than 50% of its shares are so present
or represented, or (b) more than 50% of its outstanding shares.
Those fundamental policies not set forth in the Prospectus are set
forth below.
1. The Trust invests only in certain limited securities.
Since the Trust cannot buy any securities other than those
listed under "Investment of the Trust's Assets" in the Prospectus,
the Trust cannot buy any voting securities, any commodities or
commodity contracts, any mineral related programs or leases, any
shares of other investment companies or any warrants, puts, calls
or combinations thereof.
The Trust cannot purchase or hold the securities of any issuer
if, to its knowledge, Trustees, directors or officers of the Trust
or its Adviser individually owning beneficially more than 0.5% of
the securities of that issuer own in the aggregate more than 5% of
such securities.
The Trust cannot buy or sell real estate; however it may
purchase marketable securities issued by companies, including real
estate investment trusts, which invest in real estate or interests
therein.
2. Almost all of the Trust's assets must be in established
companies.
Only 5% of the Trust's total assets may be in issuers less
than three years old, that is, which have not been in continuous
operation for at least three years. This includes the operations of
predecessor companies.
3. The Trust does not buy for control.
The Trust cannot invest for the purpose of exercising control
or management of other companies.
4. The Trust does not sell securities it doesn't own or borrow
from brokers to buy securities.
Thus, it cannot sell short or buy on margin.
5. The Trust is not an underwriter.
The Trust cannot invest in securities for which there are
legal or contractual restrictions on resale or underwrite
securities of other issuers except insofar as it may technically be
deemed an underwriter under the Securities Act of 1933 in selling
portfolio securities.
LOANS OF PORTFOLIO SECURITIES
The Trust may, to increase its income, lend its securities on
a short- or long-term basis to broker-dealers, banks or certain
other financial institutions (see below) if (i) the loan is
collateralized in accordance with applicable regulatory
requirements (the "Guidelines") and if (ii) after any loan, the
value of the securities loaned does not exceed 10% of the value of
its total assets. As of the date of this Additional Statement, the
Trust does not foresee lending securities if after any loan the
value of loaned securities exceeds 5% of the value of its total
assets. The financial institutions other than broker-dealers or
banks to which the Trust can lend its securities are limited to
"accredited investors," as that term is defined in Section 2(15) of
the Securities Act of 1933. (In general, such institutions are
insurance companies, investment companies and certain employee
benefit plans.) Under the present Guidelines (which are subject to
change) the loan collateral must, on each business day, at least
equal the value of the loaned securities and must consist of cash,
bank letters of credit or U.S. Government securities. To be
acceptable as collateral, a letter of credit must obligate a bank
to pay amounts demanded by the Trust if the demand meets the terms
of the letter. Such terms and the issuing banks would have to be
satisfactory to the Trust. Any loan might be secured by any one or
more of the three types of collateral. In addition, any such
investment must meet the applicable requirements of the Rule. See
"Effect of the Rule on Portfolio Management" in the Prospectus.
The Trust receives amounts equal to the interest or other
distributions on loaned securities and also receives one or more of
the negotiated loan fees, interest on securities used as collateral
or interest on the securities purchased with such collateral,
either of which types of interest may be shared with the borrower.
The Trust may also pay reasonable finder's, custodian and
administrative fees but only to persons not affiliated with the
Trust. The terms of the Trust's loans will meet certain tests under
the Internal Revenue Code and permit the Trust to terminate the
loan and thus reacquire loaned securities on five days' notice.
DISTRIBUTION PLAN
The Trust has a Distribution Plan under Rule 12b-1 (the
"Rule") under the 1940 Act. The Rule provides in substance that an
investment company may not engage directly or indirectly in
financing any activity which is primarily intended to result in the
sale of its shares except pursuant to a plan adopted under the
Rule.
As used in the Plan, "Qualified Recipients" means (i) any
principal underwriter or underwriters of the Trust other than a
principal underwriter which is an affiliated person, or an
affiliated person of an affiliated person, of Aquila Management
Corporation (the "Administrator") and (ii) broker-dealers,
membership organizations, associations of common interest or others
selected by the Trust's administrator or sub-adviser with which it
has entered into written agreements ("Related Agreements")
contemplated by the Rule and which have rendered assistance
(whether direct, administrative or both) in the distribution and/or
retention of Trust shares, in the servicing of shareholder accounts
or in consulting or otherwise cooperating as to its members or
others in its area of interest. "Qualified Holdings" means, as to
any Qualified Recipient, all Trust shares beneficially owned by
such Qualified Recipient or by one or more of its customers
(brokerage or other), other contacts, investment advisory clients,
other clients, or its members, associates or other persons within
its area of interest, if the Qualified Recipient was, in the sole
judgment of the administrator or sub-adviser, instrumental in the
purchase and/or retention of such Trust shares and/or in providing
administrative, consulting or other assistance in relation thereto.
The Plan permits the Administrator to make payments
("Permitted Payments") to Qualified Recipients. These Permitted
Payments are made by the Administrator and are not reimbursed by
the Trust to the Administrator. Permitted Payments may not exceed,
for any fiscal year of the Trust (pro-rated for any fiscal year
which is not a full fiscal year), 0.10 of 1% of the average annual
net assets of the Trust. The Administrator shall have sole
authority (i) as to the selection of any Qualified Recipient or
Recipients; (ii) not to select any Qualified Recipient; and (iii)
to determine the amount of Permitted Payments, if any, to each
Qualified Recipient, provided that the total Permitted Payments to
all Qualified Recipients do not exceed the amount set forth above.
The Administrator is authorized, but not directed, to take into
account, in addition to any other factors deemed relevant by it,
the following: (a) the amount of the Qualified Holdings of the
Qualified Recipient; (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area; (c) the consulting or other assistance provided by
the Qualified Recipient; and (d) the possibility that the Qualified
Holdings of the Qualified Recipient would be redeemed in the
absence of its selection or continuance as a Qualified Recipient.
Notwithstanding the foregoing two sentences, a majority of the
Independent Trustees may remove any person as a Qualified
Recipient.
The Plan recognizes that, in view of the Permitted Payments
and bearing by the Administrator of certain distribution expenses,
the profits, if any, of the Administrator are dependent primarily
on the administration fees paid by the Trust to the Administrator
and that its profits, if any, would be less, or losses, if any,
would be increased due to such Permitted Payments and the bearing
by it of such expenses. If and to the extent that any such
administration fees paid by the Trust might, in view of the
foregoing, be considered as indirectly financing any activity which
is primarily intended to result in the sale of shares issued by the
Trust, the payment of such fees is authorized by the Plan.
The Plan also states that if and to the extent that any of the
payments listed below are considered by anyone to be "primarily
intended to result in the sale of" shares issued by the Trust
within the meaning of the Rule, such payments are authorized under
the Plan: (i) the costs of the preparation of all reports and
notices to shareholders and the costs of printing and mailing such
reports and notices to existing shareholders, irrespective of
whether such reports or notices contain or are accompanied by
material intended to result in the sale of shares of the Trust or
other funds or other investments; (ii) the costs of the preparation
and setting in type of all prospectuses and statements of
additional information and the costs of printing and mailing all
prospectuses and statements of additional information to existing
shareholders; (iii) the costs of preparation, printing and mailing
of any proxy statements and proxies, irrespective of whether any
such proxy statement includes any item relating to, or directed
toward, the sale of the Trust's shares; (iv) all legal and
accounting fees relating to the preparation of any such reports,
prospectuses, statements of additional information, proxies and
proxy statements; (v) all fees and expenses relating to the
qualification of the Trust and/or its shares under the securities
or "Blue-Sky" law of any jurisdiction; (vi) all fees under the
Securities Act of 1933 and the 1940 Act, including fees in
connection with any application for exemption relating to or
directed toward the sale of the Trust's shares; (vii) all fees and
assessments of the Investment Company Institute or any successor
organization, irrespective of whether some of its activities are
designed to provide sales assistance; (viii) all costs of the
preparation and mailing of confirmations of shares sold or redeemed
or share certificates, and reports of share balances; and (ix) all
costs of responding to telephone or mail inquiries of investors or
prospective investors. The Plan states that whenever the
Administrator bears the costs, not borne by the Trust's
Distributor, of printing and distributing all copies of the Trust's
prospectuses, statements of additional information and reports to
shareholders which are not sent to the Trust's shareholders, or the
costs of supplemental sales literature and advertising, such
payments are authorized.
The Independent Trustees are those Trustees who are not
"interested persons" of the Trust as defined in the 1940 Act and
have no direct or indirect financial interest in the operation of
the Plan or in any agreements related to the Plan. The Plan states
that while it is in effect, the selection and nomination of those
Trustees of the Trust who are not "interested persons" of the Trust
shall be committed to the discretion of such disinterested Trustees
but that nothing in the Plan shall prevent the involvement of
others in such selection and nomination if the final decision on
any such selection and nomination is approved by a majority of such
disinterested Trustees.
The Plan states that while it is in effect, the Trust's
Administrator shall at least quarterly report to the Trust's
Trustees in writing for their review on the following matters: (i)
all Permitted Payments made to Qualified Recipients, the identity
of the Qualified Recipient of each Payment and the purpose for
which the amounts were expended; (ii) all costs of each item
specified in the second preceding paragraph (making estimates of
such costs where necessary or desirable) during the preceding
calendar or fiscal quarter; and (iii) all fees of the Trust to the
Administrator paid or accrued during such quarter.
The Plan went into effect upon approval by the shareholders of
the Trust on February 28, 1992, and unless terminated as
hereinafter provided, and continues from November 30 of each year
and year to year thereafter, but only so long as such continuance
is specifically approved at least annually by the vote of the
Trust's Board of Trustees and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such
continuance. In voting on the implementation or continuance of the
Plan, those Trustees who vote to approve such implementation or
continuance must conclude that there is a reasonable likelihood
that the Plan will benefit the Trust and its shareholders. The Plan
may be terminated at any time by a vote of a majority of the
Independent Trustees or by the vote of the holders of a "majority"
(as defined in the 1940 Act) of the outstanding voting securities
of the Trust. The Plan may not be amended to increase materially
the amount of payments to be made without shareholder approval, and
all amendments must be approved by a vote of the Trustees of the
Trust and of the Independent Trustees, with votes cast in person at
a meeting called for the purpose of voting on the Plan.
The Plan states that in the case of a Qualified Recipient
which is a principal underwriter of the Trust, the Related
Agreement shall be the agreement contemplated by Section 15(b) of
the 1940 Act since each such agreement must be approved in
accordance with, and contain the provisions required by, the Rule.
The Plan also states that in the case of Qualified Recipients which
are not principal underwriters of the Trust, the Related Agreements
with them shall be approved in accordance with, and contain the
provisions required by, the Rule.
Under the Rule, all Related Agreements must be in writing and
must contain specified adoption and continuance requirements,
including a requirement that they terminate automatically on their
"assignment," as that term is defined in the 1940 Act. The other
adoption and continuance requirements as to Related Agreements are
the same as those described above as to the Plan itself except
that: (i) no shareholder action is required for the approval of
Related Agreements, and (ii) termination by Trustee or shareholder
action as there described may be on not more than 60 days' written
notice.
The formula under which the payments described above may be
made under the Plan by the Administrator was arrived at by
considering a number of factors. One such factor is that such
payments are designed to provide incentives for Qualified
Recipients (i) in the case of Qualified Recipients which are
principal underwriters, to act as such and (ii) in the case of all
Qualified Recipients, to devote time, persons and effort to
activities which, although not sales activities themselves, may be
useful to the Distributor in its responsibilities as to the sale of
the shares of the Trust. Another factor is that such payments by
the Administrator to Qualified Recipients provide the only
incentive for Qualified Recipients to do so since there is no sales
charge on the sale of the Trust's shares.
LIMITATION OF REDEMPTIONS IN KIND
The Trust has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which the Trust is obligated to redeem shares
solely in cash up to the lesser of $250,000 or 1 percent of the net
asset value of the Trust during any 90-day period for any one
shareholder. Should redemptions by any shareholder exceed such
limitation, the Trust will have the option of redeeming the excess
in cash or in kind. If shares are redeemed in kind, the redeeming
shareholder might incur brokerage costs in converting the assets
into cash. The method of valuing securities used to make
redemptions in kind will be the same as the method of valuing
portfolio securities described under "Net Asset Value Per Share" in
the Prospectus, and such valuation will be made as of the same time
the redemption price is determined.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust, their affiliations, if
any, with the Adviser and the Distributor, and their principal
occupations during at least the past five years are set forth
below. Messrs. Herrmann and Mason are "interested persons" of the
Trust as that term is defined in the 1940 Act as officers of the
Trust; in addition Mr. Herrmann is an officer, director and
shareholder of the Adviser and of the Distributor. They are so
designated by an asterisk. (See "General Information" for
information about shareholdings of Trustees and Officers).
Lacy B. Herrmann*, President and Chairman of the Board of
Trustees, 380 Madison Avenue, New York, New York 10017
Founder, President and Chairman of the Board of Aquila
Management Corporation since 1984, the sponsoring organization and
Administrator and/or Adviser or Sub-Adviser to the following
open-end investment companies, and Founder, Chairman of the Board
of Trustees, and President of each: Pacific Capital Cash Assets
Trust since 1984; Churchill Cash Reserves Trust since 1985; Pacific
Capital U.S. Treasuries Cash Assets Trust since 1988; Pacific
Capital Tax-Free Cash Assets Trust since 1988; each of which is a
money market fund, and together with this Trust are called the
Aquila Money-Market Funds; and Hawaiian Tax-Free Trust since 1984;
Tax-Free Trust of Arizona since 1986; Tax-Free Trust of Oregon
since 1986; Tax-Free Fund of Colorado since 1987; Churchill
Tax-Free Fund of Kentucky since 1987; Tax-Free Fund For Utah since
1992; and Narragansett Insured Tax-Free Income Fund since 1992;
each of which is a tax-free municipal bond fund, and two equity
funds, Aquila Rocky Mountain Equity Fund since 1993 and Aquila
Cascadia Equity Fund, since 1996, which are called the Aquila Bond
and Equity Funds; Vice President, Director, Secretary and formerly
Treasurer of Aquila Distributors, Inc. since 1981, distributor of
the above funds; President and Chairman of the Board of Trustees of
CCMT, a money market fund since 1981, and an Officer and
Trustee/Director of its predecessors since 1974; Chairman of the
Board of Trustees and President of Prime Cash Fund (which is
inactive), since 1982 and of Short Term Asset Reserves 1984-1996;
President and a Director of STCM Management Company, Inc., sponsor
and sub-adviser to CCMT; Chairman, President, and a Director since
1984, of InCap Management Corporation, formerly sub-adviser and
administrator of Prime Cash Fund and Short Term Asset Reserves, and
Founder and Chairman of several other money market funds; Director
or Trustee of OCC Cash Reserves, Inc., Oppenheimer Quest Global
Value Fund, Inc., Oppenheimer Quest Value Fund, Inc., and Trustee
of Quest For Value Accumulation Trust, The Saratoga Advantage
Trust, and of the Rochester Group of Funds, each of which is an
open-end investment company; Trustee of Brown University, 1990-1996
and currently Trustee Emeritus; actively involved for many years in
leadership roles with university, school and charitable
organizations.
Theodore T. Mason*, Vice Chairman of the Board of Trustees, 26
Circle Drive, Hastings-on-Hudson, New York 10706
Managing Director of EastWind Power Partners, Ltd. since 1994;
Director of Alumni Association, SUNY Maritime College since 1997;
Director of Cogeneration Development of Willamette Industries,
Inc., a forest products company, 1991-1993; Vice President of
Corporate Development of Penntech Papers, Inc., 1978-1991; Vice
President of Capital Projects for the same company, 1977-1978;
Trustee and Vice President, 1976-1981, and formerly Director of its
predecessor; Director of STCM Management Company, Inc.; Vice
Chairman of the Board of Trustees and Trustee of Prime Cash Fund
(which is inactive) since 1982; Trustee of Short Term Asset
Reserves, 1984-1986 and 1989-1996, of Hawaiian Tax-Free Trust and
Pacific Capital Cash Assets Trust since 1984, of Churchill Cash
Reserves Trust since 1985, of Pacific Capital Tax-Free Cash Assets
Trust and Pacific Capital U.S. Treasuries Cash Assets Trust since
1988 and of Churchill Tax-Free Fund of Kentucky since 1992; Vice
President and Trustee of Oxford Cash Management Fund, 1983-1989;
Vice President of Trinity Liquid Assets Trust, 1983-1985; President
and Director of Ted Mason Venture Associates, Inc., a venture
capital consulting firm, 1972-1980; Advisor to the Commander, U.S.
Maritime Defense Zone Atlantic, 1984-1988; National Vice President,
Surface/Subsurface, Naval Reserve Association, 1985-1987; National
Vice President, Budget and Finance, for the same Association,
1983-1985; Commanding Officer of four Naval Reserve Units,
1974-1985; Captain, USNR, 1978-1988.
Paul Y. Clinton, Trustee, 946 Morris Avenue, Bryn Mawr,
Pennsylvania 19010
Principal of Clinton Management Associates, a financial and venture
capital consulting firm; formerly Director of External Affairs of
Kravco Corporation, a national real estate owner and developer,
1984-1995; formerly President of Essex Management Corporation, a
management and financial consulting company, 1979-1983; Trustee of
Narragansett Insured Tax-Free Income Fund since 1996 and of Prime
Cash Fund (which is inactive), since 1993; Trustee of Short Term
Asset Reserves 1984-1996; general partner of Capital Growth Fund,
a venture capital partnership, 1979-1982; President of Geneve
Corp., a venture capital fund, 1970-1978; formerly Chairman of
Woodland Capital Corp., a small business investment company;
formerly Vice President, W.R. Grace & Co; Director or Trustee of
OCC Cash Reserves, Inc., Oppenheimer Quest Global Value Fund, Inc.,
Oppenheimer Quest Value Fund, Inc., and Trustee of Quest For Value
Accumulation Trust, and of the Rochester Group of Funds, each of
which is an open-end investment company.
Anne J. Mills, Trustee, 167 Glengarry Place, Castle Pines Village,
Castle Rock, Colorado 80104
Vice President for Business Affairs of Ottawa University since
1992; Director of Customer Fulfillment, U.S. Marketing and Services
Group, IBM Corporation, 1990-1991; Director of Business
Requirements of that Group, 1988-1990; Director of Phase Management
of that Group, 1985-1988; Budget Review Officer of the American
Baptist Churches/USA since 1994; Director of the American Baptist
Foundation since 1985; Trustee of Brown University; Trustee of
Churchill Cash Reserves Trust since 1985, of Tax-Free Trust of
Arizona since 1986, of Churchill Tax-Free Fund of Kentucky and
Tax-Free Fund of Colorado since 1987 and of Tax-Free Fund For Utah
since 1994.
Robert L. Krakoff, Trustee, 257 Commonwealth Avenue, Boston,
Massachusetts 02116
Chairman and Chief Executive Officer of Advanstar Holdings,
Inc., since 1996. Chairman and Chief Executive Officer of Cahners
Publishing Company 1991-1996; President of Cahners Publishing
Company 1989-1991; Executive Vice President of that company,
1985-1989; President of Cahners Exposition Group, a division of
that company, 1979-1985; Vice President of that company, 1973-1985;
Trustee of Narragansett Insured Tax-Free Income Fund since 1992;
Director of Centennial Capital Special Fund, Inc. until 1979;
Trustee of Trinity Liquid Assets Trust, 1982-1991; Director of Reed
Elsevier International PLC (an international publishing firm) since
1990-1996; Director of Freedom Communications, Inc. since 1996.
Cornelius T. Ryan, Trustee, c/o Oxford Partners, 315 Post Road
West, Westport, Connecticut, 06880
General Partner of Oxford Partners, a group of investment
venture capital partnerships; General Partner of Oxford Bioscience
Partners, and President of Oxford Venture Corporation, an
affiliated administrative company, since 1980; Trustee of Prime
Cash Fund (which is inactive), 1983-1996 and of Aquila Rocky
Mountain Equity Fund since 1996; President of AMR International,
Inc., a management training and publishing company, 1978-1980;
Director of Schuster Fund, Inc., 1972-1980; President of GTE New
Ventures Corporation, 1974-1978; Vice President, Corporation
Development, of GTE Corporation, 1974-1978; President and a founder
of Randolph Computer Corporation, 1965-1974; Director of Neuberger
& Berman Equity Funds, since 1988.
Charles E. Childs, III, Senior Vice President, 380 Madison Avenue,
New York, New York 10017
Vice President- Administration and formerly Assistant Vice
President and Associate of the Administrator since 1987; Senior
Vice President, Vice President or Assistant Vice President of the
Money-Money Funds since 1988; Northeastern University, 1986-1987
(M.B.A., 1987); Financial Analyst, Unisys Corporation, 1986;
Associate Analyst at National Economic Research Associates, Inc.
(NERA), a micro-economic consulting firm, 1979-1985.
Diana P. Herrmann, Vice President, 380 Madison Avenue, New York,
New York 10017
Trustee of Tax-Free Trust of Arizona and Tax-Free Trust of
Oregon since 1994, of Churchill Tax-Free Fund of Kentucky and
Churchill Cash Reserves Trust since 1995, of Aquila Cascadia Equity
Fund since 1996 and of Aquila Rocky Mountain Equity Fund and
Tax-Free Fund for Utah since 1997; President and Chief Operating
Officer of the Administrator since 1997; Senior Vice President and
Secretary, formerly Vice President of the Administrator since 1986
and Director since 1984; Senior Vice President or Vice President
and formerly Assistant Vice President of the Aquila Money-Market
Funds since 1986; Vice President of the Aquila Bond and Equity
Funds since 1997; Vice President of InCap Management Corporation
since 1986 and Director since 1983; Assistant Vice President of
Oxford Cash Management Fund, 1986-1988; Assistant Vice President
and formerly Loan Officer of European American Bank, 1981-1986;
daughter of the Trust's President; Trustee of the Leopold Schepp
Foundation (academic scholarships) since 1995; actively involved in
mutual fund and trade associations and in college and other
volunteer organizations.
John M. Herndon, Vice President and Assistant Secretary, 380
Madison Avenue, New York, New York 10017
Assistant Secretary of the Aquila Money-Market Funds and the Aquila
Bond and Equity Funds since 1995 and Vice President of the Aquila
Money-Market Funds since 1990; Vice President of the Administrator
since 1990; Investment Services Consultant and Bank Services
Executive of Wright Investors' Service, a registered investment
adviser, 1983-1989; Member of the American Finance Association, the
Western Finance Association and the Society of Quantitative
Analysts.
William C. Wallace, Vice President, 380 Madison Avenue, New York,
New York 10017
Vice President Pacific Capital Cash Assets Trust since 1984; Senior
Vice President of Hawaiian Tax-Free Trust since 1985 and Vice
President, 1984-1985; Senior Vice President of Tax-Free Trust of
Arizona since 1989 and Vice President, 1986-1988; Vice President of
Tax-Free Trust of Oregon since 1986, of Churchill Tax-Free Fund of
Kentucky and Tax-Free Fund of Colorado since 1987, of Pacific
Capital Tax-Free Cash Assets Trust and Pacific Capital U.S.
Treasuries Cash Assets Trust since 1988 and of Narragansett Insured
Tax-Free Income Fund since 1992; Secretary and Director of STCM
Management Company, Inc. since 1974; President of the Distributor
since 1995 and formerly Vice President of the Distributor,
1986-1992; Member of the Panel of Arbitrators, American Arbitration
Association, since 1978; Assistant Vice President, American Stock
Exchange, Market Development Division, and Director of Marketing,
American Gold Coin Exchange, a subsidiary of the American Stock
Exchange, 1976-1984.
Rose F. Marotta, Chief Financial Officer, 380 Madison Avenue, New
York, New York 10017
Chief Financial Officer of the Aquila Money-Market Funds and the
Aquila Bond and Equity Funds since 1991 and Treasurer, 1981-1991;
formerly Treasurer of the predecessor of CCMT; Treasurer and
Director of STCM Management Company, Inc., since 1974; Treasurer of
Trinity Liquid Assets Trust, 1982-1986 and of Oxford Cash
Management Fund, 1982-1988; Treasurer of InCap Management
Corporation since 1982, of the Administrator since 1984 and of the
Distributor since 1985.
Richard F. West, Treasurer, 380 Madison Avenue, New York, New York
10017
Treasurer of the Aquila Money-Market Funds and the Aquila Bond and
Equity Funds and of Aquila Distributors, Inc. since 1992; Associate
Director of Furman Selz Incorporated, 1991-1992; Vice President of
Scudder, Stevens & Clark, Inc. and Treasurer of Scudder
Institutional Funds, 1989-1991; Vice President of Lazard Freres
Institutional Funds Group, Treasurer of Lazard Freres Group of
Investment Companies and HT Insight Funds, Inc., 1986-1988; Vice
President of Lehman Management Co., Inc. and Assistant Treasurer of
Lehman Money Market Funds, 1981-1985; Controller of Seligman Group
of Investment Companies, 1960-1980.
Edward M. W. Hines, Secretary, 551 Fifth Avenue, New York, New
York 10176
Partner of Hollyer Brady Smith Troxell Barrett Rockett Hines &
Mone LLP, attorneys, since 1989 and counsel, 1987-1989; Secretary
of the Aquila Money-Market Funds and the Aquila Bond and Equity
Funds since 1982; Secretary of Trinity Liquid Assets Trust,
1982-1985 and Trustee of that Trust, 1985-1986; Secretary of Oxford
Cash Management Fund, 1982-1988.
Patricia A. Craven, Assistant Secretary & Compliance Officer, 380
Madison Avenue, New York, New York 10017
Assistant Secretary of the Aquila Money-Market Funds and the Aquila
Bond and Equity Funds since 1995; Counsel to the Administrator and
the Distributor since 1995; formerly a Legal Associate for
Oppenheimer Management Corporation, 1993-1995.
Compensation of Trustees
The Trust does not pay fees to Trustees affiliated with the
Administrator or to any of the Trust's officers. During the fiscal
year ended June 30, 1997, the Trust paid $23,306 in fees and
reimbursement of expenses to its other Trustees. The Trust is one
of the 14 funds in the Aquilasm Group of Funds, which consist of
tax-free municipal bond funds, money-market funds and two equity
funds. The following table lists the compensation of all Trustees
who received compensation from the Trust and the compensation they
received during the Trust's fiscal year from other funds in the
Aquilasm Group of Funds. None of such Trustees has any pension or
retirement benefits from the Trust or any of the other funds in the
Aquila group.
<TABLE>
<CAPTION>
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group now serves
<S> <C> <C> <C>
Paul Y.
Clinton $3,658 $7,585 3
Robert L.
Krakoff $1,550 $3,150 2
Theodore T.
Mason $387 $57,831 7
Anne J.
Mills $2,163 $36,526 6
Cornelius T.
Ryan $2,625 $3,950 2
</TABLE>
ADDITIONAL INFORMATION AS TO MANAGEMENT ARRANGEMENTS
Additional Information as to the Advisory Agreement
The Investment Advisory Agreement (the "Advisory Agreement")
between the Trust and STCM Management Company, Inc. (the "Adviser")
contains the provisions described below, in addition to those
described in the Prospectus.
In connection with its duties to arrange for the purchase and
sale of the Trust's portfolio securities, the Adviser shall select
such broker-dealers ("dealers") as shall, in the Adviser's
judgment, implement the policy of the Trust to achieve "best
execution," i.e., prompt, efficient, and reliable execution of
orders at the most favorable net price. The Adviser shall cause the
Trust to deal directly with the selling or purchasing principal or
market maker without incurring brokerage commissions unless the
Adviser determines that better price or execution may be obtained
by paying such commissions; the Trust expects that most
transactions will be principal transactions at net prices and that
the Trust will incur little or no brokerage costs. The Trust
understands that purchases from underwriters include a commission
or concession paid by the issuer to the underwriter and that
principal transactions placed through dealers include a spread
between the bid and asked prices. In allocating transactions to
dealers, the Adviser is authorized to consider, in determining
whether a particular dealer will provide best execution, the
dealer's reliability, integrity, financial condition and risk in
positioning the securities involved, as well as the difficulty of
the transaction in question, and thus need not pay the lowest
spread or commission available if the Adviser determines in good
faith that the amount of commission is reasonable in relation to
the value of the brokerage and research services provided by the
dealer, viewed either in terms of the particular transaction or the
Adviser's overall responsibilities as to the accounts as to which
it exercises investment discretion. If, on the foregoing basis, the
transaction in question could be allocated to two or more dealers,
the Adviser is authorized, in making such allocation, to consider
(i) whether a dealer has provided research services, as further
discussed below; and (ii) whether a dealer has sold shares of the
Trust or any other investment company or companies having the
Adviser as its investment adviser or having the same sub-adviser,
administrator or principal underwriter as the Trust. Such research
may be in written form or through direct contact with individuals
and may include quotations on portfolio securities and information
on particular issuers and industries, as well as on market,
economic, or institutional activities. The Trust recognizes that no
dollar value can be placed on such research services or on
execution services, that such research services may or may not be
useful to the Trust and/or other accounts of the Adviser, and that
research received by such other accounts may or may not be useful
to the Trust.
The expense limitation referred to in the Prospectus, if in
effect, is implemented monthly so that at no time is there any
unpaid liability under the limitation, subject to readjustment
during the year.
The Advisory Agreement may be terminated by the Adviser at any
time without penalty upon giving the Trust sixty days' written
notice, and may be terminated by the Trust at any time without
penalty upon giving the Adviser sixty days' written notice,
provided that such termination by the Trust shall be directed or
approved by the vote of a majority of all its Trustees in office at
the time or by the vote of the holders of a majority (as defined in
the 1940 Act) of its voting securities at the time outstanding and
entitled to vote; it automatically terminates in the event of its
assignment (as so defined).
The Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
its obligations thereunder, the Adviser is not liable for any loss
sustained by the adoption of any investment policy or the purchase,
sale or retention of any security and permits the Adviser to act as
investment adviser for any other person, firm or corporation. The
Trust agrees to indemnify the Adviser to the full extent permitted
under the Trust's Declaration of Trust as presently in effect, and
by the 1940 Act.
The Advisory Agreement states that it is agreed that the
Adviser shall have no responsibility or liability for the accuracy
or completeness of the Trust's Registration Statement under the
Securities Act of 1933 and the 1940 Act, except for the information
supplied by the Adviser for inclusion therein.
During the fiscal year ended June 30, 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. During the fiscal year ended June 30, 1996, the
Trust accrued $3,673 in favor of the Adviser under the Advisory
Agreement and $2,775 in favor of the Administrator under the
Administration Agreement. All such fees were waived. The expense
limitation provisions in the Advisory and Administration Agreements
in effect, would in any event have precluded any of such fees
during the last fiscal year. The Administrator also reimbursed the
Trust $73,338 to comply with the expense limitation, $14,519
pursuant to the agreement regarding total expenses of the Trust and
$3,635 voluntarily, totaling $91,492. During the fiscal year ended
June 30, 1995, the Trust accrued $3,924 in favor of the Adviser
under the Advisory Agreement and $2,943 in favor of the
Administrator under the Administration Agreement. All such fees
were waived. The expense limitation provisions in the Advisory and
Administration Agreements in effect would in any event have
precluded any of such fees during that fiscal year. In addition,
the Administrator reimbursed the Trust $64,713 to comply with the
expense limitation described in the Prospectus, $14,732 pursuant to
the agreement regarding total expenses of the Trust, described in
the Prospectus and $3,960 voluntarily, totaling $83,405.
Additional Information as to the Administration Agreement
The Administration Agreement (the "Administration Agreement")
between Aquila Management Corporation, as Administrator, and the
Trust contains the provisions described below in addition to those
described in the Prospectus.
Subject to the control of the Trust's Board of Trustees, the
Administrator provides all administrative services to the Trust
other than those relating to the Trust's investment portfolio and
the maintenance of the Trust's accounting books and records (see
below for discussion); as part of such duties, the Administrator
(i) provides office space, personnel, facilities, and equipment for
the performance of the following functions and for the maintenance
of the Trust's headquarters; (ii) oversees all relationships
between the Trust and the Trust's transfer agent, custodian, legal
counsel, auditors and principal underwriter, including the
negotiation of agreements in relation thereto, the supervision and
coordination of the performance of such agreements, and the
overseeing of all administrative matters which are necessary or
desirable for the effective operation and for the sale, servicing,
or redemption of the Trust's shares; (iii) provides to the Adviser
and to the Trust statistical and other factual information and
advice regarding economic factors and trends, but does not
generally furnish advice or make recommendations regarding the
purchase or sale of securities; (iv) maintains the Trust's books
and records (other than accounting books and records), and prepares
(or assists counsel and auditors in the preparation of) all
required proxy statements, reports to the Trust's shareholders and
Trustees, reports to and other filings with the Securities and
Exchange Commission and any other governmental agencies, and tax
returns, and oversees the Trust's insurance relationships; (v)
prepares, on the Trust's behalf, such applications and reports as
may be necessary to register or maintain the Trust's registration
or that of its shares under the securities or Blue-Sky laws of all
such jurisdictions as may be required from time to time; and (vi)
responds to any inquiries or other communications from the Trust's
shareholders and broker-dealers, or if any such inquiry or
communication is more properly to be responded to by the Trust's
shareholder servicing and transfer agent or distributor, oversees
such shareholder servicing and transfer agent's or distributor's
response thereto. Since the Trust pays its own legal and audit
expenses, to the extent that the Trust's counsel and accountants
prepare or assist in the preparation of prospectuses, proxy
statements and reports to shareholders, the costs of such
preparation or assistance are paid by the Trust.
The expense limitation referred to in the Prospectus, if in
effect, is implemented monthly so that at no time is there any
unpaid liability under the limitation, subject to readjustment
during the year.
The Administration Agreement may be terminated at any time
without penalty by the Administrator upon sixty days' written
notice to the Trust and the Adviser; it may be terminated by the
Trust at any time without penalty upon giving the Administrator
sixty days' written notice, provided that such termination by the
Trust shall be directed or approved by a vote of a majority of the
Trust's Trustees in office at the time, including a majority of
Independent Trustees. In either case the notice provision may be
waived.
The Administration Agreement provides that the Administrator
shall not be liable for any error in judgment or for any loss
suffered by the Trust in connection with the matters to which the
Administration Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence of the
Administrator in the performance of its duties, or from reckless
disregard by it of its obligations and duties under the
Administration Agreement. The Trust agrees to indemnify the
Administrator to the full extent permitted by the Trust's
Declaration of Trust and the 1940 Act.
AMORTIZED COST VALUATION
The Trust operates under Rule 2a-7 under the 1940 Act, which
permits it to value its portfolio on the basis of amortized cost.
The amortized cost method of valuation is accomplished by valuing
a security at its cost and thereafter assuming a constant
amortization rate to maturity of any discount or premium, and does
not reflect the impact of fluctuating interest rates on the market
value of the security. This method does not take into account
unrealized gains or losses.
While the amortized cost method provides certainty in
valuation, there may be periods during which value, as determined
by amortized cost, is higher or lower than the price the Trust
would receive if it sold the instrument. During periods of
declining interest rates, the daily yield on the Trust's shares may
tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon
market prices and estimates of market prices for all of its
portfolio instruments and changing its dividends based on these
changing prices. The converse would apply in a period of rising
interest rates.
Under the Rule, the Board of Trustees must establish, and has
established, procedures (the "Procedures") designed to stabilize at
$1.00, to the extent reasonably possible, the Trust's price per
share as computed for the purpose of sales and redemptions. Such
procedures must include review of the Trust's portfolio holdings by
the Board of Trustees at such intervals as they may deem
appropriate and at such intervals as are reasonable in light of
current market conditions to determine whether the Trust's net
asset value calculated by using available market quotations
deviates from the per share value based on amortized cost.
"Available market quotations" may include actual market quotations
(valued at the mean between bid and asked prices), estimates of
market value reflecting current market conditions based on
quotations or estimates of market value for individual portfolio
instruments or values obtained from yield data relating to a
directly comparable class of securities published by reputable
sources.
Under Rule 2a-7, if the extent of any deviation between the
net asset value per share based upon "available market quotations"
(see above) and the net asset value per share based on amortized
cost exceeds $0.005, the Board of Trustees must promptly consider
what action, if any, will be initiated. When the Board of Trustees
believes that the extent of any deviation may result in material
dilution or other unfair results to investors or existing
shareholders, it is required to take such action as it deems
appropriate to eliminate or reduce to the extent reasonably
practicable such dilution or unfair results. Such actions could
include the sale of portfolio securities prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity, withholding dividends or payment of distributions from
capital or capital gains, redemptions of shares in kind, or
establishing a net asset value per share using available market
quotations.
The Procedures include changes in the dividends payable by the
Trust under specified conditions, as described below under
"Computation of Daily Dividends." This portion of the Procedures
provides that actions that the Trustees would consider under
certain circumstances can be taken automatically.
COMPUTATION OF DAILY DIVIDENDS
Under the Procedures which the Trust's Board of Trustees has
adopted relating to "amortized cost" valuation, the calculation of
the Trust's daily dividends will change under certain circumstances
from that indicated in the Prospectus. If on any day the deviation
between net asset value determined on an amortized cost basis and
that determined using market quotations is $0.003 or more, the
amount of such deviation will be added to or subtracted from the
daily dividend to the extent necessary to reduce such deviation to
within $0.003.
If on any day there is insufficient net income to absorb any
such reduction, the Board of Trustees would be required under the
Rule to consider taking other action if the deviation, after
eliminating the dividend for that day, exceeds of $0.005. One of
the actions which the Board of Trustees might take could be the
elimination or reduction of dividends for more than one day.
AUTOMATIC WITHDRAWAL PLAN
You may establish an Automatic Withdrawal Plan under which you
will receive a monthly or quarterly check in a stated amount, not
less than $50, if you own or purchases shares of the Trust having
a net asset value of at least $5,000. Stock certificates will not
be issued for shares held under an Automatic Withdrawal Plan. All
dividends must be reinvested.
Shares will be redeemed on the last business day of the
month as may be necessary to meet withdrawal payments. Shares
acquired with reinvested dividends will be redeemed first to
provide such withdrawal payments and thereafter other shares will
be redeemed to the extent necessary, and, depending upon the amount
withdrawn, your principal may be depleted.
Redemption of shares for withdrawal purposes may reduce or
even liquidate your account. Monthly or quarterly payments paid to
shareholders may not be considered as a yield or income on
investment.
GENERAL INFORMATION
Background of the Trust
Capital Cash Management Trust is one of the oldest
Money-Market mutual funds in the United States. It has served a
wide range of investors for over 20 years, producing competitive
results for individuals, churches, endowments, schools, bank trust
departments and corporations.
Information about 5% shareholders
As of September 30, 1997, the following persons owned more
than 5% of the Trust's outstanding shares:
William J. Boyle and Margaret M. Boyle, JTWROS, 118,595
shares (7.8%) and Julie L. Freireich 102,205 shares (6.7%). In
addition, the Trustees and officers of the Trust owned 202,955
shares (13%), of which 178,062 shares (12%) are held as follows: by
Aquila Distributors, Inc., 18,175 shares, by Lacy B. Herrmann and
Elizabeth B. Herrmann, 37,368 shares, Diana P. Herrmann, 20,314 and
by Elizabeth B. Herrmann 102,205 shares. See "Trustees and
Officers" above for information about Mr. Herrmann, and
"Information as to the Adviser, the Administrator and the
Distributor" in the Prospectus for information about Aquila
Management Corporation.
Net Asset Value Per Share
As indicated in the Prospectus, the net asset value per
share of the Trust's shares will be determined on each day that the
New York Stock Exchange is open. That Exchange annually announces
the days on which it will not be open; the most recent announcement
indicates that it will not be open on the following days: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. However, that Exchange may close on days not
included in that announcement.
Indemnification of Shareholders and Trustees
The Trust is an entity of the type commonly known as a
"Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be
held personally liable as partners for the obligations of the
Trust. The Declaration of Trust does, however, contain an express
disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by
the Trust or the Trustees. The Declaration of Trust provides for
indemnification out of the Trust's property of any shareholder held
personally liable for the obligations of the Trust. The Declaration
of Trust also provides that the Trust shall, upon request, assume
the defense of any claim made against any shareholder for any act
or obligation of the Trust and satisfy any judgment thereon. Thus,
the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to the relatively remote
circumstances in which the Trust itself would be unable to meet its
obligations.
The Declaration of Trust further provides that the Trustees
will not be liable for errors of judgment or mistakes of fact or
law; but nothing in the Declaration of Trust protects a Trustee
against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his
office.
Custodian and Auditors
The Trust's Custodian, Bank One Trust Company, N.A., is
responsible for holding the Trust's assets.
The Trust's auditors, KPMG Peat Marwick LLP, perform an annual
audit of the Trust's financial statements.
Financial Statements
The financial statements of the Trust for the fiscal year
ended June 30, 1997, which are contained in the Annual Report for
that fiscal year, are hereby incorporated by reference into the
Additional Statement. Those financial statements have been audited
by KPMG Peat Marwick LLP, independent auditors, whose report
thereon is incorporated herein by reference.
<PAGE>
APPENDIX A
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS
Bond Ratings
At the date of this Additional Statement there are six
organizations considered as Nationally Recognized Statistical
Rating Organizations ("NRSROs") for purposes of Rule 15c3-1 under
the Securities Exchange Act of 1934. Their names, a brief summary
of their respective rating systems, some of the factors considered
by each of them in issuing ratings and their individual procedures
are described below.
STANDARD AND POOR'S CORPORATION
Commercial paper consists of unsecured promissory notes issued
to raise short-term funds. An S&P commercial paper rating is a
current assessment of the likelihood of timely payment of debt
having an original maturity of no more than 365 days. S&P's
commercial paper ratings are graded into several categories from
"A-1" for the highest-quality obligations (which can also have a
plus (+) sign designation) to "D" for the lowest. The two highest
categories are:
A-1: This highest category indicates the degree of safety
regarding timely payment is strong. Those issues
determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign.
A-2: Capacity for timely payment on issues with this
designation is satisfactory. However, the relative degree
of safety is not as high for issues designated A-1.
An S&P corporate debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific
obligation. The ratings are based, in varying degrees, on the
following considerations:
1) Likelihood of default -- capacity and willingness of
the obligor as to the timely payment of interest and
repayment of principal in accordance with the terms of
the obligations;
2) Nature of and provisions of the obligation; and
3) Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization, or
other arrangement under the laws of bankruptcy and other
laws affecting creditors' rights.
The two highest categories are:
AAA: Capacity to pay interest and repay principal is
extremely strong.
AA: Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the highest
rated issues only in a degree.
MOODY'S INVESTORS SERVICE
Moody's short-term debt ratings are opinions of the ability of
issuers to repay punctually senior debt obligations which have an
original maturity not exceeding one year. Obligations relying upon
support mechanisms such as letters of credit and bonds of indemnity
are excluded unless explicitly rated. The two highest categories
are:
Prime-1: Issuers rated P-1 have a superior ability for
repayment of senior short-term debt obligations,
evidenced by the following characteristics:
* Leading market positions in well-established
industries.
* High rates of return on funds employed.
* Conservative capital structure with moderate
reliance on debt and ample asset protection.
* Broad margins in earnings coverage of fixed
financial charges and high internal cash
generation.
* Well-established access to a range of
markets and assured sources of alternative
liquidity.
Prime-2: Issuers rated P-2 have a strong ability for
repayment of senior short-term debt obligations,
evidenced by the above-mentioned characteristics, but to
a lesser degree. Earnings trends and coverage ratios,
while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample
alternative liquidity is maintained.
Corporate bonds rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are
protected by large or exceptionally stable margin and principal is
secure. Corporate bonds rated Aa are judged to be of high quality
by all standards. Together with the Aaa group they comprise what
are generally known as high-grade bonds. Aa bonds are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities, fluctuation of protective elements may
be of greater amplitude, or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa
securities.
DUFF & PHELPS, INC.
The ratings apply to all obligations with maturities of under
one year, including commercial paper, the unsecured portion of
certificates of deposit, unsecured bank loans, master notes,
bankers' acceptances, irrevocable letters of credit and current
maturities of long-term debt. The two highest categories are:
D-1+: Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or
access to alternative sources of funds is outstanding and
safety is just below risk-free U.S. Treasury short-term
obligations.
D-1: Very high certainty of timely payment. Liquidity
factors are excellent and supported by good fundamental
protection factors. Risk factors are minor.
D-1 -: High certainty of timely payment. Liquidity
factors are strong and supported by good fundamental
protection factors. Risk factors are very small.
D-2: Good certainty of timely payment. Liquidity factors
and company fundamentals are sound. Although ongoing
funding needs may enlarge total financing requirements,
access to capital markets is good. Risk factors are very
small.
Long-term debt rated AAA represents the highest credit
quality. The risk factors are negligible, being only slightly more
than for risk-free U.S. Treasury debt. Debt rated AA represents
high credit quality. Protection factors are strong. Risk is modest
but may vary slightly from time to time because of economic
conditions.
IBCA
In determining the creditworthiness of financial institutions,
IBCA assigns ratings within the following categories: Legal,
Individual, Short and Long Term. A legal rating deals solely with
the question of whether an institution would receive support if it
ran into difficulties and not whether it is "good" or "bad". An
individual rating looks purely at the strength of a financial
institution without receiving any support. Short and long-term
ratings assess the borrowing capabilities and the capacity for
timely repayment of debt obligations. A short-term rating relates
to debt which has a maturity of less than one year, while a
long-term rating applies to a instrument of longer duration. The
legal ratings are:
1: A bank for which there is a clear legal guarantee on
the part of its home state to provide any necessary
support or a bank of such importance both internationally
and domestically that support from the state would be
forthcoming, if necessary.
2: A bank for which there is no legal obligation on the
part of its sovereign entity to provide support but for
which state support would be forthcoming, for example,
because of its importance to the total economy or its
historic relationship with the government.
The individual ratings are:
A: A bank with a strong balance sheet, favorable credit
profile and a consistent record of above average
profitability.
B: A bank with a sound credit profile and without
significant problems. The bank's performance has
generally been in line with or better than that of its
peers.
The short-term ratings are:
A-1+: Obligations supported by the highest capacity for
timely repayment.
A-1: Obligations supported by a very strong capacity for
timely repayment.
A-2: Obligations supported by a very strong capacity for
timely repayment, although such capacity may be
susceptible to adverse changes in business, economic or
financial conditions.
The long-term ratings are:
AAA: Obligations for which there is the lowest
expectation of investment risk. Capacity for timely
repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk.
AA: Obligations for which there is a very low expectation
of investment risk. Capacity for timely repayment of
principal and interest is substantial. Adverse changes in
business, economic or financial conditions may increase
investment risk albeit not significantly.
Thomson BankWatch, Inc. (TBW)
The TBW short-term ratings apply to commercial paper, other
senior short-term obligations and deposit obligations of the
entities to which the rating has been assigned. TBW's two highest
short-term ratings are:
TBW-1: Indicates a very high degree of likelihood that
principal and interest will paid on a timely basis.
TBW-2: While the degree of safety regarding timely
repayment of principal and interest is strong, the
relative degree of safety is not as high as for issues
rated "TBW-1".
The TBW long-term rating specifically assess the likelihood of
an untimely repayment of principal or interest over the term to
maturity of the rated instrument. TBW's two highest long-term
ratings are:
AAA: Indicates ability to repay principal and interest on
a timely basis is very strong.
AA: Indicates a superior ability to repay principal and
interest on a timely basis with limited incremental risk
versus issues rated in the highest category.
Fitch Investors Service, Inc.
The Fitch short-term ratings apply to debt obligations that
are payable on demand which include commercial paper, certificates
of deposit, medium-term notes and municipal and investment notes.
Short-term ratings places greater emphasis than long-term ratings
on the existence of liquidity necessary to meet the issuer's
obligations in a timely manner. Fitch short-term ratings are:
F-1+: Issues assigned this rating are regarded as having
the strongest degree of assurance for timely payment.
F-1: Issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than issues
rated "F-1+".
The Fitch long-term rating represents their assessment of the
issuer's ability to meet the obligations of a specific debt issue
or class of debt in a timely manner. The rating takes into
consideration special features of the issue, its relationship to
other obligations of the issuer, the current and prospective
financial and operating performance of the issuer and any
guarantor, as well as the economic and political environment that
might affect the issuer's future financial strength and credit
quality. The Fitch long-term rating are:
AAA: Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which
is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very
high credit quality. The obligor's ability to pay
interest and repay principal is very strong.
<PAGE>
INVESTMENT ADVISER
STCM Management Company Inc.
380 Madison Avenue, Suite 2300
New York, NY 10017
ADMINISTRATOR
Aquila Management Corporation
380 Madison Avenue, Suite 2300
New York, New York 10017
DISTRIBUTOR
Aquila Distributors, Inc.
380 Madison Avenue, Suite 2300
New York, New York 10017
TRUSTEES
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice Chairman
Paul Y. Clinton
Robert L. Krakoff
Anne J. Mills
Cornelius T. Ryan
OFFICERS
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President & 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
After November 8, 1997:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Before November 8, 1997:
Administrative Data Management Corp.
581 Main Street
Woodbridge, New Jersey 07095-1198
CUSTODIAN
Bank One Trust Company, N.A.
100 East Broad Street
Columbus, Ohio 43271
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154
COUNSEL
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue
New York, New York 10176
CAPITAL CASH
MANAGEMENT TRUST
A cash
management
investment
[LOGO]
STATEMENT OF
ADDITIONAL
INFORMATION
[LOGO]
One of the
Aquilasm Group of Funds
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
PART C: OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Financial Highlights
Incorporated by reference into Part B:
Report of Independent Auditors
Statement of Investments as of June 30, 1997
Statement of Assets and Liabilities as of
June 30, 1997
Statement of Operations for the year ended
June 30, 1997
Statement of Changes in Net Assets for the
years ended June 30, 1997 and 1996
Notes to Financial Statements
Included in Part C:
Consent of Independent Auditors
(b) Exhibits:
(1) Supplemental Declaration of Trust (i)
(2) By-laws (i)
(3) Not applicable
(4) Specimen share certificate (i)
(5) Investment Advisory Agreement (i)
(6) Distribution Agreement (i)
(7) Not applicable
(8) (a) Custody Agreement (i)
(9) (a) Transfer Agency Agreement
(before November 8, 1997) (i)
(9) (b) Transfer Agency Agreement
(after November 8, 1997) (i)
(9) (c) Administration Agreement (i)
(9) (d) Related Agreement (i)
(10) Not applicable
(11) Not applicable
(12) Not applicable
(13) Not applicable
(14) Not applicable
(15) Distribution Plan (i)
(16) Financial Data Schedule (i)
(i) Filed herewith.
ITEM 25. Persons Controlled By or Under Common Control
With Registrant
None
ITEM 26. Number of Holders of Securities
As of September 30, 1997 Registrant had 141 holders
of record of its shares.
ITEM 27. Indemnification
Subdivision (c) of Section 12 of Article SEVENTH of
Registrant's Supplemental Declaration of Trust,
filed as Exhibit 1 to Registrant's Post-Effective
Amendment No. 32 dated August 31, 1992 to its Form
N-1A, is incorporated herein by reference.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to Trustees, officers, and controlling persons of
Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable.
In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant
of expenses incurred or paid by a Trustee, officer, or
controlling person of Registrant in the successful
defense of any action, suit, or proceeding) is asserted
by such Trustee, officer, or controlling person in
connection with the securities being registered,
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is
against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 28. Business & Other Connections of Investment Adviser
STCM Management Company, Inc., Registrant's adviser,
is a mutual funds adviser. For information as to the
business, profession, vocation, or employment of a
substantial nature of its Directors and officers,
reference is made to the Form ADV filed by it under
the Investment Advisers Act of 1940.
ITEM 29. Principal Underwriters
(a) Aquila Distributors, Inc. serves as principal
underwriter to Aquila Rocky Mountain Equity Fund,
Churchill Cash Reserves Trust, Churchill Tax-Free
Fund of Kentucky, Hawaiian Tax-Free Trust,
Narragansett Insured Tax-Free Income Fund, Pacific
Capital Cash Assets Trust, Pacific Capital Tax-Free
Cash Assets Trust, Pacific Capital U.S. Treasuries
Cash Assets Trust, Prime Cash Fund, Short Term Asset
Reserves, Tax-Free Fund For Utah, Tax-Free Fund
of Colorado, Tax-Free Trust of Arizona, and Tax-Free
Trust of Oregon, in addition to serving as Registrant's
principal underwriter.
(b) For information about the Directors and officers of
Aquila Distributors, Inc., reference is made to the
Form BD filed by it under the Securities Exchange
Act of 1934.
(c) Not applicable.
ITEM 30. Location of Accounts and Records
All such accounts, books, and other documents are
maintained by the adviser, the administrator, the
custodian, and the transfer agent, whose addresses
appear on the back cover pages of the Prospectus
and Statement of Additional Information.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable.
<PAGE>
Consent of the Independent Auditors
To the Shareholders and Board of Trustees
Capital Cash Management Trust:
We consent to the use of our report dated August 8, 1997
incorporated herein by reference, and to the reference to our firm
under the headings "Financial Highlights" in the Prospectus and
"Custodian and Auditors" and "Financial Statements" in the
Statement of Additional Information.
KPMG Peat Marwick LLP
/s/KPMG Peat Marwick LLP
New York, New York
October 17, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant certifies
that it meets all the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933, and has caused this Amendment
to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York
and State of New York, on the 29th day of October, 1997.
CAPITAL CASH MANAGEMENT TRUST
(Registrant)
/s/Lacy B. Herrmann
By __________________________
Lacy B. Herrmann, President
and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement or Amendment has been signed below by
the following persons in the capacities and on the date
indicated.
SIGNATURE TITLE DATE
/s/Lacy B. Herrmann 10/29/97
______________________ President, Chairman of ___________
Lacy B. Herrmann the Board and Trustee
(Principal Executive
Officer)
/s/Theodore T. Mason 10/29/97
______________________ Vice Chairman of the ___________
Theodore T. Mason Trustees and Trustee
/s/Paul Y. Clinton 10/29/97
______________________ Trustee ___________
Paul Y. Clinton
/s/Robert L. Krakoff 10/29/97
______________________ Trustee ___________
Robert L. Krakoff
/s/Anne J. Mills 10/29/97
______________________ Trustee ___________
Anne J. Mills
/s/Cornelius T. Ryan 10/29/97
______________________ Trustee ___________
Cornelius T. Ryan
/s/Rose F. Marotta 10/29/97
______________________ Chief Financial Officer ___________
Rose F. Marotta (Principal Financial and
Accounting Officer)
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
EXHIBIT INDEX
Exhibit Exhibit
Number Name
(1) Supplemental Declaration of Trust
(2) By-laws
(4) Specimen share certificate
(5) Investment Advisory Agreement
(6) Distribution Agreement
(8) (a) Custody Agreement
(9) (a) Transfer Agency Agreement
(before November 8, 1997)
(9) (b) Transfer Agency Agreement
(after November 8, 1997)
(9) (c) Administration Agreement
(9) (d) Related Agreement
(15) Distribution Plan
(16) Financial Data Schedule
Correspondence
CAPITAL CASH MANAGEMENT TRUST
SUPPLEMENTAL DECLARATION OF TRUST
AMENDING AND RESTATING THE DECLARATION OF TRUST
SUPPLEMENTAL DECLARATION OF TRUST made the 27th day of
February, 1992, to the DECLARATION OF TRUST (the "Present
Declaration of Trust") of CAPITAL CASH MANAGEMENT TRUST (the
"Trust").
WHEREAS, paragraph 12 of Article EIGHTH of the Present
Declaration of Trust permits the Trustees of the Trust to amend
or otherwise supplement the Present Declaration of Trust by
making a Supplemental Declaration of Trust, if authorized by vote
of the Trustees and the Shareholders; and
WHEREAS, the making of this Supplemental Declaration of
Trust was duly authorized by the Trustees on September 14, 1991
and by the shareholders on February 27, 1991, such approval
having been made by the vote of the holders of a majority of the
shares issued, outstanding and entitled to vote; and
WHEREAS, the officer of the Trust executing this
Supplemental Declaration of Trust has been authorized and
directed to do so by the Trustees of the Trust and the
shareholders of the Trust on behalf of the Trustees and the
Trust;
NOW, THEREFORE, the Present Declaration of Trust is amended
and restated so that the Declaration of Trust of the Trust
(hereinafter referred to as the "Declaration of Trust") shall
read in its entirety as follows:
WHEREAS, the Trustees desire to establish a trust fund under
the laws of the Commonwealth of Massachusetts, for the investment
and reinvestment of funds contributed thereto;
NOW THEREFORE, the Trustees declare that all money and
property contributed to the trust fund hereunder shall be held
and managed under this Declaration of Trust IN TRUST as herein
set forth below.
FIRST: This Trust shall be known as CAPITAL CASH MANAGEMENT
TRUST.
SECOND: Whenever used herein, unless otherwise required by
the context or specifically provided:
1. All terms used in this Declaration of Trust which are
defined in the 1940 Act shall have the meanings given to them in
the 1940 Act.
2. The "Trust" refers to CAPITAL CASH MANAGEMENT TRUST.
3. "Shareholder" means a record owner of Shares of the
Trust.
4. The "Trustees" refer to the individual trustees in
their capacity as trustees hereunder of the Trust and their
successor or successors for the time being in office as such
trustees.
5. "Shares" means the equal proportionate units of interest
into which the beneficial interest in the Trust shall be divided
from time to time and includes fractions of Shares as well as
whole Shares.
6. The "1940 Act" refers to the Investment Company Act of
1940, as amended from time to time.
7. "Commission" means the Securities and Exchange
Commission.
8. "Board" or "Board of Trustees" means the Board of
Trustees of the Trust.
THIRD: The purpose or purposes for which the Trust is
formed and the business or objects to be transacted, carried on
and promoted by it are as follows:
1. To hold, invest and reinvest its funds, and in
connection therewith to hold part or all of its funds in cash,
and to purchase or otherwise acquire, hold for investment or
otherwise, sell, sell short, assign, negotiate, transfer,
exchange or otherwise dispose of or turn to account or realize
upon, securities (which term "securities" shall for the purposes
of this Declaration of Trust, without limitation of the
generality thereof, be deemed to include any stocks, shares,
bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the
same, or evidencing or representing any other rights or interests
therein, or in any property or assets) created or issued by any
issuer (which term "issuer" shall for the purposes of this
Declaration of Trust, without limitation of the generality
thereof be deemed to include any persons, firms, associations,
corporations, syndicates, combinations, organizations,
governments, or subdivisions thereof); and to exercise, as owner
or holder of any securities, all rights, powers and privileges in
respect thereof; and to do any and all acts and things for the
preservation, protection, improvement and enhancement in value of
any or all such securities.
2. To borrow money and pledge assets in connection with
any of the objects or purposes of the Trust, and to issue notes
or other obligations evidencing such borrowings, to the extent
permitted by the 1940 Act and by the Trust's fundamental
investment policies under the 1940 Act.
3. To issue and sell its Shares in such amounts and on
such terms and conditions, for such purposes and for such amount
or kind of consideration (including without limitation thereto,
securities) now or hereafter permitted by the laws of the
Commonwealth of Massachusetts and by this Declaration of Trust,
as the Trustees may determine.
4. To purchase or otherwise acquire, hold, dispose of,
resell, transfer, reissue or cancel (all without the vote or
consent of the Shareholders of the Trust) its Shares, in any
manner and to the extent now or hereafter permitted by the laws
of the Commonwealth of Massachusetts and by this Declaration of
Trust.
5. To conduct its business in all its branches at one or
more offices in the Commonwealth of Massachusetts and elsewhere
in any part of the world, without restriction or limit as to
extent.
6. To carry out all or any of the foregoing objects and
purposes as principal or agent, and alone or with associates or,
to the extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts, as a member of, or as the owner or
holder of any stock of, or share of interest in, any issuer, and
in connection therewith to make or enter into such deeds or
contracts with any issuers and to do such acts and things and to
exercise such powers, as a natural person could lawfully make,
enter into, do or exercise.
7. To do any and all such further acts and things and to
exercise any and all such further powers as may be necessary,
incidental, relative, conducive, appropriate or desirable for the
accomplishment, carrying out or attainment of all or any of the
foregoing purposes or objects.
The foregoing objects and purposes shall, except as
otherwise expressly provided, be in no way limited or restricted
by reference to, or inference from, the terms of any other clause
of this or any other Articles of this Declaration of Trust, and
shall each be regarded as independent and construed as powers as
well as objects and purposes, and the enumeration of specific
purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the
general powers of the Trust now or hereafter conferred by the
laws of the Commonwealth of Massachusetts, nor shall the
expression of one thing be deemed to exclude another, though it
be of like nature, not expressed; provided, however, that the
Trust shall not carry on any business, or exercise any powers, in
any state, territory, district or country except to the extent
that the same may lawfully be carried on or exercised under the
laws thereof.
FOURTH: The beneficial interest in the Trust shall at all
times be divided into an unlimited number of transferable Shares,
each such Share having a par value of one cent per Share, each of
which shall represent an equal proportionate interest in the
Trust with each other Share outstanding, none having priority or
preference over another. The Trustees may from time to time
divide or combine the Shares into a greater or lesser number
without thereby changing the proportionate beneficial interests
in the Trust. Contributions to the Trust may be accepted for,
and Shares shall be redeemed as, whole Shares and/or 1/1,000ths
of a Share or multiple thereof. The Board of Trustees of the
Trust may classify unissued Shares into one or more additional
classes which shall, together with the issued Shares of
beneficial interest of the Trust, have such designations as the
Board shall determine, and which shall be treated for all
purposes other than as to dividends as if all Shares were Shares
of one class. The dividends payable to the holders of each such
class shall, subject to any applicable rule, regulation or order
of the Commission or other applicable law or regulation, be
determined by the Board and need not be individually declared but
may be declared and paid in accordance with a formula adopted by
the Board. The Board of Trustees of the Trust may in the
alternative classify unissued Shares into one or more additional
classes which shall, together with the issued Shares of
beneficial interest of the Trust, have such designations as the
Board may determine (but which shall include the word "Series")
and shall, subject to any applicable rule, regulation or order of
the Commission or other applicable law or regulation, have the
characteristics set forth in (a) through and including (g) below.
(a) All consideration received by the Trust for the
issue or sale of Shares of each such class, together with all
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to the class of Shares with respect to which such assets,
payments, or funds were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so handled
upon the books of account of the Trust. Such assets, income,
earnings, profits and proceeds thereof, any asset derived from
any reinvestment of such proceeds, in whatever form the same may
be, are herein referred to as "assets belonging to" such class.
(b) Dividends or distributions on Shares of any such
class, whether payable in Shares or cash, shall be paid only out
of earnings, surplus or other assets belonging to such class.
(c) In the event of the liquidation or dissolution of
the Trust, Shareholders of each such class shall be entitled to
receive, as a class, out of the assets of the Trust available for
distribution to Shareholders, but other than general assets not
belonging to any particular class, the assets belonging to such
class; and the assets so distributable to the Shareholders of any
such class shall be distributed among such Shareholders in
proportion to the number of shares of such class held by them and
recorded on the books of the Trust. In the event that there are
any general assets not belonging to any particular class of
Shares and available for distribution, such distribution shall be
made to the holders of Shares of all classes in proportion to the
asset value of the respective classes.
(d) The assets belonging to any such class of Shares
shall be charged with the liabilities in respect to such class
and shall be charged with their share of the general liabilities
of the Trust, in proportion to the asset value of the respective
classes. The determination of the Board of Trustees shall be
conclusive as to the amount of liabilities, including accrued
expenses and reserves, and as to the allocation of the same as to
a given class, and as to whether the same, or general assets of
the Trust, are allocable to one or more classes. The liabilities
so allocated to a class are herein referred to as "liabilities
belonging to" such class.
(e) At all meetings of Shareholders, each shareholder
of each Share of each such class of the Trust shall be entitled
to one vote for each Share, irrespective of the class, standing
in his name on the books of the Trust, except that where a vote
of the holders of the Shares of any class, or of more than one
class, voting by class, is required by the 1940 Act and/or the
Commonwealth of Massachusetts law as to any proposal, only the
holders of such class or classes, voting by class, shall be
entitled to vote upon such proposal and the holders of any other
class or classes shall not be entitled to vote thereon. Any
fractional Share, if any such fractional Shares are outstanding,
shall carry proportionately all the rights of a whole Share,
including the right to vote and the right to receive dividends.
There shall be no cumulative voting rights with respect to any
Shares or class of Shares of the Trust.
(f) The provisions of Article FIFTH relating to voting
shall apply when the Trust has only one class of Shares
outstanding or when the Trust has more than one class of Shares
outstanding but which differ only as to their dividend rights.
(g) When the Trust has more than one class of Shares
outstanding having separate assets and liabilities: (i) the
redemption rights provided to the holders of the Trust's Shares
shall be deemed to apply only to the assets belonging to the
class of Shares in question; and (ii) the net asset value per
Share computation as provided for in Article SEVENTH shall be
applied as if each such class of Shares were the Trust as
referred to in such computation, but with its assets limited to
the assets belonging to such class and its liabilities limited to
the liabilities belonging to such class.
(h) The ownership of Shares shall be recorded in the
books of the Trust or a transfer agent. The Trustees may make
such rules as they consider appropriate for the transfer of
Shares and similar matters. The record books of the Trust or any
transfer agent, as the case may be, shall be conclusive as to who
are the holders of Shares and as to the number of Shares held
from time to time by each.
(i) The Trustees shall accept investments in the Trust
from such persons and on such terms as they may from time to time
authorize.
(j) Shareholders shall have no pre-emptive or other
right to subscribe to any additional Shares or other securities
issued by the Trust or the Trustees.
FIFTH: The following provisions are hereby adopted with
respect to voting Shares of the Trust and certain other rights:
1. The Shareholders shall have power to vote (i) for
the election of Trustees, (ii) with respect to the amendment
of this Declaration of Trust, (iii) to the same extent as
the shareholders of a Massachusetts business corporation, as
to whether or not a court action, proceeding or claim should
be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, and (iv) with
respect to such additional matters relating to the Trust as
may be required by the 1940 Act or authorized by law, by
this Declaration of Trust, or the By-Laws of the Trust or
any registration statement of the Trust with the Commission
or any State, or as the Trustees may consider desirable.
2. At all meetings of Shareholders each Shareholder
shall be entitled to one vote for each Share standing in his
name on the books of the Trust on the date, fixed in
accordance with the By-Laws, for determination of
Shareholders entitled to vote at such meeting except (if so
determined by the Board of Trustees) for Shares redeemed
prior to the meeting. Any fractional Share shall carry
proportionately all the rights of a whole Share, including
the right to vote and the right to receive dividends. The
presence in person or by proxy of the holders of one-third
of the Shares outstanding and entitled to vote thereat shall
constitute a quorum at any meeting of the Shareholders. If
at any meeting of the Shareholders there shall be less than
a quorum present, the Shareholders present at such meeting
may, without further notice, adjourn the same from time to
time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as
might have been lawfully transacted had the meeting not been
adjourned.
3. Each Shareholder, upon request to the Trust in
proper form determined by the Trust, shall be entitled to
require the Trust to redeem all or any part of the Shares
standing in the name of such Shareholder. The method of
computing such net asset value, the time at which such net
asset value shall be computed and the time within which the
Trust shall make payment therefor, shall be determined as
hereinafter provided in Article SEVENTH of this Declaration
of Trust. Notwithstanding the foregoing, the Trustees, when
permitted or required to do so by the 1940 Act, may suspend
the right of the Shareholders to require the Trust to redeem
Shares.
4. No Shareholder shall, as such holder, have any
right to purchase or subscribe for any security of the Trust
which it may issue or sell, other than such right, if any,
as the Trustees, in their discretion, may determine.
5. All persons who shall acquire Shares shall acquire
the same subject to the provisions of this Declaration of
Trust.
6. Notwithstanding anything elsewhere contained in
this Declaration of Trust or in the By-Laws of the Trust, so
long as the By-Laws of the Trust do not provide for regular
annual meetings of Shareholders of the Trust, the
Shareholders of the Trust shall have such rights, and the
Trust, the Board of Trustees and the Trustees shall have
such obligations as would exist if the Trust were a common
law trust covered by Section 16(c) of the 1940 Act. In the
event that the Trust has outstanding two or more Series,
each such Series shall be considered as if it were a
separate common law trust covered by said Section 16(c).
However, the Trust may at any time or from time to time
apply to the Commission for one or more exemptions from all
or part of said Section 16(c) and, if an exemptive order or
orders are issued by the Commission, such order or orders
shall be deemed part of said Section 16(c) for the purposes
of this paragraph 6.
SIXTH: Each Trustee shall hold office until the annual
meeting of Shareholders next succeeding his election or until his
successor is duly elected and qualifies. The initial number of
Trustees shall be six, and the persons who shall act as such
until the first annual meeting or until their successors are duly
chosen and qualify are the initial trustees executing this
Declaration of Trust or any counterpart thereof.
However, the By-Laws of the Trust may fix the number of
Trustees at a number greater than that of the number of initial
Trustees and may authorize the Trustees, by the vote of a
majority of the entire number of Trustees, to increase or
decrease the number of Trustees fixed by this Declaration of
Trust or by the By-Laws within limits specified in the By-Laws,
provided that in no case shall the number of Trustees be less
than three, and to fill the vacancies created by any such
increase in the number of Trustees. Unless otherwise provided by
the By-Laws of the Trust, the Trustees need not be Shareholders.
SEVENTH: The following provisions are hereby adopted for
the purpose of defining, limiting and regulating the powers of
the Trust and of the Trustees and Shareholders.
1. As soon as any Trustee is duly elected by the
Shareholders or the Trustees and shall have accepted this
trust, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee
hereunder.
2. The death, declination, resignation, retirement,
removal, or incapacity of the Trustees, or any one of them
shall not operate to annul the Trust or to revoke any
existing agency created pursuant to the terms of this
Declaration of Trust.
3. The assets of the Trust shall be held separate and
apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any
successor Trustees. All of the assets of the Trust shall at
all times be considered as vested in the Trustees. Except
as provided in this Declaration of Trust, no Shareholder
shall have, as such holder of beneficial interest in the
Trust, any authority, power or right whatsoever to transact
business for or on behalf of the Trust, or on behalf of the
Trustees, in connection with the property or assets of the
Trust, or in any part thereof, except the rights to receive
the income and distributable amounts arising therefrom as
set forth herein.
4. The Trustees in all instances shall act as
principals, and are and shall be free from the control of
the Shareholders. The Trustees shall have full power and
authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider
necessary or appropriate in connection with the management
of the Trust. The Trustees shall not in any way be bound or
limited by present or future laws or customs in regard to
Trust investments, but shall have full authority and power
to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the
purposes of this Trust. Subject to any applicable
limitation in this Declaration of Trust or in the By-Laws of
the Trust, the Trustees shall have power and authority:
(a) to adopt By-laws not inconsistent with this
Declaration of Trust providing for the conduct of the
business of the Trust and to amend and repeal them to the
extent that they do not reserve that right to the
Shareholders;
(b) to elect and remove such officers and appoint
and terminate such officers as they consider appropriate
with or without cause;
(c) to employ a bank or trust company as
custodian of any assets of the Trust subject to any
conditions set forth in this Declaration of Trust or in the
By-Laws;
(d) to retain a transfer agent and Shareholder
servicing agent, or both;
(e) to provide for the distribution of Shares
either through a principal underwriter or the Trust itself
or both;
(f) to set record dates in the manner provided
for in the By-Laws of the Trust;
(g) to delegate such authority as they consider
desirable to any officers of the Trust and to any agent,
custodian or underwriter;
(h) to vote or give assent, or exercise any
rights of ownership, with respect to stock or other
securities or property held in trust hereunder; and to
execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(i) to exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of
securities held in trust hereunder;
(j) to hold any security or property in a form
not indicating any trust, whether in bearer, unregistered or
other negotiable form; or either in its own name or in the
name of a custodian or a nominee or nominees, subject in
either case to proper safeguards according to the usual
practice of Massachusetts business trusts or investment
companies;
(k) to consent to or participate in any plan for
the reorganization, consolidation or merger of any
corporation or concern, any security of which is held in the
Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to
any security held in the Trust;
(l) to compromise, arbitrate, or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy including, but not limited to, claims for taxes;
(m) to make, in the manner provided in the By-
Laws, distributions of income and of capital gains to
Shareholders;
(n) to borrow money to the extent and in the
manner permitted by the 1940 Act and the Trust's fundamental
policy thereunder as to borrowing; and
(o) to enter into investment advisory or
management contracts, subject to the 1940 Act, with any one
or more corporations, partnerships, trusts, associations or
other persons; if the other party or parties to any such
contract are authorized to enter into securities
transactions on behalf of the Trust, such transactions shall
be deemed to have been authorized by all of the Trustees.
5. No one dealing with the Trustees shall be under
any obligation to make any inquiry concerning the authority
of the Trustees, or to see to the application of any
payments made or property transferred by the Trustees or
upon their order.
6. (a) The Trustees shall have no power to bind any
Shareholder personally or to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time
personally agree to pay by way of subscription to any Shares
or otherwise. Every note, bond, contract or other
undertaking issued by or on behalf of the Trust or the
Trustees relating to the Trust shall include a recitation
limiting the obligation represented thereby to the Trust and
its assets (but the omission of such a recitation shall not
operate to bind any Shareholder).
(b) Except as otherwise provided in this
Declaration of Trust or the By-Laws, whenever this
Declaration of Trust calls for or permits any action to be
taken by the Trustees hereunder, such action shall mean that
taken by the Board of Trustees by vote of the majority of a
quorum of Trustees as set forth from time to time in the By-
Laws of the Trust or as required pursuant to the provisions
of the 1940 Act and the rules and regulations promulgated
thereunder.
(c) The Trustees shall possess and exercise any
and all such additional powers as are reasonably implied
from the powers herein contained such as may be necessary or
convenient in the conduct of any business or enterprise of
the Trust, to do and perform anything necessary, suitable,
or proper for the accomplishment of any of the purposes, or
the attainment of any one or more of the objects, herein
enumerated, or which shall at any time appear conducive to
or expedient for the protection or benefit of the Trust, and
to do and perform all other acts or things necessary or
incidental to the purposes herein before set forth, or that
may be deemed necessary by the Trustees.
(d) The Trustees shall have the power to
determine conclusively whether any moneys, securities, or
other properties of the Trust property are, for the purposes
of this Trust, to be considered as capital or income and in
what manner any expenses or disbursements are to be borne as
between capital and income whether or not in the absence of
this provision such moneys, securities, or other properties
would be regarded as capital or income and whether or not in
the absence of this provision such expenses or disbursements
would ordinarily be charged to capital or to income.
7. The By-Laws of the Trust may divide the Trustees
into classes and prescribe the tenure of office of the
several classes, but no class shall be elected for a period
shorter than that from the time of the election following
the division into classes until the next annual meeting and
thereafter for a period shorter than the interval between
annual meetings or for a period longer than five years, and
the term of office of at least one class shall expire each
year.
8. The Shareholders shall have the right to inspect
the records, documents, accounts and books of the Trust,
subject to reasonable regulations of the Trustees, not
contrary to Massachusetts law, as to whether and to what
extent, and at what times and places, and under what
conditions and regulations, such right shall be exercised.
9. Any Trustee, or any officer elected or appointed
by the Trustees or by any committee of the Trustees or by
the Shareholders or otherwise, may be removed at any time,
with or without cause, in such lawful manner as may be
provided in the By-Laws of the Trust.
10. If the By-Laws so provide, the Trustees shall have
power to hold their meetings, to have an office or offices
and, subject to the provisions of the laws of the
Commonwealth of Massachusetts, to keep the books of the
Trust outside of said Commonwealth at such places as may
from time to time be designated by them.
11. Securities held by the Trust shall be voted in
person or by proxy by the President or a Vice-President, or
such officer or officers of the Trust as the Trustees shall
designate for the purpose, or by a proxy or proxies
thereunto duly authorized by the Trustees, except as
otherwise ordered by vote of the holders of a majority of
the Shares outstanding and entitled to vote in respect
thereto.
12. (a) Subject to the provisions of the 1940 Act,
any Trustee, officer or employee, individually, or any
partnership of which any Trustee, officer or employee may be
a member, or any corporation or association of which any
Trustee, officer or employee may be an officer, director,
trustee, employee or stockholder, may be a party to, or may
be pecuniarily or otherwise interested in, any contract or
transaction of the Trust, and in the absence of fraud no
contract or other transaction shall be thereby affected or
invalidated; provided that in case a Trustee, or a
partnership, corporation or association of which a Trustee
is a member, officer, director, trustee, employee or
stockholder is so interested, such fact shall be disclosed
or shall have been known to the Trustees or a majority
thereof; and any Trustee who is so interested, or who is
also a director, officer, trustee, employee or stockholder
of such other corporation or association or a member of such
partnership which is so interested, may be counted in
determining the existence of a quorum at any meeting of the
Trustees which shall authorize any such contract or
transaction, and may vote thereat to authorize any such
contract or transaction, with like force and effect as if he
were not such director, officer, trustee, employee or
stockholder of such other trust or corporation or
association or a member of a partnership so interested.
(b) Specifically, but without limitation of the
foregoing, the Trust may enter into a management,
investment advisory, sub-advisory, administration or
underwriting contract and other contracts with, and may
otherwise do business with any manager, investment adviser,
sub-adviser, or administrator for the Trust, or principal
underwriter of the Shares of the Trust, or any subsidiary or
affiliate of any such manager, investment adviser, sub-
adviser or administrator and/or principal underwriter and
may permit any such firm or corporation to enter into any
contracts or other arrangements with any other firm or
corporation relating to the Trust notwithstanding that the
Board of Trustees of the Trust may be composed in part of
partners, directors, officers or employees of any such firm
or corporation, and officers of the Trust may have been or
may be or become partners, directors, officers or employees
of any such firm or corporation, and in the absence of fraud
the Trust and any such firm or corporation may deal freely
with each other, and no such contract or transaction between
the Trust and any such firm or corporation shall be
invalidated or in any wise affected thereby, nor shall any
Trustee or officer of the Trust be liable to the Trust or to
any Shareholder or creditor thereof or to any other person
for any loss incurred by it or him solely because of the
existence of any such contract or transaction; provided that
nothing herein shall protect any Trustee or officer of the
Trust against any liability to the Trust or to its security
holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
office.
(c) (1) As used in this paragraph the following
terms shall have the meanings set forth below:
(i) the term "indemnitee" shall mean any
present or former Trustee, officer or
employee of the Trust, any present or former
Trustee or officer of another trust or
corporation whose securities are or were
owned by the Trust or of which the Trust is
or was a creditor and who served or serves in
such capacity at the request of the Trust,
any present or former investment adviser,
sub-adviser, administrator or principal
underwriter of the Trust and any association
or organization which provides consulting or
other services to the Trust and whose members
or persons of affiliated interest purchase
shares of the Trust, and the heirs,
executors, administrators, successors and
assigns of any of the foregoing; however,
whenever conduct by an indemnitee is referred
to, the conduct shall be that of the original
indemnitee rather than that of the heir,
executor, administrator, successor or
assignee;
(ii) the term "covered proceeding" shall
mean any threatened, pending or completed
action, suit or proceeding, whether civil,
criminal, administrative or investigative, to
which an indemnitee is or was a party or is
threatened to be made a party by reason of
the fact or facts under which he or it is an
indemnitee as defined above;
(iii) the term "disabling conduct" shall
mean willful misfeasance, bad faith, gross
negligence or reckless disregard of the
duties involved in the conduct of the office
in question;
(iv) the term "covered expenses" shall mean
expenses (including attorney's fees),
judgments, fines and amounts paid in
settlement actually and reasonably incurred
by an indemnitee in connection with a covered
proceeding; and
(v) the term "adjudication of liability"
shall mean, as to any covered proceeding and
as to any indemnitee, an adverse
determination as to the indemnitee whether by
judgment, order, settlement, conviction or
upon a plea of nolo contendere or its
equivalent.
(d) The Trust shall not indemnify any indemnitee
for any covered expenses in any covered proceeding if there
has been an adjudication of liability against such
indemnitee expressly based on a finding of disabling
conduct.
(e) Except as set forth in (d) above, the Trust
shall indemnify any indemnitee for covered expenses in any
covered proceeding, whether or not there is an adjudication
of liability as to such indemnitee, if a determination has
been made that the indemnitee was not liable by reason of
disabling conduct by (i) a final decision of the court or
other body before which the covered proceeding was brought;
or (ii) in the absence of such decision, a reasonable
determination, based on a review of the facts, by either (a)
the vote of a majority of a quorum of Trustees who are
neither "interested persons," as defined in the 1940 Act nor
parties to the covered proceeding or (b) an independent
legal counsel in a written opinion; provided that such
Trustees or counsel, in reaching such determination, may but
need not presume the absence of disabling conduct on the
part of the indemnitee by reason of the manner in which the
covered proceeding was terminated.
(f) Covered expenses incurred by an indemnitee in
connection with a covered proceeding shall be advanced by
the Trust to an indemnitee prior to the final disposition of
a covered proceeding upon the request of the indemnitee for
such advance and the undertaking by or on behalf of the
indemnitee to repay the advance unless it is ultimately
determined that the indemnitee is entitled to
indemnification thereunder, but only if one or more of the
following is the case: (i) the indemnitee shall provide a
security for such undertaking; (ii) the Trust shall be
insured against losses arising out of any lawful advances;
or (iii) there shall have been a determination, based on a
review of the readily available facts (as opposed to a full
trial-type inquiry) that there is a reason to believe that
the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a
written opinion or by the vote of a majority of a quorum of
trustees who are neither "interested persons" as defined in
the 1940 Act nor parties to the covered proceeding.
(g) Nothing herein shall be deemed to affect the
right of the Trust and/or any indemnitee to acquire and pay
for any insurance covering any or all indemnitees to the
extent permitted by the 1940 Act or to affect any other
indemnification rights to which any indemnitee may be
entitled to the extent permitted by the 1940 Act.
13. For purposes of the computation of net asset value, as
in this Declaration of Trust referred to, the following rules
shall apply:
(a) The net asset value of each Share of the
Trust tendered to the Trust for redemption shall be
determined as of the close of business on the New York Stock
Exchange next succeeding the tender of such share;
(b) The net asset value of each Share of the
Trust for the purpose of the issue of such shares shall be
determined as of the close of business on the New York Stock
Exchange next succeeding the receipt of an order to purchase
such shares;
(c) The net asset value of each Share of the
Trust, as of time of valuation on any day, shall be the
quotient obtained by dividing the value, as at such time, of
the net assets of the Trust (i.e., the value of the assets
of the Trust less its liabilities exclusive of its surplus)
by the total number of Shares outstanding at such time. The
assets and liabilities of the Trust shall be determined in
accordance with generally accepted accounting principles;
provided, however, that in determining the liabilities of
the Trust there shall be included such reserves for taxes or
contingent liabilities as may be authorized or approved by
the Trustees, and provided further that in determining the
value of the assets of the Trust for the purpose of
obtaining the net asset value, each security listed on the
New York Stock Exchange shall be valued on the basis of the
closing sale at the time of valuation on the business day as
of which such value is being determined; if there be no sale
on such day, then the security shall be valued on the basis
of the mean between closing bid and asked prices on such
day; if no bid and asked prices are quoted for such day,
then the security shall be valued by such method as the
Trustees shall deem in good faith to reflect its fair market
value; securities not listed on the New York Stock Exchange
shall be valued in like manner on the basis of quotations on
any other stock exchange which the Trustees may from time to
time approve for that purpose; readily marketable securities
traded in the over-the-counter market shall be valued at the
mean between their bid and asked prices, or, if the Trustees
shall so determine, at their bid prices; and all other
assets of the Trust and all securities as to which the Trust
might be considered an "underwriter" (as that term is used
in the Securities Act of 1933), whether or not such
securities are listed or traded in the over-the-counter
market, shall be valued by such method as they shall deem in
good faith to reflect their fair market value. In
connection with the accrual of any fee or refund payable to
or by an investment adviser of the Trust, the amount of
which accrual is not definitely determinable as of any time
at which the net asset value of each Share of the Trust is
being determined due to the contingent nature of such fee or
refund, the Trustees are authorized to establish from time
to time formulae for such accrual, on the basis of the
contingencies in question to the date of such determination,
or on such other basis as the Trustees may establish.
(1) Shares to be issued shall be deemed to
be outstanding as of the time of the determination
of the net asset value per share applicable to
such issuance and the net price thereof shall be
deemed to be an asset of the Trust;
(2) Shares to be redeemed by the Trust shall
be deemed to be outstanding until the time of the
determination of the net asset value applicable to
such redemption and thereupon and until paid the
redemption price thereof shall be deemed to be a
liability of the Trust; and
(3) Shares voluntarily purchased or
contracted to be purchased by the Trust pursuant
to the provisions of paragraph 13(d) of this
Article SEVENTH shall be deemed to be outstanding
until whichever is the later of (i) the time of
the making of such purchase or contract of
purchase, and (ii) the time as of which the
purchase price is determined, and thereupon and
until paid, the purchase price thereof shall be
deemed to be a liability of the Trust.
(d) The net asset value of each Share of the
Trust, as of any time other than the close of business on
the New York Stock Exchange of any day, may be determined by
applying to the net asset value as of the close of business
on that Exchange on the preceding business day, computed as
provided in this Article SEVENTH, such adjustments as are
authorized by or pursuant to the direction of the Trustees
and designed reasonably to reflect any material changes in
the market value of securities and other assets held and any
other material changes in the assets or liabilities of the
Trust and in the number of its outstanding Shares which
shall have taken place since the close of business on such
preceding business day.
(e) In addition to the foregoing, the Trustees
are empowered, in their absolute discretion, to establish
other bases or times, or both, for determining the net asset
value of each Share of the Trust in accordance with the 1940
Act and to authorize the voluntary purchase by the Trust,
either directly or through an agent, of Shares of the Trust
upon such terms and conditions and for such consideration as
the Trustees shall deem advisable in accordance with any
such provision, rule or regulation.
(f) Payment of the net asset value of Shares of
the Trust properly surrendered to it for redemption shall be
made by the Trust within seven days after tender of such
Shares to the Trust for such purpose plus any period of time
during which the right of the holders of the shares of the
Trust to require the Trust to redeem such shares has been
suspended. Any such payment may be made in portfolio
securities of the Trust and/or in cash, as the Trustees
shall deem advisable, and no Shareholder shall have a right,
other than as determined by the Trustees, to have his Shares
redeemed in kind.
EIGHTH:
1. In case any Shareholder or former Shareholder shall be
held to be personally liable solely by reason of his being or
having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other
legal representatives or in the case of a corporation or other
entity, its corporate or other general successor) shall be
entitled out of the Trust estate to be held harmless from and
indemnified against all loss and expense arising from such
liability. This Trust shall, upon request by the Shareholder,
assume the defense of any claim made against any Shareholder for
any act or obligation of the Trust and satisfy any judgment
thereon.
2. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have
any power to bind personally either the Trust's officers or any
Shareholder. All persons extending credit to, contracting with
or having any claim against the Trust or the Trustees shall look
only to the assets of the Trust for payment under such credit,
contract or claim; and neither the Shareholders nor the Trustees,
nor any of their agents, whether past, present or future, shall
be personally liable therefor. Nothing in this Declaration of
Trust shall protect a Trustee against any liability to which such
Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office of Trustee
hereunder.
3. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under
the circumstances then prevailing, shall be binding upon everyone
interested. Subject to the provisions of paragraph 2 of this
Article EIGHTH, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning
and operations of this Declaration of Trust, and subject to the
provisions of paragraph 2 of this Article EIGHTH, shall be under
no liability for any act or omission in accordance with such
advice or for failing to follow such advice. The Trustees shall
not be required to give any bond as such, nor any surety if a
bond is required.
4. This Trust shall continue without limitation of time
but subject to the provisions of sub-sections (a), (b) and (c) of
this paragraph 4.
(a) The Trustees, with the favorable vote of the
holders of more than 50% of the outstanding Shares entitled
to vote, may sell and convey the assets of the Trust (which
sale may be subject to the retention of assets for the
payment of liabilities and expenses) to another issuer for a
consideration which may be or include securities of such
issuer. Upon making provision for the payment of
liabilities, by assumption by such issuer or otherwise, the
Trustees shall distribute the remaining proceeds ratably
among the holders of the Shares of the Trust then
outstanding.
(b) The Trustees, with the favorable vote of the
holders of more than 50% of the outstanding Shares entitled
to vote, may at any time sell and convert into money all the
assets of the Trust. Upon making provision for the payment
of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust, the Trustees shall
distribute the remaining assets of the Trust ratably among
the holders of the outstanding Shares.
(c) Upon completion of the distribution of the
remaining proceeds or the remaining assets as provided in
sub-sections (a) and (b), the Trust shall terminate and the
Trustees shall be discharged of any and all further
liabilities and duties hereunder and the right, title and
interest of all parties shall be cancelled and discharged.
5. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder.
A copy of this instrument and of each supplemental declaration of
trust shall be filed with the Massachusetts Secretary of State,
as well as any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or
not any such supplemental declarations of trust have been made
and as to any matters in connection with the Trust hereunder, and
with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this
instrument or of any such supplemental declaration of trust. In
this instrument or in any such supplemental declaration of trust,
references to this instrument, and all expressions like "herein,"
"hereof" and "hereunder" shall be deemed to refer to this
instrument as amended or affected by any such supplemental
declaration of trust. This instrument may be executed in any
number of counterparts, each of which shall be deemed an
original.
6. The trust set forth in this instrument is created under
and is to be governed by and construed and administered according
to the laws of the Commonwealth of Massachusetts. The Trust
shall be of the type commonly called a Massachusetts business
trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a
trust.
7. The Board of Trustees is empowered to cause the
redemption of the Shares held in any account if the aggregate net
asset value of such Shares (taken at cost or value, as determined
by the Board) has been reduced by a Shareholder to $500 or less
upon such notice to the Shareholders in question, with such
permission to increase the investment in question and upon such
other terms and conditions as may be fixed by the Board of
Trustees in accordance with the 1940 Act.
8. In the event that any person advances the
organizational expenses of the Trust, such advances shall become
an obligation of the Trust subject to such terms and conditions
as may be fixed by, and on a date fixed by, or determined in
accordance with criteria fixed by the Board of Trustees, to be
amortized over a period or periods to be fixed by the Board.
9. Whenever any action is taken under this Declaration of
Trust under any authorization to take action which is permitted
by the 1940 Act, such action shall be deemed to have been
properly taken if such action is in accordance with the
construction of the 1940 Act then in effect as expressed in "no
action" letters of the staff of the Commission or any release,
rule, regulation or order under the 1940 Act or any decision of a
court of competent jurisdiction, notwithstanding that any of the
foregoing shall later be found to be invalid or otherwise
reversed or modified by any of the foregoing.
10. Any action which may be taken by the Board of Trustees
under this Declaration of Trust or its By-Laws may be taken by
the description thereof in the then effective prospectus relating
to the Shares under the Securities Act of 1933 or in any proxy
statement of the Trust rather than by formal resolution of the
Board.
11. Whenever under this Declaration of Trust, the Board of
Trustees is permitted or required to place a value on assets of
the Trust, such action may be delegated by the Board, and/or
determined in accordance with a formula determined by the Board,
to the extent permitted by the 1940 Act.
12. If authorized by vote of the Trustees and the favorable
vote of the holders of more than 50% of the outstanding Shares
entitled to vote, or by any larger vote which may be required by
applicable law in any particular case, the Trustees shall amend
or otherwise supplement this instrument, by making a declaration
of trust supplemental hereto, which thereafter shall form a part
hereof; however, any such supplemental declaration of trust may
be authorized by the vote of a majority of the Trustees then in
office without any shareholder vote if the sole purpose of such
supplemental declaration of trust is to change the name of the
Trust; any supplemental declaration of trust may be executed by
and on behalf of the Trust and the Trustees by any officer or
officers of the Trust.
[balance of this page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this Supplemental Declaration of Trust on behalf of the Trust and
the Trustees as of the date first above written.
CAPITAL CASH MANAGEMENT TRUST
/s/Lacy B. Herrmann
______________________________
LACY B. HERRMANN
President, Chairman of the
Board of Trustees and Trustee
Attest:
/s/Kenneth L. MacRitchie
______________________________
Kenneth L. MacRitchie
Assistant Secretary
THE UNDERSIGNED, President, Chairman of the Board of
Trustees and Trustee of CAPITAL CASH MANAGEMENT TRUST who
executed on behalf of said Trust and its Trustees the foregoing
Supplemental Declaration of Trust, hereby acknowledges, in the
name and on behalf of said Trust and its Trustees, the foregoing
Supplemental Declaration of Trust to be the act of said Trust and
its Trustees and further certifies that to the best of his
information, knowledge and belief, the matters and facts set
forth therein with respect to the approval thereof are true in
all material respects, under penalties of perjury.
/s/Lacy B. Herrmann
________________________________
Lacy B. Herrmann
Dated: June 23, 1996
CAPITAL CASH MANAGEMENT TRUST
BY-LAWS
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the
Shareholders (which term as used herein shall, together with all
other terms defined in the Declaration of Trust, have the same
meaning as in the Declaration of Trust) shall be held at the
principal office of the Trust or at such other place as may from
time to time be designated by the Board of Trustees and stated in
the notice of meeting.
Section 2. Annual Meeting. In any year in which the
Trustees determine that a meeting of the Shareholders of the
Trust shall be held for the purpose of electing Trustees, that
meeting shall be held on such date and at such time as may be
determined by the Trustees and as shall be designated in the
notice of meeting for the purpose of electing Trustees until the
next meeting for such purpose and for the transaction of such
other business as may properly be brought before the meeting.
Section 3. Special or Extraordinary Meetings. Special or
extraordinary meetings of Shareholders for any purpose or
purposes may be called by the Chairman of the Board of Trustees,
if any, or by the President or by the Board of Trustees and shall
be called by the Secretary upon receipt of the request in writing
signed by holders of Shares representing not less than one third
of the votes eligible to be cast thereat. Such request shall
state the purpose or purposes of the proposed meeting.
Section 4. Notice of Meetings of Shareholders. Not less
than ten days' and not more than ninety days' written or printed
notice of every meeting of Shareholders, stating the time and
place thereof (and the general nature of the business proposed to
be transacted at any special or extraordinary meeting), shall be
given to each Shareholder entitled to vote thereat by leaving the
same with him or at his residence or usual place of business or
by mailing it, postage prepaid and addressed to him at his
address as it appears upon the books of the Trust.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in
person or by proxy or to any Shareholder who, in writing executed
and filed with the records of the meeting, either before or after
the holding thereof, waives such notice.
Section 5. Record Dates. The Board of Trustees may fix, in
advance, a date, not exceeding ninety days and not less than ten
days preceding the date of any meeting of Shareholders, and not
exceeding ninety days preceding any dividend payment date or any
date for the allotment of rights, as a record date for the
determination of the Shareholders entitled to receive such
dividends or rights, as the case may be; and only Shareholders of
record on such date shall be entitled to notice of and to vote at
such meeting or to receive such dividends or rights, as the case
may be.
Section 6. Quorum, Adjournment of Meetings. The presence
in person or by proxy of the holders of record of one-third of
the Shares of the Trust issued and outstanding and entitled to
vote thereat, shall constitute a quorum at all meetings of the
Shareholders. If at any meeting of the Shareholders there shall
be less than a quorum present, the Shareholders present at such
meeting may, without further notice, adjourn the same from time
to time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as might
have been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of
Shareholders every Shareholder of record entitled to vote thereat
shall be entitled to vote at such meeting either in person or by
proxy appointed by instrument in writing subscribed by such
Shareholder or his duly authorized attorney-in-fact.
All elections of Trustees shall be had by a plurality of the
votes cast and all questions shall be decided by a majority of
the votes cast, in each case at a duly constituted meeting,
except as otherwise provided in the Declaration of Trust or in
these By-Laws or by specific statutory provision superseding the
restrictions and limitations contained in the Declaration of
Trust or in these By-Laws.
At any election of Trustees, the Board of Trustees prior
thereto may, or, if they have not so acted, the Chairman of the
meeting may, and upon the request of the holders of ten per cent
(l0%) of the Shares entitled to vote at such election shall,
appoint two inspectors of election who shall first subscribe an
oath or affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after the
election make a certificate of the result of the vote taken. No
candidate for the office of Trustee shall be appointed such
Inspector.
The Chairman of the meeting may cause a vote by ballot to be
taken upon any election or matter, and such vote shall be taken
upon the request of the holders of ten per cent (l0%) of the
Shares entitled to vote on such election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings
of the Shareholders shall be presided over by the Chairman of the
Board of Trustees, if any, or if he shall not be present, by the
President, or if he shall not be present, by a Vice-President,
or if neither the Chairman of the Board of Trustees, the
President nor any Vice-President is present, by a chairman to be
elected at the meeting. The Secretary of the Trust, if present,
shall act as Secretary of such meetings, or if he is not present,
an Assistant Secretary shall so act; if neither the Secretary nor
an Assistant Secretary is present, then the meeting shall elect
its secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At
every meeting of the Shareholders, all proxies shall be received
and taken in charge of and all ballots shall be received and
canvassed by the secretary of the meeting, who shall decide all
questions touching the qualification of voters, the validity of
the proxies, and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed as provided in
Section 7, in which event such inspectors of election shall
decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and
property of the Trust shall be conducted and managed by a Board
of Trustees consisting of six Trustees, which number may be
increased or decreased as provided in Section 2 of this Article.
Each Trustee shall, except as otherwise provided herein, hold
office until the annual meeting of Shareholders of the Trust next
succeeding his election or until his successor is duly elected
and qualifies. Trustees need not be Shareholders.
Section 2. Increase or Decrease in Number of Trustees;
Removal. The Board of Trustees, by the vote of a majority of the
entire Board, may increase the number of Trustees to a number not
exceeding fifteen, and may elect Trustees to fill the vacancies
created by any such increase in the number of Trustees until the
next annual meeting or until their successors are duly elected
and qualify; the Board of Trustees, by the vote of a majority of
the entire Board, may likewise decrease the number of Trustees to
a number not less than two but the tenure of office of any
Trustee shall not be affected by any such decrease. Vacancies
occurring other than by reason of any such increase shall be
filled as provided for a Massachusetts business corporation. In
the event that after proxy material has been printed for a
meeting of Shareholders at which Trustees are to be elected any
one or more management nominees dies or becomes incapacitated,
the authorized number of Trustees shall be automatically reduced
by the number of such nominees, unless the Board of Trustees
prior to the meeting shall otherwise determine. Any Trustee at
any time may be removed either with or without cause by
resolution duly adopted by the affirmative votes of the holders
of the majority of the Shares of the Trust present in person or
by proxy at any meeting of Shareholders at which such vote may be
taken, provided that a quorum is present, or by such larger vote
as may be required by Massachusetts law. Any Trustee at any time
may be removed for cause by resolution duly adopted at any
meeting of the Board of Trustees provided that notice thereof is
contained in the notice of such meeting and that such resolution
is adopted by the vote of at least two thirds of the Trustees
whose removal is not proposed. As used herein, "for cause" shall
mean any cause which under Massachusetts law would permit the
removal of a Trustee of a business trust.
Section 3. Place of Meeting. The Trustees may hold their
meetings, have one or more offices, and keep the books of the
Trust outside Massachusetts, at any office or offices of the
Trust or at any other place as they may from time to time by
resolution determine, or, in the case of meetings, as they may
from time to time by resolution determine or as shall be
specified or fixed in the respective notices or waivers of notice
thereof.
Section 4. Regular Meetings. Regular meetings of the Board
of Trustees shall be held at such time and on such notice, if
any, as the Trustees may from time to time determine.
The annual meeting of the Board of Trustees shall be held as
soon as practicable after the annual meeting of the Shareholders
for the election of Trustees.
Section 5. Special Meetings. Special meetings of the Board
of Trustees may be held from time to time upon call of the
Chairman of the Board of Trustees, if any, the President or two
or more of the Trustees, by oral or telegraphic or written notice
duly served on or sent or mailed to each Trustee not less than
one day before such meeting. No notice need be given to any
Trustee who attends in person or to any Trustee who, in writing
executed and filed with the records of the meeting either before
or after the holding thereof, waives such notice. Such notice or
waiver of notice need not state the purpose or purposes of such
meeting.
Section 6. Quorum. One-third of the Trustees then in
office shall constitute a quorum for the transaction of business,
provided that a quorum shall in no case be less than two
Trustees. If at any meeting of the Board there shall be less
than a quorum present (in person or by open telephone line, to
the extent permitted by the 1940 Act), a majority of those
present may adjourn the meeting from time to time until a quorum
shall have been obtained. The act of the majority of the
Trustees present at any meeting at which there is a quorum shall
be the act of the Board, except as may be otherwise specifically
provided by statute, by the Declaration of Trust or by these
By-Laws.
Section 7. Executive Committee. The Board of Trustees may,
by the affirmative vote of a majority of the entire Board, elect
from the Trustees an Executive Committee to consist of such
number of Trustees as the Board may from time to time determine.
The Board of Trustees by such affirmative vote shall have power
at any time to change the members of such Committee and may fill
vacancies in the Committee by election from the Trustees. When
the Board of Trustees is not in session, the Executive Committee
shall have and may exercise any or all of the powers of the Board
of Trustees in the management of the business and affairs of the
Trust (including the power to authorize the seal of the Trust to
be affixed to all papers which may require it) except as provided
by law and except the power to increase or decrease the size of,
or fill vacancies on the Board. The Executive Committee may fix
its own rules of procedure, and may meet, when and as provided by
such rules or by resolution of the Board of Trustees, but in
every case the presence of a majority shall be necessary to
constitute a quorum. In the absence of any member of the
Executive Committee the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a member of
the Board of Trustees to act in the place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint
other committees which shall in each case consist of such number
of members (not less than two) and shall have and may exercise
such powers as the Board may determine in the resolution
appointing them. A majority of all members of any such committee
may determine its action, and fix the time and place of its
meetings, unless the Board of Trustees shall otherwise provide.
The Board of Trustees shall have power at any time to change the
members and powers of any such committee, to fill vacancies, and
to discharge any such committee.
Section 9. Informal Action by and Telephone Meetings of
Trustees and Committees. Any action required or permitted to be
taken at any meeting of the Board of Trustees or any committee
thereof may be taken without a meeting, if a written consent to
such action is signed by all members of the Board, or of such
committee, as the case may be. Trustees or members of a
committee of the Board of Trustees may participate in a meeting
by means of a conference telephone or similar communications
equipment; such participation shall, except as otherwise required
by the 1940 Act, have the same effect as presence in person.
Section 10. Compensation of Trustees. Trustees shall be
entitled to receive such compensation from the Trust for their
services as may from time to time be voted by the Board of
Trustees.
Section 11. Dividends. Dividends or distributions payable
on the Shares may, but need not be, declared by specific
resolution of the Board as to each dividend or distribution; in
lieu of such specific resolutions, the Board may, by general
resolution, determine the method of computation thereof, the
method of determining the Shareholders to which they are payable
and the methods of determining whether and to which Shareholders
they are to be paid in cash or in additional Shares.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of
the Trust shall be chosen by the Board of Trustees as soon as may
be practicable after the annual meeting of the Shareholders.
These may include a Chairman of the Board of Trustees, and shall
include a President, one or more Vice-Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary
and a Treasurer. The Chairman of the Board of Trustees, if any,
and the President may, but need not be, selected from among the
Trustees. The Board of Trustees may also in its discretion
appoint Assistant Secretaries, Assistant Treasurers, and other
officers, agents and employees, who shall have such authority and
perform such duties as the Board or the Executive Committee may
determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except those of President
and Vice-President, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law or
these By-Laws to be executed, acknowledged or verified by two or
more officers.
Section 2. Term of Office. The term of office of all
officers shall be one year and until their respective successors
are chosen and qualify; however, any officer may be removed from
office at any time with or without cause by the vote of a
majority of the entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Trust
shall have such powers and duties as generally pertain to their
respective offices, as well as such powers and duties as may from
time to time be conferred by the Board of Trustees or the
Executive Committee.
ARTICLE IV
SHARES
Section 1. Certificates of Shares. Each Shareholder of the
Trust may be issued a certificate or certificates for his Shares
in such form as the Board of Trustees may from time to time
prescribe, but only if and to the extent and on the conditions
prescribed by the Board.
Section 2. Transfer of Shares. Shares shall be
transferable on the books of the Trust by the holder thereof in
person or by his duly authorized attorney or legal
representative, upon surrender and cancellation of certificates,
if any, for the same number of Shares, duly endorsed or
accompanied by proper instruments of assignment and transfer,
with such proof of the authenticity of the signature as the Trust
or its agent may reasonably require; in the case of Shares not
represented by certificates, the same or similar requirements may
be imposed by the Board of Trustees.
Section 3. Stock Ledgers. The stock ledgers of the Trust,
containing the name and address of the Shareholders and the
number of Shares held by them respectively, shall be kept at the
principal offices of the Trust or, if the Trust employs a
transfer agent, at the offices of the transfer agent of the
Trust.
Section 4. Lost, Stolen or Destroyed Certificates. The
Board of Trustees may determine the conditions upon which a new
certificate may be issued in place of a certificate which is
alleged to have been lost, stolen or destroyed; and may, in their
discretion, require the owner of such certificate or his legal
representative to give bond, with sufficient surety to the Trust
and the transfer agent, if any, to indemnify it and such transfer
agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one
so lost, stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the
Trust, in such form and bearing such inscriptions as it may
determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Trust shall be fixed by the Board of
Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Trust may be altered, amended, added to
or repealed by the Shareholders or by majority vote of the entire
Board of Trustees, but any such alteration, amendment, addition
or repeal of the By-Laws by action of the Board of Trustees may
be altered or repealed by the Shareholders.
CAPITAL CASH MANAGEMENT TRUST
A MASSACHUSETTS BUSINESS TRUST
I. FRONT OF CERTIFICATE (all text and other matter lies within 7-1/2" x
11-1/2" decorative border, 1/2" wide)
(upper right) oval with heading: SHARES
(upper left) oval with heading: NUMBER
(below right oval) SEE REVERSE FOR CERTAIN DEFINITIONS
(at left) THIS CERTIFIES THAT (at right) is the owner of
CUSIP 139856 10 8
Shares without par value of
CAPITAL CASH MANAGEMENT TRUST
(hereinafter called the "Trust"), transferable on the books of the Trust by
the holder hereof in person or by duly authorized attorney, upon surrender
of this certificate properly endorsed. This Certificate and the shares
represented hereby are issued and shall be held subject to all of the
provisions of the Declaration of Trust of the Trust to all of which the
holder by acceptance hereof assents. This certificate is not valid until
countersigned by the Transfer Agent.
Witness the seal of the Trust and the signatures of its duly
authorized officers.
Dated:
______________________ _____________________
Secretary. President.
(at lower right, printed vertically)
Countersigned:
THE FIRST JERSEY NATIONAL BANK,
(Jersey City, N.J.) Transfer Agent,
By
____________________________
Authorized Signature.
II. BACK OF CERTIFICATE (text reads from top to bottom of 11-1/2"
dimension)
For Value Received, ________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________
[ (box for SS#) ]
[_______________]____________________________________________________
(Please print or typewrite name and address
of assignee)
_____________________________________________________________________
_____________________________________________________________________
______________________________________________________________ Shares
of the Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint
___________________________________________ Attorney to transfer the
said stock on the books of the within named Trust with full power of
substitution in the premises.
Dated_________________
Signed____________________________
__________________________________
Signature(s)
guaranteed________________________
Firm or Bank
by
__________________________________
Officer
(text printed in box)
Signatures must be guaranteed by a
commercial bank or a member firm of a
domestic stock exchange.
(text printed
vertically to right)
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the certificate in every particular, without
alteration or enlargement or any change whatever.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made as of the 28th day of February, 1992,
by and between CAPITAL CASH MANAGEMENT TRUST (the "Trust"), a
Massachusetts business trust, 380 Madison Avenue, Suite 2300, New
York, New York 10017, and STCM Management Company, Inc. (the
"Adviser"), 380 Madison Avenue, Suite 2300, New York, New York
10017,
W I T N E S S E T H :
WHEREAS, the Trust and the Adviser wish to enter into an
agreement as herein set forth, referred to hereafter as "this
Agreement";
NOW THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to
act as managerial investment adviser to the Trust with respect to
the investment of the Trust's assets, and to supervise and
arrange the purchase of securities for and the sale of securities
held in the portfolio of the Trust.
2. Duties and Obligations of the Adviser With Respect To
Investment of the Assets of the Trust
(a) Subject to the succeeding provisions of this
section and subject to the direction and control of the Board of
Trustees of the Trust, the Adviser shall:
(i) Supervise continuously the investment program of
the Trust and the composition of its portfolio;
(ii) Determine what securities shall be purchased or
sold by the Trust;
(iii) Arrange for the purchase and the sale of
securities held in the portfolio of the Trust; and
(iv) Either keep the accounting records of the Trust,
including the pricing of portfolio securities and
computation of dividends and of net asset value per
share or, at its expense and responsibility, delegate
such duties in whole or in part to a company
satisfactory to the Trust.
(b) Any investment program furnished by the Adviser
under this section shall at all times conform to, and be in
accordance with, any requirements imposed by: (1) the Investment
Company Act of l940 (the "Act") and any rules or regulations in
force thereunder; (2) any other applicable laws, rules and
regulations; (3) the Declaration of Trust and By-Laws of the
Trust as amended from time to time; (4) any policies and
determinations of the Board of Trustees of the Trust; and (5) the
fundamental policies of the Trust, as reflected in its
registration statement under the Act or as amended by the
shareholders of the Trust.
(c) The Adviser shall give the Trust the benefit of its
best judgment and effort in rendering services hereunder, but the
Adviser shall not be liable for any loss sustained by reason of
the adoption of any investment policy or the purchase, sale or
retention of any security, whether or not such purchase, sale or
retention shall have been based upon (i) its own investigation
and research or (ii) investigation and research made by any other
individual, firm or corporation, if such purchase, sale or
retention shall have been made and such other individual, firm or
corporation shall have been selected in good faith by the
Adviser. Nothing herein contained shall, however, be construed
to protect the Adviser against any liability to the Trust or its
security holders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason
of its reckless disregard of its obligations and duties under
this Agreement.
(d) Nothing in this Agreement shall prevent the Adviser
or any affiliated person (as defined in the Act) of the Adviser
from acting as investment adviser or manager for any other
person, firm or corporation and shall not in any way limit or
restrict the Adviser or any such affiliated person from buying,
selling or trading any securities for its own or their own
accounts or for the accounts of others for whom it or they may be
acting, provided, however, that the Adviser expressly represents
that it will undertake no activities which, in its judgment, will
adversely affect the performance of its obligations to the Trust
under this Agreement. It is agreed that the Adviser shall have
no responsibility or liability for the accuracy or completeness
of the Trust's Registration Statement under the Act and the
Securities Act of 1933, except for information supplied by the
Adviser for inclusion therein. The Adviser shall promptly inform
the Trust as to any information concerning the Adviser
appropriate for inclusion in such Registration Statement, or as
to any transaction or proposed transaction which might result in
an assignment of the Agreement. The Trust agrees to indemnify
the Adviser to the full extent permitted by the Trust's
Declaration of Trust.
(e) In connection with its duties to arrange for the
purchase and sale of the Trust's portfolio securities, the
Adviser shall select such broker-dealers ("dealers") as shall, in
the Adviser's judgment, implement the policy of the Trust to
achieve "best execution," i.e., prompt, efficient, and reliable
execution of orders at the most favorable net price. The Adviser
shall cause the Trust to deal directly with the selling or
purchasing principal or market maker without incurring brokerage
commissions unless the Adviser determines that better price or
execution may be obtained by paying such commissions; the Trust
expects that most transactions will be principal transactions at
net prices and that the Trust will incur little or no brokerage
costs. The Trust understands that purchases from underwriters
include a commission or concession paid by the issuer to the
underwriter and that principal transactions placed through
dealers include a spread between the bid and asked prices. In
allocating transactions to dealers, the Adviser is authorized to
consider, in determining whether a particular dealer will provide
best execution, the dealer's reliability, integrity, financial
condition and risk in positioning the securities involved, as
well as the difficulty of the transaction in question, and thus
need not pay the lowest spread or commission available if the
Adviser determines in good faith that the amount of commission is
reasonable in relation to the value of the brokerage and research
services provided by the dealer, viewed either in terms of the
particular transaction or the Adviser's overall responsibilities
as to the accounts as to which it exercises investment
discretion. If, on the foregoing basis, the transaction in
question could be allocated to two or more dealers, the Adviser
is authorized, in making such allocation, to consider (i) whether
a dealer has provided research services, as further discussed
below; and (ii) whether a dealer has sold shares of the Trust or
any other investment company or companies having the Adviser as
its investment adviser or having the same sub-adviser,
administrator or principal underwriter as the Trust. Such
research may be in written form or through direct contact with
individuals and may include quotations on portfolio securities
and information on particular issuers and industries, as well as
on market, economic, or institutional activities. The Trust
recognizes that no dollar value can be placed on such research
services or on execution services, that such research services
may or may not be useful to the Trust and/or other accounts of
the Adviser, and that research received by such other accounts
may or may not be useful to the Trust.
3. Allocation of Expenses
The Adviser agrees that it will furnish the Trust, at the
Adviser's expense, all office space, facilities, equipment and
clerical personnel necessary for carrying out its duties under
this Agreement. The Adviser agrees that it will supply, or cause
to be supplied, to any sub-adviser, administrator or principal
underwriter of the Trust all necessary financial information in
connection with such sub-adviser's, administrator's or principal
underwriter's duties under any agreement between such sub-
adviser, administrator or principal underwriter and the Trust.
The Adviser will also pay all compensation of the Trust's
officers, employees, and Trustees, if any, who are affiliated
persons of the Adviser. The Trust agrees to bear the costs of
preparing and setting in type its prospectuses, statements of
additional information and reports to its 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. All costs and
expenses not expressly assumed by the Adviser under this
Agreement or by such sub-adviser, administrator or principal
underwriter shall be paid by the Trust, including, but not
limited to (i) interest and taxes; (ii) brokerage commissions;
(iii) insurance premiums; (iv) compensation and expenses of its
Trustees other than those affiliated with the Adviser or such
sub-adviser, administrator or principal underwriter; (v) legal
and audit expenses; (vi) custodian and transfer agent, or
shareholder servicing agent, fees and expenses; (vii) expenses
incident to the issuance of its shares (including issuance on the
payment of, or reinvestment of, dividends); (viii) fees and
expenses incident to the registration under Federal or State
securities laws of the Trust or its shares; (ix) expenses of
preparing, printing and mailing reports and notices and proxy
material to shareholders of the Trust; (x) all other expenses
incidental to holding meetings of the Trust's shareholders; and
(xi) such non-recurring expenses as may arise, including
litigation affecting the Trust and the legal obligations for
which the Trust may have to indemnify its officers and Trustees.
4. Compensation of the Adviser
(a) The Trust agrees to pay the Adviser, and the
Adviser agrees to accept as full compensation for all services
rendered by the Adviser as such, a management 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 .20 of 1% of
such net asset value.
(b) The Adviser agrees that the fee under (a) above
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 total expenses of the Trust in any fiscal year,
exclusive of taxes, interest, and brokerage fees, shall exceed
the lesser of (i) 1 1/2% of the first $30 million of average
annual net assets of the Trust plus 1% of its average annual net
assets in excess of $30 million, or (ii) 25% of the Trust's total
annual investment income. The payment of the fee under (a) above
at the end of any month will be reduced or postponed so that at
no time will there be any accrued but unpaid liability under this
expense limitation. The pro rata portion, as between the Adviser
and any sub-adviser or administrator of the Trust is based on the
aggregate of the fee of the Adviser and the fee of such sub-
adviser or administrator (exclusive of amounts paid or to be paid
out for the applicable period pursuant to the Trusts's
Distribution Plan).
5. Duration and Termination
(a) This Investment Advisory Agreement shall become
effective on the date set forth above following approval by the
shareholders of the Trust and shall, unless terminated as
hereinafter provided, continue in effect until the November 30
next preceding the second anniversary of the effective date of
this Agreement, and from year to year thereafter, but only so
long as such continuance is specifically approved at least
annually (1) by a vote of the Trust's Board of Trustees,
including a vote of a majority of the Trustees who are not
parties to this Agreement or "interested persons" (as defined in
the Act) of any such party, with votes cast in person at a
meeting called for the purpose of voting on such approval, or (2)
by a vote of the holders of a "majority" (as so defined) of the
outstanding voting securities of the Trust and by such a vote of
the Trustees.
(b) This Agreement may be terminated by the Adviser at
any time without penalty upon giving the Trust sixty days'
written notice (which notice may be waived by the Trust) and may
be terminated by the Trust at any time without penalty upon
giving the Adviser sixty days' written notice (which notice may
be waived by the Adviser), provided that such termination by the
Trust shall be directed or approved by a vote of a majority of
its Trustees in office at the time or by a vote of the holders of
a majority (as defined in the Act) of the voting securities of
the Trust outstanding and entitled to vote. This Agreement shall
automatically terminate in the event of its assignment (as
defined in the Act).
6. Disclaimer of Shareholder Liability
The Adviser understands that the obligations of this
Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Trust's property; the Adviser
represents that it has notice of the provisions of the Trust's
Declaration of Trust disclaiming shareholder liability for acts
or obligations of the Trust.
7. Notices of Meetings
The Trust agrees that notice of each meeting of the
Board of Trustees of the Trust will be sent to the Adviser and
that the Trust will make appropriate arrangements for the
attendance (as persons present by invitation) of such person or
persons as the Adviser may designate.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized
officers and their seals to be hereunto affixed, all as of the
day and year first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
/s/Kenneth L. MacRitchie /s/Lacy B. Herrmann
________________________ By:___________________________________
Kenneth L. MacRitchie Lacy B. Herrmann
Assistant Secretary President and Chairman
ATTEST: STCM MANAGEMENT COMPANY, INC.
/s/Charles E. Childs III /s/Rose F. Marotta
________________________ By:___________________________________
Charles E. Childs III Rose F. Marotta
Treasurer
Name of Distributor was changed
from STCM Distributors, Inc. on
September 11, 1985
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
AGREEMENT, made as of this 28th day of February,
1992, by and between CAPITAL CASH MANAGEMENT TRUST
(hereinafter called the "Trust"), and AQUILA DISTRIBUTORS,
INC. (hereinafter called the "Distributor").
W I T N E S S E T H :
WHEREAS, the Trust and the Distributor have
previously entered into an Underwriting Agreement; and
WHEREAS, the Trust and the Distributor now wish to
amend and restate their agreement as herein set forth,
(referred to hereafter as "this Agreement");
NOW, THEREFORE, in consideration of the mutual
covenants herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged,
it is agreed by and between the parties hereto as follows:
1. The Distributor agrees to act as principal
underwriter and exclusive distributor of the shares of the
Trust. The price at which shares of the Trust are issued to
the public by the Distributor shall be as computed and
effective as set forth in the Prospectus and Statement of
Additional Information of the Trust current as of the time
of such sale (collectively, the "Current Prospectus"). The
Distributor agrees to bear the costs of printing and
distributing all copies of the Trust's prospectuses,
statements of additional information and reports to
shareholders which are not sent to the Trust's shareholders,
as well as the costs of supplemental sales literature,
advertising and other promotional activities.
2. The Trust agrees to issue shares of the
Trust, subject to the provisions of its Declaration of Trust
and By-Laws, to the Distributor as ordered by the
Distributor, but only to the extent that the Distributor
shall have received purchase orders therefor at the times
and subject to the conditions set forth in the Current
Prospectus. Certificates for shares need not be created or
delivered by the Trust in any case in which the purchase is
made under terms not calling for such certificates. Shares
issued by the Trust shall be registered in such name or
names and amounts as the Distributor may request from time
to time and all shares when so paid for and issued shall be
fully paid and non-assessable to the extent set forth in the
Current Prospectus.
3. The Distributor shall act as principal in all
matters relating to promotion of the growth of the Trust and
shall enter into all of its engagements, agreements and
contracts as principal on its own account. The title to
shares of the Trust issued and sold through the Distributor
shall pass directly from the Trust to the dealer or
investor, or shall, if the Distributor so consents, first
pass to the Distributor, as may from time to time be
determined by the Board of Trustees of the Trust.
4. The Trust hereby consents to any arrangements
whereby the Distributor may act as principal underwriter for
other investment companies or as principal underwriter,
sponsor or depositor for unit investment trusts and periodic
payment plan certificates issued thereby, or as investment
adviser, sub-adviser or administrator to the Trust or other
investment companies or persons. The Trust also consents to
the Distributor carrying on a business as a broker, dealer
and underwriter in securities and to carrying on any other
lawful business.
5. The Trust covenants and agrees that it will
not during the term of this Agreement, without the consent
of the Distributor, offer any shares of the Trust for sale
directly or through any person or corporation other than the
Distributor excepting only (a) the reinvestment of dividends
and/or distributions, or their declaration in shares of the
Trust, in optional form or otherwise; (b) the issuance of
additional shares through stock splits or stock dividends;
(c) sales of shares to another investment or securities
holding company in the process of purchasing all or a
portion of its assets; or (d) in connection with an exchange
of the Trust's shares for shares of another investment
company or securities holding company.
6. The Trust agrees to use its best efforts to
register from time to time under the Securities Act of 1933
adequate amounts of shares of the Trust for sale by the
Distributor to the public and to register or qualify, or to
permit the Distributor to register or qualify, such shares
for offering to the public in such States or other
jurisdictions as may be designated by the Distributor.
7. The Trust agrees to advise the Distributor of
the net asset value of the Trust's shares as often as
computed. The Trust will also furnish to the Distributor,
as soon as practicable, such information as may reasonably
be requested by the Distributor in order that it may know
all of the facts necessary to sell shares of the Trust.
8. The Distributor is familiar with the
Declaration of Trust and By-Laws of the Trust, each as
presently in effect. Insofar as they are applicable to the
Distributor as principal underwriter of the Trust, it will
comply with the provisions of the Declaration of Trust and
By-Laws of the Trust and with the provisions of all acts
administered by the Securities and Exchange Commission (the
"Commission") and rules thereunder.
9. This amended and restated Agreement shall go
into effect on the date first above written, and shall,
unless terminated as hereinafter provided, continue in
effect until the November 30 which next precedes the second
anniversary of the effective date of this Agreement, and
from year to year thereafter, but only so long as such
continuance is specifically approved at least annually as
provided in the Investment Company Act of 1940 (the "Act").
This Agreement shall automatically terminate in the event of
its assignment (as defined in the Act) and may be terminated
by either party on sixty days' written notice to the other
party.
10. The Trust agrees with the Distributor, for
the benefit of the Distributor and each person, if any, who
controls the Distributor within the meaning of Section 15 of
the Securities Act of 1933 (the "Securities Act") and each
and all and any of them, to indemnify and hold harmless the
Distributor and any such controlling person from and against
any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject
under the Securities Act, under any other statute, at common
law or otherwise, and to reimburse the Distributor and such
controlling persons, if any, for any legal or other expenses
(including the cost of any investigation and preparation)
reasonably incurred by them or any of them in connection
with any litigation whether or not resulting in any
liability, insofar as such losses, claims, damages,
liabilities or litigation arise out of, or are based upon,
any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any
Prospectus, filed with the Commission, or any amendment
thereof or supplement thereto, or which arise out of, or are
based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided,
however, that this indemnity agreement shall not apply to
amounts paid in settlement of any such litigation if such
settlement is effected without the consent of the Trust or
to any such losses, claims, damages, liabilities or
litigation arising out of, or based upon, any untrue
statement or alleged untrue statement of a material fact
contained in any such Registration Statement or Prospectus,
or any amendment thereof or supplement thereto, or arising
out of, or based upon, the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
which statement or omission was made in reliance upon
information furnished in writing to the Trust by the
Distributor for inclusion in any such Registration Statement
or Prospectus or any amendment thereof or supplement
thereto. The Distributor and each such controlling person
shall, promptly after the complaint shall have been served
upon the Distributor or such controlling person in respect
of which indemnity may be sought from the Trust on account
of its agreement contained in this paragraph, notify the
Trust in writing of the commencement thereof. The omission
of the Distributor or such controlling person so to notify
the Trust of any such litigation shall relieve the Trust
from any liability which it may have to the Distributor or
such controlling person on account of the indemnity
agreement contained in this paragraph, but shall not relieve
the Trust from any liability which it may have to the
Distributor or controlling person otherwise than on account
of the indemnity agreement contained in the paragraph. In
case any such litigation shall be brought against the
Distributor or any such controlling person and notice of the
commencement thereof shall have been given to the Trust, the
Trust shall be entitled to participate in (and, to the
extent that it shall wish, to direct) the defense thereof at
its own expense, but such defense shall be conducted by
counsel of good standing and satisfactory to the Distributor
or such controlling person or persons, defendant or
defendants in the litigation. The indemnity agreement of
the Trust contained in this paragraph shall remain operative
and in full force and effect regardless of any investigation
made by or on behalf of the Distributor or any such
controlling person, and shall survive any delivery of shares
of the Trust. The Trust agrees to notify the Distributor
promptly of the commencement of any litigation or proceeding
against it or any of its officers or directors of which it
may be advised in connection with the issue and sale of
shares of the Trust.
11. Anything herein to the contrary
notwithstanding, the agreement in paragraph 10, insofar as
it constitutes a basis for reimbursement by the Trust for
liabilities (other than payment by the Trust of expenses
incurred or paid in the successful defense of any action,
suit or proceeding) arising under the Securities Act, shall
not extend to the extent of any interest therein of any
person who is an underwriter or a partner or controlling
person of an underwriter within the meaning of Section 15 of
the Securities Act or who, at the date of this Agreement, is
a Trustee of the Trust, except to the extent that an
interest of such character shall have been determined by a
court of appropriate jurisdiction as not against public
policy as expressed in the Securities Act. Unless in the
opinion of counsel for the Trust the matter has been
adjudicated by controlling precedent, the Trust will, if a
claim for such reimbursement is asserted, submit to a court
of appropriate jurisdiction the question of whether or not
such interest is against the public policy as expressed in
the Securities Act.
12. The Distributor agrees to indemnify and hold
harmless the Trust and its Trustees and such officers as
shall have signed any Registration Statement filed with the
Commission from and against any and all losses, claims,
damages or liabilities, joint or several, to which the Trust
or such Trustees or officers may become subject under the
Securities Act, under any other statute, at common law or
otherwise, and will reimburse the Trust or such Trustees or
officers for any legal or other expenses (including the cost
of any investigation and preparation) reasonably incurred by
it or them or any of them in connection with any litigation,
whether or not resulting in any liability, insofar as such
losses, claims, damages, liabilities or litigation arise out
of, or are based upon, any untrue statement or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, which statement or omission was made in
reliance upon information furnished in writing to the Trust
by the Distributor for inclusion in any Registration
Statement or any Prospectus, or any amendment thereof or
supplement thereto. The Distributor shall not be liable for
amounts paid in settlement of any such litigation if such
settlement was effected without its consent. The Trust and
its Trustees and such officers, defendant or defendants, in
any such litigation shall, promptly after the complaint
shall have been served upon the Trust or any such Trustee or
officer in respect of which indemnity may be sought from the
Distributor on account of its agreement contained in this
paragraph, notify the Distributor in writing of the
commencement thereof. The omission of the Trust or such
Trustee or officer so to notify the Distributor of any such
litigation shall relieve the Distributor from any liability
which it may have to the Trust or such Trustee or officer on
account of the indemnity agreement contained in this
paragraph, but shall not relieve the Distributor from any
liability which it may have to the Trust or such Trustee or
officer otherwise than on account of the indemnity agreement
contained in this paragraph. In case any such litigation
shall be brought against the Trust or any such Trustee or
officer and notice of the commencement thereof shall have
been so given to the Distributor, the Distributor shall be
entitled to participate in (and, to the extent that it shall
wish, to direct) the defense thereof at its own expense, but
such defense shall be conducted by counsel of good standing
and satisfactory to the Trust. The indemnity agreement of
the Distributor contained in this paragraph shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of the Trust and shall
survive any delivery of shares of the Trust. The
Distributor agrees to notify the Trust promptly of the
commencement of any litigation or proceeding against it or
any of its officers or directors or against any such
controlling person of which it may be advised, in connection
with the issue and sale of the Trust's shares.
13. Notwithstanding any provision contained in
this Agreement, no party hereto and no person or persons in
control of any party hereto shall be protected against any
liability to the Trust or its security holders to which they
would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence, in the performance of their
duties, or by reason of their reckless disregard of their
obligations and duties under this Agreement.
14. The Trust shall immediately advise the
Distributor (a) when any post-effective amendment to its
Registration Statement or any further amendment or
supplement thereto or any further Registration Statement or
amendment or supplement thereto becomes effective, (b) of
any request by the Commission for amendments to the
Registration Statement or the then effective Prospectus or
for additional information, (c) of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement, or the initiation of any
proceedings for that purpose, and (d) of the happening of
any event which makes untrue any material statement made in
the Registration Statement or the Current Prospectus or
which in the opinion of counsel for the Trust requires the
making of a change in the Registration Statement or the
Current Prospectus in order to make the statements therein
not misleading. In case of the happening at any time of any
event which materially affects the Trust or its securities
and which should be set forth in a supplement to or an
amendment of the Current Prospectus in order to make the
statements therein not misleading the Trust shall prepare
and furnish to the Distributor such amendment or amendments
to the then effective Prospectus as will correct the
Prospectus so that as corrected it will not contain, or such
supplement or supplements to the then effective Prospectus
which when read in conjunction with the then effective
Prospectus will make the combined information not contain,
any untrue statement or a material fact or any omission to
state any material fact necessary in order to make the
statements in the then effective Prospectus not misleading.
The Trust shall, if at any time the Commission shall issue
any stop order suspending the effectiveness of the
Registration Statement, make every reasonable effort to
obtain the prompt lifting of such order.
15. Except as expressly provided in paragraphs 10
and 12 hereof, the agreements herein set forth have been
made and are made solely for the benefit of the Trust, the
Distributor, and the persons expressly provided for in
paragraphs 10 and 12, their respective heirs, successors,
personal representatives and assigns, and except as so
provided, nothing expressed or mentioned herein is intended
or shall be construed to give any person, firm or
corporation, other than the Trust, the Distributor, and the
persons expressly provided for in paragraphs 10 and 12, any
legal or equitable right, remedy or claim under or in
respect of this Agreement or any representation, warranty or
agreement herein contained. Except as so provided, the term
"heirs, successors, personal representatives and assigns"
shall not include any purchaser of shares merely because of
such purchase.
16. The Distributor understands that the
obligations of this Agreement are not binding upon any
shareholder of the Trust personally, but bind only the
Trust's property; the Distributor represents that it has
notice of the provisions of the Trust's Declaration of Trust
disclaiming shareholder liability for acts or obligations of
the Trust.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective duly
authorized officers and their seals to be affixed as of the
day and year first above written.
CAPITAL CASH MANAGEMENT TRUST
/s/Rose F. Marotta
By:________________________________
Rose F. Marotta
C.F.O.
ATTEST:
/s/Charles E. Childs III
__________________________
Charles E. Childs III
Vice Pres.
AQUILA DISTRIBUTORS, INC.
/s/Lacy B. Herrmann, Vice Pres.
By:________________________________
Lacy B. Herrmann
Vice Pres.
ATTEST:
/s/Kenneth L. MacRitchie
__________________________
Kenneth L. MacRitchie
Asst. Secy.
CUSTODY AGREEMENT
THIS AGREEMENT, is made as of March 30, 1995, by and between
CAPITAL CASH MANAGEMENT TRUST, a business trust organized under the
laws of the Commonwealth of Massachusetts (the "Trust"), and BANK
ONE TRUST COMPANY, N.A., a banking company organized under the laws
of the United States (the "Custodian").
WITNESSETH:
WHEREAS, the Trust desires that Securities and cash of the
Trust be held and administered by the Custodian pursuant to this
Agreement; and
WHEREAS, the Trust is an open-end management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:
1.1 "Authorized Person" means any Officer or other person
duly authorized by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Trust and
named in Exhibit B hereto or in such resolutions of the Board of
Trustees, certified by an Officer, as may be received by the
Custodian from time to time.
1.2 "Board of Trustees" shall mean the Trustees from time to
time serving under the Trust's Declaration of Trust, dated August
20, 1976, as from time to time amended.
1.3 "Book-Entry System" shall mean a federal book-entry
system as provided in Subpart O of Treasury Circular No. 300, 31
CFR 306, in Subpart B of 31 CFR Part 350, or in such book-entry
regulations of federal agencies as are substantially in the form of
such Subpart O.
1.4 "Business Day" shall mean any day recognized as a
settlement day by The New York Stock Exchange, Inc. and any other
day for which the Fund computes the net asset value of the Fund.
1.5 "Fund" shall mean any of the individual investment
portfolios of the Trust, including any additional portfolios
hereafter created, as each are or will be identified in Exhibit A
hereto; provided, however, that in the event that the Trust
consists of only one such portfolio, "Fund" shall refer to the
Trust.
1.6 "NASD" shall mean The National Association of Securities
Dealers, Inc.
1.7 "Officer" shall mean the President, any Senior Vice
President, Vice President or Assistant Vice President, the
Secretary, any Assistant Secretary, the Chief Financial Officer,
the Treasurer, or any Assistant Treasurer of the Trust.
1.8 "Oral Instructions" shall mean instructions orally
transmitted to and accepted by the Custodian because such
instructions are: (i) reasonably believed by the Custodian to have
been given by an Authorized Person, (ii) recorded and kept among
the records of the Custodian made in the ordinary course of
business and (iii) orally confirmed by the Custodian. The Trust
shall cause all Oral Instructions to be confirmed by Written
Instructions. If such Written Instructions confirming Oral
Instructions are not received by the Custodian prior to a
transaction, it shall in no way affect the validity of the
transaction or the authorization thereof by the Trust. If Oral
Instructions vary from the Written Instructions which purport to
confirm them, the Custodian shall notify the Trust of such variance
but such Oral Instructions will govern unless the Custodian has not
yet acted.
1.9 "Custody Account" shall mean any account in the name of
a Fund, which is provided for in Section 3.2 below, or of the
Trust.
1.10 "Proper Instructions" shall mean Oral Instructions or
Written Instructions. Proper Instructions may be continuing
Written Instructions when deemed appropriate by both parties.
1.11 "Securities Depository" shall mean The Participants Trust
Company or The Depository Trust Company and (provided that the
Custodian shall have received a copy of a resolution of the Board
of Trustees, certified by an Officer, specifically approving the
use of such clearing agency as a depository for the Trust) any
other clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities and Exchange Act of
1934 (the "1934 Act"), which acts as a system for the central
handling of Securities where all Securities of any particular class
or series of an issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of the Securities.
1.12 "Securities" shall include, without limitation, common
and preferred stocks, bonds, call options, put options, debentures,
notes, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities, other money market instruments or other
obligations, and any certificates, receipts, warrants or other
instruments or documents representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other
rights or interests therein, or any similar property or assets that
the Custodian has the facilities to clear and to service.
1.13 "Shares" shall mean the units of beneficial interest
issued by the Trust.
1.14 "Written Instructions" shall mean (i) written
communications actually received by the Custodian and signed by one
or more persons as the Board of Trustees shall have from time to
time authorized, or (ii) communications by telex or any other such
system from a person or persons reasonably believed by the
Custodian to be Authorized, or (iii) communications transmitted
electronically through the Institutional Delivery System (IDS), or
any other similar electronic instruction system acceptable to the
Custodian and approved by resolutions of the Board of Trustees, a
copy of which, certified by an Officer, shall have been delivered
to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Trust hereby constitutes and appoints
the Custodian as custodian of all Securities and cash owned by or
in the possession of the Trust at any time during the period of
this Agreement, provided that such Securities or cash at all times
shall be and remain the property of the Trust.
2.2 Acceptance. The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as
hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 Segregation. All Securities and non-cash property held
by the Custodian for the account of the Fund, except Securities
maintained in a Securities Depository or Book-Entry System, shall
be physically segregated from other Securities and non-cash
property in the possession of the Custodian and shall be identified
as subject to this Agreement.
3.2 Custody Account. The Custodian shall open and maintain
in its trust department a custody account in the name of each Fund,
subject only to draft or order of the Custodian, in which the
Custodian shall enter and carry all Securities, cash and other
assets of the Fund which are delivered to it.
3.3 Appointment of Agents. Subject to the continuing
approval of the Board of Trustees, the Custodian may appoint, and
at any time remove, any domestic bank or trust company, and is
qualified to act as a custodian under the 1940 Act, as sub-
custodian to hold Securities and cash of the Funds and to carry out
such other provisions of this Agreement as it may determine, and
may also open and maintain one or more banking accounts with such
a bank or trust company (any such accounts to be in the name of the
Custodian and subject only to its draft or order), provided,
however, that the appointment of any such agent shall not relieve
the Custodian of any of its obligations or liabilities under this
Agreement.
3.4 Delivery of Assets to Custodian. The Fund shall deliver,
or cause to be delivered, to the Custodian all of the Fund's
Securities, cash and other assets, including (a) all payments of
income, payments of principal and capital distributions received by
the Fund with respect to such Securities, cash or other assets
owned by the Fund at any time during the period of this Agreement,
and (b) all cash received by the Fund for the issuance, at any time
during such period, of Shares. The Custodian shall not be
responsible for such Securities, cash or other assets until
actually received by it.
3.5 Securities Depositories and Book-Entry Systems. The
Custodian may deposit and/or maintain Securities of the Funds in a
Securities Depository or in a Book-Entry System, subject to the
following provisions:
(a) Prior to a deposit of Securities of the Funds in any
Securities Depository or Book-Entry System, the Fund
shall deliver to the Custodian a resolution of the Board
of Trustees, certified by an Officer, authorizing and
instructing the Custodian on an on-going basis to deposit
in such Securities Depository or Book-Entry System all
Securities eligible for deposit therein and to make use
of such Securities Depository or Book-Entry System to the
extent possible and practical in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and
returns of collateral consisting of Securities.
(b) Securities of a Fund kept in a Book-Entry System or
Securities Depository shall be kept in an account
("Depository Account") of the Custodian in such Book-
Entry System or Securities Depository which includes only
assets held by the Custodian as a fiduciary, custodian or
otherwise for customers.
(c) The records of the Custodian and the Custodian's account
on the books of the Book-Entry System and Securities
Depository as the case may be, with respect to Securities
of a Fund maintained in a Book-Entry System or Securities
Depository shall, by book-entry or otherwise, identify
such Securities as belonging to the Fund.
(d) If Securities purchases by the Fund are to be held in a
Book-Entry System or Securities Depository, the Custodian
shall pay for such Securities upon (i) receipt of advice
from the Book-Entry System or Securities Depository that
such Securities have been transferred to the Depository
Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for
the account of the Fund. If Securities sold by the Fund
are held in a Book-Entry System or Securities Depository,
the Custodian shall transfer such Securities upon (i)
receipt of advice from the Book-Entry System or
Securities depository that payment for such Securities
has been transferred to the Depository Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the
Fund.
(e) Upon request, the Custodian shall provide the Fund with
copies of any report (obtained by the Custodian from a
Book-Entry System or Securities Depository in which
Securities of the Fund is kept) on the internal
accounting controls and procedures for safeguarding
Securities deposited in such Book-Entry System or
Securities Depository.
(f) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the
Trust for any loss or damage to the Trust resulting (i)
from the use of a Book-Entry System or Securities
Depository by reason of any negligence or willful
misconduct on the part of the Custodian or any sub-
custodian appointed pursuant to Section 3.3 above or any
of its or their employees, or (ii) from failure of the
Custodian or any such sub-custodian to enforce
effectively such rights as it may have against a Book-
Entry System or Securities Depository. At its election,
the Trust shall be subrogated to the rights of the
Custodian with respect to any claim against a Book-Entry
System or Securities Depository or any other person for
any loss or damage to the Funds arising from the use of
such Book-Entry System or Securities Depository, if and
to the extent that the Custodian has been made whole for
any such loss or damage.
3.6 Disbursement of Moneys from Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall disburse moneys
from a Custody Account but only in the following cases:
(a) For the purchase of Securities for the Fund but only upon
compliance with Section 4.1 of this Agreement and only
(i) in the case of Securities (other than options on
Securities, futures contracts and options on futures
contracts), against the delivery to the Custodian (or any
sub-custodian appointed pursuant to Section 3.3 above) of
such Securities registered as provided in Section 3.9
below in proper form for transfer, or if the purchase of
such Securities is effected through a Book-Entry System
or Securities Depository, in accordance with the
conditions set forth in Section 3.5 above; (ii) in the
case of options on Securities, against delivery to the
Custodian (or such sub-custodian) of such receipts as are
required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and
options on futures contracts, against delivery to the
Custodian (or such sub-custodian) of evidence of title
thereto in favor of the Trust or any nominee referred to
in Section 3.9 below; and (iv) in the case of repurchase
or reverse repurchase agreements entered into between the
Trust and a bank which is a member of the Federal Reserve
System or between the Trust and a primary dealer in U.S.
Government securities, against delivery of the purchased
Securities either in certificate form or through an entry
crediting the Custodian's account at a Book-Entry System
or Securities Depository for the account of the Fund with
such Securities;
(b) In connection with the conversion, exchange or surrender,
as set forth in Section 3.7(f) below, of Securities owned
by the Fund;
(c) For the payment of any dividends or capital gain
distributions declared by the Fund;
(d) In payment of the redemption price of Shares as provided
in Section 5.1 below;
(e) For the payment of any expense or liability incurred by
the Trust, including but not limited to the following
payments for the account of a Fund: interest; taxes;
administration, investment management, investment
advisory, accounting, auditing, transfer agent,
custodian, trustee and legal fees; and other operating
expenses of a Fund; in all cases, whether or not such
expenses are to be in whole or in part capitalized or
treated as deferred expenses;
(f) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-
dealer registered under the 1934 Act and a member of the
NASD, relating to compliance with rules of The Options
Clearing Corporation and of any registered national
securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in
connection with transactions by the Trust;
(g) For transfer in accordance with the provisions of any
agreement among the Trust, the Custodian, and a futures
commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of
the Commodity Futures Trading Commission and/or any
contract market (or any similar organization or
organizations) regarding account deposits in connection
with transactions by the Trust;
(h) For the funding of any uncertificated time deposit or
other interest-bearing account with any banking
institution (including the Custodian), which deposit or
account has a term of one year or less; and
(i) For any other proper purposes, but only upon receipt, in
addition to Proper Instructions, of a copy of a
resolution of the Board of Trustees, certified by an
Officer, specifying the amount and purpose of such
payment, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom such
payment is to be made.
3.7 Delivery of Securities from Fund Custody Accounts. Upon
receipt of Proper Instructions, the Custodian shall release and
deliver Securities from a Custody Account but only in the following
cases:
(a) Upon the sale of Securities for the account of a Fund but
only against receipt of payment therefor in cash, by
certified or cashiers check or bank credit;
(b) In the case of a sale effected through a Book-Entry
System or Securities Depository, in accordance with the
provisions of Section 3.5 above;
(c) To an offeror's depository agent in connection with
tender or other similar offers for Securities of a Fund;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
(d) To the issuer thereof or its agent (i) for transfer into
the name of the Trust, the Custodian or any sub-custodian
appointed pursuant to Section 3.3 above, or of any
nominee or nominees of any of the foregoing, or (ii) for
exchange for a different number of certificates or other
evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
Securities are to be delivered to the Custodian;
(e) To the broker selling Securities, for examination in
accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization
or readjustment of the issuer of such Securities, or
pursuant to provisions for conversion contained in such
Securities, or pursuant to any deposit agreement,
including surrender or receipt of underlying Securities
in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the
new Securities and cash, if any, are to be delivered to
the Custodian;
(g) Upon receipt of payment therefor pursuant to any
repurchase or reverse repurchase agreement entered into
by a Fund;
(h) In the case of warrants, rights or similar Securities,
upon the exercise thereof, provided that, in any such
case, the new Securities and cash, if any, are to be
delivered to the Custodian;
(i) For delivery in connection with any loans of Securities
of a Fund, but only against receipt of such collateral as
the Trust shall have specified to the Custodian in Proper
Instructions;
(j) For delivery as security in connection with any
borrowings by the Trust on behalf of a Fund requiring a
pledge of assets by such Fund, but only against receipt
by the Custodian of the amounts borrowed;
(k) Pursuant to any authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization
of the Trust or a Fund;
(l) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian and a broker-
dealer registered under the 1934 Act and a member of the
NASD, relating to compliance with the rules of The
Options Clearing Corporation and of any registered
national securities exchange (or of any similar
organization or organizations) regarding escrow or other
arrangements in connection with transactions by the Trust
on behalf of a Fund;
(m) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of a Fund, the
Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading
Commission and/or any contract market (or any similar
organization or organizations) regarding account deposits
in connection with transactions by the Trust on behalf of
a Fund; or
(n) For any other proper corporate purposes, but only upon
receipt, in addition to Proper Instructions, of a copy of
a resolution of the Board of Trustees, certified by an
Officer, specifying the Securities to be delivered,
setting forth the purpose for which such delivery is to
be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom
delivery of such Securities shall be made.
3.8 Actions Not Requiring Proper Instructions. Unless
otherwise instructed by the Trust, the Custodian shall with respect
to all Securities held for a Fund;
(a) Subject to Section 7.4 below, collect on a timely basis
all income and other payments to which the Trust is
entitled either by law or pursuant to custom in the
securities business;
(b) Present for payment and, subject to Section 7.4 below,
collect on a timely basis the amount payable upon all
Securities which may mature or be called, redeemed, or
retired, or otherwise become payable;
(c) Endorse for collection, in the name of the Trust, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or Securities in temporary
form for Securities in definitive form;
(e) Execute, as custodian, any necessary declarations or
certificates of ownership under the federal income tax
laws or the laws or regulations of any other taxing
authority now or hereafter in effect, and prepare and
submit reports to the Internal Revenue Service ("IRS")
and to the Trust at such time, in such manner and
containing such information as is prescribed by the IRS;
(f) Hold for a Fund, either directly or, with respect to
Securities held therein, through a Book-Entry System or
Securities Depository, all rights and similar securities
issued with respect to Securities of the Fund; and
(g) In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in
connection with sale, exchange, substitution, purchase,
transfer and other dealings with Securities and assets of
the Fund.
3.9 Registration and Transfer of Securities. All Securities
held for a Fund that are issued or issuable only in bearer form
shall be held by the Custodian in that form, provided that any such
Securities shall be held in a Book-Entry System for the account of
the Trust on behalf of a Fund, if eligible therefor. All other
Securities held for a Fund may be registered in the name of the
Trust on behalf of such Fund, the Custodian, or any sub-custodian
appointed pursuant to Section 3.3 above, or in the name of any
nominee of any of them, or in the name of a Book-Entry System,
Securities Depository or any nominee of either thereof; provided,
however, that such Securities are held specifically for the account
of the Trust on behalf of a Fund. The Trust shall furnish to the
Custodian appropriate instruments to enable the Custodian to hold
or deliver in proper form for transfer, or to register in the name
of any of the nominees hereinabove referred to or in the name of a
Book-Entry System or Securities Depository, any Securities
registered in the name of a Fund.
3.10 Records. (a) The Custodian shall maintain, by Fund,
complete and accurate records with respect to Securities, cash or
other property held for the Trust, including (i) journals or other
records of original entry containing an itemized daily record in
detail of all receipts and deliveries of Securities and all
receipts and disbursements of cash; (ii) ledgers (or other records)
reflecting (A) Securities in transfer, (B) Securities in physical
possession, (C) monies and Securities borrowed and monies and
Securities loaned (together with a record of the collateral
therefor and substitutions of such collateral), (D) dividends and
interest received, and (E) dividends receivable and interest
accrued; and (iii) cancelled checks and bank records related
thereto. The Custodian shall keep such other books and records of
the Trust as the Trust shall reasonably request, or as may be
required by the 1940 Act, including, but not limited to Section 31
and Rule 31a-1 and 31a-2 promulgated thereunder.
(b) All such books and records maintained by the Custodian
shall (i) be maintained in a form acceptable to the Trust and in
compliance with rules and regulations of the Securities and
Exchange Commission, (ii) be the property of the Trust and at all
times during the regular business hours of the Custodian be made
available upon request for inspection by duly authorized officers,
employees or agents of the Trust and employees or agents of the
Securities and Exchange Commission, and (iii) if required to be
maintained by Rule 31a-1 under the 1940 Act, be preserved for the
periods prescribed in Rule 31a-2 under the 1940 Act.
3.11 Fund Reports by Custodian. The Custodian shall furnish
the Trust with a daily activity statement by Fund and a summary of
all transfers to or from the Custody Account on the day following
such transfers. At least monthly and from time to time, the
Custodian shall furnish the Trust with a detailed statement, by
Fund, of the Securities and moneys held for the Trust under this
Agreement.
3.12 Other Reports by Custodian. The Custodian shall provide
the Trust with such reports, as the Trust may reasonably request
from time to time, on the internal accounting controls and
procedures for safeguarding Securities, which are employed by the
Custodian or any sub-custodian appointed pursuant to Section 3.3
above.
3.13 Proxies and Other Materials. The Custodian shall cause
all proxies, if any, relating to Securities which are not
registered in the name of a Fund, to be promptly executed by the
registered holder of such Securities, without indication of the
manner in which such proxies are to be voted, and shall include all
other proxy materials, if any, promptly deliver to the Trust such
proxies, all proxy soliciting materials, and all notices to the
holders of such Securities.
3.14 Information on Corporate Actions. The Custodian will
promptly notify the Trust of corporate actions, limited to those
Securities registered in nominee name and to those Securities held
at a Depository or sub-Custodian acting as agent for the Custodian.
The Custodian will be responsible only if the notice of such
corporate actions is published by the Financial Card Service, J.J.
Kenny's Munibase System, Depository Trust Reorganization Notices,
Xcitek Inc., Standard & Poor's Called Bond Listing or The Wall
Street Journal or received by first class mail from the agent. For
market announcements not yet received and distributed by the
Custodian's services, the Trust will inform its custody
representative with appropriate instructions. The Custodian will,
upon receipt of the Trusts's response within the required deadline,
effect such action for receipt or payment for the Trust. For those
responses received after the deadline, the Custodian will effect
such action for receipt or payment, subject to the limitations of
the agent(s) effecting such actions. The Custodian will promptly
notify the Trust for put options only if the notice is received by
first class mail from the agent. The Trust will provide or cause
to be provided to the Custodian with all relevant information
contained in the prospectus for any security which has unique
put/option provisions and provide the Custodian with specific
tender instructions at least ten business days prior to the
beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 Purchase of Securities. Promptly upon each purchase of
Securities for the Trust, Written Instructions shall be delivered
to the Custodian, specifying (a) the Fund making the purchase, (b)
the name of the issuer or writer of such Securities, and the title
or other description thereof, (c) the number of shares, principal
amount (and accrued interest, if any) or other units purchased, (d)
the date of purchase and settlement, (e) the purchase price per
unit, (f) the total amount payable upon such purchase, and (g) the
name of the person to whom such amount is payable. The Custodian
shall upon receipt of such Securities purchased by a Fund pay out
of the moneys held for the account of such Fund the total amount
specified in such Written Instructions to the person named therein.
The Custodian shall not be under any obligation to pay out moneys
to cover the cost of a purchase of Securities for a Fund, if in the
relevant Custody Account there is insufficient cash available to
the Fund for which such purchase was made.
4.2 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for the purchase of
Securities for a Fund is made by the Custodian in advance of
receipt for the account of the Fund of the Securities purchased but
in the absence of specific Written or Oral Instructions to so pay
in advance, the Custodian shall be liable to the Fund for such
Securities to the same extent as if the Securities had been
received by the Custodian.
4.3 Sale of Securities. Promptly upon each sale of
Securities by a Fund, Written Instructions shall be delivered to
the Custodian, specifying (a) the Fund making the purchase, (b) the
name of the issuer or writer of such Securities, and the title or
other description thereof, (c) the number of shares, principal
amount (and accrued interest, if any), or other units sold, (d) the
date of sale and settlement (e) the sale price per unit, (f) the
total amount payable upon such sale, and (g) the person to whom
such Securities are to be delivered. Upon receipt of the total
amount payable to the Trust as specified in such Written
Instructions, the Custodian shall deliver such Securities to the
person specified in such Written Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as shall
be satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in
Securities.
4.4 Delivery of Securities Sold. Notwithstanding Section 4.3
above or any other provision of this Agreement, the Custodian, when
instructed to deliver Securities against payment, shall be
entitled, if so directed in Written Instructions and if in
accordance with generally accepted market practice, to deliver such
Securities prior to actual receipt of final payment therefor. In
any such case, the Trust shall bear the risk that final payment for
such Securities may not be made or that such Securities may be
returned or otherwise held or disposed of by or through the person
to whom they were delivered, and the Custodian shall have no
liability for any of the foregoing.
4.5 Payment for Securities Sold, etc. In its sole discretion
and from time to time, the Custodian may credit the relevant
Custody Account, prior to actual receipt of final payment thereof,
with (i) proceeds from the sale of Securities which it has been
instructed to deliver against payment, (ii) proceeds from the
redemption of Securities or other assets of the Trust, and (iii)
income from cash, Securities or other assets of the Trust. Any
such credit shall be conditional upon actual receipt by the
Custodian of final payment and may be reversed if final payment is
not actually received in full. The Custodian may, in its sole
discretion and from time to time, permit the Trust to use funds so
credited to its Custody Account in anticipation of actual receipt
of final payment. Any such funds shall be repayable immediately
upon demand made by the Custodian at any time prior to the actual
receipt of all final payments in anticipation of which funds were
credited to the Custody Account.
4.6 Advances by Custodian for Settlement. If the Custodian
should, in its sole discretion, advance funds to the Trust to
facilitate the settlement of transactions on behalf of a Fund in
its Custody Account, then such advance shall be repayable
immediately upon demand made by the Custodian and shall bear
interest from the date incurred at a rate per annum (based on a
360-day year from the actual number of days involved) equal to 1%
over the Federal Funds rate in effect from time to time as
announced by The Wall Street Journal under the section entitled
Money Rates, or any successor title, such rate to be adjusted on
the effective date of any changes in such rate.
ARTICLE V
REDEMPTION OF TRUST SHARES
5.1 Transfer of Funds. From such funds as may be available
for the purpose in the relevant Custody Account, and upon receipt
of Proper Instructions specifying that the funds are required to
redeem Shares of a Fund, the Custodian shall wire each amount
specified in such Proper Instructions to or through such bank as
the Trust may designate with respect to such amount in such Proper
Instructions.
5.2 No Duty Regarding Paying Banks. The Custodian shall not
be under any obligation to effect payment or distribution by any
bank designated in Proper Instructions given pursuant to Section
5.1 above of any amount paid by the Custodian to such bank in
accordance with such Proper Instructions.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of and in conformity with Proper Instructions,
the Custodian shall establish and maintain a segregated account or
accounts for and on behalf of each Fund, into and from which
account or accounts may be transferred cash and/or Securities,
including Securities maintained in a Depository Account,
(a) in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered
under the 1934 Act and a member of the NASD (or any
futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity
Futures Trading commission or any registered contract
market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Trust,
(b) for purposes of segregating cash or Securities in
connection with securities options purchased or written
by a Fund or in connection with financial futures
contracts (or options thereon) purchased or sold by a
Fund,
(c) which constitute collateral for loans of Securities made
by a Fund,
(d) for purposes of compliance by the Trust with requirements
under the 1940 Act for the maintenance of segregated
accounts by registered investment companies in connection
with reverse repurchase agreements and when-issued,
delayed delivery and firm commitment transactions, and
(e) for other proper corporate purposes, but only upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Trustees,
certified by an Officer, setting forth the purpose or
purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. The Custodian shall be held to the
exercise of reasonable care in carrying out its obligations under
this Agreement, and shall be without liability to the Trust for any
loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damages, cost,
expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any sub-custodian
appointed pursuant to Section 3.3 above. The Custodian shall be
entitled to rely on and may act upon advice of counsel on all
matters, and shall be without liability for any action reasonably
taken or omitted pursuant to such advice. The Custodian shall
promptly notify the Trust of any action taken or omitted by the
Custodian pursuant to advice of counsel. The Custodian shall not
be under any obligation at any time to ascertain whether the Trust
is in compliance with the 1940 Act, the regulations thereunder, the
provisions of the Trust's charter documents or by-laws, or its
investment objectives and policies as then in effect.
7.2 Actual Collection Required. The Custodian shall not be
liable for, or considered to be custodian of, any cash belonging to
the Trust or any money represented by a check, draft or other
instrument for the payment of money, until the Custodian or its
agents actually receive such cash or collect on such instrument.
7.3 No Responsibility for title, etc. So long as and to the
extent that it is in the exercise of reasonable care, the Custodian
shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received or delivered by
it pursuant to this Agreement.
7.4 Limitation on Duty to Collect. The Custodian shall not
be required to enforce collection, by legal means or otherwise, of
any money or property due and payable with respect to Securities
held for the Trust if such Securities are in default or payment is
not made after due demand or presentation. The Custodian shall
inform the Trust promptly of any such default or failure to make
payment.
7.5 Reliance Upon Documents and Instructions. The Custodian
shall be entitled to rely upon any certificate, notice or other
instrument in writing received by it and reasonably believed by it
to be genuine. The Custodian shall be entitled to rely upon any
Oral Instructions and/or any Written Instructions actually received
by it pursuant to this Agreement.
7.6 Express Duties Only. The Custodian shall have no duties
or obligations whatsoever except such duties and obligations as are
specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the
Custodian.
7.7 Cooperation. The Custodian shall cooperate with and
supply necessary information to the entity or entities appointed by
the Trust to keep the books of account of the Trust and/or compute
the value of the assets of the Trust. The Custodian shall take all
such reasonable actions as the Trust may from time to time request
to enable the Trust to obtain, from year to year, favorable
opinions from the Trust's independent accountants with respect to
the Custodian's activities hereunder in connection with (a) the
preparation of the Trust's filings on Form N-1A and Form N-SAR and
any other reports required by the Securities and Exchange
Commission, and (b) the fulfillment by the Trust of any other
requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. The Trust shall indemnify and hold
harmless the Custodian and any sub-custodian appointed pursuant to
Section 3.3 above, and any nominee of the Custodian or of such sub-
custodian from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability
(including, without limitation, liability arising under the
Securities Act of 1933, the 1934 Act, the 1940 Act, and any state
or foreign securities and/or banking laws) or claim arising
directly or indirectly (a) from the fact that Securities are
registered in the name of any such nominee, or (b) from any action
or inaction by the Custodian or such sub-custodian (i) at the
request or direction of or in reliance on the advice of the Trust,
or (ii) upon Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement or any sub-
custody agreement with a sub-custodian appointed pursuant to
Section 3.3 above or, in the case of any such sub-custodian, from
the performance of its obligations under such custody agreement,
provided that neither the Custodian nor any such sub-custodian
shall be indemnified and held harmless from and against any such
loss, damage, cost, expense, liability or claim arising from the
Custodian's or such sub-custodian's negligence, bad faith or
willful misconduct.
8.2 Indemnity to be Provided. If the Trust requests the
Custodian to take any action with respect to Securities, which may,
in the opinion of the Custodian, result in the Custodian or its
nominee becoming liable for the payment of money or incurring
liability of some other form, the Custodian shall not be required
to take such action until the Trust shall have provided indemnity
therefor to the Custodian in an amount and form satisfactory to the
Custodian.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any
failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its
reasonable control as may cause interruption, loss or malfunction
of utility, transportation, computer (hardware or software) or
telephone communication service; accidents; labor disputes, acts of
civil or military authority; governmental actions; or inability to
obtain labor, material, equipment or transportation; provided,
however, that the Custodian in the event of a failure or delay
shall use its best efforts to ameliorate the effects of any such
failure or delay.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 Effective Period. This Agreement shall become effective
as of the date first set forth above and shall continue in full
force and effect until terminated as hereinafter provided.
10.2 Termination. Either party hereto may terminate this
Agreement by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less
than ninety (90) days after the date of the giving of such notice.
If a successor custodian shall have been appointed by the Board of
Trustees, the Custodian shall, upon receipt of a notice of
acceptance by the successor custodian, on such specified date of
termination (a) deliver directly to the successor custodian all
Securities (other than Securities held in a Book-Entry System or
Securities Depository) and cash then owned by the Trust and held by
the Custodian as custodian, and (b) transfer any Securities held in
a Book-Entry System or Securities Depository to an account of or
for the benefit of the Trust at the successor custodian, provided
that the Trust shall have paid to the Custodian all fees, expenses
and other amounts to the payment or reimbursement of which it shall
then be entitled. Upon such delivery and transfer, the Custodian
shall be relieved of all obligations under this Agreement. The
Trust may at any time immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the
Custodian by regulatory authorities in the State of Ohio or upon
the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
10.3 Failure to Appoint Successor Custodian. If a successor
custodian is not designated by the Trust on or before the date of
termination specified pursuant to Section 10.1 above, then the
Custodian shall have the right to deliver to a bank or trust
company of its own selection, which is (a) a "Bank" as defined in
the 1940 Act, (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published report of not
less than $25 million, and (c) is doing business in New York, New
York, all Securities, cash and other property held by the Custodian
under this Agreement and to transfer to an account of or for the
Trust at such bank or trust company all Securities of the Trust
held in a Book-Entry System or Securities Depository. Upon such
delivery and transfer, such bank or trust company shall be the
successor custodian under this Agreement and the Custodian shall be
relieved of all obligations under this Agreement. If, after
reasonable inquiry, the Custodian cannot find a successor custodian
as contemplated in this Section 10.3, then the Custodian shall have
the right to deliver to the Trust all Securities and cash then
owned by the Trust and to transfer any Securities held in a Book-
Entry System or Securities Depository to an account of or for the
Trust. Thereafter, the Trust shall be deemed to be its own
custodian with respect to the Trust and the Custodian shall be
relieved of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon
from time to time by the Trust and the Custodian. The fees and
other charges in effect on the date hereof and applicable to the
Funds are set forth in Exhibit C attached hereto.
ARTICLE XII
LIMITATION OF LIABILITY
The Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts and under a Declaration of Trust, to
which reference is hereby made a copy of which is on file at the
office of the Secretary of State of Massachusetts as required by
law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of the Trust entered into in the name of
the Trust or on behalf thereof by any of the Trustees, officers,
employees or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of the Trust or the Funds
personally, but bind only the assets of the Trust, and all persons
dealing with any of the Funds of the Trust must look solely to the
assets of the Trust belonging to such Fund for the enforcement of
any claims against the Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices,
instructions, and other communications to be given to a party
hereunder shall be in writing and shall be sent or delivered to the
party at the address set forth after its name herein below:
To the Trust:
CAPITAL CASH MANAGEMENT TRUST
380 Madison Avenue
New York, NY 10017
Attn: Mr. Richard F. West, Treasurer and Mr.
William Killeen, Senior Operations
Officer
Telephone: (212)-697-6666
Facsimile: (212)-687-5373
To the Custodian:
BANK ONE TRUST COMPANY, N.A.,
100 East Broad Street
Columbus, OH 43271-0187
Attention: Mr. Robert F. Schultz, Senior Trust
Officer
Telephone: (614)-248-5445
Facsimile: (614)-248-2554
or at such other address as either party shall have provided to the
other by notice given in accordance with this Article XIII.
Writing shall include transmission by or through teletype,
facsimile, central processing unit connection, on-line terminal and
magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
14.2 No Waiver. No failure by either party hereto to exercise
and no delay by such party in exercising, any right hereunder shall
operate as a waiver thereof. The exercise by either party hereto
of any right hereunder shall not preclude the exercise of any other
right, and the remedies provided herein are cumulative and not
exclusive of any remedies provided at law or in equity.
14.3 Amendments. This Agreement cannot be changed orally and
no amendment to this Agreement shall be effective unless evidenced
by an instrument in writing executed by the parties hereto.
14.4 Counterparts. This Agreement may be executed in one or
more counterparts, and by the parties hereto on separate
counterparts, each of which shall be deemed an original but all of
which together shall constitute but one and the same instrument.
14.5 Severability. If any provision of this Agreement shall
be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired thereby.
14.6 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that this
Agreement shall not be assignable by either party hereto without
the written consent of the other party hereto.
14.7 Headings. The headings of sections in this Agreement are
for convenience of reference only and shall not affect the meaning
or construction of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered in its name and on its
behalf by its representatives thereunto duly authorized, all as of
the day and year first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
/s/Patricia A. Craven /s/Lacy B. Herrmann
_____________________ By: ______________________
Assistant Secretary President
ATTEST: BANK ONE TRUST COMPANY, N.A.
/s/Beth Hayes /s/Robert F. Schultz
______________________ By: _______________________
Senior Trust Officer
<PAGE>
EXHIBIT A
Name of Fund (if different from Date Added (if
the Trust different from
date of original
Custody Agreement
<PAGE>
EXHIBIT B
I, Richard F. West, Treasurer, and I, Patricia Craven, Assistant
Secretary, of CAPITAL CASH MANAGEMENT TRUST, a Massachusetts
business trust (the "Trust"), do hereby certify that:
The following individuals have been duly authorized by the Board of
Trustees of the Trust in conformity with the Trust's Declaration of
Trust and By-Laws to give Oral Instructions and Certificate on
behalf of the Trust, and the signatures set forth opposite their
respective names are their true and correct signatures:
NAME SIGNATURE
/s/Lacy B. Herrmann
Lacy B. Herrmann _____________________________
Rose F. Marotta _____________________________
/s/Richard F. West
Richard F. West _____________________________
/s/William C. Wallace
William C. Wallace _____________________________
/s/Diana P. Herrmann
Diana P. Herrmann _____________________________
/s/Charles E. Childs III
Charles E. Childs III _____________________________
/s/John M. Herndon
John M. Herndon _____________________________
/s/William Killeen
William Killeen _____________________________
/s/Patricia A. Craven
Patricia A. Craven _____________________________
/s/Richard F. West /s/Patricia A. Craven
________________________ _____________________________
Richard F. West, Patricia A. Craven,
Treasurer Assistant Secretary
<PAGE>
EXHIBIT C
Compensation of Custodian - Equity Fund/Money Market Funds
Whereas Article XI of the Custody Agreement between Capital Cash
Management Trust and Bank One Trust Company, N.A. stipulates that
the compensation of Custodian shall be agreed upon by the Trust and
Custodian, the following is hereby agreed:
The compensation of the Custodian shall be computed according to
the following schedule:
I. Activity Fee:
A. $5.00 per book entry security transaction.
For the purpose of this agreement, a "transaction "
includes, but is not limited to, a purchase sale,
maturity, redemption, tender, exchange, deposit,
withdrawal, and collateral movement of a security.
B. $28.00 per ineligible security transaction.
C. $10.00 per principal paydown on amortized issues.
II. Other Activity Fees:
A. $5.00 per wire.
B. $2.00 per outgoing check from custody account.
III. Overdraft Charges:
As described in Section 4.6 of the Custody Agreement,
overdraft charges will be at 100 basis points above the
Fed Funds rate.
An earnings credit using the most recent 90-day T-bill auction rate
applied to 90% of each day's positive collected balance will reduce
custody, FDIC and other fees as allowed by law. For each month
that the charges exceed the earnings credit, the deficiency shall
be paid to Custodian. For each month that the earnings credit
exceeds the charges, the Custodian shall carry such surplus credits
forward to subsequent month(s) and calendar year(s) until utilized.
Custodian is to be reimbursed for out of pocket expenses deemed to
be exceptional.
The above fee schedule will remain in effect until March 31, 1998
and thereafter unless changed.
As stated by the Custodian in bidding to provide custody services
to the Trust, if at any time the Trust is not completely satisfied
with the Custodian's service levels, the Custodian will cease to
charge custody fees until its responsiveness and accuracy meet the
requirements of the Trust.
TRANSFER AGENCY AGREEMENT
THIS AGREEMENT is made this 9th day of February, 1989, by and
between Capital Cash Management Trust, an unincorporated business
trust organized under the laws of Massachusetts (the "Fund"), and
ADMINISTRATIVE DATA MANAGEMENT CORP., a corporation organized and
existing under the laws of the State of New York ("ADM").
R E C I T A L S
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of
1940, as amended (the "1940 Act") currently offering one class of
shares (the "Shares"); and
WHEREAS, the Fund desires to retain ADM to serve as the Fund's
transfer agent, registrar and dividend disbursing agent, and ADM is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto
as follows:
1. Appointment. The Fund hereby appoints ADM to serve as
transfer agent, registrar and dividend disbursing agent for the
Fund, for the period and on the terms set forth in this Agreement.
ADM accepts such appointment and agrees to furnish the services
herein set forth in return for the compensation as provided for in
Paragraph 15 of this Agreement.
2. Delivery of Documents. (a) The Fund has furnished ADM
with copies properly certified or authenticated of each of the
following:
(i) Resolutions of the Fund's Board of Trustees
authorizing the execution of this Agreement;
(ii) Appendix B identifying and containing the signatures
of the Fund's officers and other persons authorized to sign Written
Instructions and give Oral Instructions, each as hereinafter
defined, on behalf of the Fund;
(iii) The Fund's Declaration of Trust filed with the
Secretary of State of the Commonwealth of Massachusetts and all
amendments thereto (such Declaration of Trust, as presently in
effect and as it shall from time to time be amended, is herein
called the "Declaration");
(iv) The Fund's By-Laws and all amendments thereto (such
By-Laws, as presently in effect and as they shall from time to time
be amended, are herein called the "By-Laws");
(v) The Fund's Registration Statement on Form N-1A under
the Securities Act of 1933, as amended (the "1933 Act") and under
the 1940 Act as filed with the Securities and Exchange Commission
("SEC") and all amendments thereto;
(vi) The Fund's most recent prospectus and statement of
additional information (such prospectus and statement of additional
information, as from time to time in effect and all amendments and
supplements thereto are herein called the "Prospectus").
(b) ADM has furnished the Fund with copies properly
certified or authenticated its Registration Statement on Form TA-1
under the Securities Exchange Act of 1934, as amended and all
annual or other public reports filed with the SEC as may be
requested by the Fund.
(c) Each party from time to time will furnish the other
with copies, properly certified or authenticated, of all amendments
or supplements to the foregoing, if any. Neither party is
obligated hereby to provide the other with otherwise confidential
information.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the
term "Authorized Person" means the Fund's officers and other
persons duly authorized by the Board of Trustees of the Fund to
give Oral and Written Instructions on behalf of the Fund and listed
on the Certificate annexed hereto as Appendix B or any amendment
thereto as may be received by ADM from time to time.
(b) "Oral Instructions". As used in this Agreement, the
term "Oral Instructions" means verbal instructions actually
received by ADM from an Authorized Person or from a person
reasonably believed by ADM to be an Authorized Person. The Fund
agrees to deliver to ADM Written Instructions confirming Oral
Instructions.
(c) "Written Instructions". As used in this Agreement,
the term "Written Instructions" means written instructions
delivered by mail, telegram, cable, telex or facsimile sending
device, and received by ADM and signed by an Authorized Person or
reasonably believed by ADM to have been signed by or authorized by
an Authorized Person unless otherwise required by a resolution of
the Board of Trustees furnished to ADM pursuant to Section 2(a)
hereof.
4. Instructions Consistent with Declaration, etc.
(a) Unless otherwise provided in this Agreement, ADM
shall act only upon Oral or Written Instructions. Although ADM may
take cognizance of the provisions of the Declaration and By-Laws of
the Fund, the Fund's Prospectus and the laws, rules and regulations
applicable to the Fund, ADM may assume that any Oral or Written
Instructions received hereunder are not in any way inconsistent
with any provisions of such Declaration or By-Laws, the Fund's
Prospectus or with any laws, rules or regulations applicable to the
Fund or any vote, resolution or proceeding of the Shareholders, or
of the Board of Trustees, or of any committee thereof.
(b) ADM shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by ADM
pursuant to this Agreement and shall have no liability for any
action which it takes or omits in accordance with such Oral
Instructions or Written Instructions, whether received from
personnel of the Fund, its investment adviser, its administrator,
or otherwise. The Fund agrees to forward to ADM Written
Instructions confirming Oral Instructions in such manner that the
Written Instructions are received by ADM, whether by hand delivery,
telex, facsimile sending device or otherwise, as promptly as
practicable after Oral Instructions are given to ADM. The Fund
agrees that the fact that such confirming Written Instructions are
not received by ADM shall in no way affect the validity of the
actions or transactions or enforceability of the actions or
transactions authorized by the Fund by giving Oral Instructions.
5. Transactions Not Requiring Instructions.
(a) In the absence of contrary Written Instructions, ADM
is authorized to take and to the extent set forth in the Activities
List shall take the following actions:
(i) issuance, transfer and
redemption of Shares;
(ii) opening, maintenance, servicing
and closing of accounts of Shareholders or prospective
Shareholders;
(iii) acting as agent of the Fund, in
connection with plan accounts, upon the terms and subject to the
conditions contained in the application relating to the plan
account in question;
(iv) causing the reinvestment in
Shareholders' accounts of dividends and distributions declared upon
shares;
(v) transferring the investment of
an investor into, or from, the shares of other open-end investment
companies, if and to the extent permitted by the Prospectus;
(vi) processing redemptions;
(vii) examining and approving legal
transfers;
(viii) furnishing to Shareholders
confirmations of transactions relating to their Shares;
(ix) preparing and mailing to the
Internal Revenue Service and all payees all information returns and
payee statements required under the Internal Revenue Code in
respect to the Fund's dividends and distributions and taking all
other necessary actions in connection with the dividend and other
withholding requirements of that Code;
(x) mailing to Shareholders annual
and semi-annual reports prepared by or on behalf of the Fund, and
mailing new Prospectuses upon their issue to shareholders.
(xi) preparation and sending such
other information from the Fund records held by ADM as may be
reasonably requested by the Fund;
(xii) preparation and sending to the
Fund such affidavits of mailing and certifications as are
reasonably requested by an officer of the Fund;
(xiii) transferring stock certificates
representing shares for other stock certificates representing such
shares;
(xiv) replacing allegedly lost, stolen
or destroyed stock certificates with or without surety bonds; and
(xv) maintaining such books and
records relating to transactions effected by ADM as are required by
the 1940 Act, or by any other applicable provisions of law, to be
maintained by the Fund or its transfer agent with respect to such
transactions, and preserving, or causing to be preserved, any such
books and records for such periods as may be required by any such
law, rule or regulation.
(b) ADM agrees to act as Proxy Agent in connection with
the holding of annual or special meetings of Shareholders, mailing
to Shareholders notices, proxies and proxy statements in connection
with the holding of such meetings, receiving and tabulating votes
cast by proxy and communicating to the Fund the results of such
tabulation accompanied by appropriate certificates, and preparing
and furnishing to the Fund certified lists of Shareholders as of
such date, and in such form and containing such information as may
be required by the Fund to comply with any applicable provisions of
law or its Declaration and/or By-Laws relating to such meetings.
ADM shall be reimbursed for out-of-pocket expenses in performing
such services, such as the costs of forms, envelopes and postage.
ADM at its cost with the consent of the Fund may employ another
firm to perform all or some of the functions required by this
subsection. The Fund shall pay such additional charges as the
parties may agree upon for the services of the Transfer Agent in
connection with special meetings of shareholders of the Fund in
excess of one such meeting held in any fiscal year of the Fund.
(c) ADM shall furnish to the Fund such information and
at such intervals as the Fund may reasonably request for the Fund
to comply with the normal registration and/or the normal reporting
requirements of the SEC, Blue Sky authorities or other regulatory
agencies. All such information shall be materially correct and
complete based upon information supplied to ADM.
(d) ADM shall, in addition to the services herein
itemized, if so requested by the Fund and for such additional fees
as the Fund and ADM may from time to time agree, perform and do all
other acts and services that are customarily performed and done by
transfer agents, dividend disbursing agents and shareholder
servicing agents of open-end mutual funds such as the Fund,
provided that normally occurring improvements in the services of
such agents will be provided without initial capital cost to the
Fund and at service fees which are competitive with those
prevailing in the industry.
(e) The parties hereto agree that without prejudice to
any other provisions of this Agreement, the functions of ADM and
the Fund under this Agreement will be substantially performed in
accordance with the Activities List set out in Appendix A to this
Agreement. Such activities List as amended from time to time is an
integral part of this Agreement. In the event that the provisions
of this Agreement are in conflict with or are inconsistent with
those set forth in such Activity List the provisions of the
Activities List shall govern.
(f) ADM agrees to provide to the Fund upon request such
information as may reasonably be required to enable the Fund to
reconcile the number of outstanding shares of the Fund between
ADM's records and the account books of the Fund.
6. Authorized Shares. The Fund hereby represents that the
Declaration authorizes the Board of Trustees to issue an unlimited
number of shares.
7. Dividends and Distributions. The Fund shall furnish ADM
with the amount of each daily dividend and with appropriate
evidence of action by the Fund's Board of Trustees authorizing the
daily declaration of dividends and distributions in respect of
Shares as described in the then current Prospectus. Upon
declaration of each dividend other than daily dividends, each
capital gain distribution or other distribution by the Board of
Trustees of the Fund, the Fund shall promptly notify ADM of the
date of such declaration, the amount payable per share, the record
date for determining the shareholders entitled to payment, the
payment date, and the reinvestment date and price which is to be
used to purchase shares for reinvestment, all sufficiently in
advance to permit ADM to process properly such dividend or capital
gain distribution or other distribution in a timely and orderly
manner.
Sufficiently in advance of each payment date to permit ADM to
have federal funds available to it for the payment thereof, the
Fund will transfer, or cause the Custodian to transfer, to ADM in
its capacity as dividend disbursing agent, at First Financial
Savings Bank, S.L.A. or at such bank or other financial institution
as ADM with the consent of the Fund shall select, which may but
need not be an affiliate of ADM, the total amount of the dividend
or distribution currently payable. After deducting any amount
reasonably believed by ADM to be required to be withheld by any
applicable tax laws, rules and regulations or other applicable
laws, rules and regulations, based upon information available to
it, ADM shall, as agent for each Shareholder and in accordance with
the provisions of the Fund's Declaration and then current
Prospectus, invest dividends in Shares in the manner described in
the Prospectus or pay them in cash.
ADM shall prepare, file with the Internal Revenue Service, and
address and mail to shareholders such returns and information
relating to dividends and distributions paid by the Fund as are
required to be so prepared, filed and mailed by applicable laws,
rules and regulations, or such substitute form of notice as may
from time to time be permitted or required by the Internal Revenue
Service. The Fund shall promptly provide ADM with the information
necessary to prepare such returns and information, all sufficiently
in advance to permit ADM to prepare properly and mail such returns
and information in a timely and orderly manner. On behalf of the
Fund, ADM shall pay on a timely basis to the appropriate Federal
authorities any taxes withheld on dividends and distributions paid
by the Fund.
8. Notification of ADM: The Fund shall promptly notify ADM
of the closing net asset value per share and the offering price per
share each day there are any transaction in shares of the Fund, but
in any event not later than sixty (60) minutes after the closing of
the New York Stock Exchange (if the Fund is not a money market
Fund) or before 1:00 p.m. New York Time (if the Fund is a money
market Fund.) In the event ADM is not so notified, it may assume
that the price is unchanged from the prior price.
9. Communications with Shareholders.
(a) Communications to Shareholders. The Fund shall
prepare, print and provide ADM with sufficient quantities of all
communications by the Fund to its shareholders all sufficiently in
advance to permit ADM to properly address and mail in a timely and
orderly manner all communications by the Fund to its Shareholders,
including reports to Shareholders, dividend and distribution
notices and proxy material for its meetings of Shareholders. ADM
agrees to mail all such material to shareholders of the Fund in a
timely manner. ADM or a firm employed by ADM will at ADM'S cost and
expense receive and tabulate the proxy cards for the meetings of
the Fund's Shareholders.
(b) Correspondence. ADM will answer such correspondence
from Shareholders, securities brokers and others relating to its
duties hereunder and such other correspondence as may from time to
time be mutually agreed upon between ADM and the Fund.
10. Records. ADM shall keep the records described on the
Activities List, including but not limited to the following:
(a) accounts for each Shareholder showing the following
information:
(i) name, address and United States
Tax Identification or Social Security number;
(ii) number of Shares held and number
of Shares for which certificates, if any, have been issued,
including certificate numbers and denominations;
(iii) historical information regarding
the account of each Shareholder, including dividends and
distributions paid and the date and the price, if applicable, for
all transactions in a Shareholder's account;
(iv) any stop or restraining order
placed against a Shareholder's account;
(v) any correspondence relating to
the current maintenance of a Shareholder's account;
(vi) information with respect to
withholdings in the case of a foreign account; and
(vii) information with respect to
withholding in the case of an account subject to backup
withholding;
(ix) any information required in
order for ADM to perform any calculations contemplated or required
by this Agreement.
(b) If agreed between the Fund and ADM, subaccounts may
be maintained for each Shareholder requesting such services in
connection with shares held by such Shareholder for separate
accounts containing the same information for each subaccount as
required by subparagraph (a) above.
The books and records pertaining to the Fund which
are in the possession of ADM shall be the property of the Fund.
Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws and rules and
regulations in effect from time to time. ADM will, if so requested
by the counsel to the Fund, modify the manner in which such books
and records are prepared and maintained so as to comply with the
reasonable opinion of such counsel as to such laws and rules. The
Fund, or the Fund's authorized representatives, shall have access
to such books and records at all times during ADM's normal business
hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by ADM to the Fund or the
Fund's authorized representative at the Fund's expense.
11. Reports and Other Information.
Upon reasonable request of the Fund, provided that the
cost or effort required therefor are, singly or in the aggregate,
not unduly burdensome or expensive to it, ADM will promptly
transmit to the Fund, at no additional cost to the Fund, (a)
documents and information in the possession of ADM and not
otherwise available necessary to enable it and its affiliates to
comply with the requirements of the Internal Revenue Service, the
SEC, the National Association of Securities Dealers, Inc., state
blue sky authorities, and any other regulatory bodies having
jurisdiction; (b) documents and information in the possession of
ADM necessary to enable the Fund to conduct annual and special
meetings of its shareholder; and (c) such other information,
including shareholder lists and statistical information concerning
accounts as may be agreed upon from time to time between the Fund
and ADM.
12. Cooperation with Accountants. ADM shall cooperate with
the Fund's independent public accountants and shall take all
reasonable action in the performance of its obligations under this
Agreement to assure that the necessary information is made
available on a timely basis to such accountants for the expression
of their unqualified opinion, including but not limited to the
opinion included in the Fund's annual report to Shareholders and on
Form N-SAR, or similar form.
13. Confidentiality. ADM agrees on behalf of itself and its
employees to treat confidentially all confidential records and
other confidential information relative to the Fund and its prior,
present or potential shareholders and relative to the Fund's
Distributor and its prior, present or potential customers. ADM
will under normal circumstances not divulge any such confidential
records or information to anyone other than the shareholder,
dealer, Fund or other person, firm, corporation or other entity
which ADM reasonably believes is entitled to such records or
information except, after prior notification to and approval in
writing by the Fund, which approval shall not be unreasonably
withheld and may not be withheld where ADM may be exposed to civil
or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted
authorities, or when so requested by the Fund.
ADM shall not be considered to have breached this provision if
it, in good faith, has provided information or documents to an
individual, firm, corporation or other entity (governmental or
otherwise) which it reasonably believes is entitled to such
information or documents; provided that it shall, with respect to
any non-routine governmental investigation or inquiry, first
provide notice thereof to the Fund.
14. Equipment Failures. ADM shall maintain adequate and
reliable computer and other equipment necessary or appropriate to
carry out its obligations under this Agreement. In the event of
computer or other equipment failures at its own facilities beyond
ADM's reasonable control, ADM shall, at its expense, take
reasonable steps to minimize service interruptions. The foregoing
obligation of ADM shall not extend to computer terminals owned or
maintained by others, located outside of premises maintained by
ADM. ADM represents that it has presently in effect backup and
emergency systems described on Appendix C hereto. ADM will
maintain such arrangements or equivalent while this Agreement is in
force unless ADM notifies the Fund to the contrary and establishes
to the satisfaction of the Fund that industry standards no longer
require such arrangements.
15. Compensation. As compensation for the services rendered
by ADM during the term of this Agreement, ADM shall be entitled to
receive such reimbursement for out-of-pocket expenses and such
compensation is specified on Appendix D attached hereto or as may
from time to time be otherwise agreed on in writing between the
parties.
16. Responsibility of ADM. In the performance of its duties
hereunder, ADM shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within
reasonable limits to insure the accuracy and completeness of all
services performed under this Agreement.
ADM and the affiliates and agents of ADM shall not be
responsible for or liable for any taxes, assessments, penalties,
fines or other governmental charges of whatever description which
may be levied or assessed on any basis whatsoever in connection
with withholding of amounts, verifying or providing taxpayer
identification numbers or otherwise under applicable tax laws and
preparing and filing of tax forms, excepting only for taxes
assessed on the basis of its compensation hereunder, provided that
ADM exercises the care and diligence required by this Agreement,
and in the case of its responsibilities for backup withholding,
verifying or providing taxpayer identification numbers or
otherwise, as to any shareholder from whom such withholding is
required, it withholds the necessary amount and attempts with
reasonable frequency, but no less often than once a calendar
quarter, to obtain the necessary information from the shareholder
until withholding is no longer required.
ADM and the affiliates and agents of ADM shall not be
responsible or liable for the actions, inactions, or any losses or
damages caused by any such actions or inactions of any agents,
brokers or others who are specifically selected by the Fund in
writing.
17. Release. ADM understands that the obligations of this
Agreement are not binding upon any Shareholder of the Fund
personally, but bind only the Fund's property; ADM represents that
it has notice of the provisions of the Fund's Declaration
disclaiming Shareholder liability for acts or obligations of the
Fund.
The Fund understands that the obligations of this
Agreement are not binding upon the parent corporation of ADM or any
affiliates or subsidiaries of ADM and that the Fund, its Directors,
Trustees, Officers, Shareholders and others shall look only to the
separate assets of ADM.
18. Right to Receive Advice. (a) Advice of Fund. If ADM
shall be in doubt as to any action to be taken or omitted by it, it
may request, and shall receive, from the Fund directions or advice,
including Oral or Written Instructions where appropriate.
(b) Advice of Counsel. If ADM shall be in doubt as to
any question of law involved in any action to be taken or omitted
by ADM, it may request advice without cost to itself from counsel
of its own choosing (who may be counsel for the Adviser, the Fund
or ADM, at the option of ADM).
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by ADM
pursuant to subparagraph (a) of this paragraph and advice received
by ADM pursuant to subparagraph (b) of this paragraph, ADM shall be
entitled to rely on and follow the advice received pursuant to the
latter provision alone.
(d) Protection of ADM. ADM shall be fully protected in
any action or inaction which it takes in reliance on the provisions
of the Fund's Prospectus, procedures established between ADM and
the Fund, or in reliance on any directions, advice or Oral or
Written Instructions received pursuant to subparagraph (a) or (b)
of this paragraph which ADM, after receipt of any such directions,
advice or Oral or Written Instructions, in good faith believes to
be consistent with such directions, advice or Oral or Written
Instructions, as the case may be. However, nothing in this
paragraph shall be construed as imposing upon ADM any obligation
(i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions,
advice or Oral or Written Instructions when received, unless, under
the terms of another provision of this Agreement, the same is a
condition to ADM's properly taking or omitting to take such action.
19. Compliance with Governmental Rules and Regulations.
ADM shall have no responsibility for insuring that the
contents of each Prospectus of the Fund complies with all
applicable requirements of the 1933 Act, the 1940 Act, and any
laws, rules and regulations of governmental authorities having
jurisdiction, except that ADM shall cause a senior officer of ADM,
who shall be its General Counsel unless otherwise agreed upon, or
his designee to provide such information and represents and
warrants that all information so furnished by it for specific use
in any such Prospectus will be correct and complete in all material
respects.
20. Records From Others: ADM, its affiliates and agents
shall have no responsibility or liability for the accuracy or
completeness of any documents, records, or information maintained
or provided by or reasonably believed by ADM to have been
maintained or provided by any prior transfer agent, any shareholder
or dealer, or by the Fund or anyone on behalf of the Fund and the
Fund hereby specifically agrees that ADM, its affiliates and agents
may rely on and will be fully protected in so relying on the
completeness and accuracy of all such documents, records and
information; provided, that ADM will inform the Fund of material
errors coming to its attention in the course of the performance of
its duties hereunder.
ADM, its affiliates and agents may conclusively rely on, and
will be fully protected in relying on, the authenticity and
accuracy of any documents or communications, whether oral, written
or facsimile, it receives from the Fund or which ADM, its
affiliates or agents reasonably believes are from the Fund,
provided these are received from Authorized Persons in accordance
with this Agreement. This provision will apply to, among other
things, the daily public offering and net asset value prices for
Fund shares; instructions from the Fund concerning dividends and
other distributions; and other matters relating to the Fund and its
shareholders.
21. Responsibilities of the Fund: The Fund and the Agents of
the Fund hereby acknowledge and agree that ADM, its affiliates and
its agents are responsible only for those functions and duties set
forth in this Agreement and unless so set forth are not responsible
for any of the following which are to be handled by the Fund:
(a) creating or maintaining any records on behalf of the Fund
or others required by any federal or state law, or
regulation or rule of any agency thereof or any self-
regulatory authority except (i) those relating to
shareholder account information set forth in Rule 31a-
1(b)(2)(iv) promulgated under the 1940 Act or equivalent
regulation applicable from time to time; and (ii) such
additional records as may reasonably be requested from
time to time by the Fund which are customarily maintained
by transfer agents to mutual funds, and which ADM by use
of its best efforts may provide at minimal cost and
inconvenience to it; with respect to these records ADM
agrees that they: (i) are the property of the Fund; (ii)
will be maintained by ADM for the period prescribed in
Rule 31a-2 or equivalent regulation; (iii) will be made
available, upon request to the Fund and the SEC; and (iv)
will be surrendered promptly upon the request of the
Fund;
(b) determining the legality of any sale, exchange, issuance
or redemption of any shares of the Fund;
(c) determining the legality of any communications, oral or
written, which is sent or provided by ADM, its affiliates
or its agents on behalf of the Fund;
(d) complying with any federal or state laws or the
regulations or rules of any agency thereof or of any
self-regulatory authority except those specifically
applicable to ADM as a transfer agent;
(e) filing any documents on behalf of the Fund or any one
else with any federal or state government or with any
agency thereof or of any self-regulatory authority except
ADM will file with the Internal Revenue Service copies of
1099 Div, 1099R and 1099B Forms sent to shareholders of
the Fund and forms relating to withholding and non-
resident alien withholding;
(f) monitoring the activities of the Fund or any one else or
their compliance with applicable law, rules and
regulations or with the provisions of the Fund's
Prospectus, of Trust, By-Laws or other governing
instruments; or
(g) compliance of the Fund or others with applicable federal
and state laws, regulations and rules of any agency
thereof, or of any self-regulatory authority pertaining
to the registration of the Fund or of shares of the Fund
or the legality of their sale although ADM will, in order
to provide the Fund with assistance in complying with
normal Blue Sky requirements, upon the reasonable request
of the Fund provide the Fund with a report generated from
the information readily available to ADM detailing the
amount of shares of the Fund purchased and redeemed and
the states of residence of the shareholders purchasing or
redeeming such shares.
22. Information and Documents: (a) The Fund shall promptly
provide ADM with the current Prospectus for the Fund, the Annual
and Semi-Annual Reports to shareholders of the Fund, Proxy
Statement and other Fund material, all in sufficient quantities and
sufficiently in advance to permit ADM to provide them to
shareholders of the Fund in a timely and orderly fashion.
(b) To the extent necessary or appropriate to enable ADM to
carry out its responsibilities under this Agreement, the Fund shall
(i) promptly notify ADM of all material events which
affect the Fund or any affiliate of the Fund;
(ii) promptly notify ADM of any suits or other
proceedings threatened or actually instituted
against the Fund or any affiliate of the Fund by the
federal government, any state government, or any
agency thereof (including but not limited to the
SEC, the Securities Commission of any state) or by
the National Association of Securities Dealers,
Inc., or any other self-regulatory authority;
(iii) promptly notify ADM of any consent order, stop
orders or similar orders affecting the Fund or any
affiliate of the Fund issued by the federal
government, any state government, or any agency
thereof (including but not limited to the SEC, the
Securities Commission of any state) or by the
National Association of Securities Dealers, Inc. or
any other self-regulatory authority;
(iv) promptly provide ADM, with copies of the audited
Annual Financial Statements for each affiliate of
the Fund which is an Investment Advisor, Investment
Sub-Advisor, Distributor or Administrator of the
Fund;
(v) promptly provide ADM, upon request, with copies of
any filings made by the Fund or any affiliate of the
Fund which is an Investment Advisor, Investment Sub-
Advisor, Distributor or Administrator of the Fund
with the federal government or any state government
or any agency thereof or with any self-regulatory
authority; and
(vi) promptly provide ADM, upon request, with copies of
any documents relating to items (ii) and (iii)
above.
(vii) discuss with ADM changes in the description of ADM
and the services which ADM provides to shareholders
contained in the Prospectus of the Fund at the time
of filing any amendments to the registration
statement of the Fund involving any such change.
ADM shall use its best efforts to assure the
accuracy and completeness of all material
information furnished by it for inclusion in any
such document.
23. Indemnification. Neither party nor any of its nominees
shall be indemnified against any liability to the other party (or
any expenses incident to such liability) arising solely out of (a)
such party's or such nominee's own willful misfeasance, bad faith
or gross negligence or reckless disregard of its duties in
connection with the performance of any duties, obligations or
responsibilities provided for in this Agreement or (b) such party's
or such nominee's own negligent failure to perform its duties
expressly provided for in this Agreement or otherwise agreed to in
writing.
24. Liability. (a) ADM shall be responsible for the
performance of its obligations under this Agreement notwithstanding
the delegation of some or all of such obligations to others in
accordance with the terms of this Agreement.
(b) ADM shall not be responsible for loss, liability cost
or expense arising out of occurrences beyond its control caused by
fire, flood, power failure, unanticipated equipment failure, acts
of God, or war or civil insurrection; provided, however, that it
shall have contingency planning for equipment or electrical failure
and such other contingencies as provided in this Agreement.
25. Insurance. ADM shall maintain fidelity, errors and
omissions and other insurance coverage in amounts and on terms and
conditions as set forth in information provided to the Fund from
time to time.
26. Advancement of Monies: Nothing in this Agreement shall
require ADM or any affiliate or agent of ADM to pay any monies
prior to its receipt of federal funds for such payment or for ADM
or any of its affiliates or agents to incur or assume any liability
for the payment of any such monies prior to its receipt of federal
funds for such payment.
27. Exclusivity. It is expressly understood and agreed that
the services to be rendered by ADM to the Fund under the provisions
of this Transfer Agency Agreement are not deemed to be exclusive
and ADM shall be free to render similar or different services to
others.
28. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are reasonably
necessary to effectuate the purposes hereof.
29. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the
party against which enforcement of such change or waiver is sought.
30. Assignment. This Agreement and the performance hereunder
may not be assigned by ADM without the Fund's written consent. Not
withstanding the previous sentence, ADM may, without the Fund's
consent, assign the performance of all or a portion of its
responsibilities and duties hereunder to an affiliate of ADM,
provided that the Fund shall incur no additional cost or expense in
connection therewith.
31. Declaration and Termination. This Agreement shall
continue until termination by the Fund on sixty (60) days' written
notice or by ADM on ninety (90) days' written notice.
32. Notices. All notices and other communications, including
Written Instructions (collectively referred to as "Notice" or
"Notices" in this paragraph), hereunder shall be in writing or by
confirming telegram, cable, telex or facsimile sending device.
Notices shall be addressed;
(a) if to ADM at:
Administrative Data Management Corp.
10 Woodbridge Center Drive
Woodbridge, New Jersey 07095
Attn: Ms. Anne Condon, Vice President
or to such other address as ADM shall instruct the Fund, in
writing, from time to time;
(b) if to the Fund at:
___________________________
200 Park Avenue, Suite 4515
New York, New York 10017
Attention: President
or to such other address as the Fund shall instruct ADM, in
writing, from time to time; or
(c) if to neither of the foregoing, at such other address as
shall have been notified to the sender of any such Notice or other
communication.
33. Miscellaneous. This Agreement embodies the entire
agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings relating to the
subject matter hereof, provided that the parties hereto may embody
in one or more separate documents their agreement, if any, with
respect to Oral Instructions. The captions in this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a
contract made in New York and governed by New York law. If any
provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. None of the provisions
contained in this Agreement shall be deemed waived or modified
because of a previous failure of a party to insist upon strict
performance thereof. This Agreement shall be binding and shall
inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below
on the day and year first above written.
CAPITAL CASH
MANAGEMENT TRUST
/s/Kenneth L. MacRitchie /s/Lacy B. Herrmann
Attest:By: ______________________ By:______________________
Kenneth L. MacRitchie, Lacy B. Herrmann,
Assistant Secretary President
ADMINISTRATIVE DATA
MANAGEMENT CORP.
/s/Andrew J. Donohue /s/Glenn O. Head
Attest:By: ______________________ By:_______________________
Name: Andrew J. Donohue Name: Glenn O. Head
Title: Secretary & General Title: Chairman
Counsel
<PAGE>
APPENDIX A
ACTIVITIES LIST
It is understood that the Fund, its Custodian, and other
persons, firms, corporations or other entities performing services
for or on behalf of the Fund shall provide ADM and the Fund with
such services, information, or other assistance as may be necessary
or appropriate to permit the Transfer Agent to properly perform the
services hereunder.
A. SHAREHOLDER ACCOUNTING SERVICES
1. General Scope
All terms used herein shall be as defined in the attached
Agreement (the "Agreement") except that ADM is referred
to as the "Transfer Agent." In accordance with the terms
of the Agreement the Transfer Agent will provide a
comprehensive Shareholder accounting service generally
consistent with that provided to other investment
companies, including:
a. dividend accounting;
b. arrangement for wire receipt and payout of
Shareholder funds;
c. to the extent that it is reasonably within the
control of, or can be reasonably arranged without
additional cost by, the Transfer Agent, the rapid
and efficient transfer of investment monies between
various accounts;
d. to the extent that it is reasonably within the
control of, or can reasonably be arranged without
additional cost by, the Transfer Agent, the
effective and controlled processing of expedited
redemptions and exchanges by telegraphic and
telephonic means.
2. Computer Accounting and Record Keeping
The Transfer Agent will perform daily maintenance and
routine file update.
The Transfer Agent will perform a dividend credit run as
required in order to credit all existing Shareholder
accounts with each daily dividend, monthly dividend,
capital gain distribution or other distribution. The
Transfer Agent will establish new and adjust or close
existing Shareholder accounts if necessary on or as of
each business day.
The Transfer Agent will take reasonable precautions for
safeguarding of all Shareholder accounts during these
computer runs.
The Transfer Agent will provide continuous proof to the
outstanding Shares maintained by the Fund on a daily
basis, and off-line availability of all file data
pertaining to Shareholder accounts.
The Transfer Agent will to the extent technically
feasible create and maintain the ability to liquidate and
back out dividends reinvested in accounts which are
subsequently liquidated by or on behalf of the Fund due
to nonreceipt of funds, improper registration, or other
sufficient reason.
3. Establishing and Servicing Accounts
The Transfer agent will, as set forth in the Fund's
Prospectus, or substantially in conformity with
procedures established by or on behalf of the Fund,
accept instructions from investors to open new accounts
and perform such functions consistent with opening a new
account:
a. Accept applications in proper form sent directly to
the Fund or its Custodian when they are properly
delivered to the Transfer Agent;
b. Accept applications in proper form sent directly to
it when they are received by the Transfer Agent;
c. Transfer Shares accompanied by apparent proper
instructions;
d. Audit and verify payment items for apparent
compliance with the requirements established by the
Fund, e.g. minimum investment amount, apparent
proper endorsements on third party checks or drafts
if the Fund elects to accept such third party checks
or drafts, and other particulars as prescribed in
the prospectus. The Fund will provide the Transfer
Agent, from time to time, with names and taxpayer
identification numbers of individuals entitled to
purchase shares at a reduced offering price as
described in the prospectus;
e. Review existing accounts to determine whether there
are any other existing accounts with the same
registration; process W-9 or similar forms received
by the Transfer Agent; and compare upon receipt of
a computer tape from the Internal Revenue Service
taxpayer identification numbers contained in such
tape against those maintained by the Transfer Agent
for the Fund.
f. Assign account numbers as necessary and, where
appropriate, indicate the account number on
applications;
g. Review payment items to determine whether the payee,
original or by endorsement, on such payment items
corresponds to the registration of the account to
which it is to be credited (permitted exceptions
include ADM or the Fund specified as the payee when
accompanied by a valid account number or all
necessary documents to establish a new account or
such other exceptions as the Transfer Agent and the
Fund shall agree);
h. Upon opening incoming mail, record the date and
approximate time of day all checks were received;
i. Produce microfilm record of all incoming checks and
other documentation on filmstrips or other microfilm
retrieval method so as to be retrievable and
reproducible upon request;
j. Process address changes and acknowledge such changes
to previous address of record;
k. Answer inquiries from Shareholders or other
individuals, corporations, or other entity who
appear to be the Shareholder, dealer or otherwise
entitled to receive information as to account
information;
l. Open new accounts per telephone instructions
received from a prospective Shareholder, his dealer
or his fiduciary pending receipt of funds
transmitted by bank wire or other means; forward a
new account application to the prospective investor;
and issue a confirmation, including duplicates where
requested, when funds are received by the Transfer
Agent or the Fund's Custodian; under normal
circumstances the new account application bearing
the Shareholder account number assigned must be
completed by or appear to have been completed by the
Shareholder and received by the Transfer Agent
before any redemption orders are accepted and
processed for that account.
m. Prepare confirmations in such form as may be agreed
between the Fund and the Transfer Agent from time to
time for all "Open Accounts" after each non-dividend
transaction in a Shareholder's account which affects
the share balance; mailing confirmations to the
Shareholder as such changes occur;
n. Process on a daily basis if necessary or appropriate
routine transactions such as:
(1) Deposit or withdrawal of Shares from
Shareholders' accounts;
(2) Changes of address;
(3) Miscellaneous changes;
(4) Stop-transfers;
(5) Instructions relating to the remittance or
reinstatement of Dividends and other
distributions;
o. Incorporate in the Shareholder accounting software
and procedures the necessary flags, audits, and
tests reasonably designed to assure that the various
provisions and requirements specified elsewhere in
this Agreement to be performed by the Transfer Agent
will be substantially satisfied.
B. TRANSFER AGENT SERVICES
In accordance with the Agreement, and in particular Section
5(d) thereof, the Transfer Agent will perform the functions
normally performed by the Transfer Agent for other investment
companies of a similar type. Such functions shall include but
not necessarily be limited to:
1. Processing
a. Keep such records in the form and manner as the
Transfer Agent may deem advisable but not
inconsistent with the rules and regulations of
appropriate governmental authorities applicable to
the Transfer Agent or as may otherwise be agreed
from time to time in writing between the Fund and
the Transfer Agent;
b. Process transfers as requested by Shareholders or
persons, firms, corporations or other entities the
Transfer Agent reasonably believes to be the
Shareholder or authorized to act on behalf of the
Shareholder including obtaining and reviewing papers
and all other documents necessary to satisfy
transfer requirements; the Fund will, upon request
of the Transfer Agent, advise the Transfer Agent of
the transfer requirements of the Fund, and the
Transfer Agent will be fully protected by the Fund
if it is following such transfer requirements;
c. Process initial and subsequent investments from
Shareholders;
d. On a semi-monthly or other basis acceptable to the
Transfer Agent and the Fund initiate, accept and
process pre-authorized checks or, when available,
electronic funds transfers drawn against
Shareholders' checking accounts;
e. Process and record redemption of Shares to satisfy
ordinary redemptions and Plan account;
f. Proportionally allocate dividends, which are
provided to the Transfer Agent by the Fund in gross
dollar amount, to the benefit of the Fund
Shareholders entitled to receive them. The
procedure used must show that the amounts allocated
daily substantially balance to the gross dollar
amount provided by the Fund to the Transfer Agent.
Until otherwise specified by the Fund, dividends
shall be in accordance with the following: Three-
day accrual on Monday for the previous weekend; Two-
day accrual on the first business day following a
holiday or Four-day accrual if the holiday
immediately precedes or follows a weekend;
compatibility with the Merrill Lynch Automatic
Investment of Dividends System, and the issuance of
all reports incidental thereto provided the Fund's
method of operation is so compatible.
2. Custody and Control of Shares and Certificates:
Certificates will not be issued except on Shareholder
request but shares will be credited to the Shareholder's
account in non-certificate form. The Transfer Agent will
examine certificates surrendered for transfer or
redemption, or requests for transfer or redemption of
shares not represented by certificates, for apparent
genuineness or alterations; pass upon the apparent
validity thereof including endorsements, signature
guarantees and (if applicable) tax stamps or waivers,
provided that the Transfer Agent shall not be required to
compare any such endorsements against other records it
maintains except in accordance with written procedures
agreed upon between it and the Fund. The Transfer Agent
will also:
a. Countersign all certificates;
b. Prepare, mail, or deliver certificates for original
issue, subsequent investments, exchanges, or
transfers upon request from the Shareholder or one
reasonably believed to be the Shareholder;
c. Prepare, mail, or deliver certificates for Shares
previously held in non-certificate form;
d. Deposit certificate Shares;
e. Cancel surrendered certificates;
f. Establish and maintain safeguards for cancelled and
uncancelled certificates;
g. Establish and maintain a system to monitor stop-
transfers;
h. Replace lost certificates.
C. SUBSCRIPTION AGENT SERVICES:
The Transfer Agent will act as Subscription Agent for the
Fund. In addition to subscription functions described
elsewhere in this Agreement, the Transfer Agent will:
1. Maintain a Subscription Account for the Fund. This
account shall be established and operated so as to
satisfy the following criteria:
a. The account shall be established by the Transfer
Agent for the benefit of the Fund in accordance with
the terms of the Agreement;
b. The account shall be provided at no additional cost
except as may otherwise be stated in Appendix D of
the Agreement;
c. The account shall serve as the sole depository for
subscription monies intended for the purchase of
Fund Shares until such funds are transferred to the
Custody Account;
d. The Transfer Agent shall be prepared to receive and
efficiently process incoming cash, checks, Federal
Reserve Drafts and bank wire transfers of funds;
e. Withdrawals from the account shall be for the
purpose of transferring funds into the Custody
Account or, where appropriate, the crediting or
payment of commission or dealer's commissions;
withdrawals are also permitted to accommodate net
settlements with the Custodian;
f. No dividend or redemption or any other payments
shall be made to Fund Shareholders from the
Subscription Account;
g. The Transfer Agent will cashier all items presented
in payment as expeditiously as possible.
2. In connection with managing the Subscription Account, the
Transfer Agent will exercise all possible care in
satisfying operational requirements in each of the
following critical areas:
a. Validation Receipt of Good Subscription Funds
Procedures and criteria are to be established by the
Transfer Agent and approved by the Fund for the
purpose of providing assurance that good (collected)
funds were received from Shareholders prior to
paying out any redemption proceeds (under a Plan
account or as a result of one or more specific
redemption requests). Such procedures are to deal
with:
(1) Screening subscriptions to prevent:
-forgery, fraud, improper endorsement or other
unauthorized use particularly when accepting third
party funds;
-maintenance of accounts in names other than proper
form; funds received where the legal existence or
legal capacity of the subscriber is in doubt shall
be employed in a temporary investment status until
a proper account is established to which prior
income will be credited, or until the funds are
returned upon determination that no subscriber of
legal existence and capacity exits.
(2) Establishing and maintaining procedures
reasonably designed to assure the clearance and
collection of checks which are otherwise properly
drawn.
In this regard, the Transfer Agent with the approval
of the Fund will:
-Establish for all parts of the United States the
normal number of days required for check clearance
and return notice of uncollectability;
-Establish redemption amount and clearing time
criteria which together place an automatic stop on
issuance of certificates, if any, and upon
redemption payments until the Transfer Agent
reasonably believes that good subscription funds
were received.
In general, the redemption of a subscription payment
received in the form of a check, draft or similar
instrument shall not be made until the Transfer
Agent has determined, by telephone call to the
drawee bank or otherwise, that the deposit has
cleared the drawee bank or until fifteen (15)
calendar days after the receipt of such subscription
payment, in order to permit the orderly clearing
thereof.
-Provide a means to record and promptly retrieve the
status of a subscription received (which may include
days remaining before redemptions permitted, name of
bank, or other similar information as may be agreed
upon.)
Shareholder checks returned for insufficient funds or
other reasons will be promptly processed for liquidation
on or after the date of receipt or notification to the
effect that a check is being returned. Returned checks
will be cleared promptly and processed through a Returned
Check Account in conjunction with the following actions:
(1) Place a freeze on the account to prevent redemption
of the amount of such returned check or such lesser
amount as is in the affected account;
(2) Determine how many shares are to be liquidated due
to the investment attributable to such returned
check;
(3) Calculate and back out accrued dividends, if any,
attributable to such investment;
(4) Process the liquidation for the appropriate amount;
(5) Mail the Shareholder confirmation of the liquidation
and the check with a letter of explanation;
(6) Allocate the accrued dividends, if any, which were
attributable to such investment, as the Fund shall
direct which will normally be to the remaining
Shareholder accounts as of the next month-end
dividend run;
(7) Take reasonable steps to recover commissions or
dealer concessions applicable to such returned
check, although the Distributor shall be ultimately
responsible therefor.
b. Establish Procedures to Process Effectively Bank
Wire Transfers
Establish and maintain procedures reasonably
designed by the Transfer Agent and approved by the
Fund to maintain positive control over movements of
incoming money by bank wire so as to:
(1) Accept requests (WATS and local calls) for bank wire
instructions, record account information and client
telephone number, assign as appropriate a wire
control number, establish Shareholder pending file,
and if appropriate alert the bank wire department;
(2) Advise the Fund of pending bank wire receipts at
selected cutoff times during the course of each
business day so as to facilitate full investment of
Fund assets;
(3) Confirm to the Fund actual bank wire receipts at
selected cutoff times during the course of each
business day;
(4) Close out pending Shareholder files if bank wire
receipts are not received as of the date agreed
upon;
(5) Open new or credit existing Shareholder account in
accordance with the provisions of the current
prospectus upon receipt of bank wire funds;
(6) Take appropriate action to secure from Shareholders
who invest by bank wire the necessary written
applications and redemption authorizations.
D. DIVIDEND DISBURSING AND REDEMPTION AGENT SERVICES
In performance of the Dividend Disbursing and Redemption Agent
functions, the Transfer Agent will provide the Fund with
regular checks (or electronic funds transfer if available, at
the Shareholder's option) and carry out the following
functional activities:
1. Dividends
a. The Fund shall advise the Transfer Agent of dividend
amounts which shall then be applied as described in
the Prospectus or as directed by the Fund, or its
officers or Trustees;
b. Confirmation of dividend reinvestments shall be
mailed to Shareholders after each reinvestment.
c. Additional dividend information, if provided by the
Fund to the Transfer Agent shall then be provided to
Shareholders upon written request.
2. Redemption Procedures
The Transfer Agent with the approval of the Fund shall
establish procedures reasonably designed to insure that
redemption requirements established by the Transfer Agent
and agreed to by the Fund have been met, including the
receipt and examination of stock certificates,
endorsements, signature guarantees and obtaining any
needed papers or documents, including properly completed
Application, where lacking. More specifically:
a. The Transfer Agent will accept redemption requests
in written, telegraphic or telephonic form provided
the necessary instructions and authorizations are
reasonably believed by the Transfer Agent to be in
good form. Generally, telephonic redemption
requests will be repeated for confirmation to the
person making the request, and upon voice
confirmation by such person, will be recorded in a
log kept for that purpose.
b. Requests for the redemption of shares not
represented by certificates received and without
signature guarantees will be honored only if:
(1) the applicable portion of the Application has been
completed and the proceeds are forwarded to the
previously designated bank account, address, or
other destination identified on the Application;
(2) Expedited Redemption Authorization instructions
filed at any time other than upon the original
opening of a Shareholder's account are filed on an
appropriate form and bear or reasonably appear to
bear a signature guarantee;
(3) Shareholder accounts in the name of joint tenants
shall generally be handled on the basis of jointly
signed instructions and signature guarantees (where
applicable) for any payments.
c. The Transfer Agent will provide a means to record,
call up, and display on Cathode Ray tube or
otherwise an appropriate symbol or other indication
that redemption authorization instructions are on
file and appear to be in proper form.
d. All redemption requests will be promptly reviewed to
insure:
(1) that there are sufficient shares available in the
Shareholder's account;
(2) the applicable subscription check has not been
returned to ADM or its agent and the applicable
period of days has expired before using the funds
for redemption (see above);
(3) that no redemptions in accounts represented in whole
or in part by certificates are effected without
cancellation of an adequate number of certificate
shares, if necessary.
(4) that no signature guarantees shall be acceptable
unless they reasonably appear to have been provided
by a commercial bank or by a brokerage firm which is
a member of the New York, American, Midwest, or
Pacific Stock Exchanges, except as otherwise stated
in the Prospectus or in instructions received from
the Fund.
e. Certificate acceptance and replacement:
(1) Accept for redemption, certificates received for
redemptions accompanied by what reasonably appears
to be Shareholder's instructions.
(2) Furnish to the Shareholder, after with the policies
and procedures established by the Fund and the
Transfer Agent proper investigation and receipt of
necessary documentation for protection of the Fund,
replacement certificates and dividend and redemption
checks alleged to have been lost, stolen, destroyed,
or not received.
3. Dividend Account
The Transfer Agent will maintain a Dividend Account for
the Fund. This account shall be established and operated so as to
satisfy the following criteria:
1. This account shall be used to disburse cash in
payment of dividends, capital gain distributions and
returns of capital.
2. This account shall be operated in the same manner as
the Redemption Account (see below) except as otherwise
required by the purpose for which it shall be used; it
may, at the election of the Transfer Agent, be operated
as a combined account with the Redemption Account (see
below).
4. Redemption Account
The Transfer Agent will maintain a Redemption Account for
the Fund. This account shall generally be established
and operated so as to satisfy the following criteria.
1. All withdrawals from the account shall be for the
exclusive purpose of making payments to Fund
Shareholders. These payments are to be made only to
satisfy automatic or other account liquidation payment
requirements.
2. No deposits or subscription receipts shall be made
directly in the Redemption Account.
3. The Transfer Agent will advise the Fund at various
mutually established times during each business day as to
the total demand for valid payments to be honored that
day or the following day. Valid payments consist of
liquidations of shares for which funds are payable in
cash or check to shareholders, whether initiated by
check, wire, letter, automatic distribution plan,
determination of the Fund or otherwise. The notification
of demand for payments shall only include valid demands
for payment which are actually in hand, such that the
Fund need not fund the Redemption Account with any more
funds than are actually required. The Fund agrees to
fund, or cause the Custodian to fund, the Redemption
Account sufficiently to cover all demands for payment
which are currently valid or will become valid the
following business day. The Fund and the Transfer Agent
agree that a goal of this procedure is to allow for the
maximum employment of Fund Assets while still adequately
funding the Redemption Account. The Transfer Agent and
its affiliates shall not be required to honor any demand
for payment for which previously collected funds have not
been received from the Custodian or other Agent of the
Fund.
4. The Transfer Agent with the approval of the Fund will
develop specific procedures reasonably designed to
protect against:
(a) raising of dollar amounts or any other alteration of
instruments representing redemption payments;
(b) fraudulent or forged endorsements;
(c) other improper use of a redemption item which could
result in the Fund or its Shareholders being
defrauded.
Such procedures shall take into account the type of
accounts involved, the sums involved and the cost
effectiveness of such procedures.
5. Employ due diligence in servicing redemption requests as
promptly as possible.
E. EXCHANGE AGENT SERVICES
The Transfer Agent will provide services as required to
implement the exchange privileges described from time to time
in the prospectus of the Fund. The Transfer Agent will
install and utilize a telephonic system that is designed to
afford the Shareholder the opportunity to exchange Shares
among eligible Funds and that will record the telephone
request for such exchange. It is understood that the Transfer
Agent is only able to effect exchanges among funds for which
the Transfer Agent has entered into an agreement similar to
this Agreement for provision of Transfer Agency services.
F. PROXY AGENT SERVICES
The Transfer Agent agrees to act as Proxy Agent in connection
with the holding of annual or special meetings of
Shareholders, mailing to Shareholders notice, proxies and
proxy statements in connection with the holding of such
meetings, receiving and tabulating votes cast by proxy and
communicating to the Fund the results of such tabulation
accompanied by appropriate certificates, and preparing and
communicating to the Fund certified lists of Shareholders as
of such date, and in such form and containing such information
as may be required by the Fund to comply with any applicable
provisions relating to such meetings. The Transfer Agent may
at its expense employ another firm to provide all or a portion
of such services.
I. Reports to be provided by Transfer Agent:
A. Daily
1. Payment Journals
2. Transfers
3. Non-Certificate Redemption Journal
4. Original Issue Non-Certificate Shares
5. Clerical Journal
6. New Account Journal
7. Closed Account Journal
B. Monthly
1. Sales By State and Dividends Reinvested
2. Withdrawals and Dividends Paid in Cash List
3. Record of Out-of-Pocket Costs Incurred
C. Annual Reports
Provide Fund Management upon request with all
reports reasonably required to conduct an annual
review of Transfer Agency functions relating to the
Fund, including but not limited to performance,
volume, error ratios, costs and other matters
relating to the Fund. The Transfer Agent shall also
provide to the Fund general information concerning
its operations which might be believed to affect
adversely the future services to the Fund.
D. Periodic Marketing Reports - Provided these reports
are readily available from existing information and
can be produced without unreasonable effort or
expense by the Transfer Agent, including, e.g.,
1. Geographic Distribution Data
2. Size of Holdings Data
II. Other Services
The Transfer Agent will provide the following additional
services:
A. Security
1. Design and maintain security procedures reasonably
designed to guard against the possible theft and/or
use by others of the names and addresses of Fund
Shareholders.
2. Periodic duplication of all records
(computer/microfilm/hardcopy/copy) at a frequency
and in a detail reasonably designed to assure
protection of Shareholder record information in the
event of a disaster to the Transfer Agent's
facilities, including:
(a) significant voltage drop;
(b) power blackout;
(c) major destruction of the Transfer Agent's
central facilities.
3. The Transfer Agent will maintain equipment
reasonably designed or represented to assure an
uninterrupted power supply of at least 10 minutes at
the offices of the Transfer Agent to allow for
orderly shut down of hardware in the event of a
power outage; periodic back-up of tapes to be stored
at an offsite facility of the Transfer Agent's
choosing; and will provide redundancy capacity in
accordance with the Agreement.
B. Statements
1. Provide for up to two extra lines of print on
Shareholder statements which may be employed by the
Fund to advise Shareholders of such information as
yield or other explanatory account information. The
Fund will advise the Transfer Agent of such
information sufficiently in advance to permit it to
properly insert such information in a timely and
orderly manner.
2. Provide a combined dividend check and statement to
Shareholders electing cash distributions.
C. Processing Routine Shareholder Inquiries
1. Receive, control, research, and promptly reply to
all routine Shareholder and other inquiries whether
received by written or telephonic means which
pertain to a Shareholder's account.
2. Exercise due care to protect confidential
information in responding to inquiries.
3. Request ATT or such other telephone company as may
be appropriate to provide, at the Distributor's
expense, for a dedicated transmission line between
Aquila Distributors, 380 Madison Avenue, New York
and Transfer Agent, Woodbridge, N.J. for inquiry via
a dedicated or P.C. terminal.
4. Provide if possible for continuity of present 800
telephone numbers for existing funds and adequate
personnel for live telephone response generally
until 7:00 PM, New York time on normal business
days. It is mutually understood that continuity of
the 800 numbers is dependant on cooperation from the
prior transfer agent and appropriate telephone
companies.
5. Provide for the automated tracking of all
Shareholder/Dealer telephone inquiries with on line
update status.
D. Other Mailings
1. Mailing services include addressing, enclosing, and
mailing quarterly reports, semi-annual reports,
annual reports, prospectuses and notices to all
accounts will be provided. To the extent the
Transfer Agent utilizes the services of another firm
to accomplish this for any First Investors Fund, it
shall be permitted to do so for the Fund, at the
Transfer Agent's expense.
2. All routine mailings to Shareholder/Dealers will,
where appropriate, utilize pre-sorted zip codes.
3. All month-end reinvestment statements, with any
month-end dividend check attached, will generally be
mailed to Shareholders, with duplicates to dealer
and representative, by the fourth business day of
the next month.
4. Commission checks and statements will generally be
mailed to brokerage firms on at least a weekly basis
for direct investments of prior weeks.
E. Other Services
1. Refer all Shareholder, dealer or governmental
inquiries of a policy or non-routine nature to the
Fund.
2. Provide an Account Officer to serve as the primary
point of contact between the Fund and the Transfer
Agent. The Transfer Agent will exercise due care in
assigning an individual who is both conversant with
standard investment company practices and of
sufficient stature to deal quickly and efficiently
with problems peculiar to placing a new investment
company on line.
F. Messenger Service
Provide messenger pick-up and delivery as necessary but
no less frequently than once daily between the Fund's
offices provided they are located within the borough of
Manhattan and the offices of the Transfer Agent.
<PAGE>
Exhibit 1
The Fund and the Transfer Agent anticipate that the following
activities should be incorporated into and become a part of
Appendix A as they become effective:
1. Installation of the National Security Clearing
Corporation, Fund/SERV system which shall be
operational no later than June 30, 1989.
2. The Transfer Agent will make a best effort to
provide networking capabilities with tape
transmission to dealers when and as required by
market competitiveness.
3. The Transfer Agent will work with the Distributor to
define criteria for an Audio Response system and
arrange for the implementation of such a system on
a timely basis.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
APPENDIX B
Signatures
On the date of the Agreement and thereafter until further
notice, the following persons shall be Authorized Persons as
defined therein:
/s/Lacy B. Herrmann
Lacy B Herrmann _____________________
Chairman of the Board of Trustees Lacy B. Herrmann
/s/William C. Wallace
William C. Wallace _____________________
Vice President William C. Wallace
/s/Robert P. Sanchez
Robert P. Sanchez _____________________
Vice President Robert P. Sanchez
/s/Rose F. Marotta
Rose F. Marotta _____________________
Treasurer Rose F. Marotta
/s/Kenneth L. MacRitchie
Kenneth L. MacRitchie _____________________
Assistant Secretary Kenneth L. MacRitchie
/s/William K. Killeen
William K. Killeen _____________________
William K. Killeen
/s/Diana P. Herrmann
Diana P. Herrmann _____________________
Diana P. Herrmann
/s/Charles E. Childs III
Charles E. Childs III ______________________
Charles E. Childs III
/s/Stephen J. Caridi
Stephen J. Caridi ______________________
Stephen J. Caridi
/s/Brian R. Katzman
Brian R. Katzman ______________________
Brian R. Katzman
/s/Sandra J. Hermida
Sandra J. Hermida ______________________
Sandra J. Hermida
<PAGE>
APPENDIX C
Backup Arrangement
ADM currently has in effect a redundancy arrangement with
Comdisco Disaster Recovery Services, Inc. The agreement with
Comdisco provides that in the event of a data processing systems
disaster at ADM's facilities in Woodbridge, New Jersey, ADM may use
equipment available at Comdisco's facilities for routine and other
processing. The agreement with Comdisco also provides for
dedicated time on Comdisco's data processing equipment each year to
allow ADM to test the redundancy system.
<PAGE>
APPENDIX D
Compensation
In accordance with the provisions of Section 15 of the
attached Agreement, the Fund shall pay ADM the monthly amount of
$1.25 for each account in the Fund open at any time during the
month. The minimum amount of compensation for each month shall be
$208.33.
In addition to the above charges, the Fund shall pay or
reimburse ADM for out-of pocket expenses, including but not limited
to: postage; forms relating to the Fund or shareholders of the
Fund; envelopes; paper; bank charges; costs relating to the
production of special reports for the Fund, its distributor, or
otherwise; and similar expenses. The Fund will also reimburse ADM
for counsel fees in accordance with the Agreement.
<PAGE>
Exhibit 1 to Appendix D
February 7, 1989
Aquila Distributors, Inc.
200 Park Avenue, Suite 4515
New York, New York 10017
Attn: Mr. William Killeen
Dear Mr. Killeen
Below please find a listing of the revised business checking fees
that will be applied to the Aquila accounts. This list supercedes
the listing included in my letter of February 1, 1989.
Account maintenance $15.00
Currency shipments (per $1000) .20
Currency shipments (per shipment) 1.50
Coin orders (per order) 2.00
Checks cleared .05
Check deposits .50
Deposited items .07
Coin and currency deposits .50
Returned deposited items 7.50
Returned checks 15.00
Incoming wire transfers 5.00
Outgoing wire transfers 5.00
Bond redemptions 10.00
Facsimilies / Photocopies 3.00
Stop payment orders 10.00
Tax deposits 10.00
Very truly yours,
/s/Marc S. Milgram
Marc S. Milgram
Vice President and Treasurer
MSM/hs
copies to: Kathryn S. Head
Gina Walling
Anne Condon
Randy Pagan
Greg Miller
Jay G. Baris, Esq.
Romelle Holmgren
Edward M.W. Hines, Esq.
October 17, 1997
TRANSFER AGENCY SERVICES AGREEMENT
THIS AGREEMENT is made as of_________________,_1997 by and
between PFPC INC., a Delaware corporation ("PFPC"), and Capital
Cash Management Trust, a Massachusetts business trust (the
"Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC to serve as transfer
agent, registrar, dividend disbursing agent and shareholder
servicing agent to its investment portfolios listed on Exhibit A
attached hereto and made a part hereof, as such Exhibit A may be
amended from time to time (each a "Portfolio"), and PFPC wishes
to furnish such services, on the terms and for the considerations
set forth in this agreement (the "Agreement").
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Definitions. As used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as
amended.
(b) "1934 Act" means the Securities Exchange Act of
1934, as amended.
(c) "Authorized Person" means any officer of the Fund
and any other person duly authorized by the Fund's Board of
Trustees to give Oral Instructions and Written Instructions on
behalf of the Fund and listed on the Authorized Persons Appendix
attached hereto and made a part hereof or any amendment thereto
as may be received by PFPC. An Authorized Person's scope of
authority may be limited by the Fund by setting forth such
limitation in the Authorized Persons Appendix.
(d) "CEA" means the Commodities Exchange Act, as
amended.
(e) "Oral Instructions" mean oral instructions
received by PFPC from an Authorized Person or from a person
reasonably believed by PFPC to be an Authorized Person.
(f) "SEC" means the Securities and Exchange
Commission.
(g) "Securities Laws" mean the 1933 Act, the 1934 Act,
the 1940 Act and the CEA.
(h) "Shares" mean the shares of beneficial interest
of any series or class of the Fund.
(i) "Written Instructions" mean written instructions
signed by an Authorized Person and received by PFPC. The
instructions may be delivered by hand, mail, tested telegram,
cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to serve as
transfer agent, registrar, dividend disbursing agent and
shareholder servicing agent to the Fund in accordance with the
terms set forth in this Agreement. PFPC accepts such appointment
and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where
applicable, will provide PFPC with the following:
(a) Certified or authenticated copies of the
resolutions of the Fund's Board of Trustees,
approving the appointment of PFPC or its
affiliates to provide services to the Fund and
approving this Agreement;
(b) A copy, and all amendments thereto, of the Fund's
most recent effective registration statement;
(c) A copy of the applicable administration, advisory
and/or sub-advisory agreements, and all amendments
thereto, with respect to each Portfolio;
(d) A copy of the distribution agreement, and all
amendments thereto, with respect to each class of
Shares;
(e) Copies of any shareholder servicing agreements,
and all amendments thereto, made in respect of the
Fund or a Portfolio;
(f) The Fund's Declaration of Trust filed with the
Secretary of State of the Commonwealth of
Massachusetts and all amendments thereto (such
Declaration of Trust, as presently in effect and
as it shall from time to time be amended, is
herein called the "Declaration of Trust"); and
(g) The Fund's By-Laws and all amendments thereto
(such By-Laws, as presently in effect and as they
shall from time to time be amended, are
hereinafter called the "By-Laws").
PFPC has furnished the Fund with copies properly
certified or authenticated of its Registration Statement on Form
TA-1 under the Securities and Exchange Act of 1934, as amended
and all other public reports filed with the SEC related to the
services provided to the Fund as may be requested from time to
time by the Fund.
4. Compliance with Rules and Regulations. PFPC undertakes
to comply with all applicable requirements of the Securities Laws
and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by
PFPC hereunder. Except as specifically set forth herein, PFPC
assumes no responsibility for such compliance by the Fund or any
of its investment portfolios.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC
shall act only upon Oral Instructions and Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral
Instructions and Written Instructions it receives from an
Authorized Person (or from a person reasonably believed by PFPC
to be an Authorized Person) pursuant to this Agreement. PFPC may
assume that any Oral Instruction or Written Instruction received
hereunder is not in any way inconsistent with the provisions of
organizational documents or this Agreement or of any vote,
resolution or proceeding of the Fund's Board of Trustees or of
the Fund's shareholders, unless and until PFPC receives Written
Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written
Instructions confirming Oral Instructions so that PFPC receives
the Written Instructions by the close of business on the same day
that such Oral Instructions are received. The fact that such
confirming Written Instructions are not received by PFPC shall in
no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. Where Oral
Instructions or Written Instructions reasonably appear to have
been received from an Authorized Person, PFPC shall incur no
liability to the Fund in acting upon such Oral Instructions or
Written Instructions provided that PFPC's actions comply with the
other provisions of this Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any
action it should or should not take, PFPC may request directions
or advice, including Oral Instructions or Written Instructions,
from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as
to any question of law pertaining to any action it should or
should not take, PFPC may request advice at its own cost from
such counsel of its own choosing (who may be counsel for the
Fund, the Fund's investment adviser or PFPC, at the option of
PFPC).
(c) Conflicting Advice. In the event of a conflict
between directions, advice or Oral Instructions or Written
Instructions PFPC receives from the Fund, and the advice it
receives from counsel, PFPC may rely upon and follow the advice
of counsel. In the event PFPC so relies on the advice of
counsel, PFPC remains liable for any action or omission on the
part of PFPC which constitutes willful misfeasance, bad faith,
negligence or reckless disregard by PFPC of any duties,
obligations or responsibilities set forth in this Agreement.
(d) Protection of PFPC. PFPC shall be protected in
any action it takes or does not take in reliance upon directions,
advice or Oral Instructions or Written Instructions it receives
from the Fund or from counsel and which PFPC believes, in good
faith, to be consistent with those directions, advice or Oral
Instructions or Written Instructions. Nothing in this section
shall be construed so as to impose an obligation upon PFPC (i) to
seek such directions, advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such directions,
advice or Oral Instructions or Written Instructions unless, under
the terms of other provisions of this Agreement, the same is a
condition of PFPC's properly taking or not taking such action.
Nothing in this subsection shall excuse PFPC when an action or
omission on the part of PFPC constitutes willful misfeasance, bad
faith, negligence or reckless disregard by PFPC of any duties,
obligations or responsibilities set forth in this Agreement.
7. Records; Visits. The books and records pertaining to
the Fund which are in the possession or under the control of PFPC
shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. PFPC will,
if so requested by counsel to the Fund, work with such counsel to
develop an acceptable modification to the manner in which such
books and records are prepared and maintained so as to comply
with the reasonable opinion of such counsel as to such laws and
rules. Such modification will be subject to additional mutually-
agreed upon pricing, if any. The Fund and Authorized Persons
shall have access to such books and records at all times during
PFPC's normal business hours. Copies of any such books and
records shall be provided by PFPC to the Fund or to an Authorized
Person at the Fund's expense. Prior to any destruction of any
books or records, PFPC will advise the Fund of the proposed
destruction and in accordance with instructions of the Fund, the
records will be destroyed or, at the expense of the Fund,
delivered to the Fund or as it may otherwise direct.
8. Confidentiality. PFPC agrees to keep confidential all
records of the Fund and information relating to the Fund and its
shareholders, unless the release of such records or information
is otherwise consented to, in writing, by the Fund, and shall
maintain procedures reasonably designed to protect such
confidentiality. The Fund agrees that its consent shall not be
unreasonably withheld and may not be withheld where PFPC may be
exposed to civil or criminal contempt proceedings or when
required to divulge such information or records to duly
constituted authorities, and that such consent shall not be
required where consent or notice to the Fund is not permitted by
law or regulation.
9. Cooperation with Accountants. PFPC shall cooperate
with the Fund's independent public accountants and shall take all
reasonable actions in the performance of its obligations under
this Agreement to ensure that the necessary information is made
available on a timely basis to such accountants for the
expression of their opinion, as required by the Fund.
10. Adequate Facilities; Disaster Recovery. PFPC shall
maintain adequate personnel and facilities, as well as adequate
and reliable computer and other equipment, necessary and
appropriate to carry out its obligations under this Agreement,
including appropriate duplicate files (which shall be readable
by computer or otherwise or maintained in hard copy form, and
shall be maintained at a frequency and in a detail reasonably
designed pursuant to industry standards to provide for protection
of such files in the event of a disaster to PFPC's facilities).
PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making adequate and
reliable provisions for emergency use of electronic data
processing equipment to the extent appropriate equipment is
available. In the event of equipment failures, PFPC shall, at no
additional expense to the Fund, take reasonable steps to minimize
service interruptions. PFPC shall periodically back up data
(including all predecessor transfer agent data delivered to PFPC
by the Fund's prior transfer agent in a machine readable format
and converted by PFPC) on appropriate media to be stored at an
offsite facility of PFPC's choosing. PFPC shall have no
liability with respect to the loss of data or service
interruptions caused by equipment failure or otherwise, provided
such loss or interruption is not caused by PFPC's own willful
misfeasance, bad faith, negligence or reckless disregard of its
duties or obligations under this Agreement.
11. Insurance. PFPC shall maintain adequate fidelity,
error and omissions and other insurance coverage in connection
with its transfer agent services throughout the duration of this
Agreement.
12. Compensation. As compensation for services rendered by
PFPC during the term of this Agreement, for the period commencing
on the date upon which PFPC becomes transfer agent for the Fund,
the Fund will pay to PFPC a fee or fees as agreed to from time to
time in writing by the Fund and PFPC. All services detailed in
this Agreement and expenses incurred in the performance of these
services will be provided by PFPC without cost to the Fund except
as otherwise stated in this Agreement or otherwise agreed to in
writing.
13. Indemnification. The Fund agrees to indemnify and hold
harmless PFPC and its affiliates from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any
state and foreign securities and blue sky laws, and amendments
thereto), and expenses, including (without limitation) attorneys'
fees and disbursements, arising directly or indirectly from (i)
any action or omission to act which PFPC takes (a) at the request
or on the direction of or in reliance on the advice of the Fund
or (b) upon Oral Instructions or Written Instructions or (ii) the
acceptance, processing and/or negotiation of checks or other
methods utilized for the purchase of Shares. Neither PFPC nor
any of its affiliates shall be indemnified against any liability
(or any expenses incident to such liability) arising out of
PFPC's or its affiliates' own willful misfeasance, bad faith,
negligence or reckless disregard of its duties and obligations
under this Agreement.
14. Release. PFPC understands that the obligations of this
Agreement are not binding upon any shareholder of the Fund
personally, but bind only the Fund's property; PFPC represents
that it has notice of the provision in the Fund's Declaration of
Trust disclaiming shareholder liability for acts or obligations
of the Fund.
15. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action on
behalf of the Fund except as specifically set forth herein or as
may be specifically agreed to by PFPC in writing. PFPC shall be
obligated to exercise care and diligence in the performance of
its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, to ensure the accuracy and
completeness of all services performed under this Agreement.
PFPC shall be liable for any damages arising out of PFPC's
failure to perform its duties under this Agreement to the extent
such damages arise out of PFPC's willful misfeasance, bad faith,
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing
or of any other provision of this Agreement, (i) PFPC shall not
be liable for losses beyond its control, provided that PFPC has
acted in accordance with the standard of care set forth above;
and (ii) PFPC shall not be under any duty or obligation to
inquire into and shall not be liable for (A) the validity or
invalidity or authority or lack thereof of any Oral Instruction
or Written Instruction, notice or other instrument which conforms
to the applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (B) subject to Section 10,
delays or errors or loss of data occurring by reason of
circumstances beyond PFPC's control, including acts of civil or
military authority, national emergencies, labor difficulties,
fire, flood, catastrophe, acts of God, insurrection, war, riots
or failure of the mails, transportation, communication or power
supply.
(c) Notwithstanding anything in this Agreement to the
contrary, neither PFPC nor its affiliates shall be liable to the
Fund for any consequential, special or indirect losses or damages
which the Fund may incur or suffer by or as a consequence of
PFPC's or its affiliates' performance of the services provided
hereunder, whether or not the likelihood of such losses or
damages was known by PFPC or its affiliates.
16. Description of Services.
(a) Itemized Services. PFPC shall:
(i) Calculate 12b-1 payments and payments under
any Shareholder Services Plan of the Fund,
produce and mail statements and checks where
applicable or generate payments through the
National Securities Clearing Corp. (the
"NSCC") to all eligible dealers, and forward
ineligible checks and statements to Aquila
Distributors, Inc. (the "Distributor");
(ii) Make weekly payment of direct commissions,
including settlement through NSCC;
(iii) Establish and maintain proper shareholder
registrations;
(iv) Review new applications for required
information and correspond with shareholders
to complete or correct information;
(v) Provide payment processing of checks or
wires;
(vi) Prepare and certify stockholder lists in
conjunction with proxy solicitations;
(vii) Issue and countersign share certificates
(when requested in writing by a shareholder)
and cancel share certificates;
(viii) Prepare and mail to shareholders confirmation
of activity;
(ix) Provide toll-free lines and voice response
unit for direct shareholder use, plus
customer liaison staff for on-line inquiry
response (generally until 6 p.m., New York
time, on days on which the New York Stock
Exchange is open), including the ability to
receive redirected toll-free calls from the
Distributor on an as-needed basis;
(x) On a monthly basis, mail duplicate statements
to: (1) broker-dealers of their clients'
activity, whether executed through the
broker-dealer or directly with PFPC, and (2)
other parties (e.g., lawyers and accountants)
as requested by the shareholders;
(xi) Provide periodic shareholder lists and
statistics to the Fund;
(xii) Provide detailed data for underwriter/broker
confirmations, including daily outstanding
confirmed purchases, redemptions, and paid
not issued shares;
(xiii) Prepare periodic mailing of year-end tax and
statement information;
(xiv) Provide reports, notification, and where
applicable reconciliation on a timely basis
to the investment adviser, sub-adviser,
administrator, accounting agent, and
custodian of fund activity;
(xv) Perform other participating broker-dealer
shareholder services, including Fund/Serv,
Automated Customer Account Transfer System
("ACATS"), Networking and terminal access for
selected dealers, and such other services as
may be agreed upon from time to time;
(xvi) Promptly transmit to the Fund all reports,
documents and information as are requested by
the Fund and agreed to by PFPC, which
agreement shall not be unreasonably withheld,
that are necessary to enable the Fund and its
service providers to comply with the
requirements of the Internal Revenue Service,
the SEC, the National Association of
Securities Dealers, Inc, the National
Securities Clearing Corp., the state blue sky
authorities and any other regulatory bodies
having jurisdiction over the Fund, it being
understood and agreed that such reports shall
include those on the list contained in
Exhibit __ hereto, as such list may be
amended from time to time by agreement
between the parties;
(xvii) Process all clerical transactions;
(xviii) Screen and maintain Transfer on Death
registrations according to Fund guidelines
(except those guidelines hereafter adopted by
the Fund which are considered in PFPC's sole
good-faith discretion to be more burdensome
than the guidelines in effect on the date of
this Agreement);
(xix) Provide electronic imaging and time-stamping
of all incoming mail;
(xx) Compute and track all front-end and
contingent deferred sales charges imposed
upon the purchase and redemption of Shares;
(xxi) Track and convert Shares in accordance with
the share conversion features described in
the prospectus of the Fund;
(xxii) Answer written or telephonic correspondence
relating to its duties hereunder (including
providing written acknowledgement of address
changes to previous addresses of record) and
such other correspondence as may from time to
time be mutually agreed upon between PFPC and
the Fund; inquiries of a non-routine nature
shall be referred to the Fund;
(xxiii) Remit supporting detail of underwriter fees
to the Distributor on a semi-monthly basis;
(xxiv) Until such time as Fund management and legal
counsel to the Fund determine otherwise and
so inform PFPC in Written Instructions,
establish, maintain for the benefit of the
Fund and control the flow of funds through
separate subscription, redemption and
dividend disbursement accounts (each an
"Operational Account") provided by PNC Bank,
N.A. or by such other financial institution
as may be agreed upon by the Fund and PFPC;
(xxv) To the extent reasonably feasible, reverse
trades (including backing out dividends) due
to nonreceipt of funds, improper
registration, or other sufficient reason;
(xxvi) Compute and track all letters of intent;
(xxvii) Screen all transactions with respect to the
Fund's Blue Sky requirements of which PFPC is
informed by the Fund by Written Instructions,
and comply with the Written Instructions of
the Fund in effect from time to time limiting
issuance of Shares to specified states (based
on address of registration), including
screening for Shares sold in states other
than those so specified (but relating only to
those Shares sold after PFPC commences its
duties as transfer agent hereunder);
(xxviii) Provide abandoned property reporting and
filing to meet the escheat requirements of
each of the states named by the Fund in
Written Instructions;
(xxix) Maintain a record of all incoming checks, new
account applications and documentation set
forth in Section 16(g), on filmstrips,
another microfilm retrieval method or
otherwise so as to be retrievable and
reproducible, upon reasonable request, within
time frames that meet reasonable industry
standards;
(xxx) Process W-9 or similar forms received by PFPC
and review taxpayer identification numbers
for all same number (e.g., 888 88 8888),
sequential numbering (e.g., 123 45 6789) and
non-numeric numbers (e.g., 128 4A 3927) and
other conditions of obvious irregularity in
accordance with PFPC's normal operating
procedures;
(xxxi) On a semi-monthly or other basis acceptable
to PFPC and the Fund (but in no event more
frequently than once per month per
shareholder account) initiate, accept and
process pre-authorized checks or, when
available, electronic funds transfers drawn
against shareholders' checking accounts;
(xxxii) In accordance with policies and procedures
established by the Fund and PFPC, furnish to
shareholders dividend and redemption checks
alleged to have been lost, stolen, destroyed
or not received; and
(xxxiii) Record all incoming telephone conversations
and telephonic transactions that are received
via the Fund's published customer service
numbers and retain such recordings for a
minimum of six months.
(xxxiv) Post and perform shareholder transfers and
post and perform exchanges for shares of
other funds with which the Fund has exchange
privileges, pursuant to shareholder
instructions; and
(xxxv) Reconcile to Fund accounting records and pay
dividends and other distributions, including
direct deposit credits through the Automatic
Clearing House ("ACH") upon proper written
shareholder authorization.
(b) Purchase of Shares. PFPC shall issue Shares and
credit an account of an investor, in the manner described in the
Fund's prospectus, once it has screened for blue sky compliance
pursuant to Section 16(a)(xxvii) and Transfer on Death
registration compliance pursuant to Section 16(a)(xviii) and
receives:
(i) A purchase order or application, either
directly from an investor or otherwise,
complying with requirements for purchases
prescribed by the prospectus;
(ii) Proper information to establish a shareholder
account; and
(iii) A purchase check or confirmation of receipt
or crediting of available funds for such
order to the Fund's custodian.
In opening new shareholder accounts, PFPC will assign account
numbers. PFPC shall assign Aquila Distributors, Inc. as broker
of record whenever dealer information is omitted and send a copy
of any related application to Aquila Distributors, Inc.
PFPC must receive a completed application before any
redemption orders are accepted and processed for an account
opened directly by an investor.
(c) Redemption of Shares. PFPC shall redeem Shares
only if that function is properly authorized by the Declaration
of Trust or resolution of the Fund's Board of Trustees. If the
Fund is a money-market fund, PFPC shall arrange, in accordance
with the Fund's prospectus, for a shareholder's redemption of
shares from a shareholder's account with a checkwriting
privilege. Shares shall be redeemed and payment therefor shall
be made in accordance with the Fund's prospectus, including
provisions set forth therein for automatic redemption, telephone
redemption requests and check-writing privileges, when the
recordholder tenders Shares in proper form and amount and
properly directs the method of redemption. If Shares are
received in proper form, Shares shall be redeemed before the
funds are provided to PFPC from the Fund's custodian. If the
recordholder has not directed that redemption proceeds be wired,
when the custodian provides PFPC with funds, a redemption check
shall be sent to and made payable to the recordholder, unless:
(i) the surrendered certificate is drawn to the
order of an assignee or holder and transfer
authorization is signed by the recordholder;
(ii) Transfer authorizations are signed by the
recordholder when Shares are held in
book-entry form;
(iii) Such redemption is through money market fund
check-writing capabilities; or
(iv) such redemption is in settlement of dealer
confirmed redemptions via Fund/Serv.
Consistent with provisions set forth in the prospectus,
redemption proceeds shall be wired upon request. When a
broker-dealer notifies PFPC of a redemption desired by a
customer, and the Fund's custodian provides PFPC with funds, PFPC
shall prepare and send the redemption check to the broker-dealer,
made payable to the broker-dealer on behalf of its customer.
PFPC shall establish procedures reasonably designed to
ensure that redemption requirements established by PFPC and
agreed to by the Fund have been met, including the receipt and
examination of stock certificates and related endorsements,
signature guarantees and obtaining any needed papers or
documents, including a properly completed application, where
required. No redemptions in accounts represented in whole or in
part by certificates shall be effected without cancellation of an
adequate number of certificate Shares, if necessary. No
signature guarantees shall be acceptable if received by facsimile
and signature guarantees must reasonably appear to have been
provided by an eligible guarantor institution of a type described
as such in the prospectus which is a participant in a medallion
program recognized by the Securities Transfer Association or in
instructions received from the Fund; provided, however, that PFPC
may accept a signature guarantee received by facsimile if so
instructed by Oral or Written Instructions.
(d) Dividends and Distributions. Upon receipt of a
resolution of the Fund's Board of Trustees authorizing the
declaration and payment of dividends and distributions, PFPC
shall issue dividends and distributions declared by the Fund in
Shares, or, upon shareholder election, pay such dividends and
distributions in cash, if and as provided for in the Fund's
prospectus. Such issuance or payment, as well as payments upon
redemption as described above, shall be made after deduction and
payment of the required amount of funds to be withheld in
accordance with any applicable tax laws or other laws, rules or
regulations. PFPC shall timely mail to the Fund's shareholders
and appropriate taxing authorities such tax forms and other
information, or permissible substitute notice, relating to
dividends and distributions paid by the Fund as are required to
be filed and mailed by applicable law, rule or regulation. PFPC
shall prepare, maintain and file with the IRS and other
appropriate taxing authorities reports relating to all dividends
paid by the Fund to its shareholders as required by tax or other
law, rule or regulation.
(e) Communications to Shareholders. PFPC shall
address, enclose and mail all communications by the Fund to its
shareholders (pre-sorting where reasonably practicable),
including:
(i) Reports to shareholders;
(ii) Confirmations of purchases and sales of
Shares;
(iii) Monthly or quarterly statements (with extra
print lines for additional information, such
as additional dividend information, to
shareholders), generally by the fifth
business day after the dividend payable date,
providing a combined check and statement to
shareholders electing cash distributions;
(iv) Dividend and distribution notices (at year-
end, such notices will be upon Written
Instructions);
(v) Tax form information (upon Written
Instructions);
(vi) Forms W-9 or W-8 as appropriate;
(vii) Prospectuses;
(viii) Account-related shareholder correspondence
that is considered in PFPC's sole discretion
to be routine; and
(ix) Any other routine shareholder communications
as agreed to between the Fund and PFPC.
(f) Third Party Proxy Provider. PFPC shall assist the
Fund in obtaining competitive bids for proxy services. Proxy
services shall be provided by a third party. The Fund
understands and agrees that PFPC bears no responsibility for the
provision of any proxy services or the manner in which any proxy
services are provided, that PFPC will not be considered the
Fund's agent in connection with the provision of any proxy
services, and that any party providing proxy services to the Fund
shall not be considered to be the agent of PFPC or to have any
other relationship with PFPC with respect to such services. Such
proxy services, which will be decided upon solely between the
Fund and the third party provider, shall include proxy mailing,
receiving and tabulating proxy cards for the meetings of the
Fund's shareholders, communicating to the Fund daily and final
results of such tabulation accompanied by appropriate
certificates, and preparing and furnishing to the Fund certified
lists of shareholders as of such date, and in such form and
containing such information as may be required by the Fund to
comply with any applicable provisions of law or its Declaration
of Trust and/or By-Laws relating to such meetings.
Notwithstanding the foregoing provisions of this Subsection (f),
PFPC shall furnish to the third-party proxy provider such
information as is reasonably requested by such provider
pertaining to shareholder registration information and record-
date share positions to permit the Fund to obtain the benefits of
the services necessary for conduct of its shareholder meetings.
(g) Records. PFPC shall maintain records of the
accounts for each shareholder showing the following information:
(i) Name, address, United States Tax
Identification or Social Security number, and
any pertinent beneficiary information;
(ii) Number and class of Shares held and number
and class of Shares for which certificates,
if any, have been issued, including
certificate numbers and denominations;
(iii) Historical information regarding the account
of each shareholder, including dividends and
distributions paid and the date and price for
all transactions in a shareholder's account;
(iv) Any stop or restraining order placed against
a shareholder's account;
(v) Any correspondence relating to the current
maintenance of a shareholder's account;
(vi) Information with respect to withholdings,
including withholdings in the case of a
foreign account and accounts subject to
backup withholding; and
(vii) Any information required in order for the
transfer agent to perform any calculations
contemplated or required by this Agreement.
PFPC shall use its best efforts to convert for use in
its system such data of the predecessor transfer agent that has
been provided to PFPC as shall permit PFPC to maintain on its
system such converted data covering a minimum of 18 months prior
to commencement of its services as transfer agent of the Fund.
PFPC is not responsible for errors or omissions in or caused by
the records of any predecessor transfer agent. PFPC shall inform
the Fund of material errors coming to its attention in the course
of performance of its duties hereunder. PFPC shall maintain on
its system in a readily viewable form pertinent account
information (i.e., the information listed in this Section 16(g))
relating to shareholders of the Fund (including all predecessor
transfer agent data delivered to PFPC by the Fund's prior
transfer agent in a machine readable format and converted by
PFPC) for a minimum of 13 months after the date of the
transaction or other matter to which the information relates and
shall thereafter maintain such information in a readily
accessible format to the extent required by the 1940 Act and
other applicable securities laws, rules and regulations.
(h) Lost or Stolen Certificates. PFPC shall place a
stop notice against any certificate reported to be lost, stolen,
destroyed or not received and comply with all applicable federal
regulatory requirements for reporting such loss or alleged
misappropriation. A new certificate shall be registered and
issued only upon:
(i) The shareholder's pledge of a lost instrument
bond or such other appropriate indemnity bond
issued by a surety company approved by PFPC;
and
(ii) Completion of a release and indemnification
agreement signed by the shareholder to
protect PFPC and its affiliates.
(i) Shareholder Inspection of Fund Records. Upon a
request from any Fund shareholder to inspect Fund records, PFPC
will notify the Fund and the Fund will issue instructions
granting or denying each such request. Unless PFPC has acted
contrary to the Fund's instructions, the Fund agrees and does
hereby release PFPC from any liability for refusal of permission
for a particular shareholder to inspect the Fund's records.
(j) Withdrawal of Shares and Cancellation of
Certificates. Upon receipt of Written Instructions, PFPC shall
cancel outstanding certificates surrendered by the Fund to reduce
the total amount of outstanding Shares by the number of Shares
surrendered by the Fund.
(k) Fraud Detection Procedures. PFPC shall establish
procedures that are reasonably designed to detect fraudulent
purchase, redemption and distribution checks (including
fraudulent or forged endorsements and altered payment amounts);
however, PFPC shall have no liability for loss resulting from any
fraud perpetrated or attempted to be perpetrated on the Fund,
unless PFPC has acted with willful misfeasance, bad faith,
negligence or reckless disregard of its duties hereunder. Such
procedures shall take into account the type of accounts involved,
the sums involved and cost/benefit considerations.
(l) Third Party Checks. PFPC shall not accept any
third party check (i.e., an investment check whose payee is other
than the Fund or PFPC) except pursuant to Written Instructions.
(m) Relationship Officer. PFPC agrees to provide a
Relationship Officer to serve as the primary point of contact
between the Fund and PFPC. PFPC will exercise due care in
assigning an individual who is conversant with standard
investment company practices.
(n) Additional Services.
(i) PFPC shall, in addition to the services
herein itemized, if so requested by the Fund
and agreed to by PFPC, which shall bargain in
good faith regarding such requests and the
fees and charges to be paid therefor, for
such additional fees and charges as the Fund
and PFPC may from time to time agree, perform
and do all other acts and services as
required by the Fund's prospectus or the law
or that are customarily performed and done by
transfer agents, dividend disbursing agents,
and shareholder servicing agents of open-end
mutual funds such as the Fund.
(ii) PFPC shall, in addition to the services
herein itemized, provide such additional
services to the Fund and in such manner as
are normally provided by PFPC to its mutual
fund transfer agency customers in the normal
course of business, subject to additional
mutually-agreed upon pricing, if any.
(o) Procedures. In order to facilitate the carrying
out of the services set forth in this Agreement, PFPC shall
follow the procedures attached hereto as Exhibit _______ and PFPC
and the Fund may from time to time mutually agree to changes
thereto.
17. Duration and Termination. This Agreement shall
continue until terminated by the Fund on sixty (60) days' prior
written notice or by PFPC on one-hundred-twenty (120) days' prior
written notice to the other party, provided, however, that
without the Fund's consent PFPC shall not for a period of three
years after the date of this Agreement terminate this Agreement
with the intent to enter into a new agreement with the Fund that
provides for higher fees.
18. Notices. All notices and other communications,
including Written Instructions, shall be in writing or by
confirming telegram, cable, telex or facsimile sending device.
Notices shall be addressed (a) if to PFPC, at 400 Bellevue
Parkway, Wilmington, Delaware 19809; (b) if to the Fund, at 380
Madison Avenue, Suite 2300, New York, NY 10017, Attn: President
or (c) if to neither of the foregoing, at such other address as
shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is
sent by confirming telegram, cable, telex or facsimile sending
device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have
been given three days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the
day it is delivered.
19. Amendments. This Agreement, or any term thereof, may
be changed or waived only by a written amendment, signed by the
party against whom enforcement of such change or waiver is
sought.
20. Delegation; Assignment. PFPC may assign its rights and
delegate its duties hereunder only to any wholly-owned direct or
indirect subsidiary of PNC Bank, National Association or PNC Bank
Corp., provided that (i) PFPC gives the Fund thirty (30) days'
prior written notice; (ii) the delegate (or assignee) agrees with
PFPC and the Fund to comply with all relevant provisions of the
1940 Act; and (iii) PFPC and such delegate (or assignee) promptly
provide such information as the Fund may request, and respond to
such questions as the Fund may ask, relative to the delegation
(or assignment), including (without limitation) the capabilities
of the delegate (or assignee).
21. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
22. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are necessary
to effectuate the purposes hereof.
23. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the
entire agreement and understanding between the parties and
supersedes all prior agreements and understandings relating to
the subject matter hereof, provided that the parties may embody
in one or more separate documents their agreement, if any, with
respect to delegated duties and Oral Instructions.
(b) Captions. The captions in this Agreement are
included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their
construction or effect.
(c) Governing Law. This Agreement shall be deemed to
be a contract made in Delaware and governed by Delaware law,
without regard to principles of conflicts of law.
(d) Partial Invalidity. If any provision of this
Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
(e) Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of
any party to this Agreement shall constitute the valid and
binding execution hereof by such party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
PFPC INC.
By:_________________________________
Title:______________________________
Capital Cash Management Trust
By:_________________________________
Title:______________________________
<PAGE>
EXHIBIT A
THIS EXHIBIT A, dated as of ___________________, 1997, is
Exhibit A to that certain Transfer Agency Services Agreement
dated as of ____________________, 1997 between PFPC Inc. and
________________________.
PORTFOLIOS
[List all Portfolios here]
<PAGE>
AUTHORIZED PERSONS APPENDIX
On the date of the Agreement and thereafter until further
notice, the following persons shall be Authorized Persons as
defined therein:
Name (Type) Signature
Lacy B. Herrmann
______________________________________
Lacy B. Herrmann
William C. Wallace
______________________________________
William C. Wallace
Diana P. Herrmann
______________________________________
Diana P. Herrmann
Charles E. Childs, III
______________________________________
Charles E. Childs, III
John M. Herndon
______________________________________
John M. Herndon
Rose F. Marotta
______________________________________
Rose F. Marotta
Richard F. West
______________________________________
Richard F. West
Patricia A. Craven
______________________________________
Patricia A. Craven
Stephen J. Caridi
______________________________________
Stephen J. Caridi
William Killeen _____________________________________
William Killeen
<PAGE>
[Report List for Aquila Group of Funds
12b-1 Report
5 Percent or More Shareholder Listing
5 Percent or More Shareholder Listing - sorted by ssn
Account Analysis by Type
Asset Report by Dealer for Management Company
Asset Report by Fund and Dealer
Blue Sky Sales Report
Capital Stock Reporting
Daily Transaction Journal
Dealer Commission Check Register/Dealer Commission Statement
DTS Activity Summary
DTS Liquidation Placements
DTS Outstanding Trades by Fund
DTS Posted Transactions
DTS Purchase Placement
Matrix Summary by Fund With Dealer Name
Matrix Summary by Management Company With Dealer Name
Month to Sales (Demographics by Account Group)
Monthly Statistical Report
Monthly Wire Order (Purchases/Redemptions)
New Account Journal
Next Day NSCC Settlement Detail
NSAR Based on trade date
Transactions at a Glance]
AMENDED AND RESTATED
ADMINISTRATION AGREEMENT
THIS AGREEMENT, made the 16th day of December 1992, by and
between CAPITAL CASH MANAGEMENT TRUST (the "Trust"), a
Massachusetts business Trust, 380 Madison Avenue, Suite 2300, New
York, New York 10017 and AQUILA MANAGEMENT CORPORATION (the
"Administrator"), a New York corporation, 380 Madison Avenue,
Suite 2300, New York, New York 10017,
W I T N E S S E T H
WHEREAS, the Trust and the Administrator wish to amend and
as so amended, to continue the Administration Agreement which
became effective the 28th day of February, 1992 to read as herein
set forth (referred to hereafter as "this Agreement");
NOW THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. In General.
The Administrator shall perform (at its own expense) the
functions set forth more fully herein for the Trust and for the
investment adviser for the Trust (the "Adviser").
2. Duties and Obligations of the Adviser and Administrator to
the Trust and to Each Other.
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of
the Trust, the Administrator shall provide all administrative
services to the Trust other than those services relating to the
investment portfolio of the Trust and the maintenance of its
accounting books and records; as part of such duties, the
Administrator shall:
(i) provide office space, personnel, facilities and
equipment for the performance of the following functions and
for the maintenance of the headquarters of the Trust;
(ii) oversee 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 the effective operation of the Trust and
for the sale, servicing or redemption of the Trust's shares;
(iii) provide to the Adviser and the Trust statistical and
other factual information and advice regarding economic
factors and trends, but shall not generally furnish advice
or make recommendations regarding the purchase or sale of
securities;
(iv) maintain the Trust's books and records (other than
accounting books and records), and prepare (or assist
counsel and auditors in the preparation of) all required
proxy statements, reports to the Trust's shareholders and
Trustees, reports to and other filings with the Securities
and Exchange Commission and any other governmental agencies,
and tax returns, and oversee the insurance relationships of
the Trust;
(v) prepare, on behalf of the Trust and at the Trust's
expense, such applications and reports as may be necessary
to register or maintain the registration of the Trust and/or
its shares under the securities or "Blue-Sky" laws of all
such jurisdictions as may be required from time to time;
(vi) respond to any inquiries or other communications of
shareholders of the Trust and broker-dealers, or if any such
inquiry or communication is more properly to be responded to
by the Trust's shareholder servicing and transfer agent or
distributor, oversee such shareholder servicing and transfer
agent's or distributor's response thereto.
(b) Any activities performed by the Administrator under this
section shall at all times conform to, and be in accordance with,
any requirements imposed by: (1) the Investment Company Act of
1940 (the "Act") and any rules or regulations in force
thereunder; (2) any other applicable laws, rules and regulations;
(3) the Declaration of Trust and By-Laws of the Trust as amended
and restated from time to time; (4) any policies and
determinations of the Board of Trustees of the Trust; and (5) the
fundamental policies of the Trust, as reflected in its
registration statement under the Act, or as amended by the
shareholders of the Trust.
(c) The Administrator assumes no responsibility under this
agreement other than to render the services called for hereunder,
and specifically assumes no responsibilities for investment
advice or the investment or reinvestment of the Trust's assets.
(d) The Administrator shall not be liable for any error in
judgment or for any loss suffered by the Trust in connection with
the matters to which this Agreement relates, except a loss
resulting from wilful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this
Agreement.
(e) Nothing in this Agreement shall prevent the
Administrator or any officer thereof from acting as investment
adviser, sub-adviser, administrator or manager for any other
person, firm, or corporation, and shall not in any way limit or
restrict the Administrator or any of its officers, stockholders
or employees from buying, selling or trading any securities for
its own or their own accounts or for the accounts of others for
whom it or they may be acting, provided, however, that the
Administrator expressly represents that it will undertake no
activities which, in its judgment, will adversely affect the
performance of its obligations to the Adviser or the Trust under
this Agreement. The Trust shall indemnify the Administrator to
the full extent permitted by the Trust's Declaration of Trust.
3. Allocation of Expenses.
The Administrator shall, at its own expense, provide office
space, facilities, equipment, and personnel for the performance
of its functions hereunder and shall pay all compensation of
Trustees, officers, and employees of the Trust who are affiliated
persons of the Administrator.
4. Compensation of the Administrator.
(a) The Trust shall pay the Administrator, and the
Administrator shall accept as full compensation for all services
rendered hereunder, 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.
(b) 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 total expenses of the Trust 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 average annual net assets of the Trust plus 1% of its
average annual net assets in excess of $30 million, or (ii) 25%
of the Trust's total annual investment income. The payment of
the above fee at the end of any month will be reduced or
postponed so that at no time will there be any accrued but unpaid
liability under this expense limitation, subject to readjustment
during the year. The pro rata portion, as between the and
Administrator and Adviser, 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 Trust's Distribution Plan).
5. Expense Guarantee.
In addition to the expense limitation in the foregoing
section of this Agreement, under the expense guarantee provided
in this section the Administrator shall 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 this
Agreement to the Administrator at the end of any month will be
reduced or postponed as may be required by reason of this expense
guarantee, subject to readjustment during the year. Any
reimbursement of expense to the Trust with respect to a fiscal
year shall be made during or at the end of that fiscal year, and
any reimbursements made during the fiscal year shall be subject
to readjustment during the year. This expense guarantee shall
continue until the last day of the fiscal year of the Trust
during which this Agreement became effective and for three years
thereafter; it shall continue 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. This expense guarantee and any outstanding
obligation thereunder shall survive the termination of this
Agreement.
6. Duration and Termination.
(a) This Agreement shall become effective as of the date
first written above, after approval by a vote of a majority of
the Trustees who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party, with votes
cast in person at a meeting called for the purpose of voting on
such approval and shall, unless terminated as hereinafter
provided, continue in effect until the November 30 next preceding
the second anniversary of the effective date of this Agreement,
and from year to year thereafter.
(b) This Agreement may be terminated by the Administrator at
any time without penalty upon giving the Adviser and the Trust
sixty days' written notice (which notice may be waived by them)
and may be terminated by the Trust at any time without penalty
upon giving the Administrator sixty days' written notice (which
notice may be waived by the Administrator) provided that such
termination by the Trust shall be directed or approved by a vote
of a majority of its Trustees in office at the time, including a
majority of the Trustees who are not interested persons (as
defined in the Act) of the Trust.
7. Disclaimer of Shareholder Liability
The Administrator understands that the obligations of this
Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Trust's property; the Administrator
represents that it has notice of the provisions of the Trust's
Declaration of Trust disclaiming shareholder liability for acts
or obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized officers and
their seals to be hereunto affixed, all as of the day and year
first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
/s/Kenneth L. MacRitchie /s/John M. Herndon
________________________ By:___________________________________
Assistant Secretary Vice President
ATTEST: AQUILA MANAGEMENT CORPORATION
/s/Rose F. Marotta /s/Lacy B. Herrmann
_______________________ By:___________________________________
Treasurer President and Chairman
RELATED AGREEMENT
UNDER DISTRIBUTION PLAN
THIS AGREEMENT, made as of the 28th day of February,
1992, by and between CAPITAL CASH MANAGEMENT TRUST (the "Trust"),
a Massachusetts business trust, 380 Madison Avenue, Suite 2300, New
York, New York 10017, and AQUILA MANAGEMENT CORPORATION (the
"Administrator"), 380 Madison Avenue, Suite 2300, New York, New
York 10017,
W I T N E S S E T H :
WHEREAS, the Distribution Plan of the Trust (the
"Distribution Plan") provides that the Administrator shall make
determinations under the Distribution Plan, may make Permitted
Payments to Qualified Recipients, as there defined, and has certain
other responsibilities under the Distribution Plan; and
WHEREAS, the Trust and the Administrator wish to
enter into an agreement as herein set forth, referred to hereafter
as "this Agreement" concerning the operation of the Distribution
Plan;
NOW THEREFORE, in consideration of the mutual
promises and agreements herein contained and other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Services of the Administrator.
(a) The Administrator agrees to act as
administrator and manager under the Distribution Plan, to make such
determinations and disbursements as may be required or permitted
under the Distribution Plan, to provide such reports to the
Trustees as are required by the Distribution Plan and to oversee
compliance with the Plan, all as more particularly set forth
therein.
(b) Any services furnished by the Administrator
under this Agreement shall at all times conform to, and be in
accordance with, any requirements imposed by: (1) the Investment
Company Act of l940 (the "Act") and any rules or regulations in
force thereunder; (2) any other applicable laws, rules and
regulations; (3) the Declaration of Trust and By-Laws of the Trust
as amended from time to time; (4) any policies and determinations
of the Board of Trustees of the Trust; and (5) the Distribution
Plan.
4. Compensation of the Administrator
(a) The Administrator shall serve without
compensation for the services to be provided under this Agreement.
5. Duration and Termination
(a) This Agreement shall become effective on
the date set forth above and shall, unless terminated as
hereinafter provided, continue in effect until the November 30 next
preceding the first anniversary of the effective date of this
Agreement, and from year to year thereafter, but only so long as
such continuance is specifically approved at least annually (1) by
a vote of the Trust's Board of Trustees, including a vote of a
majority of the Trustees who are not parties to this Agreement or
"interested persons" (as defined in the Act) of any such party,
with votes cast in person at a meeting called for the purpose of
voting on such approval, or (2) by a vote of the holders of a
"majority" (as so defined) of the outstanding voting securities of
the Trust and by such a vote of the Trustees.
(b) This Agreement may be terminated by the
Administrator at any time without penalty upon giving the Trust
sixty days' written notice (which notice may be waived by the
Trust) and may be terminated by the Trust at any time without
penalty upon giving the Administrator sixty days' written notice
(which notice may be waived by the Administrator), provided that
such termination by the Trust shall be directed or approved by a
vote of a majority of its Trustees in office at the time who are
not interested persons of the Trust and have no direct or indirect
financial interest in the operation of the Distribution Plan or in
any agreements related to the Distribution Plan
or by a vote of the holders of a majority (as defined in the Act)
of the voting securities of the Trust outstanding and entitled to
vote. This Agreement shall automatically terminate in the event of
its assignment (as defined in the Act).
6. Disclaimer of Shareholder Liability
The Administrator understands that the
obligations of this Agreement are not binding upon any shareholder
of the Trust personally, but bind only the Trust's property; the
Administrator represents that it has notice of the provisions of
the Trust's Declaration of Trust disclaiming shareholder liability
for acts or obligations of the Trust.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
caused the foregoing instrument to be executed by their duly
authorized officers and their seals to be hereunto affixed, all as
of the day and year first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
/s/Kenneth L. MacRitchie /s/Lacy B. Herrmann
________________________ By:___________________________________
Kenneth L. MacRitchie Lacy B. Herrmann
Assistant Secretary President and Chairman
ATTEST: AQUILA MANAGEMENT CORPORATION
/s/Charles E. Childs III /s/Rose F. Marotta
________________________ By:___________________________________
Charles E. Childs III Rose F. Marotta
Treasurer and Asst. Secy.
Dated: December 12, 1996
CAPITAL CASH MANAGEMENT TRUST
DISTRIBUTION PLAN
1. The Plan. This amended and restated distribution plan (the
"Plan") is the written plan, contemplated by Rule 12b-1 (the
"Rule") under the Investment Company Act of 1940 (the "1940
Act"), of CAPITAL CASH MANAGEMENT TRUST (the "Trust").
2. Definitions. As used in this Plan, "Qualified Recipients"
shall mean broker-dealers, membership organizations, associations
of common interest or others selected by the Trust's
administrator or sub-adviser, including but not limited to any
principal underwriter of the Trust (other than a principal
underwriter which is an affiliated person, or an affiliated
person of an affiliated person, of the administrator or sub-
adviser) which render assistance (whether direct, administrative,
or both) in the distribution and/or retention of the Trust's
shares, in servicing of shareholder accounts, or in consulting or
otherwise cooperating as to its members or others in its area of
interest. "Qualified Holdings" shall mean, as to any Qualified
Recipient, all Trust shares beneficially owned by such Qualified
Recipient, or beneficially owned by its brokerage customers,
other customers, other contacts, investment advisory clients,
other clients, or its members, associates or other persons within
its area of interest, if the Qualified Recipient was, in the sole
judgment of the administrator or sub-adviser, instrumental in the
purchase and/or retention of such Trust shares and/or in
providing administrative, consulting or other assistance in
relation thereto.
3. Certain Payments Permitted. The administrator or sub-adviser
may make payments ("Permitted Payments") to Qualified Recipients,
which Permitted Payments shall be made by the administrator or
sub-adviser, directly, or through the Distributor or shareholder
servicing agent as disbursing agent, and shall not be the subject
of reimbursement by the Trust to the administrator or sub-
adviser, which may not exceed, for any fiscal year of the Trust
(pro-rated for any fiscal year which is not a full fiscal year)
.10 of 1% of the average annual net assets of the Trust. The
administrator or sub-adviser shall have sole authority (i) as to
the selection of any Qualified Recipient or Recipients; (ii) not
to select any Qualified Recipient; and (iii) the amount of
Permitted Payments, if any, to each Qualified Recipient provided
that the total Permitted Payments to all Qualified Recipients do
not exceed the amount set forth above. The administrator or sub-
adviser is authorized, but not directed, to take into account, in
addition to any other factors deemed relevant by it, the
following: (a) the amount of the Qualified Holdings of the
Qualified Recipient; (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area; (c) the consulting or other assistance provided
by the Qualified Recipient; and (d) the possibility that the
Qualified Holdings of the Qualified Recipient would be redeemed
in the absence of its selection or continuance as a Qualified
Recipient. Notwithstanding the foregoing two sentences, a
majority of the Independent Trustees (as defined below) may
remove any person as a Qualified Recipient.
Whenever the sub-adviser or administrator bears the costs,
not borne by the Trust's Distributor, of printing and
distributing all copies of the Trust's prospectuses, statements
of additional information and reports to shareholders which are
not sent to the Trust's shareholders, or the costs of
supplemental sales literature and advertising, such payments are
authorized.
It is recognized that, in view of the Permitted Payments and
bearing by the administrator or sub-adviser of certain
distribution expenses, the profits, if any, of the administrator
or sub-adviser are dependent primarily on the administration fees
paid by the Trust to the administrator or sub-adviser and that
its profits, if any, would be less, or losses, if any, would be
increased due to such Permitted Payments and the bearing by it of
such expenses. If and to the extent that any such administration
fees paid by the Trust might, in view of the foregoing, be
considered as indirectly financing any activity which is
primarily intended to result in the sale of Trust shares, the
payment of such fees is authorized by this Plan.
4. Certain Trust Payments Authorized. If and to the extent that
any of the payments listed below are considered to be "primarily
intended to result in the sale of" Trust shares within the
meaning of the Rule, such payments are authorized under this
Plan: (i) the costs of the preparation of all reports and notices
to shareholders and the costs of printing and mailing such
reports and notices to existing shareholders, irrespective of
whether such reports or notices contain or are accompanied by
material intended to result in the sale of Trust shares, shares
of other funds, or other investments; (ii) the costs of the
preparation and setting in type of all prospectuses and
statements of additional information and the costs of printing,
and mailing of all prospectuses and statements of additional
information to existing shareholders; (iii) the costs of the
preparation, printing, and mailing of all proxy statements and
proxies, irrespective of whether any such proxy statement
includes any item relating to, or directed toward, the sale of
the Trust's shares; (iv) all legal and accounting fees relating
to the preparation of any such reports, prospectuses, statements
of additional information, proxies, and proxy statements; (v) all
fees and expenses relating to the registration or qualification
of the Trust or its shares under the securities or "Blue Sky"
laws of any jurisdiction; (vi) all fees under the Securities Act
of 1933 and the 1940 Act, including fees in connection with any
application for exemption relating to or directed toward the sale
of the Trust's shares; (vii) all fees and assessments of the
Investment Company Institute or any successor organization,
irrespective of whether some of its activities are designed to
provide sales assistance; (viii) all costs of the preparation and
mailing of confirmations of shares sold or redeemed or share
certificates, and reports of share balances; and (ix) all costs
of responding to telephone or mail inquiries of investors.
5. Disinterested Trustees. While this Plan is in effect, the
selection and nomination of those Trustees of the Trust who are
not "interested persons" of the Trust shall be committed to the
discretion of such disinterested Trustees. Nothing herein shall
prevent the involvement of others in such selection and
nomination if the final decision on any such selection and
nomination is approved by a majority of such disinterested
Trustees.
6. Reports. While this Plan is in effect, the Trust's
administrator or sub-adviser shall report at least quarterly to
the Trust's Trustees in writing for their review on the following
matters: (i) all Permitted Payments made under Section 3 of this
Plan, the identity of the Qualified Recipient of each Payment,
and the purposes for which the amounts were expended; (ii) all
costs of each item specified in Section 4 of this Plan (making
estimates of such costs where necessary or desirable) during the
preceding calendar or fiscal quarter; and (iii) all fees of the
Trust to the administrator or sub-adviser paid or accrued during
such quarter.
7. Effectiveness, Continuation, Termination, and Amendment. This
Plan shall go into effect when it has been approved (i) by a vote
of the Trustees of the Trust and of those Trustees (the
"Independent Trustees") who are not "interested persons" of the
Trust (as defined in the 1940 Act) and have no direct or indirect
financial interest in the operation of this Plan or in any
agreements related to this Plan, with votes cast in person at a
meeting called for the purpose of voting on this Plan; and (ii)
by a vote of the holders of at least a "majority" (as defined in
the 1940 Act) of the outstanding voting securities of the Trust.
This Plan shall, unless terminated as hereinafter provided,
continue in effect until the November 30 following its effective
date and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the
Trust's Board of Trustees and its Independent Trustees, with
votes cast in person at a meeting called for the purpose of
voting on such continuance. This Plan may be terminated at any
time by the vote of a majority of the Independent Trustees or by
the vote of the holders of a "majority" (as defined in the 1940
Act) of the outstanding voting securities of the Trust. This
Plan may not be amended to increase materially the amount of
payments to be made without shareholder approval as set forth in
(ii) above, and all amendments must be approved in the manner set
forth in (i) above.
8. Related Agreements. In the case of a Qualified Recipient
which is a principal underwriter of the Trust, the related
agreement shall be the agreement contemplated by Section 15(b) of
the 1940 Act since each such agreement must be approved in
accordance with, and contain the provisions required by, the
Rule. In the case of Qualified Recipients which are not
principal underwriters of the Trust, the related agreements with
them shall be approved in accordance with, and contain the
provisions required by, the Rule.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's annual report dated June 30, 1997 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000093832
<NAME> CAPITAL CASH MANAGEMENT TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 1,400,068
<INVESTMENTS-AT-VALUE> 1,400,068
<RECEIVABLES> 51,387
<ASSETS-OTHER> 4,017
<OTHER-ITEMS-ASSETS> 699
<TOTAL-ASSETS> 1,456,171
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21,015
<TOTAL-LIABILITIES> 21,015
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,435,156
<SHARES-COMMON-STOCK> 1,435,156
<SHARES-COMMON-PRIOR> 1,764,935
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,435,156
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 90,640
<OTHER-INCOME> 0
<EXPENSES-NET> 6,857
<NET-INVESTMENT-INCOME> 83,783
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 83,783
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 83,783
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,446,854
<NUMBER-OF-SHARES-REDEEMED> 1,860,327
<SHARES-REINVESTED> 83,694
<NET-CHANGE-IN-ASSETS> (329,779)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,423
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 111,078
<AVERAGE-NET-ASSETS> 1,711,691
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .049
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .049
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
