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. 39 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [ X ]
Amendment No. 22 [ 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 30, 1998 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 effective
date for a previous post-effective amendment.
<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 30, 1998
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 30, 1998
(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 this Prospectus. The
Additional Statement is incorporated by reference in its entirety
in this Prospectus. Only when you have read both this Prospectus
and the Additional Statement are all the material facts about the
Trust available to you.
AN INVESTMENT IN THE TRUST IS NEITHER INSURED NOR GUARANTEED
BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE TRUST
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.
SHARES OF THE TRUST ARE NOT DEPOSITS IN, OBLIGATIONS OF OR
GUARANTEED OR ENDORSED BY ANY BANK. SHARES OF THE TRUST ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL
AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT
OR ANY STATE.
AN INVESTMENT IN THE TRUST INVOLVES INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
For Purchase, Redemption or Account inquiries contact the
Trust's Shareholder Servicing Agent:
PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809
Call 800-952-6666 toll free
For General Inquiries & Yield Information,
Call 800-227-4638 toll free or 212-697-6666
This Prospectus Should Be Read and Retained For Future Reference
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
TABLE OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Load Imposed on Purchases........................... 0%
Maximum Sales Load Imposed on Reinvested Dividends................ 0%
Deferred Sales Load............................................... 0%
Redemption Fees................................................... 0%
Exchange Fee ..................................................... 0%
ANNUAL TRUST OPERATING EXPENSES*
(as a percentage of average net assets)
Investment Advisory Fee After Waiver+ ............................. 0%
12b-1 Fee++........................................................ 0%
Total Other Expenses After Expense Reimbursement and Fee Waiver+... 0.40%
Administration Fee After Waiver+..........................0.00%
Other Expenses After Expense Reimbursement+...............0.40%
Total Trust Operating Expenses After Expense Reimbursement
and Fee Waivers+............................................... 0.40%
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 5.14%.
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 has been audited
by KPMG Peat Marwick LLP, independent auditors, whose report thereon
is included with 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. The
Trust's Annual Report contains additional information about the
Trust's performance and is available upon request 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,
1998 1997 1996 1995 1994
<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............... 0.0521 0.0489 0.0518 0.0497 0.030
Less Distributions:
Dividends from net
investment income.... (0.0521) (0.0489) (0.0518) (0.0497) (0.0309)
Net Asset Value,
End of Year........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return(%)....... 5.33 5.00 5.29 5.09 3.14
Ratios/Supplemental
Data
Net Assets, End of Year
($ in thousands)..... 1,613 1,435 1,765 1,660 1,713
Ratio of Expenses
to Average Net
Assets (%)........... 0.40 0.40 0.40 0.40 0.28
Ratio of Net Investment
Income to Average
Net Assets %......... 5.21 4.89 5.17 5.00 3.08
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 and the Administrator's voluntary expense reimbursement
would have been:
Net Investment
Income (loss)($)..... 0.0047 (0.0119) (0.0018) 0.0038 (0.0137)
Ratio of Expenses
to Average Net
Assets.(%)........... 5.14 6.49 5.75 5.02 4.73
Ratio of Net
Investment Income
to Average Net
Assets................ 0.47 (1.19) (0.18) 0.38 (1.37)
</TABLE>
The Trust's "current yield" for the seven days ended June 30, 1998 was
5.25% and its "compounded effective yield" for that period was 5.38%;
see the Additional Statement for the methods of calculating these yields.
<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 certain 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 and the Custodian is open (a "Business Day") 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).
The New York Stock Exchange is normally not 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, the
Exchange may close on other days. In addition, the Custodian is
not open on Columbus Day and Veterans Day.
HOW TO INVEST IN THE TRUST
The Trust's shares are sold on a continuous basis at the net
asset value next determined after an order is entered and deemed
effective. There is no sales charge. The minimum initial
investment is $1,000. Subsequent investments may be in any
amount. Aquila Distributors, Inc. (the "Distributor") is the
exclusive Distributor of the Trust's shares. The Distributor
sells shares only for purchase orders received.
Opening an Account
To open a new account you must send a properly completed
Application to PFPC Inc., the Trust's Shareholder Servicing Agent
(the "Agent"). Redemption of shares purchased by wire payment
will not be honored until a properly completed Application has
been received by the Agent. Initial investments may be made in
any of these three ways:
1. By Mail. Payment may be made by check, money order,
Federal Reserve Draft, or other negotiable bank draft drawn
in United States dollars on a United States commercial or
savings bank or credit union (each of which is a "Financial
Institution") payable to the order of Capital Cash
Management Trust and mailed to:
Capital Cash Management Trust
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
2. By Wire. Payment may be wired in Federal funds (monies
credited to a bank's account with a Federal Reserve Bank) to
PNC Bank, NA ("PNC Bank"), using the wire information set
forth below.
To insure prompt and proper crediting to your account, if
you choose this method of payment, you should first telephone the
Agent (800-952-6666 toll free) and then instruct your bank to
wire funds as indicated below:
PNC BANK, NA
Philadelphia, PA
ABA No. 0310-0005-3
Account No. 85-0216-4765
FFC: Capital Cash Management Trust
Account Name and Number (if an existing account)
The name in which the investment is to be registered (if a
new account).
Your bank may impose a charge for wiring funds.
3. Through Brokers. You may invest in the Trust by
purchasing shares through registered broker-dealers.
There is no sales or service charge imposed by the Trust,
although broker-dealers may make reasonable charges to their
customers for their services. The services to be provided and the
fees therefor are established by each broker-dealer acting
independently; broker-dealers may also determine to establish, as
to accounts serviced by them, higher initial or subsequent
investment requirements than those required by the Trust.
Broker-dealers are responsible for prompt transmission of orders
placed through them.
Additional Investments
You may make additional investments in shares of the
Trust 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 Managment
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 Business Day
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
Business Day. Wire payments not in Federal funds will normally be
converted into Federal funds on the next Business Day 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 it is a Business
Day and otherwise at 4:00 p.m. on the next Business Day 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 Business Day
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 Business Day, in which case the order
will be executed at the net asset value determined on the next
Business Day. 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 Business Day. 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(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 on 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 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 to 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.
Expedited Redemption Methods described below will not be
available and delay and expense may be incurred if you lose the
certificates. No certificates will be issued for fractional
shares or to shareholders who have elected the checking account
or predesignated bank account methods of withdrawing cash from
their accounts. (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 receipt in proper form 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 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. You
should verify the accuracy of confirmation statements immediately
upon receipt.
2. By FAX or Mail. You may also request redemption
payments to a predesignated Financial Institution account by
a letter of instruction sent to: PFPC Inc., by FAX at
302-791-3055 or by mail at 400 Bellevue Parkway, Wilmington,
DE 19809, indicating account name(s), account number, amount
to be redeemed, and any payment directions, and signed by
the registered holder(s). Signature guarantees are not
required. (See "Redemption Payments" below for payment
methods).
If you wish to use the above procedures you should so
elect on the Expedited Redemption section of the Application or
Ready Access Features Form and provide the required information
concerning the Financial Institution account number. The
Financial Institution account must be in the exclusive name(s) of
the shareholder(s) as registered with the Trust. You may change
the designated Financial Institution account at any time by
completing and returning a Ready Access Features Form. For
protection of your assets, this form requires signature
guarantees and possible additional documentation.
3. By Check. The Agent will, upon request, provide you
with forms of drafts ("checks") drawn on PNC Bank, NA (the
"Bank"). This feature is not available if your shares are
represented by certificates. These checks represent a
further alternative redemption means and you may make them
payable to the order of anyone in any amount of not less
than $100. If you wish to use this check writing redemption
procedure you should notify the Agent or so indicate on your
Application. You will be issued special checks to be drawn
against the Bank for this purpose. You will be subject to
the Bank's rules and regulations governing its checking
accounts. If the account is registered in more than one
name, each check must be signed by each account holder
exactly as the names appear on the account registration,
unless expressly stated otherwise on your Application.
There is no charge for the maintenance of this special check
writing privilege or for the clearance of any checks.
When such a check is presented to the Bank for payment, a
sufficient number of full and fractional shares in your account
will be redeemed to cover the amount of the check. This check
writing redemption procedure enables you to continue receiving
dividends on those shares equaling the amount being redeemed by
check until such time as the check is actually presented to the
Bank for payment.
As these checks are redemption drafts relating to Trust
shares, you should be certain that adequate shares for which
certificates have not been issued and which were not recently
purchased by check are in the account to cover the amount of the
check. (See "Redemption Payments" below for more details as to
special problems as to Trust shares recently purchased by
check.) If insufficient redeemable shares are in the account, the
redemption check will be returned marked "insufficient funds."
The fact that redemption checks are drafts may also permit a bank
in which they are deposited to delay crediting the account in
question until that bank has received payment funds for the
redemption check.
Checks may not be directly presented to any branch of the
Bank. This does not affect checks used for the payment of bills
or cashed at other banks. You may not use checks to close your
account, since the number of shares in your account changes daily
through dividend payments which are automatically reinvested in
full and fractional shares. Consequently, you may not present a
check directly to the Bank and request redemption for all or
substantially all shares held in your account. Only expedited
redemption to a predesignated bank account or the regular
redemption method (see below) may be used when closing your
account.
Multiple Redemption Services. You are not limited in
choice of redemption methods but may utilize all available forms.
However, when both redemption to a predesignated Financial
Institution account and check writing are desired, you must so
elect on your Application, or by proper completion of a Ready
Access Features Form.
Regular Redemption Method
(Certificate and Non-Certificate Shares)
1. Certificate Shares. Certificates in blank (unsigned)
representing shares to be redeemed should be sent to the
Trust's Shareholder Servicing Agent: PFPC Inc., 400 Bellevue
Parkway, Wilmington, DE 19809, with payment instructions. A
stock assignment form signed by the registered
shareholder(s) exactly as the account is registered must
also be sent to the Shareholder Servicing Agent.
For your own protection, it is essential that certificates
be mailed separately from signed redemption documentation.
Because of possible mail problems, it is also recommended that
certificates be sent by registered mail, return receipt
requested.
For the redemption request to be in "proper form," the
signature or signatures must be the same as in the registration
of the account. In a joint account, the signatures of both
shareholders are necessary. Additional documentation may be
required where shares are held by a corporation, a partnership,
trustee or executor, or if redemption is requested by other than
the shareholder of record. If redemption proceeds of less than
$50,000 are payable to the record holder and are to be sent to
the record address no signature guarantee is required. In all
other cases, signatures must be guaranteed by a member of a
national securities exchange, a U.S. bank or trust company, a
state-chartered savings bank, a federally chartered savings and
loan association, a foreign bank having a U.S. correspondent bank
or a participant in the Securities Transfer Association Medallion
Program (STAMP), the Stock Exchanges Medallion Program (SEMP) or
the New York Stock Exchange, Inc. Medallion Signature Program
(MSP). A notary public is not an acceptable signature guarantor.
2. Non-Certificate Shares. If you own non-certificate
shares registered on the books of the Trust, and you have
not elected Expedited Redemption to a predesignated
Financial Institution account, you must use the Regular
Redemption Method. Under this redemption method you should
send a letter of instructions to: PFPC Inc., 400 Bellevue
Parkway, Wilmington, DE 19809, containing:
Account Name(s)
Account Number;
Dollar amount or number of shares to be redeemed
or a statement that all shares held in the account
are to be redeemed;
Payment instructions (normally redemption proceeds
will be mailed to your address as registered with
the Trust);
Signature(s) of the registered shareholder(s); and
Signature guarantee(s), if required, as indicated
above.
Redemption Payments
For redemptions other than by checks you have written,
redemption payments will ordinarily be mailed to you at your
address of record. If you so request and the amount of your
redemption proceeds is $1,000 or more, the proceeds will,
wherever possible, be wired or transferred through the facilities
of the Automated Clearing House to the Financial Institution
account specified in the Expedited Redemption section of your
Application or Ready Access Features Form. The Trust may impose a
charge, not exceeding $5.00 per wire redemption, after written
notice to shareholders who have elected this redemption
procedure. The Trust has no present intention of making this
charge. Upon 30 days' written notice to shareholders, the Trust
may modify or terminate the use of the Automated Clearing House
to make redemption payments at any time or charge a service fee.
If any such changes are made, the Prospectus will be supplemented
to reflect them. If you use a broker or dealer to arrange for a
redemption, you may be charged a fee for this service.
Redemption proceeds on shares issued under the third method
under which shares are issued (see "When Shares Are Issued and
Dividends Are Declared on Them" under "How to Invest in the
Trust") will be wired in Federal funds on the date of redemption,
if practicable, and, if not practicable, as soon thereafter as
practicable, irrespective of amount. Redemption requests as to
such shares may be made by telephone.
Except as indicated above, the Trust will normally make
payment for all shares redeemed on the next business day
following receipt of request. Except as set forth below, in no
event will payment be made more than seven days after receipt of
a redemption request made in compliance with one of the
redemption methods specified above. However, the right of
redemption may be suspended or the date of payment postponed (i)
during periods when the New York Stock Exchange is closed for
other than weekends and holidays or when trading on such exchange
is restricted as determined by the Securities and Exchange
Commission by rule or regulation; (ii) during periods in which an
emergency, as determined by the Securities and Exchange
Commission, exists which causes disposal of, or valuation of the
net asset value of, the portfolio securities to be unreasonable
or impracticable; or (iii) for such other periods as the
Securities and Exchange Commission may permit. Payment for
redemption by any method (including redemption by check) of
shares recently purchased by check (irrespective of whether the
check is a regular check or a certified, cashier's or official
bank check) or by Automatic Investment or Telephone Investment
may be delayed up to 15 days or until (i) the purchase check or
Automatic Investment or Telephone Investment has been honored or
(ii) the Agent has received assurances by telephone or in writing
from the bank on which the purchase check was drawn or from which
the funds for Automatic Investment or Telephone Investment were
transferred, satisfactory to the Agent and the Trust, that the
purchase check or Automatic Investment or Telephone Investment
will be honored. Shares so purchased within the prior 15 days
will not be redeemed under the check writing redemption procedure
and a shareholder must not write a check if (i) it will be
presented to the Bank for payment within 15 days of a share
purchase by check and (ii) the redemption check would cause the
redemption of some or all of those shares. Possible delays in
payment of redemption proceeds can be eliminated by using wire
payments or Federal Reserve drafts to pay for purchases.
If the Board of Trustees determines that it would be
detrimental to the best interests of the remaining shareholders
of the Trust to make payment wholly or partly in cash, the Trust
may pay the redemption price in whole or in part by the
distribution in kind of securities from the portfolio of the
Trust, in lieu of cash, in conformity with applicable rules of
the Securities and Exchange Commission. (See the Additional
Statement for details.)
The Trust has the right to compel the redemption of shares
held in any account if the aggregate net asset value of such
shares is less than $500 due to shareholder redemptions. If the
Board of Trustees elects to do this, shareholders who are
affected will receive prior written notice and will be permitted
60 days to bring their accounts up to the minimum before this
redemption is processed.
AUTOMATIC WITHDRAWAL PLAN
If you own or purchase shares of the Trust having a net
asset value of at least $5,000 you may establish an Automatic
Withdrawal Plan under which you will receive a monthly or
quarterly check in a stated amount, not less than $50. If such a
plan is established, all dividends and distributions must be
reinvested in your shareholder's account. (See the Automatic
Withdrawal Plan provisions of the Application included in the
Prospectus, the Additional Statement under "Automatic Withdrawal
Plan" and "Dividend and Tax Information" below.)
MANAGEMENT ARRANGEMENTS
The Board of Trustees
The business and affairs of the Trust are managed under the
direction and control of its Board of Trustees. The Additional
Statement lists the Trust's Trustees and officers and provides
further information about them.
The Advisory Agreement
STCM Management Company, Inc. (the "Adviser") supervises
the investment program of the Trust and the composition of its
portfolio. The Adviser formerly acted as the Trust's sub-adviser.
(See "Information as to the Adviser, the Administrator and the
Distributor," below.)
The services of the Adviser are rendered under an Investment
Advisory Agreement (the "Advisory Agreement") which provides,
subject to the control of the Board of Trustees, for investment
supervision and for either keeping the accounting records of the
Trust, including the computation of the net asset value per share
and the dividends, or, at the Adviser's expense and
responsibility, delegating these accounting duties in whole or
in part to a company satisfactory to the Trust. The Advisory
Agreement states that the Adviser shall, at its expense, provide
to the Trust all office space and facilities, equipment and
clerical personnel necessary for the carrying out of the
Adviser's duties under the Advisory Agreement.
Under the Advisory Agreement, the Adviser pays all
compensation of those officers and employees of the Trust and of
those Trustees, if any, who are affiliated with the Adviser.
Under the Advisory Agreement, the Trust bears the cost of
preparing and setting in type its prospectuses, statements of
additional information, and reports to shareholders and the costs
of printing or otherwise producing and distributing those copies
of such prospectuses, statements of additional information and
reports as are sent to its shareholders. Under the Advisory
Agreement, all costs and expenses not expressly assumed by the
Adviser or by the Administrator under the Administration
Agreement or by the Trust's principal underwriter are paid by the
Trust. The Advisory Agreement lists examples of such expenses
borne by the Trust, the major categories of such expenses being:
legal and audit expenses, custodian and transfer agent, or
shareholder servicing agent fees and expenses, stock issuance and
redemption costs, certain printing costs, registration costs of
the Trust and its shares under Federal and State securities laws,
interest, taxes, and non-recurring expenses, including
litigation.
Under the Advisory Agreement, the Trust pays a fee payable
monthly and computed on the net asset value of the Trust as of
the close of business each business day at the annual rate of
0.20 of 1% of the Trust's average daily net assets; however, the
total fees which the Trust pays are at the annual rate of 0.35 of
1% of such net asset value, since the Administrator, under the
Administration Agreement, described below, also receives a fee
from the Trust at the annual rate of 0.15 of 1% of such net asset
value. The Administrator has undertaken to waive fees and
reimburse expenses in order to enable the Trust to maintain a
moderate expense ratio. In addition, these fees are subject to
expense limitations described below. It is currently anticipated
that most if not all of such fees will be waived to enable the
Trust to maintain a competitive yield.
The Adviser agrees that the above fee shall be reduced, but
not below zero, by an amount equal to its pro-rata portion
(hereafter described) of the amount, if any, by which the Trust's
total expenses in any fiscal year, exclusive of taxes, interest,
and brokerage fees, shall exceed the lesser of (i) 1.5% of the
first $30 million of the Trust's average annual net assets, plus
1% of the Trust's average annual net assets in excess of $30
million, or (ii) 25% of the Trust's total annual investment
income. The pro-rata portion, as between the Adviser and the
Administrator, is based on the aggregate of the fee of the
Adviser and the fee of the Administrator (exclusive of amounts
paid or to be paid out for the applicable period pursuant to the
Distribution Plan).
The Advisory Agreement contains provisions as to the
allocation of the portfolio transactions of the Trust (see the
Additional Statement). Under these provisions, the Adviser is
authorized to consider sales of the Trust's shares in making this
allocation.
The Administration Agreement
Under an Administration Agreement (the "Administration
Agreement"), Aquila Management Corporation as Administrator, at
its own expense, provides office space, personnel, facilities and
equipment for the performance of its functions thereunder and as
is necessary in connection with the maintenance of the
headquarters of the Trust and pays all compensation of the
Trust's Trustees, officers and employees who are affiliated
persons of the Administrator.
Under the Administration Agreement, subject to the
control of the Trust's Board of Trustees, the Administrator
provides all administrative services to the Trust other than
those relating to its investment portfolio and the maintenance of
its accounting books and records. Such administrative services
include but are not limited to maintaining books and records
(other than accounting books and records) of the Trust, and
overseeing all relationships between the Trust and its transfer
agent, custodian, legal counsel, auditors and principal
underwriter, including the negotiation of agreements in relation
thereto, the supervision and coordination of the performance of
such agreements, and the overseeing of all administrative matters
which are necessary or desirable for effective operation of the
Trust and for the sale, servicing or redemption of the Trust's
shares. (See the Additional Statement for a further description
of functions listed in the Administration Agreement as part of
such duties.)
Under the Administration Agreement, the Trust pays a fee
payable monthly and computed on the net asset value of the Trust
at the end of each business day at the annual rate of 0.15 of 1%
of such net asset value. The Administrator has agreed that the
above fee shall be reduced, but not below zero, by an amount
equal to its pro-rata portion (hereafter described) of the
amount, if any, by which the Trust's total expenses in any fiscal
year, exclusive of taxes, interest, and brokerage fees, shall
exceed the lesser of (i) 1.5% of the first $30 million of the
Trust's average annual net assets, plus 1% of the Trust's average
annual net assets in excess of $30 million, or (ii) 25% of the
Trust's total annual investment income. The pro-rata portion, as
between the Adviser and the Administrator, is based on the
aggregate of the fee of the Adviser and the fee of the
Administrator (exclusive of amounts paid or to be paid out for
the applicable period pursuant to the Distribution Plan).
In addition to the foregoing expense limitation, the
Administration Agreement contains provision under which the
Administrator agrees to waive fees and reimburse expenses to the
Trust as required so that the total expenses of the Trust in any
fiscal year shall not exceed 0.60 of 1% of its average annual net
assets. The payment of any fee under the Administration Agreement
to the Administrator at the end of any month will be reduced or
postponed as may be required by reason of the expense guarantee,
subject to readjustment during the year. Any reimbursement of
expense to the Trust with respect to a fiscal year will be made
during or at the end of that fiscal year, and any reimbursements
made during the fiscal year will be subject to readjustment
during the year. The expense guarantee continues until June 30,
1995, and for three years thereafter; it continues from year to
year thereafter, provided, however, that upon at least six
months' written notice to the Trust, the Administrator may cancel
its obligation under this expense guarantee. Upon the expiration
of the expense guarantee, any amount then outstanding thereunder
shall be paid, and thereupon neither party shall have any further
liability to the other thereunder. The expense guarantee and any
outstanding obligation thereunder shall survive the termination
of the Administration Agreement.
Information as to the Adviser, the Administrator and the
Distributor
From August 1, 1988 until February 28, 1992, when the
Advisory Agreement became effective, the Adviser performed
portfolio management functions and the keeping of the accounting
records of the Trust, including the computation of the net asset
value and the dividends, on a basis not exceeding its cost. These
services replaced those performed by HT Investors, Inc., under an
Investment Advisory Agreement in effect until August 1, 1988. The
Adviser continued to act as Sub-Adviser and Administrator of the
Trust during that period under a sub-advisory agreement which
terminated on February 28, 1992.
The Administrator has agreed that it will provide funding to
the Adviser as necessary to cover operating expenses and other
financial commitments and will make available personnel, office
space and equipment support to the Adviser at no charge. As a
result of these arrangements, the Adviser currently incurs no
costs for salaries, rent or equipment. It is anticipated that
these arrangements will remain in place until the Trust achieves
sufficient size so that it is no longer necessary for the Adviser
to waive its fees or for the Trust's expenses to be reimbursed.
If these arrangements are discontinued, the Prospectus will be
supplemented. Certain officers of the Administrator are also
officers of the Adviser. (See "Additional Information as to
Management Arrangements" in the Additional Statement.)
The Board of Trustees in approving the Advisory Agreement
considered all of the foregoing matters as well as the
performance of the Adviser as interim adviser. The Board
determined that the Adviser has all the capabilities and
resources needed to perform its functions for the Trust.
During the fiscal year ended June 30, 1998, the Trust
accrued $3,238 in favor of the Adviser under the Advisory
Agreement and $2,429 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 $54,773 to comply with the expense
limitation, $12,988 pursuant to the agreement regarding total
expenses of the Trust and $3,237 voluntarily, totaling
$70,998.
The Trust's Administrator is administrator to the
Aquilasm Group of Funds which consists of money market funds,
tax-free municipal bond funds and equity funds. As of August 31,
1998, these funds had aggregate assets of approximately $3.0
billion, of which approximately $1.1 billion 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 this Prospectus, there is a proposed
transaction whereby all of the shares of the Distributor, which
are currently owned 75% by Mr. Herrmann and 25% by Diana P.
Herrmann, will be owned by certain directors and/or officers of
the Administrator and/or the Distributor, 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.
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 certain tax-free municipal bond funds and equity
funds (the "Bond or Equity Funds") and certain money market funds
(together with the Trust, the "Money-Market Funds"), all of which
are sponsored by Aquila Management Corporation and Aquila
Distributors, Inc., and have the same Manager or 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. Government Securities 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.
Generally, you can exchange shares of a given class of a
Bond or Equity Fund for shares of the same class of any other
Bond or Equity Fund, or for shares of any Money-Market Fund,
without the payment of a sales charge or any other fee, and there
is no limit on the number of exchanges you can make from fund to
fund. However, the following important information should be
noted:
(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 contingent
deferred sales charge ("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 Fund
shares.
(2) CDSCs Upon Redemptions of Shares Acquired Through
Exchanges. If you exchange shares subject to a CDSC, no 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.
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 of 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
Fund 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. Government Securities Cash
Assets Trust (which invests in U.S. Government 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.
The Year 2000
Like other financial and business organizations, the
Trust could be adversely affected if computer systems the Trust
relies on do not properly process date-related information and
data involving the year 2000 and after. The Administrator is
taking steps that it believes are reasonable to address this
problem in its own computer systems and to obtain assurances that
steps are being taken by the other major service providers to the
Trust to achieve comparable results. The three mission critical
vendors -- the shareholder servicing agent, the custodian and the
fund accounting agent -- as well as other support organizations,
have advised the Administrator that they are actively working on
necessary changes. Certain vendors have advised the Administrator
that they are currently compliant. The target date for compliance
by the mission critical vendors is late 1998. The Administrator
has also requested the Trust's portfolio manager to attempt to
evaluate the potential impact of this problem on the issuers of
securities in which the Trust invests. At this time there can be
no assurance that the target dates will be met or that these
steps will be sufficient to avoid any adverse impact on the
Trust.
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:
PFPC Inc., 400 Bellevue Parkway Wilmington, DE 19809
Tel.# 1-800-952-6666
STEP 1
A. ACCOUNT REGISTRATION
___Individual Use line 1
___Joint Account* Use lines 1&2
___For a Minor Use line 3
___For Trust, Corporation, Partnership or other Entity Use line 4
* Joint Accounts will be Joint Tenants with rights of survivorship
unless otherwise specified.
** Uniformed Gifts/Transfers to Minors Act.
Please type or print name exactly as account is to be registered
1.______________________________________________________________________
First Name Middle Initial Last Name Social Security Number
2.______________________________________________________________________
First Name Middle Initial Last Name Social Security Number
3.______________________________________________________________________
Custodian's First Name Middle Initial Last Name
Custodian for __________________________________________________________
Minor's First Name Middle Initial Last Name
Under the ___________UGTMA** ___________________________________________
Name of State Minor's Social Security Number
4. _____________________________________________________________________
_____________________________________________________________________
(Name of Corporation or Organization. If a Trust, include the name(s) of
Trustees in which account will be registered and the name and date of the
Trust Instrument. Account for a Pension or Profit Sharing Plan or Trust
may be registered in the name of the Plan or Trust itself.)
________________________________________________________________________
Tax I.D. Number Authorized Individual Title
B. MAILING ADDRESS AND TELEPHONE NUMBER
________________________________________________________________________
Street or PO Box City
_________________________________ (______)_______________________
State Zip Daytime Phone Number
Occupation:________________________Employer:____________________________
Employer's Address:_____________________________________________________
Street Address: City State Zip
Citizen or resident of: ___ U.S. ___ Other Check here ___ if you are a
non-U.S. Citizen or resident and not subject to back-up withholding (See
certification in Step 4, Section B, below.)
C. INVESTMENT DEALER OR BROKER:
(Important - to be completed by Dealer or Broker)
______________________________ ____________________________________
Dealer Name Branch Number
______________________________ ____________________________________
Street Address Rep. Number/Name
______________________________ (_________)_________________________
City State Zip Area Code Telephone
STEP 2 PURCHASES OF SHARES
A. INITIAL INVESTMENT
1) ___ By Check
2) ___ By Wire
1) By Check: make check payable to CAPITAL CASH MANAGEMENT TRUST
Amount of investment $ ______________ Minimum initial investment $1,000
OR
2) By Wire:
$________________________________ From ________________________________
Name of Financial Institution
_________________________________ __________________________________
Financial Institution Account No. Branch, Street or Box #
On_______________________________ __________________________________
(Date) City State Zip
*NOTE: If investing by wiring of funds, instruct your Financial
Institution to wire funds to:
PNC Bank, NA Account of: (Account name and
ABA No. 0310-0005-3 number, or name in which
Account No. 85-0216-4765 investment is to be registered
FFC: Capital Cash Management Trust if new account)
(A Financial Institution is a commercial bank, savings bank
or credit union.)
B. DIVIDENDS
All income dividends are automatically reinvested in additional shares
at Net Asset Value unless otherwise indicated below.
Dividends are to be:___ Reinvested or ___ Paid in cash*
* For cash dividends, please choose one of the following options:
___ Deposit directly into my/our Financial Institution account.
ATTACHED IS A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK
showing the Financial Institution account where I/we would like you
to deposit the dividend.
___ Mail check to my/our address listed in Step 1B.
STEP 3 SPECIAL FEATURES
A. AUTOMATIC INVESTMENT PROGRAM
(Check appropriate box)
___ Yes ___ No
This option provides you with a convenient way to have amounts
automatically drawn on your Financial Institution account and invested in
your account. To establish this program, please complete Step 4, Sections
A & B of this Application.
I/We wish to make regular monthly investments of $ _________________
(minimum $50) on the ___ 1st day or ___ 16th day of the month (or
on the first business day after that date).
(YOU MUST ATTACH A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK)
B. TELEPHONE INVESTMENT
(Check appropriate box)
___ Yes ___ No
This option provides you with a convenient way to add to your account
(minimum $50 and maximum $50,000) at any time you wish by simply calling
the Trust's Shareholder Servicing Agent (the "Agent") toll-free at
1-800-952-6666. To establish this program, please complete Step 4,
Sections A & B of this Application.
(YOU MUST ATTACH A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK)
C. AUTOMATIC WITHDRAWAL PLAN
(Minimum investment $5,000)
Application must be received in good order at least 2 weeks prior to
1st actual liquidation date.
(Check appropriate box)
___ Yes ___ No
Please establish an Automatic Withdrawal Plan for this account,
subject to the terms of the Automatic Withdrawal Plan Provisions set
forth below. To realize the amount stated below, the Agent is authorized
to redeem sufficient shares from this account at the then current Net
Asset Value, in accordance with the terms below:
Dollar Amount of each withdrawal $____________ beginning________________
Minimum:$50 Month/Year
Payments to be made: ___ Monthly or ___ Quarterly
Checks should be made payable as indicated below. If check is
payable to a Financial Institution for your account, indicate Financial
Institution name, address and your account number.
____________________________________ _________________________________
First Name Middle Initial Last Name Financial Institution Name
____________________________________ _________________________________
Street Financial Institution Street Address
____________________________________ _________________________________
City State Zip City State Zip
____________________________________
Financial Institution Account Number
D. TELEPHONE EXCHANGE
(Check appropriate box)
___ Yes ___ No
This option allows you to effect exchanges among accounts in your name
within the Aquilasm Group of Funds by telephone.
To make a Telephone Exchange, call the Agent at 1-800-952-6666
The Agent is authorized to accept and act upon my/our or any other
person's telephone instructions to execute the exchange of shares with
identical shareholder registration in the manner described in the
Prospectus. Except for gross negligence in acting upon such telephone
instructions to execute an exchange, and subject to the conditions set
forth herein, I/we understand and agree to hold harmless the Agent, each
of the Aquila Funds and their respective officers, directors, trustees,
employees, agents and affiliates against any liability, damage, expense,
claim or loss, including reasonable costs and attorney's fees, resulting
from acceptance of, or acting or failure to act upon, this Authorization.
E. EXPEDITED REDEMPTION
(Check appropriate box)
___Yes ___ No
The proceeds will be deposited to your Financial Institution account listed.
To make an expedited redemption, call the Agent at 1-800-952-6666
Cash proceeds in any amount from the redemption of shares will be
mailed or wired, whenever possible, upon request, if in an amount of $1,000
or more to my/our account at a Financial Institution. The Financial
Institution account must be in the same name(s) as this Trust account is
registered.
(YOU MUST ATTACH A PRE-PRINTED DEPOSIT SLIP OR VOIDED CHECK).
_______________________________ _____________________________________
Account Registration Financial Institution Account Number
_______________________________ _____________________________________
Financial Institution Name Financial Institution Transit/Routing
Number
_______________________________ _____________________________________
Street City State Zip
F. CHECKING ACCOUNT SERVICE
(Check appropriate box)
___ Yes ___ No
Please open a redemption checking account at PNC Bank, NA, in my
(our) name(s) as registered and send me (us) a supply of checks. I (we)
understand that this checking account will be subject to the rules and
regulations of Bank One Trust Company, N.A., pertaining thereto and as
amended from time to time. For joint account: Check here whether either
owner ___ is authorized, or all owners ___ are required to sign checks.
IF NO BOX IS CHECKED, TWO SIGNATURES WILL BE REQUIRED ON JOINT ACCOUNTS.
STEP 4 Section A
DEPOSITOR'S AUTHORIZATION TO HONOR DEBITS
IF YOU SELECTED AUTOMATIC INVESTMENT OR TELEPHONE INVESTMENT
YOU MUST ALSO COMPLETE STEP 4, SECTIONS A & B.
I/We authorize the Financial Institution listed below to charge to my/our
account any drafts or debits drawn on my/our account initiated by the
Agent, and to pay such sums in accordance therewith, provided my/our account
has sufficient funds to cover such drafts or debits. I/We further agree that
your treatment of such orders will be the same as if I/we personally signed
or initiated the drafts or debits.
I/We understand that this authority will remain in effect until you
receive my/our written instructions to cancel this service. I/We also
agree that if any such drafts or debits are dishonored, for any reason,
you shall have no liabilities.
Financial Institution Account Number __________________________________
Name and Address where my/our account is maintained
Name of Financial Institution__________________________________________
Street Address_________________________________________________________
City_______________________________State _________________ Zip ________
Name(s) and Signature(s) of Depositor(s) as they appear where account
is registered
_________________________________________________
(Please Print)
X________________________________________________ ____________________
(Signature) (Date)
_________________________________________________
(Please Print)
X________________________________________________ ____________________
(Signature) (Date)
INDEMNIFICATION AGREEMENT
To: Financial Institution Named Above
So that you may comply with your depositor's request, Aquila Distributors,
Inc. (the "Distributor") agrees:
1 Electronic Funds Transfer debit and credit items transmitted pursuant
to the above authorization shall be subject to the provisions of the
Operating Rules of the National Automated Clearing House Association.
2 To indemnify and hold you harmless from any loss you may suffer in
connection with the execution and issuance of any electronic debit
in the normal course of business initiated by the Agent (except any
loss due to your payment of any amount drawn against insufficient or
uncollected funds), provided that you promptly notify us in writing
of any claim against you with respect to the same, and further
provided that you will not settle or pay or agree to settle or pay
any such claim without the written permission of the Distributor.
3 To indemnify you for any loss including your reasonable costs and
expenses in the event that you dishonor, with or without cause, any
such electronic debit.
STEP 4 Section B
SHAREHOLDER AUTHORIZATION/SIGNATURE(S) REQUIRED
- - The undersigned warrants that he/she has full authority and is of
legal age to purchase shares of the Trust and has received and
read a current Prospectus of the Trust and agrees to its terms.
- - I/We authorize the Trust and its agents to act upon these
instructions for the features that have been checked.
- - I/We acknowledge that in connection with an Automatic Investment or
Telephone Investment, if my/our account at the Financial Institution
has insufficient funds, the Trust and its agents may cancel the
purchase transaction and are authorized to liquidate other shares or
fractions thereof held in my/our Trust account to make up any
deficiency resulting from any decline in the net asset value of shares
so purchased and any dividends paid on those shares. I/We authorize the
Trust and its agents to correct any transfer error by a debit or credit
to my/our Financial Institution account and/or Trust account and to
charge the account for any related charges.
- - The Trust, the Agent and the Distributor and their Trustees,
directors, employees and agents will not be liable for acting upon
instructions believed to be genuine, and will not be responsible for
any losses resulting from unauthorized telephone transactions if the
Agent follows reasonable procedures designed to verify the identity of
the caller. The Agent will request some or all of the following
information: account name and number; name(s) and social security
number registered to the account and personal identification; the
Agent may also record calls. Shareholders should verify the accuracy
of confirmation statements immediately upon receipt. Under penalties
of perjury, the undersigned whose Social Security (Tax I.D.) Number is
shown above certifies (i) that Number is my correct taxpayer
identification number and (ii) currently I am not under IRS
notification that I am subject to backup withholding (line out (ii) if
under notification). If no such Number is shown, the undersigned
further certifies, under penalties of perjury, that either (a) no such
Number has been issued, and a Number has been or will soon be applied
for; if a Number is not provided to you within sixty days, the
undersigned understands that all payments (including liquidations) are
subject to 31% withholding under federal tax law, until a Number is
provided and the undersigned may be subject to a $50 I.R.S. penalty; or
(b) that the undersigned is not a citizen or resident of the U.S.; and
either does not expect to be in the U.S. for 183 days during each
calendar year and does not conduct a business in the U.S. which would
receive any gain from the Trust, or is exempt under an income tax treaty.
NOTE: ALL REGISTERED OWNERS OF THE ACCOUNT MUST SIGN BELOW. FOR A TRUST,
ALL TRUSTEES MUST SIGN.*
__________________________ __________________________ _________
Individual (or Custodian) Joint Registrant, if any Date
__________________________ __________________________ _________
Corporate Officer, Partner, Title Date
Trustee, etc.
* For Trusts, 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>
ADMINISTRATOR
Aquila Management Corporation
380 Madison Avenue, Suite 2300
New York, New York 10017
INVESTMENT ADVISER
STCM Management Company Inc.
380 Madison Avenue, Suite 2300
New York, NY 10017
DISTRIBUTOR
Aquila Distributors, Inc.
380 Madison Avenue, Suite 2300
New York, New York 10017
TRUSTEES
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice Chairman
Paul Y. Clinton
Diana P. Herrmann
Anne J. Mills
Cornelius T. Ryan
OFFICERS
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President & Assistant Secretary
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
Patricia A. Craven, Assistant Secretary
TRANSFER AND SHAREHOLDER SERVICING AGENT
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
Bank One Trust Company, N.A.
100 East Broad Street
Columbus, OH 43271
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154
COUNSEL
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue
New York, New York 10176
TABLE OF CONTENTS
Table of Expenses
Financial Highlights
Introduction
Investment Of The Trust's Assets
Investment Restrictions
Net Asset Value Per Share
How To Invest In The Trust
How To Redeem Your Investment
Automatic Withdrawal Plan
Management Arrangements
Dividend And Tax Information
Exchange Privilege
General Information
CAPITAL CASH
MANAGEMENT TRUST
A cash management
investment
[LOGO]
stability*liquidity*yield
PROSPECTUS
One of the
Aquilasm Group of Funds
<PAGE>
Capital Cash Management Trust
380 Madison Avenue
Suite 2300
New York, NY 10017
212-697-6666
Statement of Additional Information
October 30, 1998
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 30, 1998, of Capital Cash Management Trust (the
"Trust"), which may be obtained from the Trust's Shareholder
Servicing Agent:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
Call 800-952-6666 toll free
For General Inquiries & Yield Information,
Call 800-437-1020 toll free or 212-986-8826
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, 1998, 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. . . . . . . . . . . . . . . . . . . 20
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 and Ms. Herrmann 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. Ms.
Herrmann is a shareholder of the Distributor. Each is also an
interested person as a member of the immediate family of the other.
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 and Chairman of the Board of Aquila Management
Corporation since 1984, the sponsoring organization and Manager or
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. Government Securities Cash Asset 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; 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 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 and Director, and formerly Secretary,
of Aquila Distributors, Inc. since 1981, distributor of the above
funds; an Officer and Trustee/Director of the predecessors of the
Trust 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. and Quest For Value Accumulation Trust, and Director
or Trustee of Oppenheimer Quest Value Fund, Inc., Oppenheimer Quest
Global Value Fund, Inc. and Oppenheimer 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;
Second Vice President, Alumni Association, SUNY Maritime College
1998; Director for the same organization, 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 of the Trust, 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. Government Securities 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, 39 Blossom Avenue, Osterville, MA
02655
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.
Diana P. Herrmann*, Trustee and 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 Manager/Administrator since 1997; Senior Vice
President and Secretary, and formerly Vice President, of the
Manager/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; Executive
Vice President, Senior Vice President or Vice President of the
Aquila Bond Funds and Vice President of the Aquila 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 and Prime Cash Fund 1986-1996;
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.
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, 1994-1997; Director of the American Baptist
Foundation 1985-1986 and since 1998; Trustee of Brown University;
Trustee of Churchill Cash Reserves Trust since 1985, of Tax-Free
Trust of Arizona since 1986, of Churchill Tax-Free Fund of Kentucky
and Tax-Free Fund of Colorado since 1987 and of Tax-Free Fund For
Utah since 1994.
Cornelius T. Ryan, Trustee, c/o Oxford Partners, 315 Post Road
West, Westport, Connecticut, 06880
General Partner of Oxford Ventures Partners, a group of
investment venture capital partnerships, since 1981; and Managing
Partner of Oxford Bioscience Partners,an affiliated administrative
company, since 1992; 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;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
Senior Vice President - Corporate development since 1998,
formerly Vice President - Administration, Assistant Vice President
and Associate of the Administrator since 1987; Senior Vice
President, Vice President or Assistant Vice President of the
Money-Market Funds since 1988; Northeastern University, 1986-1987
(M.B.A., 1987); Financial Analyst, Unisys Corporation, 1986;
Associate Analyst at National Economic Research Associates, Inc.
(NERA), a micro-economic consulting firm, 1979-1985.
John M. Herndon, Vice President 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.
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 the Trust; 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; Secretary of the
Distributor since 1997; 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, 1998, the Trust paid $12,562 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 equity funds.
The following table lists the compensation of all Trustees who
received compensation from the Trust and the compensation they
received during the Trust's fiscal year from other funds in the
Aquilasm Group of Funds. None of such Trustees has any pension or
retirement benefits from the Trust or any of the other funds in the
Aquila group.
<TABLE>
<CAPTION>
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group now serves
<S> <C> <C> <C>
Paul Y.
Clinton $2,505 $9,423 3
Theodore T.
Mason $583 $49,703 7
Anne J.
Mills $1,507 $33,912 6
Cornelius T.
Ryan $3,300 $4,150 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, 1998, the Trust
accrued $3,238 in favor of the Adviser under the Advisory Agreement
and $2,429 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 $54,773 to
comply with the expense limitation, $12,988 pursuant to the
agreement regarding total expenses of the Trust and $3,237
voluntarily, totaling $70,988. 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.
Additional Information as to the Administration Agreement
The Administration Agreement (the "Administration Agreement")
between Aquila Management Corporation, as Administrator, and the
Trust contains the provisions described below in addition to those
described in the Prospectus.
Subject to the control of the Trust's Board of Trustees, the
Administrator provides all administrative services to the Trust
other than those relating to the Trust's investment portfolio and
the maintenance of the Trust's accounting books and records (see
below for discussion); as part of such duties, the Administrator
(i) provides office space, personnel, facilities, and equipment for
the performance of the following functions and for the maintenance
of the Trust's headquarters; (ii) oversees all relationships
between the Trust and the Trust's transfer agent, custodian, legal
counsel, auditors and principal underwriter, including the
negotiation of agreements in relation thereto, the supervision and
coordination of the performance of such agreements, and the
overseeing of all administrative matters which are necessary or
desirable for the effective operation and for the sale, servicing,
or redemption of the Trust's shares; (iii) provides to the Adviser
and to the Trust statistical and other factual information and
advice regarding economic factors and trends, but does not
generally furnish advice or make recommendations regarding the
purchase or sale of securities; (iv) maintains the Trust's books
and records (other than accounting books and records), and prepares
(or assists counsel and auditors in the preparation of) all
required proxy statements, reports to the Trust's shareholders and
Trustees, reports to and other filings with the Securities and
Exchange Commission and any other governmental agencies, and tax
returns, and oversees the Trust's insurance relationships; (v)
prepares, on the Trust's behalf, such applications and reports as
may be necessary to register or maintain the Trust's registration
or that of its shares under the securities or Blue-Sky laws of all
such jurisdictions as may be required from time to time; and (vi)
responds to any inquiries or other communications from the Trust's
shareholders and broker-dealers, or if any such inquiry or
communication is more properly to be responded to by the Trust's
shareholder servicing and transfer agent or distributor, oversees
such shareholder servicing and transfer agent's or distributor's
response thereto. Since the Trust pays its own legal and audit
expenses, to the extent that the Trust's counsel and accountants
prepare or assist in the preparation of prospectuses, proxy
statements and reports to shareholders, the costs of such
preparation or assistance are paid by the Trust.
The expense limitation referred to in the Prospectus, if in
effect, is implemented monthly so that at no time is there any
unpaid liability under the limitation, subject to readjustment
during the year.
The Administration Agreement may be terminated at any time
without penalty by the Administrator upon sixty days' written
notice to the Trust and the Adviser; it may be terminated by the
Trust at any time without penalty upon giving the Administrator
sixty days' written notice, provided that such termination by the
Trust shall be directed or approved by a vote of a majority of the
Trust's Trustees in office at the time, including a majority of
Independent Trustees. In either case the notice provision may be
waived.
The Administration Agreement provides that the Administrator
shall not be liable for any error in judgment or for any loss
suffered by the Trust in connection with the matters to which the
Administration Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence of the
Administrator in the performance of its duties, or from reckless
disregard by it of its obligations and duties under the
Administration Agreement. The Trust agrees to indemnify the
Administrator to the full extent permitted by the Trust's
Declaration of Trust and the 1940 Act.
AMORTIZED COST VALUATION
The Trust operates under Rule 2a-7 under the 1940 Act, which
permits it to value its portfolio on the basis of amortized cost.
The amortized cost method of valuation is accomplished by valuing
a security at its cost and thereafter assuming a constant
amortization rate to maturity of any discount or premium, and does
not reflect the impact of fluctuating interest rates on the market
value of the security. This method does not take into account
unrealized gains or losses.
While the amortized cost method provides certainty in
valuation, there may be periods during which value, as determined
by amortized cost, is higher or lower than the price the Trust
would receive if it sold the instrument. During periods of
declining interest rates, the daily yield on the Trust's shares may
tend to be higher than a like computation made by a fund with
identical investments utilizing a method of valuation based upon
market prices and estimates of market prices for all of its
portfolio instruments and changing its dividends based on these
changing prices. The converse would apply in a period of rising
interest rates.
Under the Rule, the Board of Trustees must establish, and has
established, procedures (the "Procedures") designed to stabilize at
$1.00, to the extent reasonably possible, the Trust's price per
share as computed for the purpose of sales and redemptions. Such
procedures must include review of the Trust's portfolio holdings by
the Board of Trustees at such intervals as they may deem
appropriate and at such intervals as are reasonable in light of
current market conditions to determine whether the Trust's net
asset value calculated by using available market quotations
deviates from the per share value based on amortized cost.
"Available market quotations" may include actual market quotations
(valued at the mean between bid and asked prices), estimates of
market value reflecting current market conditions based on
quotations or estimates of market value for individual portfolio
instruments or values obtained from yield data relating to a
directly comparable class of securities published by reputable
sources.
Under Rule 2a-7, if the extent of any deviation between the
net asset value per share based upon "available market quotations"
(see above) and the net asset value per share based on amortized
cost exceeds $0.005, the Board of Trustees must promptly consider
what action, if any, will be initiated. When the Board of Trustees
believes that the extent of any deviation may result in material
dilution or other unfair results to investors or existing
shareholders, it is required to take such action as it deems
appropriate to eliminate or reduce to the extent reasonably
practicable such dilution or unfair results. Such actions could
include the sale of portfolio securities prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity, withholding dividends or payment of distributions from
capital or capital gains, redemptions of shares in kind, or
establishing a net asset value per share using available market
quotations.
The Procedures include changes in the dividends payable by the
Trust under specified conditions, as described below under
"Computation of Daily Dividends." This portion of the Procedures
provides that actions that the Trustees would consider under
certain circumstances can be taken automatically.
COMPUTATION OF DAILY DIVIDENDS
Under the Procedures which the Trust's Board of Trustees has
adopted relating to "amortized cost" valuation, the calculation of
the Trust's daily dividends will change under certain circumstances
from that indicated in the Prospectus. If on any day the deviation
between net asset value determined on an amortized cost basis and
that determined using market quotations is $0.003 or more, the
amount of such deviation will be added to or subtracted from the
daily dividend to the extent necessary to reduce such deviation to
within $0.003.
If on any day there is insufficient net income to absorb any
such reduction, the Board of Trustees would be required under the
Rule to consider taking other action if the deviation, after
eliminating the dividend for that day, exceeds of $0.005. One of
the actions which the Board of Trustees might take could be the
elimination or reduction of dividends for more than one day.
AUTOMATIC WITHDRAWAL PLAN
You may establish an Automatic Withdrawal Plan under which you
will receive a monthly or quarterly check in a stated amount, not
less than $50, if you own or purchases shares of the Trust having
a net asset value of at least $5,000. Stock certificates will not
be issued for shares held under an Automatic Withdrawal Plan. All
dividends must be reinvested.
Shares will be redeemed on the last business day of the month
as may be necessary to meet withdrawal payments. Shares acquired
with reinvested dividends will be redeemed first to provide such
withdrawal payments and thereafter other shares will be redeemed to
the extent necessary, and, depending upon the amount withdrawn,
your principal may be depleted.
Redemption of shares for withdrawal purposes may reduce or
even liquidate your account. Monthly or quarterly payments paid to
shareholders may not be considered as a yield or income on
investment.
GENERAL INFORMATION
Background of the Trust
Capital Cash Management Trust is one of the oldest
Money-Market mutual funds in the United States. It has served a
wide range of investors for over 20 years, producing competitive
results for individuals, churches, endowments, schools, bank trust
departments and corporations.
Information about 5% shareholders
As of October 5, 1998, the following persons owned more
than 5% of the Trust's outstanding shares:
William J. Boyle and Margaret M. Boyle, JTWROS, 110,597
shares (6.2%) and Julie L. Freireich, 100,965 shares (6.2%). In
addition, the Trustees and officers of the Trust owned 461,550
shares (28.5%), of which 400,780 shares (24.8%) are held as
follows: by Aquila Distributors, Inc., 122,049 shares (7.5%), by
Lacy B. Herrmann and Elizabeth B. Herrmann, 178,993 shares (11.1%),
and by Elizabeth B. Herrmann, 99,738 shares (6.2%). 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, 1998, 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>
ADMINISTRATOR
Aquila Management Corporation
380 Madison Avenue, Suite 2300
New York, New York 10017
INVESTMENT ADVISER
STCM Management Company Inc.
380 Madison Avenue, Suite 2300
New York, NY 10017
DISTRIBUTOR
Aquila Distributors, Inc.
380 Madison Avenue, Suite 2300
New York, New York 10017
TRUSTEES
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice Chairman
Paul Y. Clinton
Diana P. Herrmann
Anne J. Mills
Cornelius T. Ryan
OFFICERS
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President & Assistant Secretary
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
Patricia A. Craven, Assistant Secretary
TRANSFER AND SHAREHOLDER SERVICING AGENT
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
Bank One Trust Company, N.A.
100 East Broad Street
Columbus, OH 43271
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, New York 10154
COUNSEL
Hollyer Brady Smith Troxell
Barrett Rockett Hines & Mone LLP
551 Fifth Avenue
New York, New York 10176
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, 1998
Statement of Assets and Liabilities as of
June 30, 1998
Statement of Operations for the year ended
June 30, 1998
Statement of Changes in Net Assets for the
years ended June 30, 1998 and 1997
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) Transfer Agency Agreement (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 (ii)
(i) Filed as an exhibit to Registrant's Post-Effective
Amendment number 38 filed October 29, 1997.
(ii) Filed herewith.
ITEM 25. Persons Controlled By or Under Common Control
With Registrant
None
ITEM 26. Number of Holders of Securities
As of October 5, 1998, 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
the following Funds, including the Registrant: Capital Cash
Management Trust, 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. Government Securities Cash Assets Trust,
Prime Cash Fund, Tax-Free Fund For Utah, Tax-Free Fund of
Colorado, Tax-Free Trust of Arizona, Aquila Rocky Mountain
Equity Fund, Aquila Cascadia Equity Fund and Tax-Free Trust of
Oregon.
(b) For information about the Directors and officers of
Aquila Distributors, Inc., reference is made to the
Form BD filed by it under the Securities Exchange
Act of 1934.
(c) Not applicable.
ITEM 30. Location of Accounts and Records
All such accounts, books, and other documents are
maintained by the adviser, the administrator, the
custodian, and the transfer agent, whose addresses
appear on the back cover pages of the Prospectus
and Statement of Additional Information.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable.
<PAGE>
Independent Auditors Consent
To the Shareholders and Board of Trustees
Capital Cash Management Trust:
We consent to the use of our report dated August 7, 1998,
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 20, 1998
<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, 1998.
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 10/29/98
______________________ President, Chairman of ___________
Lacy B. Herrmann the Board and Trustee
(Principal Executive
Officer)
/s/Theodore T. Mason 10/29/98
______________________ Vice Chairman of the ___________
Theodore T. Mason Trustees and Trustee
/s/Paul Y. Clinton 10/29/98
______________________ Trustee ___________
Paul Y. Clinton
/s/Diana P. Herrmann 10/29/98
______________________ Trustee ___________
Diana P. Herrmann
/s/Anne J. Mills 10/29/98
______________________ Trustee ___________
Anne J. Mills
/s/Cornelius T. Ryan 10/29/98
______________________ Trustee ___________
Cornelius T. Ryan
/s/Rose F. Marotta 10/29/98
______________________ Chief Financial Officer ___________
Rose F. Marotta (Principal Financial and
Accounting Officer)
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
EXHIBIT INDEX
Exhibit Exhibit
Number Name
(16) Financial Data Schedule
Correspondence
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Registrant's Annual Report dated June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000093832
<NAME> CAPITAL CASH MANAGEMENT TRUST
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,643,932
<INVESTMENTS-AT-VALUE> 1,643,932
<RECEIVABLES> 0
<ASSETS-OTHER> 3,429
<OTHER-ITEMS-ASSETS> 2,223
<TOTAL-ASSETS> 1,649,584
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36,815
<TOTAL-LIABILITIES> 36,815
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,612,769
<SHARES-COMMON-STOCK> 1,612,769
<SHARES-COMMON-PRIOR> 1,491,996
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,612,769
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 90,809
<OTHER-INCOME> 0
<EXPENSES-NET> 6,477
<NET-INVESTMENT-INCOME> 84,332
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 84,332
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 84,332
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,888,398
<NUMBER-OF-SHARES-REDEEMED> 1,792,565
<SHARES-REINVESTED> 81,780
<NET-CHANGE-IN-ASSETS> 177,613
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,238
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 83,213
<AVERAGE-NET-ASSETS> 1,619,022
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .052
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .052
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
