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. 41 [ X ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [ X ]
Amendment No. 24 [ 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 November 1, 1999 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 November 1, 1999,pursuant to paragraph (a)(ii) of Rule
485.
[___] This post-effective amendment designates a new effective
date for a previous post-effective amendment.
<PAGE>
<PAGE>
Capital Cash Management Trust
380 Madison Avenue, Suite 2300
New York, New York 10017
212-697-6666
Original Shares
Prospectus November 1, 1999
Capital Cash Management Trust consists of two separate
portfolios:
Capital Cash Management Trust (the "Cash Fund") is a
general purpose money-market mutual fund which invests in
short-term "money-market" securities.
Capital Cash U.S. Government Securities Trust (the
"Government Securities Fund") is a money-market mutual fund which
invests in short-term direct obligations of the United States
Treasury, in other obligations issued or guaranteed by agencies
or instrumentalities of the United States Government and in
certain repurchase agreements secured by U.S. government
securities.
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
The Securities and Exchange Commission has not approved or
disapproved the Funds' securities or passed upon the adequacy of
this prospectus. Any representation to the contrary is a criminal
offense.
<PAGE>
The Cash Fund: Objective, Investment Strategies, Main Risks
"What is the Cash Fund's objective?"
The objective of the Cash Fund is to achieve a high level of
current income, stability and liquidity for investors' cash
assets by investing in a diversified portfolio of short-term
"money-market" securities meeting specific quality standards.
"What are the Cash Fund's investment strategies?"
The Cash Fund seeks to attain this objective by investing in
short-term money-market securities denominated in U.S. dollars
that are of high quality and present minimal credit risks.
Under the current management policies, the Cash Fund invests
only in the following types of obligations:
(1) U.S. government securities or obligations guaranteed by
the U.S. government or its agencies or instrumentalities.
(2) Bank obligations and instruments secured by them.
("Banks" include commercial banks, savings banks and savings and
loan associations.)
(3) Short-term corporate debt known as "commercial paper."
(4) Corporate debt obligations (for example, bonds and
debentures). Debentures are a form of unsecured corporate debt.
(5) Variable amount master demand notes which are repayable
on not more than 30 days' notice.
(6) Repurchase agreements.
The Cash Fund seeks to maintain a net asset value of $1.00
per share.
In general, not more than 5% of the Cash Fund's net
assets can be invested in the securities of any issuer.
The dollar weighted average maturity of the Cash Fund will
be 90 days or less and the Cash Fund may buy only those
instruments that have a remaining maturity of 397 days or less.
Securities the Cash Fund buys must present minimal credit
risks and at the time of purchase be rated in the two highest
rating categories for short-term securities by any two of the
nationally recognized statistical rating organizations
("NRSROs"); if they are unrated, they must be determined by the
Board of Trustees to be of comparable quality. Some securities
may have third-party guarantees to meet these rating
requirements.
STCM Management Company, Inc. (the "Adviser") seeks to
develop an appropriate portfolio by considering the differences
among securities of different issuers, yields, maturities and
market sectors.
The Cash Fund may change any of its management policies
without shareholder approval.
"What are the main risks of investing in the Cash Fund?"
Although the Cash Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the Cash Fund.
Investment in the Cash Fund is not a deposit in any bank and
is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
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. Variable amount master demand notes
repayable in more than seven days are securities which are not
readily marketable, and fall within the Cash Fund's overall 10%
limitation on securities which are illiquid. These notes are also
subject to credit risk.
Repurchase agreements involve some risk to the Cash Fund if
the other party does not fulfill its obligations under the
agreement.
The value of money-market instruments tends to fall if
prevailing interest rates rise.
Corporate bonds and debentures are subject to interest rate
and credit risks.
Interest rate risk relates to fluctuations in market
value arising from changes in interest rates. If interest rates
rise, the value of debt securities will normally decline. All
fixed-rate debt securities, even the most highly rated, are
subject to interest rate risk. Credit risk relates to the ability
of the particular issuers of the obligations the Cash Fund owns
to make periodic interest payments as scheduled and ultimately
repay principal at maturity.
Investments in foreign banks and foreign branches of United
States banks involve certain risks. Foreign banks and foreign
branches of domestic banks may not be subject to regulations that
meet U.S. standards. Investments in foreign banks and foreign
branches of domestic banks may also be subject to other risks,
including future political and economic developments, 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.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST- ORIGINAL SHARES
CASH FUND
RISK/RETURN BAR CHART AND PERFORMANCE TABLE
The bar chart and table shown below provide an indication of the
risks of investing in the Cash Fund's Original Shares by showing
changes in the Cash Fund's performance from year-to-year over a
10-year period and by showing the Cash Fund's average annual
returns for one, five, ten years and since inception. How the
Cash Fund has performed in the past is not necessarily an
indication of how the Cash Fund will perform in the future.
[Bar Chart]
Annual Total Returns (Original Shares)
1989-1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10%
8.97
8% XXXX 7.93
XXXX XXXX
6% XXXX XXXX 5.77
XXXX XXXX XXXX 5.57 5.16 5.23
4% XXXX XXXX XXXX 3.61 3.94 XXXX 5.02 XXXX XXXX
XXXX XXXX XXXX XXXX 2.94 XXXX XXXX XXXX XXXX XXXX
2% XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
0% XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Calendar Years
During the 10-year period shown in the bar chart, the highest
return for a quarter was 2.31% (quarter ended June 30, 1989) and
the lowest return for a quarter was 0.72% (quarter ended June 30,
1993).
The year-to-date (from January 1, 1999 to September 30, 1999)
total return was 3.47%.
</TABLE>
Average Annual Total Return
For the period ended
December 31, 1998
Since
1-Year 5-Year 10-Years inception
Capital Cash
Management Trust- Original Shares
5.23% 4.99% 5.40% 7.19%*
* From commencement of operations on July 8, 1974.
Please call (800) 227-4638 toll free to obtain the Cash Fund's
most current seven-day yield.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
CASH FUND
ORIGINAL SHARES
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if
you buy and hold Original Shares of the Cash Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases.........................0.00%
Maximum Deferred Sales Charge (Load).........0.00%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends......................0.00%
Redemption Fees..............................0.00%
Exchange Fees................................0.00%
Annual Fund Operating Expenses (expenses that are
deducted from the Fund's assets)
Management Fee (1)...........................0.20%
Distribution
and/or Service (12b-1) Fee...................0.00%
All Other Expenses:
Administration Fee.(1)................0.15%
Other Expenses........................3.16%
Total All Other Expenses....................3.31%
Total Annual Fund Operating Expenses(2)......3.51%
[FN]
(1) Undertakings by the Investment Adviser and the Administrator
to waive their fees, and by the Administrator to reimburse
expenses, limit the annual expenses of the Fund to 0.60 of 1% of
average annual net assets in any fiscal year; the Administrator's
undertakings may be cancelled or modified upon six months'
notice. These fee waivers and expense reimbursement may reduce
the fees and expenses of the Fund, thereby helping to maintain a
competitive yield. After June 30, 2000 the Administrator's
undertakings will not apply to payments under the Distribution
Plan and the Shareholder Services Plan applicable to the Service
Shares class.
</FN>
[FN]
(2) Total operating expenses of the Original Shares of the Cash
Fund for the fiscal year ended June 30, 1999 were 0.40% of
average annual net assets because of the undertakings described
in note 1 and additional, voluntary, expense reimbursements by
the Administrator. Voluntary fee waivers and expense
reimbursements may be terminated at any time, although it is
expected that they will continue as necessary at least until June
30, 2000 so that total expenses for Original Shares will not
exceed 0.40% for the fiscal year ending on that date.
</FN>
Example
This Example is intended to help you compare the cost of
investing in the Original Shares of the Cash Fund with the cost
of investing in other mutual funds.
The Example assumes that you invest $10,000 in Original Shares of
the Cash Fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year, that you
reinvest all dividends and distributions, and that the Cash
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your
costs would be:
1 year 3 years 5 years 10 years
$354 $1,077 1,822 $3,783
<PAGE>
The Government Securities Fund: Objective, Investment Strategies,
Main Risks
"What is the Government Securities Fund's objective?"
The objective of the Government Securities Fund is to
provide safety of principal while achieving as high a level as
possible of liquidity and of current income.
" What are the Government Securities Fund's investment
strategies?"
The Government Securities Fund seeks to attain this
objective by investing only in short-term direct obligations of
the United States Treasury, in other obligations issued or
guaranteed by agencies or instrumentalities of the United States
Government (with remaining maturities of one year or less) and in
certain repurchase agreements secured by U.S. government
securities.
Under the current management policies, the Government
Securities Fund invests only in the following types of
obligations:
U. S. Treasury Obligations
The U.S. Treasury issues various types of marketable
securities, consisting of bills, notes, bonds, and certificates of
indebtedness, which are all direct obligations of the U.S.
government backed by its "full faith and credit" and which differ
primarily in the length of their maturity. The Fund may also invest
in separately traded principal and interest components of
securities issued by the United States Treasury. The principal and
interest components of selected securities are traded independently
under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS"). Under the STRIPS program, the
principal and interest components are individually numbered and
separately issued by the U.S. Treasury at the request of depository
financial institutions, which then trade the component parts
independently. These instruments may experience more market
volatility than regular treasury securities.
Other U.S. Government Securities
U.S. government agencies and instrumentalities that issue or
guarantee securities include, but are not limited to, the Farmers
Home Administration, Federal Farm Credit System, Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation, Federal Housing
Administration, Federal National Mortgage Association, Financing
Corporation, Government National Mortgage Association, Resolution
Funding Corporation, 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 Government Securities Fund 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.
Repurchase Agreements
The Government Securities Fund may purchase securities subject
to repurchase agreements provided that such securities are U.S.
government securities. 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 Government Securities Fund.
The Government Securities Fund seeks to maintain a net asset
value of $1.00 per share.
The dollar weighted average maturity of the Government
Securities Fund will be 90 days or less and the Government
Securities Fund may buy only those instruments that have a
remaining maturity of 397 days or less.
Securities the Government Securities Fund buys must present
minimal credit risks and at the time of purchase be rated in the
two highest rating categories for short-term securities by any two
of the NRSROs or, if they are unrated, be determined by the Board
of Trustees to be of comparable quality. Some securities may have
third-party guarantees to meet these rating requirements.
The Adviser seeks to develop an appropriate portfolio by
considering the differences in yields among securities of different
issuers, yields, maturities and market sectors.
The Government Securities Fund will purchase only those issues
that will enable it to achieve and maintain the highest rating for
a mutual fund by two NRSROs. There is no assurance that it will be
able to maintain such rating. As a result of this policy, the range
of obligations in which the Government Securities Fund can invest
is reduced and the yield obtained on such obligations may be less
than would be the case if this policy were not in force.
The Government Securities Fund may change any of its
management policies without shareholder approval.
"What are the main risks of investing in the Government Securities
Fund?"
Although the Government Securities Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in the Government Securities Fund.
Investment in the Government Securities Fund is not a deposit
in any bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Repurchase agreements involve some risk to the Government
Securities Fund if the other party does not fulfill its obligations
under the agreement.
The value of money-market instruments tends to fall if
prevailing interest rates rise.
Original Shares of the Government Securities Fund were
first offered on November 1, 1999. There is no performance chart
for the Government Securities Fund because its shares were first
offered on November 1, 1999 and no historical information about the
Fund exists on the date of this Prospectus.
<PAGE>
CAPITAL CASH
GOVERNMENT SECURITIES FUND
ORIGINAL SHARES
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if
you buy and hold Original Shares of the Government Securities Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases.........................0.00%
Maximum Deferred Sales Charge (Load).........0.00%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends.....................0.00%
Redemption Fees..............................0.00%
Exchange Fees................................0.00%
Annual Fund Operating Expenses (expenses that are
deducted from the Fund's assets)
Management Fee (1)...........................0.20%
Distribution
and/or Service (12b-1) Fee..................0.00%
All Other Expenses:
Administration Fee (1)................0.15%
Other Expenses........................3.16%
Total All Other Expenses....................3.31%
Total Annual Fund Operating Expenses(2).....3.51%
[FN]
(1) Undertakings by the Investment Adviser and the Administrator to
waive their fees, and by the Administrator to reimburse expenses,
limit the annual expenses of the Fund to 0.60 of 1% of average
annual net assets in any fiscal year; the Administrator's
undertakings may be cancelled or modified upon six months' notice.
These fee waivers and expense reimbursement may reduce the fees and
expenses of the Fund, thereby helping to maintain a competitive
yield. The Administrator's undertaking to reimburse expenses does
not apply to payments under the Distribution Plan and the
Shareholder Services Plan applicable to the Service Shares class.
</FN>
[FN]
(2) Total operating expenses of the Original Shares of the Cash
Fund for the fiscal year ended June 30, 1999 were 0.40 of 1% of
average annual net assets because of the undertakings described in
note 1 and additional, voluntary, expense reimbursements by the
Administrator. Voluntary fee waivers and expense reimbursements
may be terminated at any time, although it is expected that they
will continue as necessary at least until June 30, 2000 so that
total expenses for Original Shares will not exceed 0.40% for the
fiscal year ending on that date.
</FN>
Example
This Example is intended to help you compare the cost of investing
in the Government Securities Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000 in Original Shares of
the Government Securities Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each
year, you reinvest all dividends and distributions, and that the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs
would be:
1 year 3 years 5 years 10 years
$354 $1,077 $1,822 $3,783
<PAGE>
General Risks
Year 2000. Like other financial and business organizations,
the Funds could be adversely affected if computer systems the Funds
rely 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 Funds to
achieve comparable results. Certain vendors have advised the
Administrator that they are currently compliant. The Funds' 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. These three vendors have
advised the Administrator that they expect to be ready and will
additionally be prepared to implement contingency plans if
necessary. All such expenses are being borne, and are expected to
continue to be borne, by the respective service providers. The
Funds have not incurred, nor are they anticipated to incur any
costs related to these matters. The Administrator has also
requested the Funds' portfolio managers to attempt to evaluate the
potential impact of this problem on the issuers of securities in
which the Funds invest. These factors could also have a negative
impact on the issuers of securities held by the Funds, which could
in turn have a negative impact on yields. At this time there can
be no assurance that these steps will be sufficient to avoid any
adverse impact on the Funds.
MANAGEMENT OF THE FUNDS
"How are the Funds managed?"
STCM Management Company Inc., 380 Madison Avenue, Suite 2300,
New York, NY 10017 (the "Adviser") is the investment adviser for
each of the Funds. Under the Advisory Agreements, the Adviser
provides for investment supervision including supervising
continuously the investment program of each Fund and the
composition of its portfolio; determining what securities will be
purchased or sold by each Fund; arranging for the purchase and the
sale of securities held in the portfolio of each Fund; and, at the
Adviser's expense, pricing of each Fund's portfolio daily.
Aquila Management Corporation, 380 Madison Avenue, Suite 2300,
New York, NY 10017, the Administrator, is responsible for
administrative services, including providing for the maintenance of
the headquarters of the Funds, overseeing relationships between the
Funds and the service providers to the Funds, maintaining the
Funds' books and records and providing other administrative
services.
During the fiscal year ended June 30, 1999, the Cash Fund
(during that period the only outstanding series) accrued advisory
fees (0.20 of 1%) and administration fees (0.15 of 1%) at the total
annual rate of 0.35 of 1% of its average annual net assets. All of
these fees were waived.
Information about the Adviser and the Administrator
The Adviser has acted as investment adviser for the Cash
Fund from since 1992. The Funds' Administrator is founder and
Administrator and/or Manager to the Aquilasm Group of Funds, which
consists of tax-free municipal bond funds, money-market funds and
equity funds. As of December 31, 1998, these funds had aggregate
assets of approximately $3.2 billion, of which approximately $2.0
billion consisted of assets of the tax-free municipal bond 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.
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 Funds achieve
sufficient size so that it is no longer necessary for the Adviser
to waive its fees or for the Funds' 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.
NET ASSET VALUE PER SHARE
The net asset value per share for each class of each Fund's
shares is determined as of 4:00 p.m. New York time on each day
that the New York Stock Exchange and the Custodian are open (a
"Business Day") by dividing the value of the net assets of the
Fund allocable to the class (i.e., the value of the assets less
liabilities) by the total number of shares of that class of the
Fund then outstanding. The price at which a purchase or
redemption of shares is effected is the next calculated net asset
value after your purchase or redemption order is received in
proper form.
The net asset value per share will normally remain constant
at $1.00 per share except under extraordinary circumstances. The
net asset value per share is based on a valuation of each Fund's
investments at amortized cost.
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 as well. In addition, the
Custodian is not open on Columbus Day and Veterans Day.
PURCHASES
Opening an Account
To open a new Original Shares account, you must send a
properly completed Application to PFPC Inc. (the "Agent"). The
Funds will not honor redemption of shares purchased by wire
payment until a properly completed Application has been received
by the Agent. The minimum initial investment is $1,000.
Subsequent investments may be in any amount.
Original Shares are offered solely to (1) institutions,
for their own account or acting for investors in a fiduciary,
agency, investment advisory or custodial capacity; (2) persons
entitled to exchange into such shares under the Funds' exchange
privilege; (3) shareholders of record on November 1, 1999, the
date on which the Funds first offered two classes of shares; and
(4) members 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 and which have entered into agreements with the
Distributor under a Fund's Distribution Plan.
You can make investments in Original Shares in any of these
three ways:
1. By Mail. You can make payment 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 or Capital Cash U.S. Government Securities
Trust, as the case may be, and mailed to:
(Specify the name of the Fund)
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
2. By Wire. You can wire Federal Funds (monies credited
to a bank's account with a Federal Reserve Bank) to PNC
Bank, NA.
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 for the appropriate Fund:
the Cash Fund:
PNC BANK, NA
Philadelphia, PA
ABA No. 0310-0005-3
Account No. 85-0216-4765
FFC: Capital Cash Management Trust
Original Shares
the Government Securities Fund:
PNC BANK, NA
Philadelphia, PA
ABA No. 0310-0005-3
Account No. 86-1282-3418
FFC: Capital Cash U.S. Government Securities Trust
Original Shares
In addition you should supply:
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. If you wish, you may invest in the Funds
by purchasing shares through registered broker-dealers.
The Funds impose no sales or service charge, 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 establish, as to accounts serviced by them,
higher initial or subsequent investment requirements than those
required by the Funds. Broker-dealers are responsible for prompt
transmission of orders placed through them.
Opening an Account Adding to An Account
* Make out a check for * Make out a check for
the investment amount the investment amount
payable to payable to
the appropriate Fund. the appropriate Fund.
* Complete the Application * Fill out the pre-printed
included with the Prospectus, stub attached
indicating the features to each Fund's confirmations
you wish to authorize. or supply the name(s)
of account owner(s),
the account number and
the name of the Fund.
* Send your check and * Send your check and
completed application account information
to your dealer or
to your dealer or to the Funds' Agent, PFPC
to the Funds' Agent, PFPC Inc., or
Inc., or
* Wire funds as described above. * Wire funds as described
above.
Be sure to supply the name(s) of account owner(s), the account
number, the name of the Fund.
"Can I transfer funds electronically?"
You can have funds transferred electronically in amounts of
$50 or more from your Financial Institution if it is a member of
the Automated Clearing House. You may make investments through
two electronic transfer features, "Automatic Investment" and
"Telephone Investment."
* Automatic Investment You can authorize a pre-determined
amount to be regularly transferred from your account.
* Telephone Investment You can make single investments of up
to $50,000 to be made by telephone instructions to the
Agent.
Before you can transfer funds electronically, the Agent must
have your completed Application authorizing these features. If
you initially decide not to choose these conveniences and then
later wish to do so, you must complete a Ready Access Features
Form which is available from the Distributor or Agent. The Funds
may modify or terminate these investment methods or charge a
service fee, upon 30 days' written notice to shareholders.
When Shares are Issued and Dividends are Declared on Them
The Funds issue shares two ways.
First Method - ordinary investments. You will be paid
dividends starting on the day (whether or not a Business Day)
after the first Business Day on which your purchase order has
been received in proper form and funds have become available for
investment. You will be paid a dividend on the day on which your
shares are redeemed.
"When will funds be available so that my order will become
effective?"
The Funds must have payment for your purchase available for
investment before 4:00 p.m. New York time on a Business Day for
your order to be effective on that Business Day. Your order is
effective and you will receive the next determined net asset
value per share depending on the method of payment you choose, as
follows.
Payment Method When will an order When will an order
received before received after
4:00 p.m on a 4:00 p.m. on a
Business Day Business Day
be deemed be deemed
effective? effective?
By wire in
Federal Funds or
Federal Reserve
Draft That day Next Business Day
By wire not
in Federal Funds 4:00 p.m. on the 4:00 p.m. on the
Business Day Business Day
converted to converted to
Federal Funds Federal Funds
(normally the (normally the
next Business next Business
Day) Day)
By Check 4:00 p.m. on the 4:00 p.m. on the
Business Day Business Day
converted to converted to
Federal Funds Federal Funds
(normally (normally
two Business two Business
Days for checks Days for checks
on banks in the on banks in the
Federal Reserve Federal Reserve
System, longer System, longer
for other banks) for other banks)
Automatic
Investment The day you specify;
if it is not a
Business Day, on the
next Business Day
Telephone
Investment That day Next Business Day
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. (The Agent will convert wires and checks to Federal Funds
as your agent.)
Second Method- For broker-dealers or banks which have
requested that this method be used, to which request a Fund has
consented. You will be paid dividends starting on the day on
which your purchase order has been received in proper form and
funds have become available for investment. You will not be paid
a dividend on the day on which your shares are redeemed.
"When will my order be effective under the Second Method?"
Your purchase order is effective and your funds are invested
as follows:
On that day, if
(i) you advise the Agent before 1:00 p.m. New York time
on a Business Day of a dollar amount to be invested in the Cash
Fund or Government Securities Fund; and
(ii) Your payment in Federal Funds is received by wire on
that day.
The second investment method is available to prospective
investors in shares of a Fund 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
the Funds will advise you 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 two investment methods
set forth above. If you make a redemption request and have
purchased shares under the first or second methods, 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.
Under each method, shares are issued at the net asset
value per share next determined after the purchase order is
received in proper form. Under each method, the Application must
be properly completed and have been received and accepted by the
Agent; the Funds or the Distributor may also reject any purchase
order. Under each method, Federal Funds (see above) must either
be available to the Funds or the payment thereof must be
guaranteed to the Funds so that the Funds can be as fully
invested as practicable.
Transfer on Death Registration
The Funds generally permit "transfer on death" ("TOD")
registration of shares, so that on the death of the shareholder
the shares are transferred to a designated beneficiary or
beneficiaries. Ask the Agent or your broker-dealer for the
Transfer on Death Registration Request Form. With it you will
receive a copy of the TOD Rules of the Aquilasm Group of Funds,
which specify how the registration becomes effective and
operates. By opening a TOD Account, you agree to be bound by the
TOD Rules.
REDEEMING YOUR INVESTMENT
You may redeem some or all of your shares by a request to
the Agent. Shares will be redeemed at the next net asset value
determined after your request has been received in proper form.
There is no minimum period for investment in the Funds,
except for shares recently purchased by check or by Automatic or
Telephone Investment as discussed below.
How to Redeem Your Investment
By mail, send instructions to:
PFPC Inc.
Attn: Aquilasm Group of Funds
400 Bellevue Parkway
Wilmington, Delaware 19809
By telephone, call:
800-952-6666 toll-free
By FAX, send instructions to: 302-791-3055
For liquidity and convenience, the Funds offer expedited
redemption.
Expedited Redemption Methods
(Non-Certificate Shares Only)
You may request expedited redemption for any shares not
issued in certificate form in two ways:
1 By Telephone. The Agent will accept instructions from
anyone by telephone to redeem shares and make payments:
a) to a Financial Institution account you
have previously specified or
b) by check in the amount of $50,000 or less,
mailed to the same name and address (which
has been unchanged for the past 30 days) as
the account from which you are redeeming. You
may only redeem by check via telephone
request once in any 7-day period.
Telephoning the Agent
Whenever you telephone the Agent, please be prepared to
supply:
account name(s) and number
name of the caller
the social security number(s) registered to the account
personal identification
Note: Check the accuracy of your confirmation statements
immediately. The Funds, the Agent, and the Distributor are
not responsible for losses resulting from unauthorized
telephone transactions if the Agent follows reasonable
procedures designed to verify a caller's identity. The
Agent may record calls.
2. By FAX or Mail. You may request redemption payments to a
predesignated Financial Institution account by a letter of
instruction sent to the Agent: PFPC Inc., by FAX at 302-791-3055
or by mail to 400 Bellevue Parkway, Wilmington, DE 19809. The
letter, signed by the registered shareholder(s) (no signature
guarantee is required), must indicate:
account name(s),
account number,
amount to be redeemed,
any payment directions.
To have redemption proceeds sent directly to a Financial
Institution Account, you must complete the Expedited Redemption
section of the Application or a Ready Access Features Form. You
will be required to provide (1) details about your Financial
Institution account, (2) signature guarantees and (3) possible
additional documentation.
The name(s) of the shareholder(s) on the Financial
Institution account must be identical to those on the Funds'
records of your account.
You may change your designated Financial Institution account
at any time by completing and returning a revised Ready Access
Features Form.
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. 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.
Because these checks are paid by redemption of shares in
your account, you should be certain that adequate shares are in
the account to cover the amount of the 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. Note:
You cannot use checks to redeem shares represented by
certificates. If you purchase shares by check, you cannot use
checks to redeem them until 15 days after your purchase.
You may not present checks directly 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 redeem the
entire balance of your account, since the number of shares in
your account changes daily through dividend payments which are
automatically reinvested in full and fractional shares.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)
Certificate Shares. Mail to the Funds' Agent: (1) blank
(unsigned) certificates for Original Shares to be redeemed, (2)
redemption instructions, and (3) a stock assignment form.
To be in "proper form," items (2) and (3) must be signed by
the registered shareholder(s) exactly as the account is
registered. For a joint account, both shareholder signatures
are necessary.
For your protection, mail certificates separately from
signed redemption instructions. We recommend that
certificates be sent by registered mail, return receipt
requested.
We may require additional documentation for certain types of
shareholders such as corporations, partnerships, trustees or
executors, or if redemption is requested by someone other
than the shareholder of record. The Agent may require
signature guarantees if insufficient documentation is on
file.
We do not require a signature guarantee for redemptions up
to $50,000, payable to the record holder(s), and sent to the
address of record, except as noted above. In all other
cases, signatures must be guaranteed.
Your signature may be guaranteed by any:
member of a national securities exchange
U.S. bank or trust company
state-chartered savings bank
federally chartered savings and loan association
foreign bank having a U.S. correspondent bank; or
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.
Non-Certificate Shares. You must use the Regular Redemption
Method if you have not chosen Expedited Redemption to a
predesignated Financial Institution account. To redeem by
this method, send a letter of instruction to the Funds'
Agent, which includes:
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 (we normally mail redemption
proceeds to your address as registered with a Fund)
Signature(s) of the registered shareholder(s) and
Signature guarantee(s), if required, as indicated
above.
"When will I receive the proceeds of my redemption?"
Redemption proceeds are normally sent, as shown below, to
your address of record on the next business day following receipt
of your redemption request in proper form. Except as described
below, the Funds will send payments within 7 days.
Redemption Method of Payment Charges
Under $1,000 Check None
$1,000 or more Check or, if and as None
you requested on your
Application or Ready Access
Features Form, wired
or transferred through
the Automated Clearing
House to your Financial
Institution Account
Through a broker
/dealer Check or wire, to your None.
broker/dealer However,
your
broker/dealer
may charge a
fee.
Although the Funds do not currently intend to, either
Fund may impose a charge, not exceeding $5.00 per wire
redemption, after written notice to shareholders who have elected
this redemption procedure. Neither Fund has any present intention
of making this charge. Upon 30 days' written notice to
shareholders, either Fund may modify or terminate the use of the
Automated Clearing House to make redemption payments at any time
or charge a service fee, although no such fee is currently
contemplated. If any such changes are made, the Prospectus will
be supplemented to reflect them. If you use a broker or dealer to
arrange for a redemption, you may be charged a fee for this
service.
The Funds may delay payment for redemption of shares
recently purchased by check (including certified, cashier's or
official bank check) or by Automatic Investment or Telephone
Investment up to 15 days after purchase; however, payment for
redemption will not be delayed after (i) the check or transfer of
funds has been honored, or (ii) the Agent receives satisfactory
assurance that your Financial Institution will honor the check or
transfer of funds. You can eliminate possible delays by paying
for purchased shares with wired funds or Federal Reserve
drafts.
The Funds have the right to postpone payment or suspend
redemption rights during certain periods. These periods may
occur (i) when the Exchange is closed for other than weekends and
holidays, (ii) when the Securities and Exchange Commission (the
"SEC") restricts trading on the Exchange, (iii) when the SEC
determines an emergency exists which causes disposal of, or
determination of the value of, the portfolio securities to be
unreasonable or impracticable, and (iv) during such other periods
as the SEC may permit.
Payment for redemption by any method (including redemption
by check) of Original 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 Fund, that the purchase check
or Automatic Investment or Telephone Investment will be honored.
Original 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 purchase of Original
Shares by check and (ii) the redemption check would cause the
redemption of some or all of those shares.
Either Fund can redeem your shares if their value totals
less than $500 as a result of redemptions or failure to meet and
maintain the minimum investment level under an Automatic
Investment Program. Before such a redemption is made, we will
send you a notice giving you 60 days to make additional
investments to bring your account up to the minimum.
Redemption proceeds may be paid in whole or in part
("redemption in kind") by distribution of a Fund's portfolio
securities in conformity with SEC rules. This method would only
be used if the Trustees determine that payments partially or
wholly in cash would be detrimental to the best interests of the
remaining shareholders.
"Is there an Automatic Withdrawal Plan?"
Yes. Under an Automatic Withdrawal Plan you can arrange to
receive a monthly or quarterly check in a stated amount, not less
than $50.
DISTRIBUTION ARRANGEMENTS
Confirmations and Share Certificates
A statement will be mailed to you confirming each purchase
of shares in a Fund. Accounts are rounded to the nearest 1/1000th
of a share. The Funds will not issue share certificates unless
you so request from the Agent in writing and declare a need for
such certificates, such as a pledge of shares or an estate
situation. If you have certificates issued, Expedited Redemption
Methods described above will not be available and delay and
expense may be incurred if you lose the certificates. The Funds
will not issue certificates for fractional shares or to
shareholders who have elected the checking account or
predesignated bank account methods of withdrawing cash from their
accounts.
The Funds and the Distributor may 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
Each Fund has adopted a Distribution Plan under Rule 12b-1
("Rule 12b-1") under the 1940 Act. 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 plan
adopted under that rule. One section of the first part of the
Distribution Plan of each Fund is designed to protect against any
claim against or involving the Fund that some of the expenses
which the Fund pays or may pay come within the purview of Rule
12b-1. Another section of the first part of the Distribution Plan
authorizes Aquila Management Corporation (the "Administrator"),
not the Fund, 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 Fund.
Each Distribution Plan has other provisions that relate
to payments in connection with the Fund's Service Shares Class.
None of such payments are made from assets represented by
Original Shares of a Fund.
DIVIDENDS
The Funds will declare all of their net income for
dividend purposes daily as dividends. 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 issued under the " second"
method.
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.
Dividends paid by each Fund with respect to Service
Shares (the Fund's other class of shares) and Original Shares
will be calculated in the same manner, at the same time, on the
same day, and will be in the same amount except that any class
expenses (including any payments made by Service Shares under the
Distribution Plan or the Shareholder Services Plan for Service
Shares) will be borne exclusively by that class. Dividends on
Original Shares are expected generally to be higher than those on
Service Shares because expenses allocated to Service Shares will
generally be higher.
Dividends will be taxable to you as ordinary income, even
though reinvested. Statements as to the tax status of your
dividends will be mailed annually.
It is possible but unlikely that a Fund may have realized
long-term capital gains or losses in a year.
Dividends of each Fund will automatically be reinvested in
full and fractional shares of the same class at net asset value
unless you elect otherwise.
You may choose to have all or any part of the payments for
dividends paid in cash. You can elect to have the cash portion of
your dividends deposited, without charge, by electronic funds
transfers into your account at a financial institution, if it is
a member of the Automated Clearing House.
You can make any of these elections on the Application, by a
Ready Access Features Form or by a letter to the Agent. Your
election to receive some or all of your dividends in cash will be
effective as of the next payment of dividends after it has been
received in proper form by the Agent. It will continue in effect
until the Agent receives written notification of a change.
All shareholders, whether their dividends are received in
cash or reinvested, will receive a monthly statement indicating
the current status of their account.
If you do not comply with laws requiring you to furnish
taxpayer identification numbers and report dividends, the Funds
may be required to impose backup withholding at a rate of 31%
upon payment of redemptions and dividends.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
ORIGINAL SHARES
CASH FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
The financial highlights table is intended to help you understand the
Fund's financial performance for the indicated periods of the Fund's
operations. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in Original Shares of
the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, whose report, along with the
Fund's financial statements, is included in the annual report, is
incorporated by reference into the SAI and is available upon request.
Year ended June 30,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Period.........$1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from
Investment Operations:
Net investment
income............ 0.0473 0.0521 0.0489 0.0518 0.0497
Less Distributions:
Dividends from net
investment income..(0.0473) (0.0521) (0.0489) (0.0518) (0.0497)
Net Asset Value,
End of Period..... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return(%).... 4.84 5.33 5.00 5.29 5.09
Ratios/Supplemental
Data
Net Assets, End of Period
($ in thousands)...1,616 1,613 1,435 1,765 1,660
Ratio of Expenses
to Average Net
Assets (%)......... 0.41 0.40 0.41 0.41 0.42
Ratio of Net Investment
Income to Average
Net Assets %........4.72 5.21 4.88 5.16 4.98
The expense and net investment income ratios without the effect of the
Adviser's and Administrator's voluntary waiver of fees and the
Administrator's expense reimbursement were:
Ratio of Expenses
to Average Net Assets(%)
3.51 5.14 6.48 5.74 5.00
Ratio of Net Investment
Income(Loss) to
Average Net
Assets(%) 1.62 0.47 (1.19) (0.17) (0.40)
The expense ratios after giving effect to the waivers, expense
reimbursement and expense offset for uninvested cash balances were:
Ratio of Expenses to
Average Net Assets(%)
0.40 0.40 0.40 0.40 0.40
</TABLE>
Unaudited: The Trust's "current yield" for the seven days ended June 30,
1999 was 4.53% and its "compounded effective yield" for that period
was 4.63%. Current yield is net income over a stated seven-day period
annualized, and is shown as a percentage. Effective yield is calculated
similarly, but, when annualized, the income earned is assumed to be
reinvested, which gives effect to compounding.
<PAGE>
Application for
Capital Cash Management Trust - Original Shares
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,
Other Organization or
any Fiduciary capacity
Use line 4
* Joint Accounts will be Joint
Tenants with rights of survivorship
unless otherwise specified.
** Uniform Gifts/Transfers
to Minors Act.
Please type or print name(s) 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
___ Capital Cash Management Trust(840)
___ Capital Cash U.S. Government Securities Trust
(860)
1) ___ By Check
2) ___ By Wire
1) By Check: Make check payable to either: Capital Cash Management Trust
or Capital Cash U.S. Government Securities 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: 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
Financial Institution to wire funds as indicated below for the
appropriate Fund:
Wire Instructions:
PNC Bank, N A
ABA No. 0310-0005-3
For further credit to (specify the Fund you are investing in)
Capital Cash Management Trust (Original Shares) A/C 85-0216-4765
Capital Cash U.S. Government Securities Trust
(Original Shares) A/C 86-1282-3418
Please include account name(s) and number (if an existing account)
or the name(s) in which the investment is to be registered (if a
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.
You can have any portion reinvested, with the balance paid in cash, by
indicating a percent below:
Dividends are to be:___% Reinvested ___% 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 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 Aquilasm 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 PNC Bank, NA, 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, PFPC Inc., and to pay such sums in accordance therewith,
provided my/our account has sufficient funds to cover such drafts or
debits. I/We further agree that your treatment of such orders will be
the same as if I/we personally signed or initiated the drafts or debits.
I/We understand that this authority will remain in effect until you
receive my/our written instructions to cancel this service. I/We also
agree that if any such drafts or debits are dishonored, for any reason,
you shall have no liabilities.
Financial Institution Account Number______________________________________
Name and Address
where my/our account Name of Financial Institution____________________
is maintained Street Address___________________________________
City______________________State_____ Zip_________
Name(s) and
Signature(s) of _______________________________
Depositor(s) as they (Please Print)
appear where account X_______________________________ __________
is registered (Signature) (Date)
________________________________
(Please Print)
X_______________________________ __________
(Signature) (Date)
INDEMNIFICATION AGREEMENT
To: Financial Institution Named Above
So that you may comply with your 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 that (i) that number is my correct taxpayer identification
number and (ii) currently I am not under IRS notification that I am
subject to backup withholding (line out (ii) if under notification). If no
such number is shown, the undersigned further certifies, under penalties
of
perjury, that either (a) no such number has been issued, and a number
has been or will soon be applied for; if a number is not provided to
you within sixty days, the undersigned understands that all payments
(including liquidations) are subject to 31% withholding under federal
tax law, until a Number is provided and the undersigned may be subject
to a $50 I.R.S. penalty; or (b) that the undersigned is not a citizen
or resident of the U.S.and either does not expect to be in the U.S.
for more than 183 days during each calendar year and does not conduct a
business in the U.S. which would receive any gain from the Trust or is
exempt under an income tax treaty.
NOTE: ALL REGISTERED OWNERS OF THE ACCOUNT MUST SIGN BELOW.
FOR A TRUST, ALL TRUSTEES MUST SIGN.*
______________________________ __________________________ __________
Individual (or Custodian) Joint Registrant, if any Date
______________________________ __________________________ __________
Corporate Officer, Partner, 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
1-800-227-4638 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>
[Inside Back Cover]
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
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 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
<PAGE>
<PAGE>
Back Cover
This Prospectus concisely states information about the Funds
that you should know before investing. A Statement of Additional
Information about the Funds dated November 1, 1999, (the "SAI")
has been filed with the Securities and Exchange Commission. The
SAI contains information about the Funds and their management not
included in this Prospectus. The SAI is incorporated by reference
in its entirety in this Prospectus. Only when you have read both
this Prospectus and the SAI are all material facts about the
Funds available to you.
You can get additional information about the Funds'
investments in the Funds' annual and semi-annual reports to
shareholders. In the Funds' annual report, you will find a
discussion of the market conditions and investment strategies
that significantly affected the Funds' performance during their
last fiscal year. You can get the SAI and the Funds' annual and
semi-annual reports without charge, upon request by calling
800-952-6666 (toll free).
In addition, you can review and copy information about the
Funds (including the SAI) at the Public Reference Room of the SEC
in Washington, D.C. You can get information on the operation of
the SEC's public reference room by calling the SEC at
1-800-SEC-0330. You can get other information about the Funds at
the SEC's Internet site at http://www.sec.gov. You can get copies
of this information, upon payment of a duplicating fee, by
writing the Public Reference Section of the SEC, Washington, D.C.
20549-6009.
This Prospectus should be read and retained for future reference
TABLE OF CONTENTS
The Cash Fund: Objective, Investment Strategies,
Main Risks...................................
Risk/Return Bar Chart and Performance Table .....
Fees and Expenses of the Cash Fund
The Government Securities Fund: Objective, Investment Strategies,
Main Risks...................................
Risk/Return Bar Chart and Performance Table .....
Fees and Expenses of the Government Securities Fund
Management of the Funds.................................
Net Asset Value Per Share........................
Purchases .......................................
Redeeming Your Investment........................
Distribution Arrangements.........................
Dividends........................................
Tax Information..................................
Financial Highlights.............................
Application
The file number under which the Trust is registered
with the SEC under the
Investment Company Act of 1940 is 811-2481
<PAGE>
Capital Cash Management Trust
Capital Cash Management Trust
Capital Cash U.S. Government Securities Trust
A cash management
investment
[LOGO]
PROSPECTUS
Original Shares
To receive a free copy of the Trust's SAI, annual or semi-annual
report, or other information about the Trust, or to make
shareholder inquiries call:
the Trust's Shareholder Servicing Agent at
800-952-6666 toll free
or you can write to:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
For general inquiries and yield information, call 800-227-4638 or
212-697-6666
This Prospectus should be read and retained for future reference
<PAGE>
Capital Cash Management Trust
380 Madison Avenue, Suite 2300
New York, New York 10017
212-697-6666
Service Shares
Prospectus November 1, 1999
Capital Cash Management Trust consists of two separate
portfolios:
Capital Cash Management Trust (the "Cash Fund") is a
general purpose money-market mutual fund which invests in
short-term "money-market" securities.
Capital Cash U.S. Government Securities Trust (the
"Government Securities Fund") is a money-market mutual fund which
invests in short-term direct obligations of the United States
Treasury, in other obligations issued or guaranteed by agencies
or instrumentalities of the United States Government and in
certain repurchase agreements secured by U.S. government
securities.
For purchase, redemption or account inquiries contact
the Funds' 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
The Securities and Exchange Commission has not approved or
disapproved the Funds' securities or passed upon the adequacy of
this prospectus. Any representation to the contrary is a criminal
offense.
<PAGE>
The Cash Fund: Objective, Investment Strategies, Main Risks
"What is the Cash Fund's objective?"
The objective of the Cash Fund is to achieve a high level of
current income, stability and liquidity for investors' cash
assets by investing in a diversified portfolio of short-term
"money-market" securities meeting specific quality standards.
" "What are the Cash Fund's investment strategies?
The Cash Fund seeks to attain this objective by investing in
short-term money-market securities denominated in U.S. dollars
that are of high quality and present minimal credit risks.
Under the current management policies, the Cash Fund invests
only in the following types of obligations:
(1) U.S. government securities or obligations guaranteed by
the U.S. government or its agencies or instrumentalities.
(2) Bank obligations and instruments secured by them.
("Banks" include commercial banks, savings banks and savings and
loan associations.)
(3) Short-term corporate debt known as "commercial paper."
(4) Corporate debt obligations (for example, bonds and
debentures). Debentures are a form of unsecured corporate debt.
(5) Variable amount master demand notes which are repayable
on not more than 30 days' notice.
(6) Repurchase agreements.
The Cash Fund seeks to maintain a net asset value of $1.00
per share.
In general, not more than 5% of the Cash Fund's net
assets can be invested in the securities of any issuer.
The dollar weighted average maturity of the Cash Fund will
be 90 days or less and the Cash Fund may buy only those
instruments that have a remaining maturity of 397 days or less.
Securities the Cash Fund buys must present minimal credit
risks and at the time of purchase be rated in the two highest
rating categories for short-term securities by any two of the
nationally recognized statistical rating organizations
("NRSROs"); if they are unrated, they must be determined by the
Board of Trustees to be of comparable quality. Some securities
may have third-party guarantees to meet these rating
requirements.
STCM Management Company, Inc. (the "Adviser") seeks to
develop an appropriate portfolio by considering the differences
among securities of different issuers, yields, maturities and
market sectors.
The Cash Fund may change any of its management policies
without shareholder approval.
"What are the main risks of investing in the Cash Fund?"
Although the Cash Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the Cash Fund.
Investment in the Cash Fund is not a deposit in any bank and
is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
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. Variable amount master demand notes
repayable in more than seven days are securities which are not
readily marketable, and fall within the Cash Fund's overall 10%
limitation on securities which are illiquid. These notes are also
subject to credit risk.
Repurchase agreements involve some risk to the Cash Fund if
the other party does not fulfill its obligations under the
agreement.
The value of money-market instruments tends to fall if
prevailing interest rates rise.
Corporate bonds and debentures are subject to interest rate
and credit risks.
Interest rate risk relates to fluctuations in market
value arising from changes in interest rates. If interest rates
rise, the value of debt securities will normally decline. All
fixed-rate debt securities, even the most highly rated, are
subject to interest rate risk. Credit risk relates to the ability
of the particular issuers of the obligations the Cash Fund owns
to make periodic interest payments as scheduled and ultimately
repay principal at maturity.
Investments in foreign banks and foreign branches of United
States banks involve certain risks. Foreign banks and foreign
branches of domestic banks may not be subject to regulations that
meet U.S. standards. Investments in foreign banks and foreign
branches of domestic banks may also be subject to other risks,
including future political and economic developments, 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.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
CASH FUND
SERVICE SHARES
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if
you buy and hold Service Shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases.........................0.00%
Maximum Deferred Sales Charge (Load).........0.00%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends.....................0.00%
Redemption Fees..............................0.00%
Exchange Fees................................0.00%
Annual Fund Operating Expenses (expenses that are
deducted from the Fund's assets)
Management Fee (1)..........................0.20%
Distribution
and/or Service (12b-1) Fee...................0.25%
All Other Expenses:
Administration Fee.(1)................0.15%
Other Expenses........................3.16%
Total All Other Expenses....................3.31%
Total Annual Fund Operating Expenses(2)......3.76%
[FN]
(1) The Investment Adviser has undertaken to waive its fee and
the Administrator has undertaken to waive its fee and reimburse
the Fund to the extent that annual expenses exceed 0.60 of 1% of
average annual net assets in any fiscal year. These undertakings
as to fee waivers and expense reimbursement may operate to reduce
the fees and expenses of the Fund in order to maintain a
competitive yield. The Administrator has advised the Fund that
its undertaking to reimburse expenses will be modified so that
after November 1, 1999, it will not apply to payments under the
Distribution Plan and Shareholder Services Plan applicable to the
Service Shares class.
</FN>
[FN]
(2) The expense ratios for the Original Shares of the Cash fund
for the fiscal year ended June 30, 1999 after giving effect to
the waivers and expense reimbursement were incurred at the
following annual rates: investment advisory fee, 0.00%;
administration fee, 0.00%; other expenses, 0.40%; for total
operating expenses of 0.40%. No information is presented for
Service Shares since they were established on November 1, 1999.
</FN>
Example
This Example is intended to help you compare the cost of
investing in the Service Shares of the Fund with the cost of
investing in other mutual funds.
The Example assumes that you invest $10,000 in Service Shares of
the Cash Fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year, that you
reinvest all dividends and distributions, and that the Cash
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your
costs would be:
1 year 3 years 5 years 10 years
$378 $1,149 1,939 $4,002
<PAGE>
The Government Securities Fund: Objective, Investment Strategies,
Main Risks
"What is the Government Securities Fund's objective?"
The objective of the Government Securities Fund is to
provide safety of principal while achieving as high a level as
possible of liquidity and of current income.
" What are the Government Securities Fund's investment
strategies?"
The Government Securities Fund seeks to attain this
objective by investing only in short-term direct obligations of
the United States Treasury, in other obligations issued or
guaranteed by agencies or instrumentalities of the United States
Government (with remaining maturities of one year or less) and in
certain repurchase agreements secured by U.S. government
securities.
Under the current management policies, the Government
Securities Fund invests only in the following types of
obligations:
U. S. Treasury Obligations
The U.S. Treasury issues various types of marketable
securities, consisting of bills, notes, bonds, and certificates of
indebtedness, which are all direct obligations of the U.S.
government backed by its "full faith and credit" and which differ
primarily in the length of their maturity. The Fund may also invest
in separately traded principal and interest components of
securities issued by the United States Treasury. The principal and
interest components of selected securities are traded independently
under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS"). Under the STRIPS program, the
principal and interest components are individually numbered and
separately issued by the U.S. Treasury at the request of depository
financial institutions, which then trade the component parts
independently. These instruments may experience more market
volatility than regular treasury securities.
Other U.S. Government Securities
U.S. government agencies and instrumentalities that issue or
guarantee securities include, but are not limited to, the Farmers
Home Administration, Federal Farm Credit System, Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation, Federal Housing
Administration, Federal National Mortgage Association, Financing
Corporation, Government National Mortgage Association, Resolution
Funding Corporation, 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 Government Securities Fund 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.
Repurchase Agreements
The Government Securities Fund may purchase securities subject
to repurchase agreements provided that such securities are U.S.
government securities. 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 Government Securities Fund.
The Government Securities Fund seeks to maintain a net asset
value of $1.00 per share.
The dollar weighted average maturity of the Government
Securities Fund will be 90 days or less and the Government
Securities Fund may buy only those instruments that have a
remaining maturity of 397 days or less.
Securities the Government Securities Fund buys must present
minimal credit risks and at the time of purchase be rated in the
two highest rating categories for short-term securities by any two
of the NRSROs or, if they are unrated, be determined by the Board
of Trustees to be of comparable quality. Some securities may have
third-party guarantees to meet these rating requirements.
The Adviser seeks to develop an appropriate portfolio by
considering the differences in yields among securities of different
issuers, yields, maturities and market sectors.
The Government Securities Fund will purchase only those issues
that will enable it to achieve and maintain the highest rating for
a mutual fund by two NRSROs. There is no assurance that it will be
able to maintain such rating. As a result of this policy, the range
of obligations in which the Government Securities Fund can invest
is reduced and the yield obtained on such obligations may be less
than would be the case if this policy were not in force.
The Government Securities Fund may change any of its
management policies without shareholder approval.
"What are the main risks of investing in the Government Securities
Fund?"
Although the Government Securities Fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in the Government Securities Fund.
Investment in the Government Securities Fund is not a deposit
in any bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Repurchase agreements involve some risk to the Government
Securities Fund if the other party does not fulfill its obligations
under the agreement.
The value of money-market instruments tends to fall if
prevailing interest rates rise.
Service Shares of the Government Securities Fund were first
offered on November 1, 1999. There is no performance chart for the
Government Securities Fund because its shares were first offered on
November 1, 1999 and no historical information about the Fund
exists on the date of this Prospectus.
<PAGE>
CAPITAL CASH
GOVERNMENT SECURITIES FUND
SERVICE SHARES
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if
you buy and hold Service Shares of the Government Securities Fund.
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases.........................0.00%
Maximum Deferred Sales Charge (Load).........0.00%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends.....................0.00%
Redemption Fees..............................0.00%
Exchange Fees................................0.00%
Annual Fund Operating Expenses (expenses that are
deducted from the Fund's assets)
Management Fee (1)...........................0.20%
Distribution
and/or Service (12b-1) Fee ..................0.25%
All Other Expenses:
Administration Fee (1)................0.15%
Other Expenses........................3.16%
Total All Other Expenses....................3.31%
Total Annual Fund Operating Expenses(2)......3.76%
[FN]
(1) The Investment Adviser has undertaken to waive its fee and the
Administrator has undertaken to waive its fee and reimburse the
Fund to the extent that annual expenses exceed 0.60 of 1% of
average annual net assets in any fiscal year. These undertakings as
to fee waivers and expense reimbursement may operate to reduce the
fees and expenses of the Fund in order to maintain a competitive
yield. The Administrator has advised the Fund that its undertaking
to reimburse expenses will be modified so that after November 1,
1999, it will not apply to payments under the Distribution Plan and
Shareholder Services Plan applicable to the Service Shares class.
</FN>
[FN]
(2) The expense ratios for the Original Shares of the Cash Fund for
the fiscal year ended June 30, 1999 after giving effect to the
waivers and expense reimbursement were incurred at the following
annual rates: investment advisory fee, 0.00%; administration fee,
0.00%; other expenses, 0.40%; for total operating expenses of
0.40%.
</FN>
Example
This Example is intended to help you compare the cost of investing
in the Government Securities Fund with the cost of investing in
other mutual funds.
The Example assumes that you invest $10,000 in Service Shares of
the Government Securities Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each
year, you reinvest all dividends and distributions, and that the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs
would be:
1 year 3 years 5 years 10 years
$378 $1,149 $1,939 $4,002
<PAGE>
General Risks
Year 2000. Like other financial and business organizations,
the Funds could be adversely affected if computer systems the Funds
rely 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 Funds to
achieve comparable results. Certain vendors have advised the
Administrator that they are currently compliant. The Funds' 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. These three vendors have
advised the Administrator that they expect to be ready and will
additionally be prepared to implement contingency plans if
necessary. All such expenses are being borne, and are expected to
continue to be borne, by the respective service providers. The
Funds have not incurred, nor are they anticipated to incur any
costs related to these matters. The Administrator has also
requested the Funds' portfolio managers to attempt to evaluate the
potential impact of this problem on the issuers of securities in
which the Funds invest. These factors could also have a negative
impact on the issuers of securities held by the Funds, which could
in turn have a negative impact on yields. At this time there can be
no assurance that these steps will be sufficient to avoid any
adverse impact on the Funds.
MANAGEMENT OF THE FUNDS
"How are the Funds managed?"
STCM Management Company Inc., 380 Madison Avenue, Suite 2300,
New York, NY 10017 (the "Adviser") is the investment adviser for
each of the Funds. Under the Advisory Agreements, the Adviser
provides for investment supervision including supervising
continuously the investment program of each Fund and the
composition of its portfolio; determining what securities will be
purchased or sold by each Fund; arranging for the purchase and the
sale of securities held in the portfolio of each Fund; and, at the
Adviser's expense, pricing of each Fund's portfolio daily.
Aquila Management Corporation, 380 Madison Avenue, Suite 2300,
New York, NY 10017, the Administrator, is responsible for
administrative services, including providing for the maintenance of
the headquarters of the Funds, overseeing relationships between the
Funds and the service providers to the Funds, maintaining the
Funds' books and records and providing other administrative
services.
During the fiscal year ended June 30, 1999, the Cash Fund
(during that period the only outstanding series) accrued advisory
fees (0.20 of 1%) and administration fees (0.15 of 1%) at the total
annual rate of 0.35 of 1% of its average annual net assets. All of
these fees were waived.
Information about the Adviser and the Administrator
The Adviser has acted as investment adviser for the Cash
Fund since 1992. The Funds' Administrator is founder and
Administrator and/or Manager to the Aquilasm Group of Funds, which
consists of tax-free municipal bond funds, money-market funds and
equity funds. As of December 31, 1998, these funds had aggregate
assets of approximately $3.2 billion, of which approximately $2.0
billion consisted of assets of the tax-free municipal bond 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.
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 Funds achieve
sufficient size so that it is no longer necessary for the Adviser
to waive its fees or for the Funds' 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.
NET ASSET VALUE PER SHARE
The net asset value per share for each class of each Fund's
shares is determined as of 4:00 p.m. New York time on each day
that the New York Stock Exchange and the Custodian are open (a
"Business Day") by dividing the value of the net assets of the
Fund allocable to the class (i.e., the value of the assets less
liabilities) by the total number of shares of that class of the
Fund then outstanding. The price at which a purchase or
redemption of shares is effected is the next calculated net asset
value after your purchase or redemption order is received in
proper form.
The net asset value per share will normally remain constant
at $1.00 per share except under extraordinary circumstances. The
net asset value per share is based on a valuation of each Fund's
investments at amortized cost.
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 as well. In addition, the
Custodian is not open on Columbus Day and Veterans Day.
PURCHASES
Opening an Account
To open a new Service Shares account directly with any Fund,
you must send a properly completed Application to PFPC Inc. (the
"Agent"). The Funds will not honor redemption of shares purchased
by wire payment until a properly completed Application has been
received by the Agent. The minimum initial investment is $1,000.
Subsequent investments may be in any amount.
You can make direct investments in Service Shares in any of
these three ways:
1. By Mail. You can make payment 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 or Capital Cash U.S. Government Securities
Trust, as the case may be, and mailed to:
(Specify the name of the Fund)
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
2. By Wire. You can wire Federal Funds (monies credited
to a bank's account with a Federal Reserve Bank) to PNC
Bank, NA.
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 for the appropriate Fund:
the Cash Fund:
PNC BANK, NA
Philadelphia, PA
ABA No. 0310-0005-3
Account No. 85-0216-4765
FFC: Capital Cash Management Trust
Service Shares
the Government Securities Fund:
PNC BANK, NA
Philadelphia, PA
ABA No. 0310-0005-3
Account No. 86-1282-3418
FFC: Capital Cash U.S. Government Securities Trust
Service Shares
In addition you should supply:
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. If you wish, you may invest in the Funds
by purchasing shares through registered broker-dealers.
The Funds impose no sales or service charge on purchases of
Service Shares, although financial intermediaries may make
reasonable charges to their customers for their services. The
services to be provided and the fees therefor are established by
each financial intermediary acting independently; financial
intermediaries may also determine to establish, as to accounts
serviced by them, higher initial or subsequent investment
requirements than those required by the Funds. Financial
intermediaries are responsible for prompt transmission of orders
placed through them.
Banks may offer an arrangement whereby their customers may
invest in Service Shares of any Fund by establishing a "sweep
account" with them. A sweep account connects an FDIC-insured
checking account with an account with the Funds. When money is
transferred out of a checking account for investment in any of
the Funds, it is no longer covered by FDIC insurance. Because of
the special arrangements for automated purchases and redemptions
of Service Shares that sweep accounts involve, certain options or
other features described in this Prospectus (such as alternative
purchase and redemption procedures, dividend and distribution
arrangements or share certificates) may not be available to
persons investing through such accounts. Investments through a
sweep account are governed by the terms and conditions of the
account (including fees and expenses associated with the
account), which are typically set forth in agreements and
accompanying disclosure statements used to establish the account.
You should review copies of these materials before investing in a
Fund through a sweep account.
If you are not investing through a financial intermediary,
you should follow these instructions:
Opening an Account Adding to An Account
* Make out a check for * Make out a check for
the investment amount the investment amount
payable to payable to
the appropriate Fund. the appropriate Fund.
* Complete the Application * Fill out the pre-printed
included with the Prospectus, stub attached
indicating the features to each Fund's confirmations
you wish to authorize. or supply the name(s)
of account owner(s),
the account number and
the name of the Fund.
* Send your check and * Send your check and
completed application account information to your
dealer or
to your dealer or to the Funds' Agent, PFPC
to the Funds' Agent, PFPC Inc., or
Inc., or
* Wire funds as described above. * Wire funds as described
above.
Be sure to supply the name(s) of account owner(s), the
account number, the name of the Fund.
If you make additional investments in Service Shares through
an account with a financial intermediary, you will follow the
procedures of the financial intermediary, rather than the
foregoing.
"Can I transfer funds electronically?"
You can have funds transferred electronically, in amounts of
$50 or more from your Financial Institution if it is a member of
the Automated Clearing House. You may make investments through
two electronic transfer features, "Automatic Investment" and
"Telephone Investment."
* Automatic Investment You can authorize a pre-determined
amount to be regularly transferred from your account.
* Telephone Investment You can make single investments of up
to $50,000 to be made by telephone instructions to the
Agent.
Before you can transfer funds electronically, the Agent must
have your completed Application authorizing these features. If
you initially decide not to choose these conveniences and then
later wish to do so, you must complete a Ready Access Features
Form which is available from the Distributor or Agent. The Funds
may modify or terminate these investment methods or charge a
service fee, upon 30 days' written notice to shareholders.
If you make additional investments in Service Shares through
an account with a financial intermediary, the procedures for such
investments will be those provided in connection with the account
rather than the foregoing.
When Shares are Issued and Dividends are Declared on Them
The Funds issue shares two ways.
First Method - ordinary investments. You will be paid
dividends starting on the day (whether or not a Business Day)
after the first Business Day on which your purchase order has
been received in proper form and funds have become available for
investment. You will be paid a dividend on the day on which your
shares are redeemed.
"When will funds be available so that my order will become
effective?"
The Funds must have payment for your purchase available for
investment before 4:00 p.m. New York time on a Business Day for
your order to be effective on that Business Day. Your order is
effective and you will receive the next determined net asset
value per share depending on the method of payment you choose, as
follows.
Payment Method When will an order When will an order
received before received after
4:00 p.m on a 4:00 p.m. on a
Business Day Business Day
be deemed be deemed
effective? effective?
By wire in
Federal Funds or
Federal Reserve
Draft That day Next Business Day
By wire not
in Federal Funds 4:00 p.m. on the 4:00 p.m. on the
Business Day Business Day
converted to converted to
Federal Funds Federal Funds
(normally the (normally the
next Business next Business
Day) Day)
By Check 4:00 p.m. on the 4:00 p.m. on the
Business Day Business Day
converted to converted to
Federal Funds Federal Funds
(normally (normally
two Business two Business
Days for checks Days for checks
on banks in the on banks in the
Federal Reserve Federal Reserve
System, longer System, longer
for other banks) for other banks)
Automatic
Investment The day you specify;
if it is not a
Business Day, on the
next Business Day
Telephone
Investment That day Next Business Day
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. (The Agent will convert wires and checks to Federal Funds
as your agent.)
Second Method- For broker-dealers or banks which have
requested that this method be used, to which request a Fund has
consented. You will be paid dividends starting on the day on
which your purchase order has been received in proper form and
funds have become available for investment. You will not be paid
a dividend on the day on which your shares are redeemed.
"When will my order be effective under the Second Method?"
Your purchase order is effective and your funds are invested
as follows:
On that day, if
(i) you advise the Agent before 1:00 p.m. New York time
on a Business Day of a dollar amount to be invested in the Cash
Fund or Government Securities Fund; and
(ii) Your payment in Federal Funds is received by wire on
that day.
The second investment method is available to prospective
investors in shares of a Fund 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
the Funds will advise you 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 two investment methods
set forth above. If you make a redemption request and have
purchased shares under both methods, 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.
Under each method, shares are issued at the net asset
value per share next determined after the purchase order is
received in proper form. Under each method, the Application must
be properly completed and have been received and accepted by the
Agent; the Funds or the Distributor may also reject any purchase
order. Under each method, Federal Funds (see above) must either
be available to the Funds or the payment thereof must be
guaranteed to the Funds so that the Funds can be as fully
invested as practicable.
Transfer on Death Registration
The Funds generally permit "transfer on death" registration
of shares ("TOD") purchased directly, so that on the death of the
shareholder the shares are transferred to a designated
beneficiary or beneficiaries. Ask the Agent or your broker-dealer
for the Transfer on Death Registration Request Form. With it you
will receive a copy of the TOD Rules of the Aquilasm Group of
Funds, which specify how the registration becomes effective and
operates. By opening a TOD Account, you agree to be bound by the
TOD Rules. TOD registration may not be available if you invest
through a financial intermediary.
REDEEMING YOUR INVESTMENT
You may redeem some or all of your shares by a request to
the Agent. Shares will be redeemed at the next net asset value
determined after your request has been received in proper form.
There is no minimum period for investment in the Funds,
except for shares recently purchased by check or by Automatic or
Telephone Investment as discussed below.
If you purchased Service Shares of either Fund 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.
How to Redeem Your Investment
By mail, send instructions to:
PFPC Inc.
Attn: Aquilasm Group of Funds
400 Bellevue Parkway
Wilmington, Delaware 19809
By telephone, call:
800-952-6666 toll-free
By FAX, send instructions to: 302-791-3055
For liquidity and convenience, the Funds offer expedited
redemption.
Expedited Redemption Methods
(Non-Certificate Shares Only)
You may request expedited redemption for any shares not
issued in certificate form in two ways:
1 By Telephone. The Agent will accept instructions from
anyone by telephone to redeem shares and make payments:
a) to a Financial Institution account you
have previously specified or
b) by check in the amount of $50,000 or less,
mailed to the same name and address (which
has been unchanged for the past 30 days) as
the account from which you are redeeming. You
may only redeem by check via telephone
request once in any 7-day period.
Telephoning the Agent
Whenever you telephone the Agent, please be prepared to
supply:
account name(s) and number
name of the caller
the social security number(s) registered to the account
personal identification
Note: Check the accuracy of your confirmation statements
immediately. The Funds, the Agent, and the Distributor are
not responsible for losses resulting from unauthorized
telephone transactions if the Agent follows reasonable
procedures designed to verify a caller's identity. The
Agent may record calls.
2. By FAX or Mail. You may request redemption payments to a
predesignated Financial Institution account by a letter of
instruction sent to the Agent: PFPC Inc., by FAX at 302-791-3055
or by mail to 400 Bellevue Parkway, Wilmington, DE 19809. The
letter, signed by the registered shareholder(s) (no signature
guarantee is required), must indicate:
account name(s),
account number,
amount to be redeemed,
any payment directions.
To have redemption proceeds sent directly to a Financial
Institution Account, you must complete the Expedited Redemption
section of the Application or a Ready Access Features Form. You
will be required to provide (1) details about your Financial
Institution account, (2) signature guarantees and (3) possible
additional documentation.
The name(s) of the shareholder(s) on the Financial
Institution account must be identical to those on the Funds'
records of your account.
You may change your designated Financial Institution account
at any time by completing and returning a revised Ready Access
Features Form.
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. 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.
Because these checks are paid by redemption of shares in
your account, you should be certain that adequate shares are in
the account to cover the amount of the 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. Note:
You cannot use checks to redeem shares represented by
certificates. If you purchase shares by check, you cannot use
checks to redeem them until 15 days after your purchase.
You may not present checks directly 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 redeem the
entire balance of your account, since the number of shares in
your account changes daily through dividend payments which are
automatically reinvested in full and fractional shares. 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)
Certificate Shares. Mail to the Funds' Agent: (1) blank
(unsigned) certificates for Service Shares to be redeemed, (2)
redemption instructions, and (3) a stock assignment form.
To be in "proper form," items (2) and (3) must be signed by
the registered shareholder(s) exactly as the account is
registered. For a joint account, both shareholder signatures
are necessary.
For your protection, mail certificates separately from
signed redemption instructions. We recommend that
certificates be sent by registered mail, return receipt
requested.
We may require additional documentation for certain types of
shareholders such as corporations, partnerships, trustees or
executors, or if redemption is requested by someone other
than the shareholder of record. The Agent may require
signature guarantees if insufficient documentation is on
file.
We do not require a signature guarantee for redemptions up
to $50,000, payable to the record holder(s), and sent to the
address of record, except as noted above. In all other
cases, signatures must be guaranteed.
Your signature may be guaranteed by any:
member of a national securities exchange
U.S. bank or trust company
state-chartered savings bank
federally chartered savings and loan association
foreign bank having a U.S. correspondent bank; or
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.
Non-Certificate Shares. You must use the Regular Redemption
Method if you have not chosen Expedited Redemption to a
predesignated Financial Institution account. To redeem by
this method, send a letter of instruction to the Funds'
Agent, which includes:
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 (we normally mail redemption
proceeds to your address as registered with a Fund)
Signature(s) of the registered shareholder(s) and
Signature guarantee(s), if required, as indicated
above.
"When will I receive the proceeds of my redemption?"
Redemption proceeds are normally sent, as shown below, to
your address of record on the next business day following receipt
of your redemption request in proper form. Except as described
below, the Funds will send payments within 7 days.
Redemption Method of Payment Charges
Under $1,000 Check None
$1,000 or more Check or, if and as None
you requested on your
Application or Ready Access
Features Form, wired
or transferred through
the Automated Clearing
House to your Financial
Institution Account
Through a broker
/dealer Check or wire, to your None.
broker/dealer However,
your
broker/dealer
may charge a
fee.
Although the Funds do not currently intend to, either
Fund may impose a charge, not exceeding $5.00 per wire
redemption, after written notice to shareholders who have elected
this redemption procedure. Neither Fund has any present intention
of making this charge. Upon 30 days' written notice to
shareholders, either Fund may modify or terminate the use of the
Automated Clearing House to make redemption payments at any time
or charge a service fee, although no such fee is currently
contemplated. If any such changes are made, the Prospectus will
be supplemented to reflect them. If you use a broker or dealer to
arrange for a redemption, you may be charged a fee for this
service.
The Funds may delay payment for redemption of Service
Shares recently purchased by check (including certified,
cashier's or official bank check) or by Automatic Investment or
Telephone Investment up to 15 days after purchase; however,
payment for redemption will not be delayed after (i) the check or
transfer of funds has been honored, or (ii) the Agent receives
satisfactory assurance that your Financial Institution will honor
the check or transfer of funds. You can eliminate possible delays
by paying for purchased shares with wired funds or Federal
Reserve drafts.
The Funds have the right to postpone payment or suspend
redemption rights during certain periods. These periods may occur
(i) when the Exchange is closed for other than weekends and
holidays, (ii) when the Securities and Exchange Commission (the
"SEC") restricts trading on the Exchange, (iii) when the SEC
determines an emergency exists which causes disposal of, or
determination of the value of, the portfolio securities to be
unreasonable or impracticable, and (iv) during such other periods
as the SEC may permit.
Payment for redemption by any method (including redemption
by check) of Service 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 Fund, that the purchase check
or Automatic Investment or Telephone Investment will be honored.
Service 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 purchase of Service
Shares by check and (ii) the redemption check would cause the
redemption of some or all of those shares.
Either Fund can redeem your shares if their value totals
less than $500 as a result of redemptions or failure to meet and
maintain the minimum investment level under an Automatic
Investment Program. Before such a redemption is made, we will
send you a notice giving you 60 days to make additional
investments to bring your account up to the minimum.
Redemption proceeds may be paid in whole or in part
("redemption in kind") by distribution of a Fund's portfolio
securities in conformity with SEC rules. This method would only
be used if the Trustees determine that payments partially or
wholly in cash would be detrimental to the best interests of the
remaining shareholders.
"Is there an Automatic Withdrawal Plan?"
Yes, but it is available only for shares purchased directly
and not for shares purchased through a financial intermediary.
Under an Automatic Withdrawal Plan you can arrange to receive a
monthly or quarterly check in a stated amount, not less than $50.
DISTRIBUTION ARRANGEMENTS
Confirmations and Share Certificates
If you invest in a Fund directly, rather than through a
financial intermediary, all purchases of Service Shares will be
confirmed and credited to you in an account maintained for you by
the Agent in full and fractional shares of the Fund being
purchased (rounded to the nearest 1/1000th of a share). Share
certificates will not be issued unless you so request from the
Agent in writing and declare a need for such certificates, such
as a pledge of shares or an estate situation. If certificates are
issued at your request, Expedited Redemption 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. Share certificates may not be available to
investors who purchase Service Shares through an account with a
financial intermediary.
The Funds and the Distributor may 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
Each Fund has adopted a Distribution Plan under Rule 12b-1
("Rule 12b-1") under the 1940 Act.
A part of each Distribution Plan that relates exclusively
to Service Shares provides for payments under agreements by the
Fund out of its assets represented by Service Shares to certain
designated payees which have rendered assistance in the
distribution and/or retention of the Funds' Service Shares or in
the servicing of Service Share accounts. The total payments under
this part of each Distribution Plan may not exceed 0.25 of 1% of
the average annual assets of the Fund represented by Service
Shares. Payment is be made only out of the Fund's assets
represented by Service Shares.
A payee may pass on a portion of the payments it receives to
other financial institutions or service organizations that also
render assistance in the distribution, retention and/or servicing
of Service Shares.
Shareholder Services Plan for Service Shares
Each Fund's Shareholder Services Plan authorizes it to
pay a service fee under agreements to certain qualified
recipients who have agreed to provide personal services to
Service Shares shareholders and/or maintain their accounts. For
any fiscal year, such fees may not exceed 0.25 of 1% of the
average annual net assets represented by a Funds's Service
Shares. Payment is be made only out of the Fund's assets
represented by Service Shares.
A payee may pass on a portion of the payments it receives
to other financial institutions or service organizations that
also render assistance in the servicing of Service Shares and/or
maintenance of Service Share accounts.
Limitation on Payments
Both the Distribution Plan and Shareholder Services Plan
provide that total payments under both plans cannot exceed 0.25
of 1% of the average annual net assets represented by Service
Shares.
DIVIDENDS
The Funds will declare all of their net income for
dividend purposes daily as dividends. 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 issued under the " second"
method.
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.
Dividends paid by each Fund with respect to Service
Shares and Original Shares (the Fund's other class of shares)
will be calculated in the same manner, at the same time, on the
same day, and will be in the same amount except that any class
expenses (including any payments made by Service Shares under the
Distribution Plan or Shareholder Services Plan) will be borne
exclusively by that class. Dividends on Original Shares are
expected generally to be higher than those on Service Shares
because expenses allocated to Service Shares will generally be
higher.
Dividends will be taxable to you as ordinary income, even
though reinvested. Statements as to the tax status of your
dividends will be mailed annually.
It is possible but unlikely that a Fund may have realized
long-term capital gains or losses in a year.
Dividends of each Fund will automatically be reinvested in
full and fractional shares of the same class at net asset value
unless you elect otherwise.
You may choose to have all or any part of the payments for
dividends paid in cash. You can elect to have the cash portion of
your dividends deposited, without charge, by electronic funds
transfers into your account at a financial institution, if it is
a member of the Automated Clearing House.
You can make any of these elections on the Application, by a
Ready Access Features Form or by a letter to the Agent. Your
election to receive some or all of your dividends in cash will be
effective as of the next payment of dividends after it has been
received in proper form by the Agent. It will continue in effect
until the Agent receives written notification of a change.
All shareholders, whether their dividends are received in
cash or reinvested, will receive a monthly statement indicating
the current status of their account.
If you do not comply with laws requiring you to furnish
taxpayer identification numbers and report dividends, the Funds
may be required to impose backup withholding at a rate of 31%
upon payment of redemptions and dividends.
<PAGE>
The table shown below for Original Shares is for information purposes only.
Original Shares are not offered by this Prospectus. No historical
information exists for Service Shares, which were established on November
1, 1999.
CAPITAL CASH MANAGEMENT TRUST
ORIGINAL SHARES
CASH FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
The financial highlights table is intended to help you understand the
Fund's financial performance for the indicated periods of the Fund's
operations. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in Original Shares of
the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by KPMG LLP, whose report, along with the
Fund's financial statements, is included in the annual report, is
incorporated by reference into the SAI and is available upon request.
<TABLE>
<CAPTION>
Year ended June 30,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Period.........$1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from
Investment Operations:
Net investment
income............ 0.0473 0.0521 0.0489 0.0518 0.0497
Less Distributions:
Dividends from net
investment income..(0.0473) (0.0521) (0.0489) (0.0518) (0.0497)
Net Asset Value,
End of Period..... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return(%).... 4.84 5.33 5.00 5.29 5.09
Ratios/Supplemental
Data
Net Assets, End of Period
($ in thousands)...1,616 1,613 1,435 1,765 1,660
Ratio of Expenses
to Average Net
Assets (%)......... 0.41 0.40 0.41 0.41 0.42
Ratio of Net Investment
Income to Average
Net Assets %........4.72 5.21 4.88 5.16 4.98
The expense and net investment income ratios without the effect of the
Adviser's and Administrator's voluntary waiver of fees and the
Administrator's expense reimbursement were:
Ratio of Expenses
to Average Net Assets(%)
3.51 5.14 6.48 5.74 5.00
Ratio of Net Investment
Income(Loss) to
Average Net
Assets(%) 1.62 0.47 (1.19) (0.17) (0.40)
The expense ratios after giving effect to the waivers, expense
reimbursement and expense offset for uninvested cash balances were:
Ratio of Expenses to
Average Net Assets(%)
0.40 0.40 0.40 0.40 0.40
</TABLE>
Unaudited: The Trust's "current yield" for the seven days ended June 30,
1999 was 4.53% and its "compounded effective yield" for that period
was 4.63%. Current yield is net income over a stated seven-day period
annualized, and is shown as a percentage. Effective yield is calculated
similarly, but, when annualized, the income earned is assumed to be
reinvested, which gives effect to compounding.
<PAGE>
Application for
Capital Cash Management Trust - Service Shares
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,
Other Organization or
any Fiduciary capacity
Use line 4
* Joint Accounts will be Joint
Tenants with rights of survivorship
unless otherwise specified.
** Uniform Gifts/Transfers
to Minors Act.
Please type or print name(s) 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
___ Capital Cash Management Trust(940)
___ Capital Cash U.S. Government Securities Trust(960)
1) ___ By Check
2) ___ By Wire
1) By Check: Make check payable to either: Capital
Cash Management Trust or Capital Cash U.S. Government Securities 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: 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 Financial Institution
to wire funds as indicated below for the appropriate Fund:
Wire Instructions:
PNC Bank, NA
ABA No. 0310-0005-3
For further credit to (specify the Fund you are investing in)
Capital Cash Management Trust (Service Shares) A/C 85-0216-4765
Capital Cash U.S. Government Securities Trust
(Service Shares) A/C 86-1282-3418
Please include account name(s) and number (if an existing account)
or the name(s) in which the investment is to be registered (if a
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.
You can have any portion reinvested, with the balance paid in cash, by
indicating a percent below:
Dividends are to be:___% Reinvested ___% 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 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 Aquilasm 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 PNC Bank, NA, 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
DEPOSITORS AUTHORIZATION TO HONOR DEBITS
IF YOU SELECTED AUTOMATIC INVESTMENT OR TELEPHONE INVESTMENT
YOU MUST ALSO COMPLETE STEP 4, SECTIONS A & B.
I/We authorize the Financial Institution listed below to charge to
my/our account any drafts or debits drawn on my/our account initiated
by the Agent, PFPC Inc., and to pay such sums in accordance therewith,
provided my/our account has sufficient funds to cover such drafts or
debits. I/We further agree that your treatment of such orders will be
the same as if I/we personally signed or initiated the drafts or debits.
I/We understand that this authority will remain in effect until you
receive my/our written instructions to cancel this service. I/We also
agree that if any such drafts or debits are dishonored, for any reason,
you shall have no liabilities.
Financial Institution Account Number______________________________________
Name and Address
where my/our account Name of Financial Institution____________________
is maintained Street Address___________________________________
City______________________State_____ Zip_________
Name(s) and
Signature(s) of _______________________________
Depositor(s) as they (Please Print)
appear where account X_______________________________ __________
is registered (Signature) (Date)
________________________________
(Please Print)
X_______________________________ __________
(Signature) (Date)
INDEMNIFICATION AGREEMENT
To: Financial Institution Named Above
So that you may comply with your 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 that (i) that number is my correct taxpayer identification
number and (ii) currently I am not under IRS notification that I am subject
to backup withholding (line out (ii) if under notification). If no such
Number is shown, the undersigned further certifies, under penalties of
perjury, that either (a) no such number has been issued, and a number
has been or will soon be applied for; if a number is not provided to
you within sixty days, the undersigned understands that all payments
(including liquidations) are subject to 31% withholding under federal
tax law, until a Number is provided and the undersigned may be subject
to a $50 I.R.S. penalty; or (b) that the undersigned is not a citizen
or resident of the U.S.and either does not expect to be in the U.S.
for more than 183 days during each calendar year and does not conduct a
business in the U.S. which would receive any gain from the Trust or is
exempt under an income tax treaty.
NOTE: ALL REGISTERED OWNERS OF THE ACCOUNT MUST SIGN BELOW.
FOR A TRUST, ALL TRUSTEES MUST SIGN.*
______________________________ __________________________ __________
Individual (or Custodian) Joint Registrant, if any Date
______________________________ __________________________ __________
Corporate Officer, Partner, 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
1-800-227-4638 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>
[Inside Back Cover]
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
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 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
<PAGE>
Back Cover
This Prospectus concisely states information about the Funds
that you should know before investing. A Statement of Additional
Information about the Funds dated November 1, 1999, (the "SAI")
has been filed with the Securities and Exchange Commission. The
SAI contains information about the Funds and their management not
included in this Prospectus. The SAI is incorporated by reference
in its entirety in this Prospectus. Only when you have read both
this Prospectus and the SAI are all material facts about the
Funds available to you.
You can get additional information about the Funds'
investments in the Funds' annual and semi-annual reports to
shareholders. In the Funds' annual report, you will find a
discussion of the market conditions and investment strategies
that significantly affected the Funds' performance during their
last fiscal year. You can get the SAI and the Funds' annual and
semi-annual reports without charge, upon request.
In addition, you can review and copy information about the
Funds (including the SAI) at the Public Reference Room of the SEC
in Washington, D.C. You can get information on the operation of
the SEC's public reference room by calling the SEC at
1-800-SEC-0330. You can get other information about the Funds at
the SEC's Internet site at http://www.sec.gov. You can get copies
of this information, upon payment of a duplicating fee, by
writing the Public Reference Section of the SEC, Washington, D.C.
20549-6009.
This Prospectus should be read and retained for future reference
TABLE OF CONTENTS
The Cash Fund: Objective, Investment Strategies,
Main Risks...................................
Fees and Expenses of the Cash Fund
The Government Securities Fund: Objective, Investment Strategies,
Main Risks...................................
Fees and Expenses of the Government Securities Fund
Management of the Funds.................................
Net Asset Value Per Share........................
Purchases .......................................
Redeeming Your Investment........................
Distribution Arrangements.........................
Dividends........................................
Tax Information..................................
Financial Highlights.............................
Application
The file number under which the Trust is registered
with the SEC under the
Investment Company Act of 1940 is 811-2481
<PAGE>
Capital Cash Management Trust
Capital Cash Management Trust
Capital Cash U.S. Government Securities Trust
A cash management
investment
[LOGO]
PROSPECTUS
Service Shares
To receive a free copy of the Trust's SAI, annual or semi-annual
report, or other information about the Trust, or to make
shareholder inquiries call:
the Trust's Shareholder Servicing Agent at
800-952-6666 toll free
or you can write to:
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
For general inquiries and yield information, call 800-227-4638 or
212-697-6666
This Prospectus should be read and retained for future reference
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
Capital Cash Management Trust
Capital Cash U.S. Government Securities Trust
380 Madison Avenue, Suite 2300
New York, New York 10017
212-697-6666
Statement of Additional Information November 1, 1999
This Statement of Additional Information (the "SAI") is not
a Prospectus. It relates to Capital Cash Management Trust (the
"Trust") which has two separate funds, Capital Cash Management
Trust and Capital Cash U.S. Government Securities Trust (each a
"Fund" and collectively, the "Funds"). There are two Prospectuses
for the Funds dated November 1, 1999: one for Original Class
Shares ("Original Shares"), the other for Service Class Shares
("Service Shares") of the Funds. References in the SAI to "the
Prospectus" refer to either of these Prospectuses. The SAI should
be read in conjunction with the Prospectus for the class of
shares in which you are considering investing. Either or both
Prospectuses may be obtained from the Fund's Shareholder
Servicing Agent, PFPC Inc., by writing to: 400 Bellevue Parkway,
Wilmington, DE 19809 or by calling:
800-952-6666 toll free
or from Aquila Distributors, Inc., the Fund's Distributor, by
writing to it at 380 Madison Avenue, Suite 2300, New York, New
York 10017; or by calling:
800-697-6666 toll free
Financial Statements
The financial statements for Capital Cash Management Trust
for the year ended June 30, 1999, which report is contained in
the Annual Report for that fiscal year, are hereby incorporated
by reference into the SAI. Those financial statements have been
audited by KPMG LLP, independent auditors, whose report thereon
is incorporated herein by reference. The Annual Report can be
obtained without charge by calling any of the toll-free numbers
listed above. The Annual Report will be delivered with the SAI.
TABLE OF CONTENTS
Trust History
Investment Strategies and Risks
Policies of the Funds
Management of the Funds
Ownership of Securities
Investment Advisory and Other Services
Brokerage Allocation and Other Practices
Capital Stock
Purchase, Redemption, and Pricing of Shares
Taxation of the Funds
Underwriter
Performance
Appendix A
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION
Trust History
Capital Cash Management Trust (the "Trust") is an open-end
investment company formed in 1976 as a Massachusetts business
trust. The Trust is one of the oldest money-market mutual funds
in the United States. The Trust consists of two separate funds:
Capital Cash Management Trust (the "Cash Fund") and Capital Cash
U.S. Government Securities Trust (the "Government Securities
Fund"). They are collectively referred to as the "Funds." Until
November 1, 1999, the Trust had only one portfolio, Capital Cash
Management Trust.
Investment Strategies and Risks
The investment objective and policies of each Fund are
described in the Prospectuses, which refers to the investments
and investment methods described below.
Additional Information About the Cash Fund's Investments
Under the current management policies, the Cash Fund 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.
(2) Bank Obligations and Instruments Secured by Them: Bank
obligations (i) of U.S. regulated banks having total assets of at
least $1.5 billion, which may be domestic banks, foreign
branches of such banks or U.S. subsidiaries of foreign banks;
(ii) of any foreign bank having total assets equivalent to at
least $1.5 billion; or (iii) that are fully insured as to
principal by the Federal Deposit Insurance Corporation. ("Banks"
include commercial banks, savings banks and savings and loan
associations.)
(3) Commercial Paper: Short-term corporate debt.
(4) Corporate Debt Obligations: Corporate debt obligations
(for example, bonds and debentures). Debentures are a form of
unsecured corporate debt.
(5) Variable Amount Master Demand Notes: Variable amount
master demand notes repayable on not more than 30 days' notice.
These notes permit the investment of fluctuating amounts by the
Cash Fund at varying rates of interest pursuant to direct
arrangements between the Cash Fund, as lender, and the borrower.
They permit daily changes in the amounts borrowed. The Cash Fund
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. Variable amount master demand
notes may or may not be backed by bank letters of credit.
(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 Cash Fund may invest (see 2 above) or a
corporation in whose commercial paper the Cash Fund may invest
(see 3 above). If the Cash Fund invests more than 5% of its net
assets in such other obligations, the Prospectus will be
supplemented to describe them.
(7) Repurchase Agreements: The Cash Fund may purchase
securities subject to repurchase agreements with commercial banks
and broker-dealers 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 two or more nationally recognized statistical
rating organizations ("NRSROs").
(8) When-Issued or Delayed Delivery Securities: The Cash
Fund may buy securities on a when-issued or delayed delivery
basis. The Cash Fund may not enter into when-issued commitments
exceeding in the aggregate 15% of the market value of the Cash
Fund's total assets, less liabilities other than the obligations
created by when-issued commitments. When-issued securities are
subject to market fluctuation and no interest accrues to the Cash
Fund until delivery and payment take place; their value at the
delivery date may be less than the purchase price.
Information on Variable Amount Master Demand Notes
The Cash Fund 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 Fund at
varying rates of interest pursuant to direct arrangements between
the Fund, as lender, and the borrower. They permit daily changes
in the amounts borrowed. The Cash Fund 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. They are redeemable (and thus repayable by the borrower) at
principal amount, plus accrued interest, at any time on not more
than thirty days' notice. Except for those notes which are
payable at principal amount plus accrued interest within seven
days after demand, such notes fall within the Fund's overall 10%
limitation on securities with possible limited liquidity. 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") 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 Fund 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 Fund can
invest.
Information On Insured Bank Obligations
The Federal Deposit Insurance Corporation ("FDIC") insures
the deposits of Federally insured banks and savings institutions
(collectively herein, "banks") up to $100,000. The Cash Fund 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 Cash Fund will invest in them
only within a 10% limit of each Fund 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 Cash Fund may purchase obligations other than those
listed in categories 1 through 5 above, but only if such other
obligations are guaranteed as to principal and interest by either
a bank in whose obligations the Cash Fund may invest or a
corporation in whose commercial paper it may invest. If any such
guarantee is unconditional and is itself an Eligible 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 an Eligible
Security and meets all other applicable requirements of Rule 2a-7
(the "Rule") of the Securities and Exchange Commission. As of the
date of the SAI the Cash Fund 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 Cash
Fund invests in these assets, they will be identified in the
Prospectus and described in the SAI.
U.S. Government Securities
All of the Funds may invest in U.S Government Securities
(i.e., obligations issued or guaranteed by the U.S. government or
its agencies or instrumentalities), which include securities
issued by the U.S. Government, such as 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.
The Funds may invest in securities of U.S. government
agencies and instrumentalities that issue or guarantee
securities. These include, but are not limited to, the Farmers
Home Administration, Federal Farm Credit System, Federal Home
Loan Banks, Federal Home Loan Mortgage Corporation, Federal
Housing Administration, Federal National Mortgage Association,
Financing Corporation, Government National Mortgage Association,
Resolution Funding Corporation, 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 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 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 Funds
will invest in government securities, including securities of
agencies and instrumentalities only the Adviser, acting under
procedures approved by the Board of Trustees, is satisfied that
these obligations present minimal credit risks.
Portfolio Turnover
In general, the Funds will purchase securities with the
expectation of holding them to maturity. However, the Funds may
to some degree engage in short-term trading to attempt to take
advantage of short-term market variations. The Funds may also
sell securities prior to maturity to meet redemptions or as a
result of a revised management evaluation of the issuer. The
Funds 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 Funds invest. (In the usual
calculation of portfolio turnover, securities of the type in
which the Funds invests are excluded; consequently, the high
turnover which the Funds will have is not comparable to the
turnover of non-money-market investment companies.)
When-Issued and Delayed Delivery Securities
The Cash Fund 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 that either Fund
makes a 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 Cash Fund will make
commitments for such when-issued transactions only when they have
the intention of actually acquiring the securities. The Cash Fund
maintain 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 Cash
Fund will each meet their obligations from maturities or sales of
the securities held in the separate account and/or from cash
flow. If the Cash Fund chooses to dispose of any 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. The Cash Fund may not
enter into when-issued commitments exceeding in the aggregate 15%
of the market value of its respective total assets, less
liabilities other than the obligations created by when-issued
commitments.
Diversification and Certain Industry Requirements
The Cash Fund has a rule 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 Fund considers
the industry of the issuer to be that of the related operating
company.
Policies of the Funds
Investment Restrictions
Each Fund 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 outstanding shares of that Fund vote to change
them. Under the 1940 Act, the vote of the holders of a majority
of the outstanding shares of a Fund means the vote of the holders
of the lesser of (a) 67% or more of the Fund'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.
Investment Restrictions of the Cash Fund
1. The Cash Fund has diversification and anti-concentration
requirements.
The Cash Fund 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 Cash Fund 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 Cash Fund's
assets in the aggregate, and to no more than the greater of 1% of
the Cash Fund's assets or $1,000,000 in the securities of any one
issuer.
The Cash Fund 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 Cash Fund may purchase (see "Investment of the Cash Fund'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 Cash Fund can make loans only by lending securities or
entering into repurchase agreements.
The Cash Fund can buy those debt securities which it is
permitted to buy (see "Investment of the Cash Fund's Assets");
this is investing, not making a loan. The Cash Fund 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 Cash Fund can lend up to 10% of its portfolio,
it does not currently foresee lending more than 5% of its
portfolio. The Cash Fund 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 Cash Fund 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 Cash Fund 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 Cash Fund can borrow only in limited amounts for special
purposes.
The Cash Fund 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 Cash Fund's income. Except in connection with borrowings, the
Cash Fund will not issue senior securities.
Investment Restrictions of the Government Securities Fund
The following restrictions on the Government Securities
Fund's investments are fundamental policies and cannot be changed
without approval of the shareholders of the Government Securities
Fund.
1. The Government Securities Fund can make loans only by
lending securities or entering into repurchase agreements.
The Government Securities Fund can buy those debt securities
which it is permitted to buy; this is investing, not making a
loan. The Government Securities Fund can lend its portfolio
securities on a collateralized basis up to 10% of the value of
its total assets to specified borrowers (broker-dealers, banks
and certain other financial institutions) to increase its income
and enter into repurchase agreements. The Government Securities
Fund 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 Government Securities Fund 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.
2. The Government Securities Fund can borrow only in limited
amounts for special purposes.
The Government Securities Fund 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 only up to the lesser of the amounts
borrowed or 5% of the value of its total assets. Interest on
borrowings would reduce the Government Securities Fund's income.
The Government Securities Fund will not purchase any securities
while it has any outstanding borrowings which exceed 5% of the
value of its assets. Except in connection with borrowings, the
Government Securities Fund will not issue senior securities.
Restrictions Applicable to all of the Funds
1. The Funds invest only in certain limited securities.
Since the Funds cannot buy any securities other than those
listed under "Investment of the Trust's Assets" in the Prospectus
or under "Investment Strategies and Risks" in the SAI, the Funds
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 Cash Fund cannot purchase or hold the securities of any
issuer if, to their knowledge, any Trustee, Director or officer
of the Fund or its Adviser individually owns beneficially more
than 0.5% of the securities of that issuer and all such Trustees,
Directors and officers together own in the aggregate more than 5%
of such securities.
The Funds 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 Funds's assets must be in established
companies.
Only 5% of the Funds'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 Funds do not buy for control.
The Funds cannot invest for the purpose of exercising
control or management of other companies.
4. The Funds do not sell securities it doesn't own or borrow from
brokers to buy securities.
Thus, they cannot sell short or buy on margin.
5. The Funds are not underwriters.
The Funds 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.
Management of the Funds
The Board of Trustees
The business and affairs of each Fund are managed under the
direction and control of its Board of Trustees. The Board of
Trustees has authority over every aspect of the Fund's
operations, including approval of the advisory agreements and
their annual renewal, the contracts with all other service
providers and payments under the Fund's Distribution Plan and
Shareholder Services Plan.
Trustees and Officers
The Trustees and officers of the Funds, their affiliations,
if any, with the Adviser or Distributor and their principal
occupations during at least the past five years are set forth
below. Each of the Trustees and officers of the Funds holds the
same position with all of the Funds. 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. As of the date of this SAI,
the Trustees and officers of the Funds owned less than 1% of the
outstanding shares of any of them.
In the following material the Funds (together with the other
Aquila money-market funds) are called the "Aquila Money-Market
Funds"; 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, Narragansett Insured Tax-Free Income
Fund and Tax-Free Fund For Utah, each of which is a tax-free
municipal bond fund, are called the "Aquila Bond Funds"; and
Aquila Cascadia Equity Fund and Aquila Rocky Mountain Equity Fund
are called the "Aquila Equity Funds."
Compensation of Trustees
The Trust does not pay fees to Trustees affiliated with the
Adviser, Administrator or to any of the Trust's officers. During
the fiscal year ended June 30, 1999, the Trust paid $11,376 in
fees and reimbursement of expenses to the 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.
Compensation Number of
from all boards on
Compensation funds in the which the
from the Aquilasm Trustee
Name Trust Group now serves
Paul Y.
Clinton $2,365 $7,050 2
Theodore T.
Mason $60 $48,138 7
Anne J.
Mills $2,153 $34,572 6
Cornelius T.
Ryan $2,190 $3,600 2
Ownership of Securities
The ownership of more than 5% of the outstanding shares of
the Cash Fund Original Shares (the only outstanding series and
class on the at date) on August 2, 1999, was as follows:
Anthony L. Cucuzella, M.D., held of record and beneficially
158,464 shares (9.0% of the class); William J. Boyle held of
record and beneficially 114,895 shares (6.6%) and Julie L
Freireich held of record and beneficially 107,811 shares (6.2%).
In addition, the Trustees and officers of the Trust owned 371,278
shares (21.2%), held as follows: by Aquila Distributors, Inc.,
153,112 shares (8.7%) by Lacy B. Herrmann,63,990 shares (3.65%),
by Elizabeth B. Herrmann, 100,998 shares (5.8%) and by Diana P.
Herrmann, 53,176 shares (3.0%).
The Funds' management is not aware of any person, other than
those named above, who beneficially owned 5% or more of either
class of a Fund's outstanding shares on such date.
Investment Advisory and Other Services
The services of STCM Management Company, Inc. (the
"Adviser") to each Fund are rendered under an Investment Advisory
Agreements between that Fund and the Adviser (together, the
"Advisory Agreements") which were most recently approved by the
shareholders (Cash Fund in 1992 and the Government Securities
Fund in 1999).
The Advisory Agreements of the Funds provide, subject to the
control of the Board of Trustees, for investment supervision by
the Adviser. Under the Advisory Agreements, the Adviser will
furnish information as to the Fund's portfolio securities to any
provider of fund accounting services to each Fund; will monitor
records of each Fund as to the Fund's portfolio, including
prices, maintained by such provider of such services; and will
supply at its expense, monthly or more frequently as may be
necessary, pricing of each Fund's portfolio based on available
market quotations using a pricing service or other source of
pricing information satisfactory to that Fund. Each Advisory
Agreement states that the Adviser shall, at its expense, provide
to the Fund all office space and facilities, equipment and
clerical personnel necessary for the carrying out of the
Adviser's duties under the Advisory Agreement.
Under each Advisory Agreement, the Adviser pays all
compensation of those officers and employees of the Fund and of
those Trustees, if any, who are affiliated with the Adviser,
provided, however that if any Trustee is an affiliate of the
Adviser solely by reason of being a member of its Board of
Directors, the Funds' may pay compensation to such Trustee, but
at a rate no greater than the rate it pays to its other Trustees.
Under the Advisory Agreements, each Fund bears the cost of
preparing and setting in type its prospectuses, statements of
additional information, and reports to its shareholders and the
costs of printing or otherwise producing and distributing those
copies of such prospectuses, statements of additional information
and reports as are sent to its shareholders. Under each Advisory
Agreement, all costs and expenses not expressly assumed by the
Adviser or by the Administrator under the Fund's Administration
Agreement or by the Fund's principal underwriter are paid by the
Fund. The Advisory Agreements list examples of such expenses
borne by the Funds, 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 Funds and their shares under Federal and State securities
laws, interest, taxes, and non-recurring expenses, including
litigation.
Under each Advisory Agreement, the each Fund pays a fee
payable monthly and computed on the net asset value of the Fund
as of the close of business each business day at the annual rate
of 0.20 of 1% of such Fund's average daily net assets.
The Adviser agrees (for the Cash Fund only) 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 Cash Fund'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 Cash
Fund'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
Cash Fund's total annual investment income.
Each Advisory Agreement may be terminated by the Adviser at
any time without penalty upon giving the Fund sixty days' written
notice, and may be terminated by the Fund at any time without
penalty upon giving the Adviser sixty days' written notice,
provided that such termination by the Fund 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).
Each 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. Each Fund agrees to indemnify the
Adviser to the full extent permitted under the Trust's
Declaration of Trust.
Each Advisory Agreement states that it is agreed that the
Adviser shall have no responsibility or liability for the
accuracy or completeness of the Fund's Registration Statement
under the Securities Act of 1933 and the 1940 Act, except for the
information supplied by the Adviser for inclusion therein.
Each Advisory Agreement contains provisions as to the Fund's
portfolio transactions which are described under "Brokerage
Allocation and other practices," below.
The Administration Agreements
Under Administration Agreements with each Fund (the
"Administration Agreements"), 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 Fund and pays all
compensation of the Fund's Trustees, officers and employees who
are affiliated persons of the Administrator. The Administration
Agreements went into effect November 1, 1993.
Under the Administration Agreements, subject to the control
of the Funds' Board of Trustees, the Administrator provides all
administrative services to each Fund 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 Funds, and overseeing all
relationships between the Funds and their 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
Funds and for the sale, servicing or redemption of the Funds'
shares.
Under the Administration Agreement, each Fund pays a fee
payable monthly and computed on the net asset value of the Fund
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 (Cash Fund
only) 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 Cash Fund'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 Cash Fund's average annual net assets, plus 1% of
the Cash Fund's average annual net assets in excess of $30
million, or (ii) 25% of the Trust's total annual investment
income.
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
Cash Fund as required so that the total expenses of the Cash Fund
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 Cash Fund 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 from year to year after June 30, 1998, provided,
however, that upon at least six months' written notice to the
Cash Fund, 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.
Advisory and Administration Fees
During the three fiscal years ended June 30, 1999, 1998 and
1997, the following fees were accrued, all of which 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 these years.
To the Adviser:
Cash Fund Government
Securities Fund
1999 $3,370 N/A
1998 $3,238 N/A
1997 $3,423 N/A
To the Administrator:
1999 $2,527 N/A
1998 $2,429(2 N/A
1997 $2,568 (3 N/A
(2) 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.
(3) 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.
Transfer Agent, Custodian and Auditors
The Funds' Shareholder Servicing Agent (transfer agent) is
PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809.
Each Fund's Custodian is Bank One Trust Company N.A., 100
East Broad Street, Columbus, Ohio 43271; it receives, holds and
delivers the Funds' portfolio securities (including physical
securities, book-entry securities, and securities in
depositories) and money, performs related accounting functions
and issues reports to the Funds.
The Funds' auditors, KPMG LLP, 345 Park Avenue, New York,
New York 10154 perform an annual audit of the Funds' financial
statements.
Brokerage Allocation and Other Practices
During the fiscal years ended June 30, 1999, 1998 and 1997,
all of the Funds' transactions were principal transactions and no
brokerage commissions were paid. Brokerage allocation and other
practices relating to brokerage are set forth in the description
of the Advisory Agreements. The Advisory Agreements provide that
in connection with its duties to arrange for the purchase and
sale of the Fund's portfolio securities, the Adviser shall select
such broker-dealers ("dealers") as shall, in the Adviser's
judgment, implement the policy of the Fund to achieve "best
execution," i.e., prompt, efficient and reliable execution of
orders at the most favorable net price. The Adviser shall cause
the Fund 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 Fund expects that
most transactions will be principal transactions at net prices
and that the Fund will incur little or no brokerage costs. The
Fund 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 Fund 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 Fund. 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 Fund 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 Fund and/or other accounts of the Adviser and
that research received by such other accounts may or may not be
useful to the Fund.
Limitation of Redemptions in Kind
Each Fund has elected to be governed by Rule 18f-1 under the
1940 Act, pursuant to which the Fund 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 Fund during any 90-day period for
any one shareholder. Should redemptions by any shareholder exceed
such limitation, the Fund 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.
Capital Stock
Description of Shares
The Business Trust issues two series of shares, each series
constituting the shares of a Fund. Each series has separate
assets and liabilities and is comprised of two classes of shares:
Original Shares and Service Shares. The Declaration of Trust
permits the 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 a Fund. Income,
direct liabilities and direct operating expenses of each series
will be allocated directly to each series, and general
liabilities and expenses, if any, of the Trust will be allocated
among the series in a manner acceptable to the Board of Trustees.
Certain expenses of a series specifically allocable to a
particular class will be borne by that class; the expense of the
series not so allocated will be allocated among the classes in a
manner acceptable to the Board of Trustees and in accordance with
any applicable exemptive order or rule of the SEC. Upon
liquidation of a series, shareholders of each class of the series
are entitled to share pro-rata (subject to liabilities, if any,
allocated specifically to that class) in the net assets of that
series available for distribution to shareholders and upon
liquidation of the Trust, the respective series are entitled to
share proportionately in the assets available to the Trust after
allocation to the various series. If they deem it advisable and
in the best interests of shareholders, the Board of Trustees of
the Trust may create additional classes of shares (subject to
rules and regulations of the Securities and Exchange Commission
or by exemptive order) or the Board of Trustees may, at its own
discretion, create additional series of shares, each of which may
have separate assets and liabilities (in which case any such
series will have a designation including the word "Series").
Shares are fully paid and non-assessable, except as set forth
below; the holders of shares have no pre-emptive or conversion
rights.
Voting Rights
At any meeting of shareholders, shareholders are entitled to
one vote for each dollar of net asset value (determined as of the
record date for the meeting) represented by the shares held (and
proportionate fractional votes for fractional dollar amounts).
Shareholders will vote on 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 Trust may be 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 such
action is approved by the vote of the holders of a majority of
the outstanding shares of each series. If not so terminated, the
Trust will continue indefinitely. Rule 18f-2 under the Investment
Company Act of 1940 provides that matters submitted to
shareholders be approved by a majority of the outstanding voting
securities of each series, unless it is clear that the interests
of each series in the matter are identical or the matter does not
affect a series. However, the rule exempts the selection of
accountants and the election of Trustees from the separate voting
requirement. Classes do not vote separately except that, as to
matters exclusively affecting one class (such as the adoption or
amendment of class-specific provisions of the Distribution Plan),
only shares of that class are entitled to vote.
Each Fund has two classes of shares:
Original Shares: Original Shares are offered solely to (1)
institutions for their own account or acting for investors in a
fiduciary, agency, investment advisory or custodial capacity; (2)
persons entitled to exchange into such shares under the Fund's
exchange privilege; (3) shareholders of record on November 1,
1999, the date on which the Funds first offered two classes of
shares; (4) members 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 and which have entered into agreements with the
Distributor under a Fund's Distribution Plan. Original Shares are
sold with no sales charge and there is no redemption fee.
Service Shares: Service Shares are offered to anyone. There
are no sales charges or redemption fees. Service Shares of each
Fund are subject to a Distribution (12b-1) fee of 0.25 of 1% of
the average annual assets of the Fund represented by Service
Shares.
The Business Trust is an entity of the type commonly known
as a Massachusetts business trust. Under Massachusetts law,
shareholders of a trust such as the Business Trust may, under
certain circumstances, be held personally liable as partners for
the obligations of the trust. However, for the protection of
shareholders, the Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of
the Business Trust and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or
executed by any Fund or the Trustees. The Declaration of Trust
provides for indemnification out of the Business Trust's property
of any shareholder held personally liable for the obligations of
the Business Trust. The Declaration of Trust also provides that
the Business Trust shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of
the Business 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 Business Trust itself would be unable
to meet its obligations. If any series or class is unable to meet
the obligations attributable to it (which, in the case of the
Business Trust, is a remote possibility), other series or classes
would be subject to such obligations with a corresponding
increase in the risk of the shareholder liability mentioned in
the prior sentence.
The Declaration of Trust further indemnifies the Trustees
out of the assets of each Fund and provides that they 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.
Purchase, Redemption, and Pricing of Shares
Amortized Cost Valuation
The Funds operate under Rule 2a-7 (the "Rule") of the
Securities and Exchange Commission which permits them to value
their portfolios 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 a Fund would
receive if it sold the instrument. During periods of declining
interest rates, the daily yield on a Fund'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, each Fund's Board of Trustees must
establish, and has established, procedures (the "Procedures")
designed to stabilize at $1.00, to the extent reasonably
possible, the Fund's price per share as computed for the purpose
of sales and redemptions. Such procedures must include review of
the Fund's portfolio holdings by the Board of Trustees at such
intervals as it may deem appropriate and at such intervals as are
reasonable in light of current market conditions to determine
whether the Fund'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 the Rule, 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 each Fund 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 each Fund's Board of Trustees has
adopted relating to amortized cost valuation, the calculation of
each Fund'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 $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
If you own or purchase shares of a Fund 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. 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 the account. Monthly or quarterly payments paid to
shareholders may not be considered as a yield or income on
investment.
EXCHANGE PRIVILEGE
There is an exchange privilege as set forth below among the
Funds 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 Funds. 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 the
Funds, 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 Funds, 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.
Transfer on Death Registration
Each of the funds in the Aquilasm Group of Funds now permits
registration of its shares in beneficiary form, subject to the
funds' rules governing Transfer on Death ("TOD") registration, if
the investor resides in a state that has adopted the Uniform
Transfer on Death Security Registration Act (a "TOD State"; for
these purposes, Missouri is deemed to be a TOD State). This form
of registration allows you to provide that, on your death, your
shares are to be transferred to the one or more persons (to a
maximum of three) that you specify as beneficiaries. To register
shares of the Trust in TOD form, complete the special TOD
Registration Request Form and review the Rules Governing TOD
Registration; both are available from the Agent. The Rules, which
are subject to amendment upon 60 days' notice to TOD account
owners, contain important information regarding TOD accounts with
the Trust; by opening such an account you agree to be bound by
them, and failure to comply with them may result in your shares'
not being transferred to your designated beneficiaries. If you
open a TOD account with the Trust that is otherwise acceptable
but, for whatever reason, neither the Trust nor the Transfer
Agent receives a properly completed TOD Registration Request Form
from you prior to your death, the Trust reserves the right not to
honor your TOD designation, in which case your account will
become part of your estate.
You are eligible for TOD registration only if, and as long
as, you reside in a TOD State. If you open a TOD account and your
account address indicates that you do not reside in a TOD State,
your TOD registration will be ineffective and the Trust may, in
its discretion, either open the account as a regular (non-TOD)
account or redeem your shares. Such a redemption may result in a
loss to you and may have tax consequences. Similarly, if you open
a TOD account while residing in a TOD State and later move to a
non-TOD State, your TOD registration will no longer be effective.
In both cases, should you die while residing in a non-TOD State
the Trust reserves the right not to honor your TOD designation.
At the date of this SAI, most states are TOD States.
Distribution Plan
Each Fund has adopted a Distribution Plan under Rule 12b-1
("Rule 12b-1") under the 1940 Act; all have substantially the
same terms. In the following material the "Plan" means the Plan
of any of the Funds. 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 plan adopted under
Rule 12b-1. The Plan is in two parts.
The Plan states that while it is in effect, the selection
and nomination of those Trustees of any Fund who are not
"interested persons" of the Fund 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.
Part I of the Plan
Part I of the Plan is designed to protect against any claim
involving the Fund that the administration fee and some of the
expenses which the Fund pays or may pay come within the purview
of Rule 12b-1. No Fund considers such fee or any payment
enumerated in Part I of the Plan as so financing any such
activity. However, it might be claimed that such fee and some of
the expenses a Fund pays come within the purview of Rule 12b-1.
If and to the extent that any payments (including fees)
specifically listed in Part I of the Plan are considered to be
primarily intended to result in or are indirect financing of any
activity which is primarily intended to result in the sale of a
Fund's shares, these payments are authorized under the Plan.
As used in Part I of the Plan, "Qualified Recipients" means
(i) any principal underwriter or underwriters of the Fund (other
than a principal underwriter which is an affiliated person, or an
affiliated person of an affiliated person, of the Administrator)
and (ii) broker-dealers or others selected by Aquila Management
Corporation (the "Administrator") with which it or a Fund has
entered into written agreements ("Plan Agreements") and which
have rendered assistance (whether direct, administrative or both)
in the distribution and/or retention of a Fund's shares or
servicing shareholder accounts. "Qualified Holdings" means, as to
any Qualified Recipient, all Fund shares beneficially owned by
such Qualified Recipient or by one or more customers (brokerage
or other) or other contacts and/or its investment advisory or
other clients, if the Qualified Recipient was, in the sole
judgment of the Administrator, instrumental in the purchase
and/or retention of such Fund shares and/or in providing
administrative assistance in relation thereto.
The Plan permits the Administrator to make payments
("Administrator's Permitted Payments") to Qualified Recipients.
These Administrator's Permitted Payments are made by the
Administrator and are not reimbursed by the Fund to the
Administrator. Permitted Payments may not exceed, for any fiscal
year of a Fund (pro-rated for any fiscal year which is not a full
fiscal year) 0.10 of 1% of the respective average annual net
assets of that Fund. 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 Administrator's Permitted Payments, if
any, to each Qualified Recipient, provided that the total
Administrator's 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; and (c)
the possibility that the Qualified Holdings of the Qualified
Recipient would be redeemed in the absence of its selection or
continuance as a Qualified Recipient. Notwithstanding the
foregoing two sentences, a majority of the Independent Trustees
(as defined below) may remove any person as a Qualified
Recipient. The Plan states that whenever the Administrator bears
the costs, not borne by a Fund's Distributor, of printing and
distributing all copies of the Fund's prospectuses, statements of
additional information and reports to shareholders which are not
sent to the Fund's shareholders, or the costs of supplemental
sales literature and advertising, such payments are authorized.
Part I of the Plan recognizes that, in view of the
Administrator's 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 Fund to the Administrator and
that its profits, if any, would be less, or losses, if any, would
be increased due to such Administrator's Permitted Payments and
the bearing by it of such expenses. If and to the extent that any
such administration fees paid by the Fund 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 Fund, the payment of such fees is authorized by
Part I of the Plan.
Part I of the Plan also states that if and to the extent
that any of the payments by the fund listed below are considered
to be "primarily intended to result in the sale of" shares issued
by the Fund within the meaning of Rule 12b-1, 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 Fund 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 Fund's shares; (iv) all legal and accounting fees relating to
the preparation of any such reports, prospectuses, statements of
additional information, proxies and proxy statements; (v) all
fees and expenses relating to the registration or qualification
of the Fund and/or its shares under the securities or "Blue-Sky"
laws of any jurisdiction; (vi) all fees under the Securities Act
of 1933 and the 1940 Act, including fees in connection with any
application for exemption relating to or directed toward the sale
of the Fund'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.
Part I of the Plan states that while Part I is in effect,
the Fund's Administrator shall report at least quarterly to the
Fund's Trustees in writing for its review on the following
matters: (i) all Administrator's 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 Fund to the Administrator paid or accrued
during such quarter.
Part I of the Plan defines as the Fund's Independent
Trustees those Trustees who are not "interested persons" of the
Fund as defined in the 1940 Act and who have no direct or
indirect financial interest in the operation of the Plan or in
any agreements related to the Plan. Part I of the Plan, unless
terminated as hereinafter provided, continues in effect from year
to year only so long as such continuance is specifically approved
at least annually by the Fund's Trustees and its Independent
Trustees with votes cast in person at a meeting called for the
purpose of voting on such continuance. In voting on the
implementation or continuance of Part I of the Plan, those
Trustees who vote to approve such implementation or continuance
must conclude that there is a reasonable likelihood that Part I
of the Plan will benefit the Fund and its shareholders. Part I of
the Plan may be terminated at any time by 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 Fund. Part I of 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 in the
manner set forth above as to continuance of Part I of the Plan.
Part I of the Plan states that in the case of a Qualified
Recipient which is a principal underwriter of the Fund the Plan
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, Rule
12b-1. The Plan also states that in the case of Qualified
Recipients which are not principal underwriters of the Fund, the
Plan Agreements with them shall be the agreements with the
Administrator with respect to payments under Part I of the Plan.
Under Rule 12b-1, all agreements related to implementation
of a plan 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 such agreements are the same as those
described above as to Part I of the Plan itself except that: (i)
no shareholder action is required for the approval of such
agreements, and (ii) termination by Trustee or shareholder action
as there described may be on not more than 60 days' written
notice. The Plan Agreement between the Fund and the Administrator
is governed by the foregoing requirements.
The formula under which the payments described above may be
made under Part I of the Plan by the Administrator was arrived at
by considering a number of factors. One of such factors 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 substantial time, persons and
effort to the sale of the shares of the Fund. Another factor is
that such payments by the Administrator to Qualified Recipients
may provide the only incentive for Qualified Recipients to do so;
there is no sales charge on the sale of the Fund's shares and,
although Part II of the Plan, as discussed below, permits certain
payments by the Fund to persons providing distribution and/or
shareholder service assistance, those payments are permitted only
in connection with one of the Fund's two classes of shares.
Another factor is that the Fund is one of a group of funds having
certain common characteristics. Each such fund (i) is a
money-market fund; and (ii) has as its investment adviser a
banking institution or an affiliate which invests assets over
which it has investment authority in money-market funds advised
by other banking institutions or affiliates. The marketing of the
Fund's shares may be facilitated since each such institution can,
due to these common characteristics, be fully and currently
informed as to the quality of the investments of and other
aspects of the operations of each of the other funds and if such
an investment is otherwise appropriate, can, although not
required to do so, invest assets over which it has investment
authority in one or more of the other funds.
Part II of the Plan
Part II of the Plan authorizes payment of certain
distribution or service fees by the Fund in connection with
Service Shares of the Fund.
As used in Part II of the Plan, "Designated Payees" means
(i) any principal underwriter or underwriters of the Fund and
(ii) broker-dealers or others selected by Aquila Distributors,
Inc. (the "Distributor") with which it or the Fund has entered
into written agreements ("Distributor's Plan Agreements") and
which have rendered assistance (whether direct, administrative or
both) in the distribution and/or retention of shares of the
specified class or servicing shareholder accounts with respect to
those shares. "Qualified Holdings" means, as to any Designated
Payee, all Service Shares beneficially owned by such Designated
Payee or by one or more customers (brokerage or other) or other
contacts and/or its investment advisory or other clients, if the
Designated Payee was, in the sole judgment of the Distributor,
instrumental in the purchase and/or retention of such shares
and/or in providing administrative assistance in relation
thereto.
Part II of the Plan permits the Fund to make payments
("Fund's Permitted Payments") to Designated Payees. These Fund's
Permitted Payments are made by the Fund directly or through the
Distributor and may not exceed, for any fiscal year of the Fund
0.25 of 1% of the average annual net assets of the Fund
represented by the Service Shares class of Fund shares. Such
payments are to be made out of the Fund assets allocable to
Service Shares. For any fiscal year, the amounts paid under the
Plan to any Designated Payee when added to any amounts paid to
the same Payee in respect of the same Qualified Holdings under
the Trust's Shareholder Services Plan, shall not exceed in the
aggregate 0.25 of 1% of the average annual net asset value of
such Qualified Holdings. Appropriate adjustments shall be made
for any part or parts of a fiscal year during which payments
under this Part II of the Plan are not accruable or for any
fiscal year which is not a full fiscal year.The Distributor shall
have sole authority (i) as to the selection of any Designated
Payee or Payees; (ii) not to select any Designated Payee; and
(iii) to determine the amount of Fund's Permitted Payments, if
any, to each Designated Payee, provided that the total Fund's
Permitted Payments to all Designated Payees do not exceed the
amount set forth above. The Distributor 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 Designated Payee; (b) the extent to
which the Designated Payee has, at its expense, taken steps in
the shareholder servicing area; and (c) the possibility that the
Qualified Holdings of the Designated Payee would be redeemed in
the absence of its selection or continuance as a Designated
Payee. The Distributor is also authorized, but not directed, to
take into account, in addition to any other factors deemed
relevant by it, the following: providing facilities to answer
questions from prospective investors about the Trust and its
Portfolios; receiving and answering correspondence, including
requests for prospectuses and statements of additional
information; preparing, printing and delivering prospectuses and
shareholder reports to prospective shareholders; complying with
federal and state securities laws pertaining to the sales of
Trust shares; and assisting investors in completing application
forms and selecting dividend and other account options.
Designated Payees may also provide their endorsement of the Trust
and its Portfolios to their clients, members or customers as an
inducement to invest in the Trust. Notwithstanding the foregoing
two sentences, a majority of the Independent Trustees (as defined
below) may remove any person as a Designated Payee.
Part II of the Plan states that while Part II is in effect,
the Distributor shall report at least quarterly to the Fund's
Trustees in writing for its review on the following matters: (i)
all Fund's Permitted Payments made to Designated Payees, the
identity of the Designated Payee of each Payment and the purpose
for which the amounts were expended; and (ii) all fees of the
Fund to the Distributor, sub-adviser or Administrator paid or
accrued during such quarter.
Part II of the Plan, unless terminated as hereinafter
provided, continues in effect from year to year only so long as
such continuance is specifically approved at least annually by
the Fund's Trustees and its Independent Trustees with votes cast
in person at a meeting called for the purpose of voting on such
continuance. In voting on the implementation or continuance of
Part II of the Plan, those Trustees who vote to approve such
implementation or continuance must conclude that there is a
reasonable likelihood that Part II of the Plan will benefit the
Fund and its shareholders. Part II of the Plan may be terminated
at any time by 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 Service
Shares class. Part II of 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 in the manner set
forth above as to continuance of Part II of the Plan.
Part II of the Plan states that in the case of a Designated
Payee which is a principal underwriter of the Fund, the
Distributor's Plan 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, Rule 12b-1. The Plan also states that in the case of
Designated Payees which are not principal underwriters of the
Fund, the Distributor's Plan Agreements with them shall be the
agreements with the Distributor with respect to payments under
Part II of the Plan.
During the three fiscal years ended June 30, 1999, 1998 and
1997, the no or nominal payments were made under the former
distribution plan, then in effect, under what is currently
designated Part I.
Shareholder Services plan
Each Fund has adopted a Shareholder Services Plan to provide
for the payment by the Service Shares of the Trust of "service
fees" within the meaning of Rule 2830 of the Conduct Rules of the
National Association of Securities Dealers, Inc. The Plan applies
only to shares of the class denominated Service Shares
(regardless of whether such class is so designated or is
redesignated by some other name). Both Plans have the same terms
and are referred to as the "Plan."
Provisions for Service Shares (Part I)
As used in Part I of the Plan, "Qualified Recipients" shall
mean broker-dealers or others selected by Aquila Distributors,
Inc. (the "Distributor"), including but not limited to the
Distributor and any other principal underwriter of the Trust, who
have, pursuant to written agreements with the Trust or the
Distributor, agreed to provide personal services to holders of
Service Shares and/or maintenance of Service Shares shareholder
accounts. "Qualified Holdings" shall mean, as to any Qualified
Recipient, all Service Shares beneficially owned by such
Qualified Recipient's customers, clients or other contacts.
"Administrator" shall mean Aquila Management Corporation, or any
successor serving as administrator of the Trust.
Subject to the direction and control of the Board of
Trustees of the Business Trust, the Trust may make payments
("Service Fees") to Qualified Recipients, which Service Fees (i)
may be paid directly or through the Distributor or shareholder
servicing agent as disbursing agent and (ii) may not exceed, for
any fiscal year of the Trust (as adjusted for any part or parts
of a fiscal year during which payments under this Part I of the
Plan are not accruable or for any fiscal year which is not a full
fiscal year) 0.25 of 1% of the average annual net assets of the
Trust represented by the Service Shares. Such payments shall be
made only out of the Trust assets allocable to the Service
Shares. For any year, the amounts paid under the Plan to any
Qualified Recipient, when added to any amounts paid to the same
Qualified recipient in respect of the same Qualified Holdings
under the Trust's Distribution Plan shall not exceed in the
aggregate 0.25 of 1% of the average annual net asset value of
such Qualified Holdings. The Distributor shall have sole
authority with respect to the selection of any Qualified
Recipient or Recipients and the amount of Service Fees, if any,
paid to each Qualified Recipient, provided that the total such
Service Fees paid to all Qualified Recipients may not exceed the
amount set forth above and provided, further, that no Qualified
Recipient may receive more than 0.25 of 1% of the average annual
net asset value of Service Shares sold by such recipient. The
Distributor 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 and (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area with respect to holders of Service Shares,
including without limitation, any or all of the following
activities: answering customer inquiries regarding account status
and history, and the manner in which purchases and redemptions of
shares of the Trust may be effected; assisting shareholders in
designating and changing dividend options, account designations
and addresses; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records;
assisting in processing purchase and redemption transactions;
arranging for the wiring of funds; transmitting and receiving
funds in connection with customer orders to purchase or redeem
shares; verifying and guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder designated accounts; and providing such other related
services as the Distributor or a shareholder may request from
time to time. Notwithstanding the foregoing two sentences, a
majority of the Independent Trustees (as defined below) may
remove any person as a Qualified Recipient. Amounts within the
above limits accrued to a Qualified Recipient but not paid during
a fiscal year may be paid thereafter; if less than the full
amount is accrued to all Qualified Recipients, the difference
will not be carried over to subsequent years.
The Plan was not in effect during the fiscal years ended
June 30, 1999, 1998 or 1997.
General Provisions (Part II)
While the Plan is in effect, the Trust's Distributor shall
report at least quarterly to the Business Trust's Trustees in
writing for their review on the following matters: (i) all
Service Fees paid under the Plan, the identity of the Qualified
Recipient of each payment, and the purposes for which the amounts
were expended; and (ii) all fees of the Trust to the Distributor
paid or accrued during such quarter. In addition, if any
Qualified Recipient is an "affiliated person," as that term is
defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), of the Trust, the Administrator, the Distributor, or
the investment adviser or sub-adviser of the Trust, such person
shall agree to furnish to the Distributor for transmission to the
Board of Trustees of the Business Trust an accounting, in form
and detail satisfactory to the Board of Trustees, to enable the
Board of Trustees to make the determinations of the fairness of
the compensation paid to such affiliated person, not less often
than annually.
The Plan has been approved by a vote of the Trustees,
including those Trustees who, at the time of such vote, were not
"interested persons" (as defined in the 1940 Act) of the Trust
and had no direct or indirect financial interest in the operation
of the Plan or in any agreements related to this Plan (the
"Independent Trustees"), with votes cast in person at a meeting
called for the purpose of voting on the Plan. It is effective as
of the date first above written and will continue in effect for a
period of more than one year from such date only so long as such
continuance is specifically approved at least annually as set
forth in the preceding sentence. It may be amended in like
manner and may be terminated at any time by vote of the
Independent Trustees.
The Plan shall also be subject to all applicable terms and
conditions of Rule 18f-3 under the 1940 Act as now in force or
hereafter amended.
While the Plan is in effect, the selection and nomination of
those Trustees of the Trust who are not "interested persons" of
the Trust, as that term is defined in the 1940 Act, shall be
committed to the discretion of such disinterested Trustees.
Nothing herein shall prevent the involvement of others in such
selection and nomination if the final decision on any such
selection and nomination is approved by a majority of such
disinterested Trustees.
Taxation of the Trust
Each Fund, 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 the Fund.
Underwriter
Aquila Distributors, Inc. acts as each Fund's principal
underwriter in the continuous public offering of each Fund's
shares. The Distributor is not obligated to sell a specific
number of shares. 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.
(1) (2) (3) (4) (5)
Name of Net Under- Compensation Brokerage Other
Principal writing on Redemptions Commissions
Compen-
Underwriter Discounts and sation
and Repurchases
Commissions
Aquila None None None None
Distributors
Inc.
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.
The shares of the Distributor are owned 72% by Mr. Herrmann
and other members of his immediate family, 24% by Diana P.
Herrmann and the balance by an officer of the Distributor.
Performance
From time to time, each Fund 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 Fund refers to the net income generated by an
investment in that Fund 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. Each Fund may also advertise or
quote its effective yield, which is calculated similarly, but,
when annualized, the income earned by an investment in a Fund 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, each Fund 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 each Fund other than their
yields, some of which are summarized below.
The yield of each Fund 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 a Fund 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.
<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>
CAPITAL CASH MANAGEMENT TRUST
PART C: OTHER INFORMATION
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, 1999
Statement of Assets and Liabilities as of
June 30, 1999
Statement of Operations for the year ended
June 30, 1999
Statement of Changes in Net Assets for the
years ended June 30, 1999 and 1998
Notes to Financial Statements
Included in Part C:
ITEM 23 Exhibits:
(a) Amended and Restated Declaration of Trust (i)
(b) By-laws (iii)
(c) Instruments defining rights of shareholders
The Declaration of Trust permits the 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 of its class; shares of the
respective classes represent proportionate interests in
the Trust in accordance with their respective net asset
values. Upon liquidation of the Trust, shareholders are
entitled to share pro-rata in the net assets of the
Trust available for distribution to shareholders, in
accordance with the respective net asset values of the
shares of each of the Trust's classes at that time. All
shares are presently divided into four classes;
however, if they deem it advisable and in the best
interests of shareholders, the Board of Trustees of the
Trust may create additional classes of shares, which
may differ from each other as provided in rules and
regulations of the Securities and Exchange Commission
or by exemptive order. The Board of Trustees may, at
its own discretion, create additional series of shares,
each of which may have separate assets and liabilities
(in which case any such series will have a designation
including the word "Series"). See the Additional
Statement for further information about possible
additional series. Shares are fully paid and
non-assessable, except as set forth under the caption
"General Information" in the Additional Statement; the
holders of shares have no pre-emptive or conversion
rights, except that Class C Shares automatically
convert to Class A Shares after being held for six
years.
At any meeting of shareholders, shareholders are
entitled to one vote for each dollar of net asset value
(determined as of the record date for the meeting) per
share held (and proportionate fractional votes for
fractional dollar amounts). Shareholders will vote on
the election of Trustees and on other matters submitted
to the vote of shareholders. Shares vote by classes on
any matter specifically affecting one or more classes,
such as an amendment of an applicable part of the
Distribution Plan. 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 except that the Trust's Board of Trustees may
change the name of the Trust. The Trust may be
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 such action
is approved by the vote of the holders of a majority of
the outstanding shares of the Trust.
(d) (a) Investment Advisory Agreement for
Capital Cash Management Trust Series (i)
(b) Investment Advisory Agreement for
Capital Cash U.S. Government Securities
Trust Series (iii)
(e) (a) Distribution Agreement for Capital
Cash Management Trust Series (iii)
(b) Distribution Agreement for Capital
Cash U.S Government Trust Series (iii)
(f) Not applicable
(g) (a) Custody Agreement for All Series (ii)
(h) (a) Transfer Agency Agreement for All
Series (ii)
(b) Administration Agreement for
Capital Cash Management Trust Series (ii)
(c) Administration Agreement for
Capital Cash U.S Government
Trust Series (iii)
(i) (a) Opinion of counsel to the Trust (iii)
(b) Consent of counsel to the Trust (iii)
(j) Not applicable
(k) Not applicable
(l) Not applicable
(m) (a) Distribution Plan for Capital Cash Management
Trust Series (iii)
(b) Distribution Plan for Capital Cash U.S.
Government Securities Trust Series (iii)
(c) Services Plan for Capital Cash Management
Trust Series (iii)
(d) Services Plan for Capital Cash U.S.
Government Securities Trust Series (iii)
(n) Plan pursuant to Rule 18f-3 under the
1940 Act (iii)
Consent of Independent Auditors
(i) Filed as an exhibit to Registrant's Post-Effective
Amendment number 38 filed October 29, 1997.
(ii) Filed as an exhibit to Registrant's Post-Effective
Amendment number 39 filed October 28, 1998.
(iii) Filed herewith.
ITEM 24. Persons Controlled By or Under Common Control
With Registrant
None
ITEM 25. 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 26. 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 27. 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 28. 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 29. Management Services
Not applicable.
ITEM 30. Undertakings
(a) Not applicable.
(b) Not applicable.
<PAGE>
Independent Auditors Consent
To the Board of Trustees and Shareholders of
Capital Cash Management Trust:
We consent to the use of our report dated July 27, 1999,
incorporated herein by reference, and to the references to our
firm under the headings "Financial Highlights" in the Prospectus
and "Financial Statements" and " Transfer Agent, Custodian and
Auditors" in the Statement of Additional Information.
KPMG LLP
/s/KPMG LLP
New York, New York
October 26, 1999
<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 28th day of October, 1999.
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 10/28/99
______________________ President, Chairman of ___________
Lacy B. Herrmann the Board and Trustee
(Principal Executive
Officer)
/s/Theodore T. Mason 10/28/99
______________________ Vice Chairman of the ___________
Theodore T. Mason Trustees and Trustee
/s/Paul Y. Clinton 10/28/99
______________________ Trustee ___________
Paul Y. Clinton
/s/Diana P. Herrmann 10/28/99
______________________ Trustee ___________
Diana P. Herrmann
/s/Anne J. Mills 10/28/99
______________________ Trustee ___________
Anne J. Mills
/s/Cornelius T. Ryan 10/28/99
______________________ Trustee ___________
Cornelius T. Ryan
/s/Rose F. Marotta 10/28/99
______________________ Chief Financial Officer ___________
Rose F. Marotta (Principal Financial and
Accounting Officer)
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
Exhibit List
Number Name
(b) By-Laws
(d) (b) Investment Advisory Agreement for
Capital Cash U.S. Government Securities
Trust Series
(e) (a) Distribution Agreement for Capital
Cash Management Trust Series
(b) Distribution Agreement for Capital
Cash U.S Government Trust Series
(h) (c) Administration Agreement for
Capital Cash U.S Government
Trust Series
(i) Opinion and consent of counsel to the Trust
(m) (a) Distribution Plan for Capital Cash Management
Trust Series
(b) Distribution Plan for Capital Cash U.S. Government
Securities Trust Series
(c) Services Plan for Capital Cash Management
Trust Series
(d) Services Plan for Capital Cash U.S. Government
Securities Trust Series
(n) Plan pursuant to Rule 18f-3 under the
1940 Act
Correspondence
Dated: September 18, 1998
CAPITAL CASH MANAGEMENT TRUST
BY-LAWS
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the
Shareholders (which term as used herein shall, together with all
other terms defined in the Declaration of Trust, have the same
meaning as in the Declaration of Trust) shall be held at the
principal office of the Trust or at such other place as may from
time to time be designated by the Board of Trustees and stated in
the notice of meeting.
Section 2. Annual Meeting. In any year in which the
Trustees determine that a meeting of the Shareholders of the
Trust shall be held for the purpose of electing Trustees, that
meeting shall be held on such date and at such time as may be
determined by the Trustees and as shall be designated in the
notice of meeting for the purpose of electing Trustees until the
next meeting for such purpose and for the transaction of such
other business as may properly be brought before the meeting.
Section 3. Special or Extraordinary Meetings. Special or
extraordinary meetings of Shareholders for any purpose or
purposes may be called by the Chairman of the Board of Trustees,
if any, or by the President or by the Board of Trustees and shall
be called by the Secretary upon receipt of the request in writing
signed by holders of Shares representing not less than one third
of the votes eligible to be cast thereat. Such request shall
state the purpose or purposes of the proposed meeting.
Section 4. Notice of Meetings of Shareholders. Not less
than ten days' and not more than ninety days' written or printed
notice of every meeting of Shareholders, stating the time and
place thereof (and the general nature of the business proposed to
be transacted at any special or extraordinary meeting), shall be
given to each Shareholder entitled to vote thereat by leaving the
same with him or at his residence or usual place of business or
by mailing it, postage prepaid and addressed to him at his
address as it appears upon the books of the Trust.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in
person or by proxy or to any Shareholder who, in writing executed
and filed with the records of the meeting, either before or after
the holding thereof, waives such notice.
Section 5. Record Dates. The Board of Trustees may fix, in
advance, a date, not exceeding ninety days and not less than ten
days preceding the date of any meeting of Shareholders, and not
exceeding ninety days preceding any dividend payment date or any
date for the allotment of rights, as a record date for the
determination of the Shareholders entitled to receive such
dividends or rights, as the case may be; and only Shareholders of
record on such date shall be entitled to notice of and to vote at
such meeting or to receive such dividends or rights, as the case
may be.
Section 6. Quorum, Adjournment of Meetings. The presence
in person or by proxy of the holders of record of one-third of
the Shares of the Trust issued and outstanding and entitled to
vote thereat, shall constitute a quorum at all meetings of the
Shareholders. If at any meeting of the Shareholders there shall
be less than a quorum present, the Shareholders present at such
meeting may, without further notice, adjourn the same from time
to time until a quorum shall attend, but no business shall be
transacted at any such adjourned meeting except such as might
have been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of
Shareholders every Shareholder of record entitled to vote thereat
shall be entitled to vote at such meeting either in person or by
proxy appointed by such Shareholder or his duly authorized
attorney-in-fact.
All elections of Trustees shall be had by a plurality of the
votes cast and all questions shall be decided by a majority of
the votes cast, in each case at a duly constituted meeting,
except as otherwise provided in the Declaration of Trust or in
these By-Laws or by specific statutory provision superseding the
restrictions and limitations contained in the Declaration of
Trust or in these By-Laws.
At any election of Trustees, the Board of Trustees prior
thereto may, or, if they have not so acted, the Chairman of the
meeting may, and upon the request of the holders of ten per cent
(l0%) of the Shares entitled to vote at such election shall,
appoint two inspectors of election who shall first subscribe an
oath or affirmation to execute faithfully the duties of
inspectors at such election with strict impartiality and
according to the best of their ability, and shall after the
election make a certificate of the result of the vote taken. No
candidate for the office of Trustee shall be appointed such
Inspector.
The Chairman of the meeting may cause a vote by ballot to be
taken upon any election or matter, and such vote shall be taken
upon the request of the holders of ten per cent (l0%) of the
Shares entitled to vote on such election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings
of the Shareholders shall be presided over by the Chairman of the
Board of Trustees, if any, or if he shall not be present, by the
President, or if he shall not be present, by a Vice-President,
or if neither the Chairman of the Board of Trustees, the
President nor any Vice-President is present, by a chairman to be
elected at the meeting. A person who relinguishes the Chair
shall not be considered present for purposes of this Section
until such time as he or she resumes the Chair. The Secretary of
the Trust, if present, shall act as Secretary of such meetings,
or if he is not present, an Assistant Secretary shall so act; if
neither the Secretary nor an Assistant Secretary is present, then
the meeting shall elect its secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At
every meeting of the Shareholders, all proxies shall be received
and taken in charge of and all ballots shall be received and
canvassed by the secretary of the meeting, who shall decide all
questions touching the qualification of voters, the validity of
the proxies, and the acceptance or rejection of votes, unless
inspectors of election shall have been appointed as provided in
Section 7, in which event such inspectors of election shall
decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and
property of the Trust shall be conducted and managed by a Board
of Trustees consisting of six Trustees, which number may be
increased or decreased as provided in Section 2 of this Article.
Each Trustee shall, except as otherwise provided herein, hold
office until the annual meeting of Shareholders of the Trust next
succeeding his election or until his successor is duly elected
and qualifies. Trustees need not be Shareholders.
Section 2. Increase or Decrease in Number of Trustees;
Removal. The Board of Trustees, by the vote of a majority of the
entire Board, may increase the number of Trustees to a number not
exceeding fifteen, and may elect Trustees to fill the vacancies
created by any such increase in the number of Trustees until the
next annual meeting or until their successors are duly elected
and qualify; the Board of Trustees, by the vote of a majority of
the entire Board, may likewise decrease the number of Trustees to
a number not less than two but the tenure of office of any
Trustee shall not be affected by any such decrease. Vacancies
occurring other than by reason of any such increase shall be
filled as provided for a Massachusetts business corporation. In
the event that after proxy material has been printed for a
meeting of Shareholders at which Trustees are to be elected any
one or more management nominees dies or becomes incapacitated,
the authorized number of Trustees shall be automatically reduced
by the number of such nominees, unless the Board of Trustees
prior to the meeting shall otherwise determine. Any Trustee at
any time may be removed either with or without cause by
resolution duly adopted by the affirmative votes of the holders
of the majority of the Shares of the Trust present in person or
by proxy at any meeting of Shareholders at which such vote may be
taken, provided that a quorum is present, or by such larger vote
as may be required by Massachusetts law. Any Trustee at any time
may be removed for cause by resolution duly adopted at any
meeting of the Board of Trustees provided that notice thereof is
contained in the notice of such meeting and that such resolution
is adopted by the vote of at least two thirds of the Trustees
whose removal is not proposed. As used herein, "for cause" shall
mean any cause which under Massachusetts law would permit the
removal of a Trustee of a business trust.
Section 3. Place of Meeting. The Trustees may hold their
meetings, have one or more offices, and keep the books of the
Trust outside Massachusetts, at any office or offices of the
Trust or at any other place as they may from time to time by
resolution determine, or, in the case of meetings, as they may
from time to time by resolution determine or as shall be
specified or fixed in the respective notices or waivers of notice
thereof.
Section 4. Regular Meetings. Regular meetings of the Board
of Trustees shall be held at such time and on such notice, if
any, as the Trustees may from time to time determine.
The annual meeting of the Board of Trustees shall be held as
soon as practicable after the annual meeting of the Shareholders
for the election of Trustees.
Section 5. Special Meetings. Special meetings of the Board
of Trustees may be held from time to time upon call of the
Chairman of the Board of Trustees, if any, the President or two
or more of the Trustees, by oral or telegraphic or written notice
duly served on or sent or mailed to each Trustee not less than
one day before such meeting. No notice need be given to any
Trustee who attends in person or to any Trustee who, in writing
executed and filed with the records of the meeting either before
or after the holding thereof, waives such notice. Such notice or
waiver of notice need not state the purpose or purposes of such
meeting.
Section 6. Quorum. One-third of the Trustees then in
office shall constitute a quorum for the transaction of business,
provided that a quorum shall in no case be less than two
Trustees. If at any meeting of the Board there shall be less
than a quorum present (in person or by open telephone line, to
the extent permitted by the 1940 Act), a majority of those
present may adjourn the meeting from time to time until a quorum
shall have been obtained. The act of the majority of the
Trustees present at any meeting at which there is a quorum shall
be the act of the Board, except as may be otherwise specifically
provided by statute, by the Declaration of Trust or by these
By-Laws.
Section 7. Executive Committee. The Board of Trustees may,
by the affirmative vote of a majority of the entire Board, elect
from the Trustees an Executive Committee to consist of such
number of Trustees as the Board may from time to time determine.
The Board of Trustees by such affirmative vote shall have power
at any time to change the members of such Committee and may fill
vacancies in the Committee by election from the Trustees. When
the Board of Trustees is not in session, the Executive Committee
shall have and may exercise any or all of the powers of the Board
of Trustees in the management of the business and affairs of the
Trust (including the power to authorize the seal of the Trust to
be affixed to all papers which may require it) except as
provided by law and except the power to increase or decrease the
size of, or fill vacancies on the Board. The Executive Committee
may fix its own rules of procedure, and may meet, when and as
provided by such rules or by resolution of the Board of Trustees,
but in every case the presence of a majority shall be necessary
to constitute a quorum. In the absence of any member of the
Executive Committee the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a member of
the Board of Trustees to act in the place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint
other committees which shall in each case consist of such number
of members (not less than two) and shall have and may exercise
such powers as the Board may determine in the resolution
appointing them. A majority of all members of any such committee
may determine its action, and fix the time and place of its
meetings, unless the Board of Trustees shall otherwise provide.
The Board of Trustees shall have power at any time to change the
members and powers of any such committee, to fill vacancies, and
to discharge any such committee.
Section 9. Informal Action by and Telephone Meetings of
Trustees and Committees. Any action required or permitted to be
taken at any meeting of the Board of Trustees or any committee
thereof may be taken without a meeting, if a written consent to
such action is signed by all members of the Board, or of such
committee, as the case may be. Trustees or members of a
committee of the Board of Trustees may participate in a meeting
by means of a conference telephone or similar communications
equipment; such participation shall, except as otherwise required
by the 1940 Act, have the same effect as presence in person.
Section 10. Compensation of Trustees. Trustees shall be
entitled to receive such compensation from the Trust for their
services as may from time to time be voted by the Board of
Trustees.
Section 11. Dividends. Dividends or distributions payable
on the Shares may, but need not be, declared by specific
resolution of the Board as to each dividend or distribution; in
lieu of such specific resolutions, the Board may, by general
resolution, determine the method of computation thereof, the
method of determining the Shareholders to which they are payable
and the methods of determining whether and to which Shareholders
they are to be paid in cash or in additional Shares.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of
the Trust shall be chosen by the Board of Trustees as soon as may
be practicable after the annual meeting of the Shareholders.
These may include a Chairman of the Board of Trustees, and shall
include a President, one or more Vice-Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary
and a Treasurer. The Chairman of the Board of Trustees, if any,
and the President may, but need not be, selected from among the
Trustees. The Board of Trustees may also in its discretion
appoint Assistant Secretaries, Assistant Treasurers, and other
officers, agents and employees, who shall have such authority and
perform such duties as the Board or the Executive Committee may
determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except those of President
and Vice-President, may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law or
these By-Laws to be executed, acknowledged or verified by two or
more officers.
Section 2. Term of Office. The term of office of all
officers shall be one year and until their respective successors
are chosen and qualify; however, any officer may be removed from
office at any time with or without cause by the vote of a
majority of the entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Trust
shall have such powers and duties as generally pertain to their
respective offices, as well as such powers and duties as may from
time to time be conferred by the Board of Trustees or the
Executive Committee.
ARTICLE IV
SHARES
Section 1. Certificates of Shares. Each Shareholder of the
Trust may be issued a certificate or certificates for his Shares
in such form as the Board of Trustees may from time to time
prescribe, but only if and to the extent and on the conditions
prescribed by the Board.
Section 2. Transfer of Shares. Shares shall be
transferable on the books of the Trust by the holder thereof in
person or by his duly authorized attorney or legal
representative, upon surrender and cancellation of certificates,
if any, for the same number of Shares, duly endorsed or
accompanied by proper instruments of assignment and transfer,
with such proof of the authenticity of the signature as the Trust
or its agent may reasonably require; in the case of Shares not
represented by certificates, the same or similar requirements may
be imposed by the Board of Trustees.
Section 3. Stock Ledgers. The stock ledgers of the Trust,
containing the name and address of the Shareholders and the
number of Shares held by them respectively, shall be kept at the
principal offices of the Trust or, if the Trust employs a
transfer agent, at the offices of the transfer agent of the
Trust.
Section 4. Lost, Stolen or Destroyed Certificates. The
Board of Trustees may determine the conditions upon which a new
certificate may be issued in place of a certificate which is
alleged to have been lost, stolen or destroyed; and may, in their
discretion, require the owner of such certificate or his legal
representative to give bond, with sufficient surety to the Trust
and the transfer agent, if any, to indemnify it and such transfer
agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one
so lost, stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the
Trust, in such form and bearing such inscriptions as it may
determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Trust shall be fixed by the Board of
Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Trust may be altered, amended, added to
or repealed by the Shareholders or by majority vote of the entire
Board of Trustees, but any such alteration, amendment, addition
or repeal of the By-Laws by action of the Board of Trustees may
be altered or repealed by the Shareholders.
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made as of [after sh vote, before 11/1],
1999 by and between CAPITAL CASH MANAGEMENT TRUST (the "Business
Trust"), a Massachusetts business trust, 380 Madison Avenue,
Suite 2300, New York, NY 10017, and STCM MANAGEMENT COMPANY, INC.
(the "Adviser"), 380 Madison Avenue, Suite 2300, New York, NY
10017
W I T N E S S E T H :
WHEREAS, the Business Trust and the Adviser have previously
entered into an Amended and Restated Investment Advisory
Agreement dated as of February 27, 1992 with respect to the
original portfolio of the Business Trust entitled Capital Cash
Management Trust, which agreement is to continue in effect
unchanged; and
WHEREAS, the Business Trust and the Adviser now wish to
enter into an agreement, referred to hereafter as "this
Agreement," with respect to an additional, recently-established
portfolio of the Business Trust entitled "CAPITAL CASH U.S.
GOVERNMENT SECURITIES TRUST" (the "Trust");
WHEREAS, this Agreement has been approved by the Board of
Trustees of the Business Trust at a meeting held on September
[18], 1999 and in addition has been approved by the holders of a
"majority" of the outstanding voting securities of the Trust, as
defined in the Investment Company Act of 1940 (the "Act"), at a
meeting held on [shareholder meeting date], 1999;
NOW THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to
act as managerial investment adviser to the Trust with respect to
the investment of the Trust's assets, and to supervise and
arrange the purchase of securities for and the sale of securities
held in the portfolio of the Trust.
2. Duties and Obligations of the Adviser With Respect To
Investment of the Assets of the Trust
(a) Subject to the succeeding provisions of this
section and subject to the direction and control of the Board of
Trustees of the Business Trust, the Adviser shall:
(i) Supervise continuously the investment program of
the Trust and the composition of its portfolio;
(ii) Determine what securities shall be purchased or
sold by the Trust;
(iii) Arrange for the purchase and the sale of
securities held in the portfolio of the Trust; and
(iv) Either keep the accounting records of the Trust,
including the pricing of portfolio securities and
computation of dividends and of net asset value per
share or, at its expense and responsibility, delegate
such duties in whole or in part to a company
satisfactory to the Trust.
(b) Any investment program furnished by the Adviser
under this section shall at all times conform to, and be in
accordance with, any requirements imposed by: (1) the Act and any
rules or regulations in force thereunder; (2) any other
applicable laws, rules and regulations; (3) the Declaration of
Trust and By-Laws of the Business Trust as amended from time to
time; (4) any policies and determinations of the Board of
Trustees of the Business Trust; and (5) the fundamental policies
of the Trust, as reflected in its registration statement under
the Act or as amended by the shareholders of the Trust.
(c) The Adviser shall give the Trust the benefit of its
best judgment and effort in rendering services hereunder, but the
Adviser shall not be liable for any loss sustained by reason of
the adoption of any investment policy or the purchase, sale or
retention of any security, whether or not such purchase, sale or
retention shall have been based upon (i) its own investigation
and research or (ii) investigation and research made by any other
individual, firm or corporation, if such purchase, sale or
retention shall have been made and such other individual, firm or
corporation shall have been selected in good faith by the
Adviser. Nothing herein contained shall, however, be construed
to protect the Adviser against any liability to the Trust or its
security holders by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason
of its reckless disregard of its obligations and duties under
this Agreement.
(d) Nothing in this Agreement shall prevent the Adviser
or any affiliated person (as defined in the Act) of the Adviser
from acting as investment adviser or manager for any other
person, firm or corporation and shall not in any way limit or
restrict the Adviser or any such affiliated person from buying,
selling or trading any securities for its own or their own
accounts or for the accounts of others for whom it or they may be
acting, provided, however, that the Adviser expressly represents
that it will undertake no activities which, in its judgment, will
adversely affect the performance of its obligations to the Trust
under this Agreement. It is agreed that the Adviser shall have
no responsibility or liability for the accuracy or completeness
of the Business Trust's Registration Statement under the Act and
the Securities Act of 1933, except for information supplied by
the Adviser for inclusion therein. The Adviser shall promptly
inform the Business Trust as to any information concerning the
Adviser appropriate for inclusion in such Registration Statement,
or as to any transaction or proposed transaction which might
result in an assignment of the Agreement. The Business Trust
agrees to indemnify the Adviser to the full extent permitted by
the Business Trust's Declaration of Trust.
(e) In connection with its duties to arrange for the
purchase and sale of the Trust's portfolio securities, the
Adviser shall select such broker-dealers ("dealers") as shall, in
the Adviser's judgment, implement the policy of the Trust to
achieve "best execution," i.e., prompt, efficient, and reliable
execution of orders at the most favorable net price. The Adviser
shall cause the Trust to deal directly with the selling or
purchasing principal or market maker without incurring brokerage
commissions unless the Adviser determines that better price or
execution may be obtained by paying such commissions; the Trust
expects that most transactions will be principal transactions at
net prices and that the Trust will incur little or no brokerage
costs. The Business 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
Business Trust recognizes that no dollar value can be placed on
such research services or on execution services, that such
research services may or may not be useful to the Trust and/or
other accounts of the Adviser, and that research received by such
other accounts may or may not be useful to the Trust.
3. Allocation of Expenses
The Adviser agrees that it will furnish the Trust, at the
Adviser's expense, all office space, facilities, equipment and
clerical personnel necessary for carrying out its duties under
this Agreement. The Adviser agrees that it will supply, or cause
to be supplied, to any sub-adviser, administrator or principal
underwriter of the Trust all necessary financial information in
connection with such sub-adviser's, administrator's or principal
underwriter's duties under any agreement between such sub-
adviser, administrator or principal underwriter and the Business
Trust. The Adviser will also pay all compensation of the Trust's
officers, employees, and Trustees, if any, who are affiliated
persons of the Adviser. The Trust agrees to bear the costs of
preparing and setting in type its prospectuses, statements of
additional information and reports to its shareholders, and the
costs of printing or otherwise producing and distributing those
copies of such prospectuses, statements of additional information
and reports as are sent to its shareholders. All costs and
expenses not expressly assumed by the Adviser under this
Agreement or by such sub-adviser, administrator or principal
underwriter shall be paid by the Trust, including, but not
limited to (i) interest and taxes; (ii) brokerage commissions;
(iii) insurance premiums; (iv) compensation and expenses of its
Trustees other than those affiliated with the Adviser or such
sub-adviser, administrator or principal underwriter; (v) legal
and audit expenses; (vi) custodian and transfer agent, or
shareholder servicing agent, fees and expenses; (vii) expenses
incident to the issuance of its shares (including issuance on the
payment of, or reinvestment of, dividends); (viii) fees and
expenses incident to the registration under Federal or State
securities laws of the Trust or its shares; (ix) expenses of
preparing, printing and mailing reports and notices and proxy
material to shareholders of the Trust; (x) all other expenses
incidental to holding meetings of the Trust's shareholders; and
(xi) such non-recurring expenses as may arise, including
litigation affecting the Trust and the legal obligations for
which the Business Trust may have to indemnify its officers and
Trustees.
4. Compensation of the Adviser
The Business Trust agrees to pay the Adviser, and the
Adviser agrees to accept as full compensation for all services
rendered by the Adviser as such, a management fee payable monthly
and computed on the net asset value of the Trust
as of the close of business each business day at the annual rate
of 0.20 of 1% of such net asset value.
5. Duration and Termination
(a) This Investment Advisory Agreement shall become
effective on the date set forth above following approval by the
shareholders of the Trust and shall, unless terminated as
hereinafter provided, continue in effect until the November 30
next preceding the second anniversary of the effective date of
this Agreement, and from year to year thereafter, but only so
long as such continuance is specifically approved at least
annually (1) by a vote of the Business Trust's Board of Trustees,
including a vote of a majority of the Trustees who are not
parties to this Agreement or "interested persons" (as defined in
the Act) of any such party, with votes cast in person at a
meeting called for the purpose of voting on such approval, or (2)
by a vote of the holders of a "majority" (as so defined) of the
outstanding voting securities of the Trust and by such a vote of
the Trustees.
(b) This Agreement may be terminated by the Adviser at
any time without penalty upon giving the Business Trust sixty
days' written notice (which notice may be waived by the Business
Trust) and may be terminated by the Business Trust at any time
without penalty upon giving the Adviser sixty days' written
notice (which notice may be waived by the Adviser), provided that
such termination by the Business Trust shall be directed or
approved by a vote of a majority of its Trustees in office at the
time or by a vote of the holders of a majority (as defined in the
Act) of the voting securities of the Trust outstanding and
entitled to vote. This Agreement shall automatically terminate
in the event of its assignment (as defined in the Act).
6. Disclaimer of Shareholder Liability
The Adviser understands that the obligations of this
Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Business Trust's property; the
Adviser represents that it has notice of the provisions of the
Business Trust's Declaration of Trust disclaiming shareholder
liability for acts or obligations of the Trust.
7. Notices of Meetings
The Business Trust agrees that notice of each meeting
of the Board of Trustees of the Business Trust will be sent to
the Adviser and that the Business Trust will make appropriate
arrangements for the attendance (as persons present by
invitation) of such person or persons as the Adviser may
designate.
IN WITNESS WHEREOF, the parties hereto have caused the
foregoing instrument to be executed by their duly authorized
officers and their seals to be hereunto affixed, all as of the
day and year first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
________________________ By:___________________________________
ATTEST: STCM MANAGEMENT COMPANY, INC.
________________________ By:___________________________________
CAPITAL CASH MANAGEMENT TRUST
DISTRIBUTION AGREEMENT
AGREEMENT, made as of this 28th day of May, 1999 by and
between CAPITAL CASH MANAGEMENT TRUST (hereinafter called the
"Trust"), and AQUILA DISTRIBUTORS, INC., (hereinafter called the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Trust and the Distributor have previously
entered into the Distribution Agreement dated as of February 10,
1999;
WHEREAS, on March 7, 1999 the Board of Trustees of the Trust
approved a new Distribution Agreement, to go into effect upon
anticipated changes in ownership of the Distributor; and
WHEREAS, the transfer of shares of the Distributor effecting
such changes in ownership occurred as of the date hereof; and
WHEREAS, contemporaneously therewith pursuant to an
instrument executed and delivered between the parties, a new
Distribution Agreement went into effect, identical in its
provisions to the Distribution Agreement in effect immediately
prior thereto, except for the date of its effectiveness; and
WHEREAS, this Agreement is a document explicitly containing
all of the provisions of the new Distribution Agreement,
representing in explicit form the new Distribution Agreement
created thereby;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by a
between the parties hereto as follows:
W I T N E S S E T H :
In consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties
hereto as follows:
1. The Distributor agrees to act as principal underwriter
and exclusive distributor of the shares of the Trust. The price
at which shares of the Trust are issued to the public by the
Distributor shall be as computed and effective as set forth in
the Prospectus and Statement of Additional Information of the
Trust current as of the time of such sale (collectively, the
"Current Prospectus"). The Distributor agrees to bear the costs
of printing and distributing all copies of the Trust's
prospectuses, statements of additional information and reports to
shareholders which are not sent to the Trust's shareholders, as
well as the costs of supplemental sales literature, advertising
and other promotional activities.
2. The Trust agrees to issue shares of the Trust, subject
to the provisions of its Declaration of Trust and By-Laws, to the
Distributor as ordered by the Distributor, but only to the extent
that the Distributor shall have received purchase orders therefor
at the times and subject to the conditions set forth in the
Current Prospectus. Certificates for shares need not be created
or delivered by the Trust in any case in which the purchase is
made under terms not calling for such certificates. Shares
issued by the Trust shall be registered in such name or names and
amounts as the Distributor may request from time to time and all
shares when so paid for and issued shall be fully paid and non-
assessable to the extent set forth in the Current Prospectus.
3. The Distributor shall act as principal in all matters
relating to promotion of the growth of the Trust and shall enter
into all of its engagements, agreements and contracts as
principal on its own account. The title to shares of the Trust
issued and sold through the Distributor shall pass directly from
the Trust to the dealer or investor, or shall, if the Distributor
so consents, first pass to the Distributor, as may from time to
time be determined by the Board of Trustees of the Trust.
4. The Trust hereby consents to any arrangements whereby
the Distributor may act as principal underwriter for other
investment companies or as principal underwriter, sponsor or
depositor for unit investment trusts and periodic payment plan
certificates issued thereby, or as investment adviser, sub-
adviser or administrator to the Trust or other investment
companies or persons. The Trust also consents to the Distributor
carrying on a business as a broker, dealer and underwriter in
securities and to carrying on any other lawful business.
5. The Trust covenants and agrees that it will not during
the term of this Agreement, without the consent of the
Distributor, offer any shares of the Trust for sale directly or
through any person or corporation other than the Distributor
excepting only (a) the reinvestment of dividends and/or
distributions, or their declaration in shares of the Trust, in
optional form or otherwise; (b) the issuance of additional shares
through stock splits or stock dividends; (c) sales of shares to
another investment or securities holding company in the process
of purchasing all or a portion of its assets; or (d) in
connection with an exchange of the Trust's shares for shares of
another investment company or securities holding company.
6. The Trust agrees to use its best efforts to register
from time to time under the Securities Act of 1933 adequate
amounts of shares of the Trust for sale by the Distributor to the
public and to register or qualify, or to permit the Distributor
to register or qualify, such shares for offering to the public in
such States or other jurisdictions as may be designated by the
Distributor.
7. The Trust agrees to advise the Distributor of the net
asset value of the Trust's shares as often as computed. The
Trust will also furnish to the Distributor, as soon as
practicable, such information as may reasonably be requested by
the Distributor in order that it may know all of the facts
necessary to sell shares of the Trust.
8. The Distributor is familiar with the Declaration of
Trust and By-Laws of the Trust, each as presently in effect.
Insofar as they are applicable to the Distributor as principal
underwriter of the Trust, it will comply with the provisions of
the Declaration of Trust and By-Laws of the Trust and with the
provisions of all acts administered by the Securities and
Exchange Commission (the "Commission") and rules thereunder.
9. This amended and restated Agreement shall go into
effect on the date first above written, and shall, unless
terminated as hereinafter provided, continue in effect until the
next November 30, and from year to year thereafter, but only so
long as such continuance is specifically approved at least
annually as provided in the Investment Company Act of 1940 (the
"Act"). This Agreement shall automatically terminate in the
event of its assignment (as defined in the Act) and may be
terminated by either party on sixty days written notice to the
other party.
10. The Trust agrees with the Distributor, for the benefit
of the Distributor and each person, if any, who controls the
Distributor within the meaning of Section 15 of the Securities
Act of 1933 (the "Securities Act") and each and all and any of
them, to indemnify and hold harmless the Distributor and any such
controlling person from and against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act, under any other
statute, at common law or otherwise, and to reimburse the
Distributor and such controlling persons, if any, for any legal
or other expenses (including the cost of any investigation and
preparation) reasonably incurred by them or any of them in
connection with any litigation whether or not resulting in any
liability, insofar as such losses, claims, damages, liabilities
or litigation arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact
contained in any Registration Statement or any Prospectus, filed
with the Commission, or any amendment thereof or supplement
thereto, or which arise out of, or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this indemnity agreement
shall not apply to amounts paid in settlement of any such
litigation if such settlement is effected without the consent of
the Trust or to any such losses, claims, damages, liabilities or
litigation arising out of, or based upon, any untrue statement or
alleged untrue statement of a material fact contained in any such
Registration Statement or Prospectus, or any amendment thereof or
supplement thereto, or arising out of, or based upon, the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission was made in
reliance upon information furnished in writing to the Trust by
the Distributor for inclusion in any such Registration Statement
or Prospectus or any amendment thereof or supplement thereto.
The Distributor and each such controlling person shall, promptly
after the complaint shall have been served upon the Distributor
or such controlling person in respect of which indemnity may be
sought from the Trust on account of its agreement contained in
this paragraph, notify the Trust in writing of the commencement
thereof. The omission of the Distributor or such controlling
person so to notify the Trust of any such litigation shall
relieve the Trust from any liability which it may have to the
Distributor or such controlling person on account of the
indemnity agreement contained in this paragraph, but shall not
relieve the Trust from any liability which it may have to the
Distributor or controlling person otherwise than on account of
the indemnity agreement contained in the paragraph. In case any
such litigation shall be brought against the Distributor or any
such controlling person and notice of the commencement thereof
shall have been given to the Trust, the Trust shall be entitled
to participate in (and, to the extent that it shall wish, to
direct) the defense thereof at its own expense, but such defense
shall be conducted by counsel of good standing and satisfactory
to the Distributor or such controlling person or persons,
defendant or defendants in the litigation. The indemnity
agreement of the Trust contained in this paragraph shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of the Distributor or any such
controlling person, and shall survive any delivery of shares of
the Trust. The Trust agrees to notify the Distributor promptly
of the commencement of any litigation or proceeding against it or
any of its officers or directors of which it may be advised in
connection with the issue and sale of shares of the Trust.
11. Anything herein to the contrary notwithstanding, the
agreement in paragraph 10, insofar as it constitutes a basis for
reimbursement by the Trust for liabilities (other than payment by
the Trust of expenses incurred or paid in the successful defense
of any action, suit or proceeding) arising under the Securities
Act, shall not extend to the extent of any interest therein of
any person who is an underwriter or a partner or controlling
person of an underwriter within the meaning of Section 15 of the
Securities Act or who, at the date of this Agreement, is a
Trustee of the Trust, except to the extent that an interest of
such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as
expressed in the Securities Act. Unless in the opinion of
counsel for the Trust the matter has been adjudicated by
controlling precedent, the Trust will, if a claim for such
reimbursement is asserted, submit to a court of appropriate
jurisdiction the question of whether or not such interest is
against the public policy as expressed in the Securities Act.
12. The Distributor agrees to indemnify and hold harmless
the Trust and its Trustees and such officers as shall have signed
any Registration Statement filed with the Commission from and
against any and all losses, claims, damages or liabilities, joint
or several, to which the Trust or such Trustees or officers may
become subject under the Securities Act, under any other statute,
at common law or otherwise, and will reimburse the Trust or such
Trustees or officers for any legal or other expenses (including
the cost of any investigation and preparation) reasonably
incurred by it or them or any of them in connection with any
litigation, whether or not resulting in any liability, insofar as
such losses, claims, damages, liabilities or litigation arise out
of, or are based upon, any untrue statement or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon information
furnished in writing to the Trust by the Distributor for
inclusion in any Registration Statement or any Prospectus, or any
amendment thereof or supplement thereto. The Distributor shall
not be liable for amounts paid in settlement of any such
litigation if such settlement was effected without its consent.
The Trust and its Trustees and such officers, defendant or
defendants, in any such litigation shall, promptly after the
complaint shall have been served upon the Trust or any such
Trustee or officer in respect of which indemnity may be sought
from the Distributor on account of its agreement contained in
this paragraph, notify the Distributor in writing of the
commencement thereof. The omission of the Trust or such Trustee
or officer so to notify the Distributor of any such litigation
shall relieve the Distributor from any liability which it may
have to the Trust or such Trustee or officer on account of the
indemnity agreement contained in this paragraph, but shall not
relieve the Distributor from any liability which it may have to
the Trust or such Trustee or officer otherwise than on account of
the indemnity agreement contained in this paragraph. In case any
such litigation shall be brought against the Trust or any such
Trustee or officer and notice of the commencement thereof shall
have been so given to the Distributor, the Distributor shall be
entitled to participate in (and, to the extent that it shall
wish, to direct) the defense thereof at its own expense, but such
defense shall be conducted by counsel of good standing and
satisfactory to the Trust. The indemnity agreement of the
Distributor contained in this paragraph shall remain operative
and in full force and effect regardless of any investigation made
by or on behalf of the Trust and shall survive any delivery of
shares of the Trust. The Distributor agrees to notify the Trust
promptly of the commencement of any litigation or proceeding
against it or any of its officers or directors or against any
such controlling person of which it may be advised, in connection
with the issue and sale of the Trust's shares.
13. Notwithstanding any provision contained in this
Agreement, no party hereto and no person or persons in control of
any party hereto shall be protected against any liability to the
Trust or its security holders to which they would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of their duties, or by reason of
their reckless disregard of their obligations and duties under
this Agreement.
14. The Trust shall immediately advise the Distributor (a)
when any post-effective amendment to its Registration Statement
or any further amendment or supplement thereto or any further
Registration Statement or amendment or supplement thereto becomes
effective, (b) of any request by the Commission for amendments to
the Registration Statement or the then effective Prospectus or
for additional information, (c) of the issuance by the Commission
of any stop order suspending the effectiveness of the
Registration Statement, or the initiation of any proceedings for
that purpose, and (d) of the happening of any event which makes
untrue any material statement made in the Registration Statement
or the Current Prospectus or which in the opinion of counsel for
the Trust requires the making of a change in the Registration
Statement or the Current Prospectus in order to make the
statements therein not misleading. In case of the happening at
any time of any event which materially affects the Trust or its
securities and which should be set forth in a supplement to or an
amendment of the then effective Prospectus in order to make the
statements therein not misleading the Trust shall prepare and
furnish to the Distributor such amendment or amendments to the
then effective Prospectus as will correct the Prospectus so that
as corrected it will not contain, or such supplement or
supplements to the then effective Prospectus which when read in
conjunction with the then effective Prospectus will make the
combined information not contain, any untrue statement of a
material fact or any omission to state any material fact
necessary in order to make the statements in the then effective
Prospectus not misleading. The Trust shall, if at any time the
Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, make every
reasonable effort to obtain the prompt lifting of such order.
15. Except as expressly provided in paragraphs 10 and 12
hereof, the agreements herein set forth have been made and are
made solely for the benefit of the Trust, the Distributor, and
the persons expressly provided for in paragraphs 10 and 12, their
respective heirs, successors, personal representatives and
assigns, and except as so provided, nothing expressed or
mentioned herein is intended or shall be construed to give any
person, firm or corporation, other than the Trust, the
Distributor, and the persons expressly provided for in paragraphs
10 and 12, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any representation, warranty or
agreement herein contained. Except as so provided, the term
"heirs, successors, personal representatives and assigns" shall
not include any purchaser of shares merely because of such
purchase.
16. The Distributor understands that the obligations of
this Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Trust's property; the Distributor
represents that it has notice of the provisions of the Trust's
Declaration of Trust disclaiming shareholder liability for acts
or obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
officers and their seals to be affixed as of the day and year
first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
_______________________ By:______________________________
ATTEST: AQUILA DISTRIBUTORS, INC.
_______________________ By:______________________________
CAPITAL CASH MANAGEMENT TRUST
DISTRIBUTION AGREEMENT
AGREEMENT, made as of this [ ] day of [ ],
1999 by and between CAPITAL CASH MANAGEMENT TRUST (hereinafter
called the "Business Trust"), and AQUILA DISTRIBUTORS, INC.,
(hereinafter called the "Distributor").
W I T N E S S E T H:
WHEREAS, the Business Trust and the Distributor have
previously entered into a Distribution Agreement dated as of May
28, 1999 with respect to the original portfolio of the Business
Trust entitled Capital Cash Management Trust, which agreement is
to continue in effect unchanged; and
WHEREAS, the Business Trust and the Distributor now wish to
enter into an agreement, referred to hereafter as "this
Agreement," with respect to an additional, recently-established
portfolio of the Business Trust entitled "CAPITAL CASH U.S.
GOVERNMENT SECURITIES TRUST" (the "Trust");
WHEREAS, this Agreement has been approved by the Board of
Trustees of the Business Trust at a meeting held on September
[18], 1999 and in addition has been approved by the holders of a
"majority" of the outstanding voting securities of the Trust, as
defined in the Investment Company Act of 1940 (the "Act"), at a
meeting held on September [ ], 1999;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by a
between the parties hereto as follows:
W I T N E S S E T H :
In consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties
hereto as follows:
1. The Distributor agrees to act as principal underwriter
and exclusive distributor of the shares of the Trust. The price
at which shares of the Trust are issued to the public by the
Distributor shall be as computed and effective as set forth in
the Prospectus and Statement of Additional Information of the
Trust current as of the time of such sale (collectively, the
"Current Prospectus"). The Distributor agrees to bear the costs
of printing and distributing all copies of the Trust's
prospectuses, statements of additional information and reports to
shareholders which are not sent to the Trust's shareholders, as
well as the costs of supplemental sales literature, advertising
and other promotional activities. The Distributor will, as
disbursing agent for the Administrator, make such payments to
Qualified Recipients, as those terms are defined in the Trust's
Distribution Plan as the Administrator may authorize and provide
funds for, from time to time and will, as disbursing agent for
the Trust, make such payments to Designated Payees, as those
terms are defined in the Trust's Distribution Plan as the
Distributor may determine are appropriate thereunder.
2. The Business Trust agrees to issue shares of the Trust,
subject to the provisions of its Declaration of Trust and By-
Laws, to the Distributor as ordered by the Distributor, but only
to the extent that the Distributor shall have received purchase
orders therefor at the times and subject to the conditions set
forth in the Current Prospectus. Certificates for shares need
not be created or delivered by the Business Trust in any case in
which the purchase is made under terms not calling for such
certificates. Shares issued by the Business Trust shall be
registered in such name or names and amounts as the Distributor
may request from time to time and all shares when so paid for and
issued shall be fully paid and non-assessable to the extent set
forth in the Current Prospectus.
3. The Distributor shall act as principal in all matters
relating to promotion of the growth of the Trust and shall enter
into all of its engagements, agreements and contracts as
principal on its own account. The title to shares of the Trust
issued and sold through the Distributor shall pass directly from
the Business Trust to the dealer or investor, or shall, if the
Distributor so consents, first pass to the Distributor, as may
from time to time be determined by the Board of Trustees of the
Business Trust.
4. The Business Trust hereby consents to any arrangements
whereby the Distributor may act as principal underwriter for
other investment companies or as principal underwriter, sponsor
or depositor for unit investment trusts and periodic payment plan
certificates issued thereby, or as investment adviser, sub-
adviser or administrator to the Business Trust or other
investment companies or persons. The Business Trust also
consents to the Distributor carrying on a business as a broker,
dealer and underwriter in securities and to carrying on any other
lawful business.
5. The Business Trust covenants and agrees that it will
not during the term of this Agreement, without the consent of the
Distributor, offer any shares of the Trust for sale directly or
through any person or corporation other than the Distributor
excepting only (a) the reinvestment of dividends and/or
distributions, or their declaration in shares of the Trust, in
optional form or otherwise; (b) the issuance of additional shares
through stock splits or stock dividends; (c) sales of shares to
another investment or securities holding company in the process
of purchasing all or a portion of its assets; or (d) in
connection with an exchange of the Trust's shares for shares of
another investment company or securities holding company.
6. The Business Trust agrees to use its best efforts to
register from time to time under the Securities Act of 1933
adequate amounts of shares of the Trust for sale by the
Distributor to the public and to register or qualify, or to
permit the Distributor to register or qualify, such shares for
offering to the public in such States or other jurisdictions as
may be designated by the Distributor.
7. The Business Trust agrees to advise the Distributor of
the net asset value of the Trust's shares as often as computed.
The Business Trust will also furnish to the Distributor, as soon
as practicable, such information as may reasonably be requested
by the Distributor in order that it may know all of the facts
necessary to sell shares of the Trust.
8. The Distributor is familiar with the Declaration of
Trust and By-Laws of the Business Trust, each as presently in
effect. Insofar as they are applicable to the Distributor as
principal underwriter of the Business Trust, it will comply with
the provisions of the Declaration of Trust and By-Laws of the
Business Trust and with the provisions of all acts administered
by the Securities and Exchange Commission (the "Commission") and
rules thereunder.
9. This amended and restated Agreement shall go into
effect on the date first above written, and shall, unless
terminated as hereinafter provided, continue in effect until the
next November 30, and from year to year thereafter, but only so
long as such continuance is specifically approved at least
annually as provided in the Investment Company Act of 1940 (the
"Act"). This Agreement shall automatically terminate in the
event of its assignment (as defined in the Act) and may be
terminated by either party on sixty days written notice to the
other party.
10. The Business Trust agrees with the Distributor, for the
benefit of the Distributor and each person, if any, who controls
the Distributor within the meaning of Section 15 of the
Securities Act of 1933 (the "Securities Act") and each and all
and any of them, to indemnify and hold harmless the Distributor
and any such controlling person from and against any and all
losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities
Act, under any other statute, at common law or otherwise, and to
reimburse the Distributor and such controlling persons, if any,
for any legal or other expenses (including the cost of any
investigation and preparation) reasonably incurred by them or any
of them in connection with any litigation whether or not
resulting in any liability, insofar as such losses, claims,
damages, liabilities or litigation arise out of, or are based
upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any
Prospectus, filed with the Commission, or any amendment thereof
or supplement thereto, or which arise out of, or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this indemnity
agreement shall not apply to amounts paid in settlement of any
such litigation if such settlement is effected without the
consent of the Business Trust or to any such losses, claims,
damages, liabilities or litigation arising out of, or based upon,
any untrue statement or alleged untrue statement of a material
fact contained in any such Registration Statement or Prospectus,
or any amendment thereof or supplement thereto, or arising out
of, or based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon information
furnished in writing to the Business Trust by the Distributor for
inclusion in any such Registration Statement or Prospectus or any
amendment thereof or supplement thereto. The Distributor and
each such controlling person shall, promptly after the complaint
shall have been served upon the Distributor or such controlling
person in respect of which indemnity may be sought from the
Business Trust on account of its agreement contained in this
paragraph, notify the Business Trust in writing of the
commencement thereof. The omission of the Distributor or such
controlling person so to notify the Business Trust of any such
litigation shall relieve the Business Trust from any liability
which it may have to the Distributor or such controlling person
on account of the indemnity agreement contained in this
paragraph, but shall not relieve the Business Trust from any
liability which it may have to the Distributor or controlling
person otherwise than on account of the indemnity agreement
contained in the paragraph. In case any such litigation shall be
brought against the Distributor or any such controlling person
and notice of the commencement thereof shall have been given to
the Business Trust, the Business Trust shall be entitled to
participate in (and, to the extent that it shall wish, to direct)
the defense thereof at its own expense, but such defense shall be
conducted by counsel of good standing and satisfactory to the
Distributor or such controlling person or persons, defendant or
defendants in the litigation. The indemnity agreement of the
Business Trust contained in this paragraph shall remain operative
and in full force and effect regardless of any investigation made
by or on behalf of the Distributor or any such controlling
person, and shall survive any delivery of shares of the Trust.
The Business Trust agrees to notify the Distributor promptly of
the commencement of any litigation or proceeding against it or
any of its officers or directors of which it may be advised in
connection with the issue and sale of shares of the Trust.
11. Anything herein to the contrary notwithstanding, the
agreement in paragraph 10, insofar as it constitutes a basis for
reimbursement by the Business Trust for liabilities (other than
payment by the Business Trust of expenses incurred or paid in the
successful defense of any action, suit or proceeding) arising
under the Securities Act, shall not extend to the extent of any
interest therein of any person who is an underwriter or a partner
or controlling person of an underwriter within the meaning of
Section 15 of the Securities Act or who, at the date of this
Agreement, is a Trustee of the Business Trust, except to the
extent that an interest of such character shall have been
determined by a court of appropriate jurisdiction as not against
public policy as expressed in the Securities Act. Unless in the
opinion of counsel for the Business Trust the matter has been
adjudicated by controlling precedent, the Business Trust will, if
a claim for such reimbursement is asserted, submit to a court of
appropriate jurisdiction the question of whether or not such
interest is against the public policy as expressed in the
Securities Act.
12. The Distributor agrees to indemnify and hold harmless
the Business Trust and its Trustees and such officers as shall
have signed any Registration Statement filed with the Commission
from and against any and all losses, claims, damages or
liabilities, joint or several, to which the Business Trust or
such Trustees or officers may become subject under the Securities
Act, under any other statute, at common law or otherwise, and
will reimburse the Business Trust or such Trustees or officers
for any legal or other expenses (including the cost of any
investigation and preparation) reasonably incurred by it or them
or any of them in connection with any litigation, whether or not
resulting in any liability, insofar as such losses, claims,
damages, liabilities or litigation arise out of, or are based
upon, any untrue statement or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, which statement or
omission was made in reliance upon information furnished in
writing to the Business Trust by the Distributor for inclusion in
any Registration Statement or any Prospectus, or any amendment
thereof or supplement thereto. The Distributor shall not be
liable for amounts paid in settlement of any such litigation if
such settlement was effected without its consent. The Business
Trust and its Trustees and such officers, defendant or
defendants, in any such litigation shall, promptly after the
complaint shall have been served upon the Business Trust or any
such Trustee or officer in respect of which indemnity may be
sought from the Distributor on account of its agreement contained
in this paragraph, notify the Distributor in writing of the
commencement thereof. The omission of the Business Trust or such
Trustee or officer so to notify the Distributor of any such
litigation shall relieve the Distributor from any liability which
it may have to the Business Trust or such Trustee or officer on
account of the indemnity agreement contained in this paragraph,
but shall not relieve the Distributor from any liability which it
may have to the Business Trust or such Trustee or officer
otherwise than on account of the indemnity agreement contained in
this paragraph. In case any such litigation shall be brought
against the Business Trust or any such Trustee or officer and
notice of the commencement thereof shall have been so given to
the Distributor, the Distributor shall be entitled to participate
in (and, to the extent that it shall wish, to direct) the defense
thereof at its own expense, but such defense shall be conducted
by counsel of good standing and satisfactory to the Business
Trust. The indemnity agreement of the Distributor contained in
this paragraph shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
the Business Trust and shall survive any delivery of shares of
the Trust. The Distributor agrees to notify the Business Trust
promptly of the commencement of any litigation or proceeding
against it or any of its officers or directors or against any
such controlling person of which it may be advised, in connection
with the issue and sale of the Trust's shares.
13. Notwithstanding any provision contained in this
Agreement, no party hereto and no person or persons in control of
any party hereto shall be protected against any liability to the
Business Trust or its security holders to which they would
otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence, in the performance of their duties, or by
reason of their reckless disregard of their obligations and
duties under this Agreement.
14. The Business Trust shall immediately advise the
Distributor (a) when any post-effective amendment to its
Registration Statement or any further amendment or supplement
thereto or any further Registration Statement or amendment or
supplement thereto becomes effective, (b) of any request by the
Commission for amendments to the Registration Statement or the
then effective Prospectus or for additional information, (c) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or the initiation of
any proceedings for that purpose, and (d) of the happening of any
event which makes untrue any material statement made in the
Registration Statement or the Current Prospectus or which in the
opinion of counsel for the Business Trust requires the making of
a change in the Registration Statement or the Current Prospectus
in order to make the statements therein not misleading. In case
of the happening at any time of any event which materially
affects the Trust or its securities and which should be set forth
in a supplement to or an amendment of the then effective
Prospectus in order to make the statements therein not misleading
the Business Trust shall prepare and furnish to the Distributor
such amendment or amendments to the then effective Prospectus as
will correct the Prospectus so that as corrected it will not
contain, or such supplement or supplements to the then effective
Prospectus which when read in conjunction with the then effective
Prospectus will make the combined information not contain, any
untrue statement of a material fact or any omission to state any
material fact necessary in order to make the statements in the
then effective Prospectus not misleading. The Business Trust
shall, if at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, make
every reasonable effort to obtain the prompt lifting of such
order.
15. Except as expressly provided in paragraphs 10 and 12
hereof, the agreements herein set forth have been made and are
made solely for the benefit of the Business Trust, the
Distributor, and the persons expressly provided for in paragraphs
10 and 12, their respective heirs, successors, personal
representatives and assigns, and except as so provided, nothing
expressed or mentioned herein is intended or shall be construed
to give any person, firm or corporation, other than the Business
Trust, the Distributor, and the persons expressly provided for in
paragraphs 10 and 12, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any
representation, warranty or agreement herein contained. Except
as so provided, the term "heirs, successors, personal
representatives and assigns" shall not include any purchaser of
shares merely because of such purchase.
16. The Distributor understands that the obligations of
this Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Business Trust's property; the
Distributor represents that it has notice of the provisions of
the Business Trust's Declaration of Trust disclaiming shareholder
liability for acts or obligations of the Business Trust.
[balance of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
officers and their seals to be affixed as of the day and year
first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
_______________________ By:______________________________
ATTEST: AQUILA DISTRIBUTORS, INC.
_______________________ By:______________________________
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
ADMINISTRATION AGREEMENT
THIS AGREEMENT, made as of [Prospectus date], 1999 by and
between CAPITAL CASH MANAGEMENT TRUST (the "Business Trust"), a
Massachusetts business trust, 380 Madison Avenue, Suite 2300, New
York, NY 10017, and AQUILA MANAGEMENT CORPORATION (the
"Administrator"), 380 Madison Avenue, Suite 2300, New York, NY
10017
W I T N E S S E T H :
WHEREAS, the Business Trust and the Administrator have
previously entered into an Amended and Restated Administration
Agreement dated as of December 16, 1992 with respect to the
original portfolio of the Business Trust entitled Capital Cash
Management Trust, which agreement is to continue in effect
unchanged; and
WHEREAS, the Business Trust and the Administrator now wish to
enter into an agreement, referred to hereafter as "this Agreement,"
with respect to an additional, recently-established portfolio of
the Business Trust entitled "CAPITAL CASH U.S. GOVERNMENT
SECURITIES TRUST" (the "Trust");
WHEREAS, this Agreement has been approved by the Board of
Trustees of the Business Trust at a meeting held on September [18],
1999;
NOW THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. In General.
The Administrator shall perform (at its own expense) the
functions set forth more fully herein for the Trust and for the
investment adviser for the Trust (the "Adviser").
2. Duties and Obligations of the Adviser and Administrator to the
Trust and to Each Other.
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of
the Business Trust, the Administrator shall provide all
administrative services to the Trust other than those services
relating to the investment portfolio of the Trust and the
maintenance of its accounting books and records; as part of such
duties, the Administrator shall:
(i) provide office space, personnel, facilities and equipment
for the performance of the following functions and for the
maintenance of the headquarters of the Trust;
(ii) oversee all relationships between the Trust and its
transfer agent, custodian, legal counsel, auditors and
principal underwriter, including the negotiation of agreements
in relation thereto, the supervision and coordination of the
performance of such agreements, and the overseeing of all
administrative matters which are necessary or desirable for
the effective operation of the Trust and for the sale,
servicing or redemption of the Trust's shares;
(iii) provide to the Adviser and the Trust statistical and
other factual information and advice regarding economic
factors and trends, but shall not generally furnish advice or
make recommendations regarding the purchase or sale of
securities;
(iv) maintain the Trust's books and records (other than
accounting books and records), and prepare (or assist counsel
and auditors in the preparation of) all required proxy
statements, reports to the Trust's shareholders and Trustees,
reports to and other filings with the Securities and Exchange
Commission and any other governmental agencies, and tax
returns, and oversee the insurance relationships of the Trust;
(v) prepare, on behalf of the Trust and at the Trust's
expense, such applications and reports as may be necessary to
register or maintain the registration of the Trust and/or its
shares under the securities or "Blue-Sky" laws of all such
jurisdictions as may be required from time to time;
(vi) respond to any inquiries or other communications of
shareholders of the Trust and broker-dealers, or if any such
inquiry or communication is more properly to be responded to
by the Trust's shareholder servicing and transfer agent or
distributor, oversee such shareholder servicing and transfer
agent's or distributor's response thereto.
(b) Any activities performed by the Administrator under this
section shall at all times conform to, and be in accordance with,
any requirements imposed by: (1) the Investment Company Act of 1940
(the "Act") and any rules or regulations in force thereunder; (2)
any other applicable laws, rules and regulations; (3) the
Declaration of Trust and By-Laws of the Business Trust as amended
and restated from time to time; (4) any policies and determinations
of the Board of Trustees of the Business Trust; and (5) the
fundamental policies of the Trust, as reflected in its registration
statement under the Act, or as amended by the shareholders of the
Trust.
(c) The Administrator assumes no responsibility under this
agreement other than to render the services called for hereunder,
and specifically assumes no responsibilities for investment advice
or the investment or reinvestment of the Trust's assets.
(d) The Administrator shall not be liable for any error in
judgment or for any loss suffered by the Trust in connection with
the matters to which this Agreement relates, except a loss
resulting from wilful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
(e) Nothing in this Agreement shall prevent the Administrator
or any officer thereof from acting as investment adviser, sub-
adviser, administrator or manager for any other person, firm, or
corporation, and shall not in any way limit or restrict the
Administrator or any of its officers, stockholders or employees
from buying, selling or trading any securities for its own or their
own accounts or for the accounts of others for whom it or they may
be acting, provided, however, that the Administrator expressly
represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations
to the Adviser or the Trust under this Agreement. The Business
Trust shall indemnify the Administrator to the full extent
permitted by the Business Trust's Declaration of Trust.
3. Allocation of Expenses.
The Administrator shall, at its own expense, provide office
space, facilities, equipment, and personnel for the performance of
its functions hereunder and shall pay all compensation of Trustees,
officers, and employees of the Trust who are affiliated persons of
the Administrator.
4. Compensation of the Administrator.
The Business Trust shall pay the Administrator, and the
Administrator shall accept as full compensation for all services
rendered hereunder, a fee payable monthly and computed on the net
asset value of the Trust at the end of each business day at the
annual rate of 0.15 of 1% of such net asset value.
5. Expense Guarantee.
Under the expense guarantee provided in this section the
Administrator shall waive fees and reimburse expenses to the Trust
as required so that the total expenses of the Trust in any fiscal
year, exclusive of amounts paid under the Distribution Plan or the
Shareholder Services Plan, or both, of the Trust, shall not exceed
0.60 of 1 % of its average annual net assets. The payment of any
fee under this Agreement to the Administrator at the end of any
month will be reduced or postponed as may be required by reason of
this expense guarantee, subject to readjustment during the year.
Any reimbursement of expense to the Trust with respect to a fiscal
year shall be made during or at the end of that fiscal year, and
any reimbursements made during the fiscal year shall be subject to
readjustment during the year. This expense guarantee shall
continue until the last day of the fiscal year of the Trust during
which this Agreement became effective. It shall continue from year
to year thereafter, provided, however, that upon at least six
months' written notice to the Trust, the Administrator may cancel
its obligation under this expense guarantee. Upon the expiration
of the expense guarantee, any amount then outstanding thereunder
shall be paid, and thereupon neither party shall have any further
liability to the other thereunder. This expense guarantee and any
outstanding obligation thereunder shall survive the termination of
this Agreement.
6. Duration and Termination.
(a) This Agreement shall become effective as of the date first
written above, after approval by a vote of a majority of the
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party, with votes cast
in person at a meeting called for the purpose of voting on such
approval and shall, unless terminated as hereinafter provided,
continue in effect until the November 30 next preceding the second
anniversary of the effective date of this Agreement, and from year
to year thereafter.
(b) This Agreement may be terminated by the Administrator at
any time without penalty upon giving the Adviser and the Business
Trust sixty days' written notice (which notice may be waived by
them) and may be terminated by the Business Trust at any time
without penalty upon giving the Administrator sixty days' written
notice (which notice may be waived by the Administrator) provided
that such termination by the Business Trust shall be directed or
approved by a vote of a majority of its Trustees in office at the
time, including a majority of the Trustees who are not interested
persons (as defined in the Act) of the Business Trust.
7. Disclaimer of Shareholder Liability
The Administrator understands that the obligations of this
Agreement are not binding upon any shareholder of the Trust
personally, but bind only the Trust's property; the Administrator
represents that it has notice of the provisions of the Business
Trust's Declaration of Trust disclaiming shareholder liability for
acts or obligations of the Business Trust.
[balance of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized officers and
their seals to be hereunto affixed, all as of the day and year
first above written.
ATTEST: CAPITAL CASH MANAGEMENT TRUST
________________________ By:___________________________________
ATTEST: AQUILA MANAGEMENT CORPORATION
_______________________ By:___________________________________
HOLLYER BRADY SMITH TROXELL
BARRETT ROCKETT HINES & MONE LLP
551 Fifth Avenue
New York, NY 10176
Tel: (212) 818-1110
FAX: (212) 818-0494
October 28, 1999
Capital Cash Management Trust
380 Madison Avenue, Suite 2300
New York, New York 10017
Ladies and Gentlemen:
You have requested that we render an opinion to
Capital Cash Management (the "Trust") with respect
post-effective amendment No. 41 (the "Amendment") to
the Registration Statement of the Trust under the
Securities Act of 1933 and No. 24 under the Investment
Company Act of 1940 which you propose to file with the
Securities and Exchange Commission (the "Commission").
The purpose of the amendment among other things is to
provide that existing shares the Trust will now be
designated "Original Shares" and a new class of shares
will be created called "Service Shares," to be issued
pursuant to a plan duly adopted under Rule 18(f)-3
under the 1940 Act, which plan is being filed as an
exhibit to the Amendment. In addition, a new series is
being created called Capital Cash U.S. Government
Securities Trust Series, which will also offer both
Original Shares and Service Shares.
We have examined originals or copies, identified
to our satisfaction as being true copies, of those
corporate records of the Trust, certificates of public
officials, and other documents and matters as we have
deemed necessary for the purpose of this opinion. We
have assumed without independent verification the
authenticity of the documents submitted to us as
originals and the conformity to the original documents
of all documents submitted to us as copies.
Upon the basis of the foregoing and in reliance
upon such other matters as we deem relevant under the
circumstances, it is our opinion that the Original
Shares and Service Shares of each of the two portfolios
of the Trust as described in the Amendment, when issued
and paid for in accordance with the terms set forth in
the prospectuses and statement of additional
information of the Trust forming a part of its then
effective Registration Statement as heretofore, hereby
and hereafter amended, will be duly issued, fully-paid
and non-assessable to the extent set forth therein.
This letter is furnished to you pursuant to your
request and to the requirements imposed upon you under
the Act and is intended solely for your use for the
purpose of completing the filing of the Amendment with
the Commission. This letter may not be used for any
other purpose or furnished to or relied upon by any
other persons, or included in any filing made with any
other regulatory authority, without our prior written
consent.
We hereby consent to the filing of this opinion
with the Amendment.
Very truly yours,
HOLLYER BRADY SMITH TROXELL
BARRETT ROCKETT HINES & MONE LLP
/s/ W.L.D. Barrett
By:_________________________________
Dated: [November 1, 1999]
CAPITAL CASH MANAGEMENT TRUST
AMENDED AND RESTATED DISTRIBUTION PLAN
1. The Plan This Distribution Plan (the "Plan") is the written
plan, contemplated by Rule 12b-1 (the "Rule") under the
Investment Company Act of 1940 (the "1940 Act"), of Capital Cash
Management Trust (the "Trust"), the original portfolio of Capital
Cash Management Trust, a Massachusetts business trust (the
"Business Trust"). Part I of the Plan applies to all classes of
shares of the Trust and Part II of the Plan applies solely to the
Service Shares class.
2. Disinterested Trustees. While the Plan is in effect, the
selection and nomination of those Trustees of the Business Trust
who are not "interested persons" of the Business Trust shall be
committed to the discretion of such disinterested Trustees.
Nothing herein shall prevent the involvement of others in such
selection and nomination if the final decision on any such
selection and nomination is approved by a majority of such
disinterested Trustees.
Part I
Defensive Provisions
3. Definitions for Part I. As used in this Part I of the Plan,
"Qualified Recipients" shall mean broker-dealers, membership
organizations, associations of common interest or others selected
by the Trust's sub-adviser, administrator or principal
underwriter, including but not limited to any principal
underwriter of the Trust (other than a principal underwriter
which is an affiliated person, or an affiliated person of an
affiliated person, of the sub-adviser or administrator), with
which the Trust, the sub-adviser or the administrator has entered
into written agreements ("Plan Agreements") and which have
rendered assistance (whether direct, administrative, or both) in
the distribution and/or retention of the Trust's shares, in
servicing of shareholder accounts, or in consulting or otherwise
cooperating as to its members or others in its area of interest.
"Qualified Holdings" shall mean, as to any Qualified Recipient,
all Trust shares beneficially owned by such Qualified Recipient,
or beneficially owned by its brokerage customers, other
customers, other contacts, investment advisory clients, other
clients, or its members, associates or other persons within its
area of interest, if the Qualified Recipient was, in the sole
judgment of the sub-adviser or administrator, instrumental in the
purchase and/or retention of such Trust shares and/or in
providing administrative, consulting or other assistance in
relation thereto.
4. Certain Payments Permitted. The sub-adviser or administrator
may make payments ("Administrator's Permitted Payments") to
Qualified Recipients, which Administrator's Permitted Payments
shall be made by the sub-adviser or administrator, directly, or
through the Distributor or shareholder servicing agent as
disbursing agent, and shall not be the subject of reimbursement
by the Trust to the sub-adviser or administrator, which 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 sub-adviser or 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) as to the amount of
Administrator's Permitted Payments, if any, to each Qualified
Recipient provided that the total Administrator's Permitted
Payments to all Qualified Recipients do not exceed the amount set
forth above. The sub-adviser or 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
(as defined below) may remove any person as a Qualified
Recipient.
Whenever the sub-adviser or administrator bears the costs,
not borne by the Trust's Distributor, of printing and
distributing copies of the Trust's prospectuses, statements of
additional information and reports to shareholders which are not
sent to the Trust's shareholders, or the costs of supplemental
sales literature and advertising, such payments are authorized.
It is recognized that, in view of the Administrator's
Permitted Payments and bearing by the sub-adviser or
administrator of certain distribution expenses, the profits, if
any, of the sub-adviser or administrator are dependent primarily
on the administration fees paid by the Trust to the sub-adviser
or administrator and that its profits, if any, would be less, or
losses, if any, would be increased due to such Administrator's
Permitted Payments and the bearing by it of such expenses. If
and to the extent that any such administration fees paid by the
Trust might, in view of the foregoing, be considered as
indirectly financing any activity which is primarily intended to
result in the sale of Trust shares, the payment of such fees is
authorized by the Plan.
5. Certain Trust Payments Authorized. If and to the extent that
any of the payments listed below are considered to be "primarily
intended to result in the sale of" Trust shares within the
meaning of the Rule, such payments are authorized under 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 Trust shares, shares of other
funds, or other investments; (ii) the costs of the preparation
and setting in type of all prospectuses and statements of
additional information and the costs of printing, and mailing of
all prospectuses and statements of additional information to
existing shareholders; (iii) the costs of the preparation,
printing, and mailing of all proxy statements and proxies,
irrespective of whether any such proxy statement includes any
item relating to, or directed toward, the sale of the Trust's
shares; (iv) all legal and accounting fees relating to the
preparation of any such reports, prospectuses, statements of
additional information, proxies, and proxy statements; (v) all
fees and expenses relating to the registration or qualification
of the Trust or its shares under the securities or "Blue Sky"
laws of any jurisdiction; (vi) all fees under the Securities Act
of 1933 and the 1940 Act, including fees in connection with any
application for exemption relating to or directed toward the sale
of the Trust's shares; (vii) all fees and assessments of the
Investment Company Institute or any successor organization,
irrespective of whether some of its activities are designed to
provide sales assistance; (viii) all costs of the preparation and
mailing of confirmations of shares sold or redeemed or share
certificates, and reports of share balances; and (ix) all costs
of responding to telephone or mail inquiries of investors.
6. Reports. While Part I of the Plan is in effect, the Trust's
sub-adviser or administrator shall report at least quarterly to
the Business Trust's Trustees in writing for their review on the
following matters: (i) all Administrator's Permitted Payments
made under Section 4 of the Plan, the identity of the Qualified
Recipient of each Payment, and the purposes for which the amounts
were expended; (ii) all costs of each item specified in Section 5
of the Plan (making estimates of such costs where necessary or
desirable) during the preceding calendar or fiscal quarter; and
(iii) all fees of the Trust to the sub-adviser or administrator
paid or accrued during such quarter.
7. Effectiveness, Continuation, Termination, and Amendment. Part
I of the Plan originally went into effect when it was approved
(i) by a vote of the Trustees of the Business Trust and of those
Trustees (the "Independent Trustees") who, at the time of such
vote, were not "interested persons" as defined in the 1940 Act of
the Business Trust and had no direct or indirect financial
interest in the operation of the Plan or in any agreements
related to the Plan, with votes cast in person at a meeting
called for the purpose of voting on the Plan; and (ii) by a vote
of holders of at least a "majority" (as so defined) of the
outstanding voting securities of the Trust. Part I of the Plan
has continued, and will, unless terminated as hereinafter
provided, continue in effect, until the November 30 next
succeeding such effectiveness, and from year to year thereafter
only so long as such continuance is specifically approved at
least annually by the Business Trust's Trustees and its
Independent Trustees with votes cast in person at a meeting
called for the purpose of voting on such continuance. Part I of
the Plan may be terminated at any time by the vote of a majority
of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the 1940 Act) of the outstanding voting
securities of the Trust. The Plan may not be amended to increase
materially the amount of payments to be made without shareholder
approval as set forth in (ii) above, and all amendments must be
approved in the manner set forth in (i) above.
8. Plan Agreements. In the case of a Qualified Recipient which
is a principal underwriter of the Trust, the Plan Agreement shall
be the agreement contemplated by Section 15(b) of the 1940 Act
since each such agreement must be approved in accordance with,
and contain the provisions required by, the Rule. In the case of
Qualified Recipients which are not principal underwriters of the
Trust, the Plan Agreements with them shall be their agreements
with the sub-adviser or administrator with respect to payments
under Part I of the Plan.
Part II
Payments Involving Trust Assets Allocated to Service Shares
9. Applicability. Part II of the Plan applies only to the class
of shares of the Trust denominated Service Shares (regardless of
whether such class is so designated or is redesignated by some
other name).
10. Definitions for Part II. Terms defined in Part I of the
Plan shall have the same meanings in this Part II, except as
otherwise defined in Part II. As used in this Part II,
"Designated Payees" shall mean broker-dealers or others selected
by the Trust's principal underwriter, Aquila Distributors, Inc.
(the "Distributor"), including but not limited to any principal
underwriter of the Trust, with which the Distributor or the Trust
has entered into written agreements ("Distributor's Plan
Agreements") and which have rendered assistance (whether direct,
administrative, or both) in the distribution and/or retention of
the Trust's shares or servicing of shareholder accounts.
"Qualified Holdings" shall mean, as to any Designated Payee, all
Trust shares beneficially owned by such Designated Payee, or
beneficially owned by its brokerage customers, other customers,
other contacts, investment advisory clients, or other clients, if
the Designated Payee was, in the sole judgment of the
Distributor, instrumental in the purchase and/or retention of
such Trust shares and/or in providing administrative assistance
or other services in relation thereto.
11. Certain Payments Permitted. Subject to the direction and
control of the Board of Trustees of the Trust, the Trust may make
payments ("Trust's Permitted Payments") to Designated Payees,
which Trust's Permitted Payments may be made directly, or through
the Distributor or shareholder servicing agent as disbursing
agent, which may not exceed, for any fiscal year of the Trust
0.25 of 1% of the average annual net assets of the Trust
represented by the Service Shares class of shares. Such payments
shall be made only out of the Trust assets allocable to the
Service Shares. For any fiscal year, the amounts paid under the
Plan to any Designated Payee when added to any amounts paid to
the same Payee in respect of the same Qualified Holdings under
the Trust's Shareholder Services Plan, shall not exceed in the
aggregate 0.25 of 1% of the average annual net asset value of
such Qualified Holdings. Appropriate adjustments shall be made
for any part or parts of a fiscal year during which payments
under this Part II of the Plan are not accruable or for any
fiscal year which is not a full fiscal year. The Distributor
shall have sole authority (i) as to the selection of any
Designated Payee or Payees; (ii) not to select any Designated
Payee; and (iii) as to the amount of Trust's Permitted Payments,
if any, to each Designated Payee provided that the total Trust's
Permitted Payments to all Designated Payees do not exceed the
amount set forth above. The Distributor 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 Designated Payee; (b) the extent to
which the Designated Payee has, at its expense, taken steps in
the shareholder servicing area, including without limitation, any
or all of the following activities: answering customer inquiries
regarding account status and history, and the manner in which
purchases and redemptions of shares of the Trust may be effected;
assisting shareholders in designating and changing dividend
options, account designations and addresses; providing necessary
personnel and facilities to establish and maintain shareholder
accounts and records; assisting in processing purchase and
redemption transactions; arranging for the wiring of funds;
transmitting and receiving funds in connection with customer
orders to purchase or redeem shares; verifying and guaranteeing
shareholder signatures in connection with redemption orders and
transfers and changes in shareholder designated accounts;
furnishing (either alone or together with other reports sent to a
shareholder by such person) monthly and year end statements and
confirmations of purchases and redemptions; transmitting, on
behalf of the Trust, proxy statements, annual reports, updating
prospectuses and other communications from the Trust to its
shareholders; receiving tabulating and transmitting to the Trust
proxies executed by shareholders with respect to meetings of
shareholders of the Trust; and providing such other related
services as the Distributor or a shareholder may request from
time to time; and (c) the possibility that the Qualified Holdings
of the Designated Payee would be redeemed in the absence of its
selection or continuance as a Designated Payee. Notwithstanding
the foregoing two sentences, a majority of the Independent
Trustees (as defined below) may remove any person as a Designated
Payee.
12. Reports. While this Part II is in effect, the Distributor
shall report at least quarterly to the Business Trust's Trustees
in writing for their review on the following matters: (i) all
Trust's Permitted Payments made under Section 11 of the Plan, the
identity of the Designated Payee of each payment, and the
purposes for which the amounts were expended; and (ii) all fees
of the Trust to the Distributor, sub-adviser or administrator
paid or accrued during such quarter. In addition, if any such
Designated Payee is an affiliated person, as that term is defined
in the Act, of the Trust, the Adviser, the Administrator or the
Distributor, such person shall agree to furnish to the
Distributor for transmission to the Board of Trustees of the
Trust an accounting, in form and detail satisfactory to the Board
of Trustees, to enable the Board of Trustees to make the
determinations of the fairness of the compensation paid to such
affiliated person, not less often than annually.
13. Effectiveness, Continuation, Termination and Amendment.
This Part II shall go into effect (i) after being approved by a
vote of Trustees, including the Independent Trustees, with votes
cast in person at a meeting called for the purpose of voting on
Part II of the Plan, and (ii) immediately preceding the first
public offering of securities of the Service Shares Class. This
Part II will, unless terminated as hereinafter provided, continue
in effect, until November 30 of each year only so long as such
continuance is specifically approved at least annually by the
Business Trust's Trustees and its Independent Trustees with votes
cast in person at a meeting called for the purpose of voting on
such continuance. This Part II may be terminated at any time by
the vote of a majority of the Independent Trustees or by the vote
of the holders of a "majority" (as defined in the 1940 Act) of
the outstanding voting securities of the Trust to which this Part
II applies. This Part II may not be amended to increase
materially the amount of payments to be made without shareholder
approval of the class or classes of shares affected by this Part
II by holders of at least a "majority" (as defined in the 1940
Act) of the outstanding voting securities of the class or classes
affected, and all amendments must be approved in the manner set
forth in (i) above.
14. Distributor's Plan Agreements. In the case of a Designated
Payee which is a principal underwriter of the Trust, the
Distributor's Plan Agreement shall be the agreement contemplated
by Section 15(b) of the 1940 Act since each such agreement must
be approved in accordance with, and contain the provisions
required by, the Rule. In the case of Designated Payees which
are not principal underwriters of the Trust, the Distributor's
Plan Agreements with them shall be their agreements with the
Distributor with respect to payments under the Plan.
15. Additional Terms and Conditions. This Part II shall also be
subject to all applicable terms and conditions of any order or
rule of the Securities and Exchange Commission governing the
creation and maintenance by the Trust of any class of shares to
which this Part II applies.
--------------------------
16. Additional Terms and Conditions. This Plan and each Part of
it shall also be subject to all applicable terms and conditions
of Rule 18f-3 under the Act as now in force or hereafter amended.
Specifically, but without limitation, the provisions of Part I
shall be deemed to be severable, within the meaning of and to the
extent required by Rule 18f-3, with respect to each outstanding
class of shares of the Fund.
Dated: [November 1, 1999]
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
AMENDED AND RESTATED DISTRIBUTION PLAN
1. The Plan This Distribution Plan (the "Plan") is the written
plan, contemplated by Rule 12b-1 (the "Rule") under the
Investment Company Act of 1940 (the "1940 Act"), of Capital Cash
U.S. Securities Trust (the "Trust"), a portfolio of Capital Cash
Management Trust, a Massachusetts business trust (the "Business
Trust"). Part I of the Plan applies to all classes of shares of
the Trust and Part II of the Plan applies solely to the Service
Shares class.
2. Disinterested Trustees. While the Plan is in effect, the
selection and nomination of those Trustees of the Business Trust
who are not "interested persons" of the Business Trust shall be
committed to the discretion of such disinterested Trustees.
Nothing herein shall prevent the involvement of others in such
selection and nomination if the final decision on any such
selection and nomination is approved by a majority of such
disinterested Trustees.
Part I
Defensive Provisions
3. Definitions for Part I. As used in this Part I of the Plan,
"Qualified Recipients" shall mean broker-dealers, membership
organizations, associations of common interest or others selected
by the Trust's sub-adviser, administrator or principal
underwriter, including but not limited to any principal
underwriter of the Trust (other than a principal underwriter
which is an affiliated person, or an affiliated person of an
affiliated person, of the sub-adviser or administrator), with
which the Trust, the sub-adviser or the administrator has entered
into written agreements ("Plan Agreements") and which have
rendered assistance (whether direct, administrative, or both) in
the distribution and/or retention of the Trust's shares, in
servicing of shareholder accounts, or in consulting or otherwise
cooperating as to its members or others in its area of interest.
"Qualified Holdings" shall mean, as to any Qualified Recipient,
all Trust shares beneficially owned by such Qualified Recipient,
or beneficially owned by its brokerage customers, other
customers, other contacts, investment advisory clients, other
clients, or its members, associates or other persons within its
area of interest, if the Qualified Recipient was, in the sole
judgment of the sub-adviser or administrator, instrumental in the
purchase and/or retention of such Trust shares and/or in
providing administrative, consulting or other assistance in
relation thereto.
4. Certain Payments Permitted. The sub-adviser or administrator
may make payments ("Administrator's Permitted Payments") to
Qualified Recipients, which Administrator's Permitted Payments
shall be made by the sub-adviser or administrator, directly, or
through the Distributor or shareholder servicing agent as
disbursing agent, and shall not be the subject of reimbursement
by the Trust to the sub-adviser or administrator, which 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 sub-adviser or 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) as to the amount of
Administrator's Permitted Payments, if any, to each Qualified
Recipient provided that the total Administrator's Permitted
Payments to all Qualified Recipients do not exceed the amount set
forth above. The sub-adviser or 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
(as defined below) may remove any person as a Qualified
Recipient.
Whenever the sub-adviser or administrator bears the costs,
not borne by the Trust's Distributor, of printing and
distributing copies of the Trust's prospectuses, statements of
additional information and reports to shareholders which are not
sent to the Trust's shareholders, or the costs of supplemental
sales literature and advertising, such payments are authorized.
It is recognized that, in view of the Administrator's
Permitted Payments and bearing by the sub-adviser or
administrator of certain distribution expenses, the profits, if
any, of the sub-adviser or administrator are dependent primarily
on the administration fees paid by the Trust to the sub-adviser
or administrator and that its profits, if any, would be less, or
losses, if any, would be increased due to such Administrator's
Permitted Payments and the bearing by it of such expenses. If
and to the extent that any such administration fees paid by the
Trust might, in view of the foregoing, be considered as
indirectly financing any activity which is primarily intended to
result in the sale of Trust shares, the payment of such fees is
authorized by the Plan.
5. Certain Trust Payments Authorized. If and to the extent that
any of the payments listed below are considered to be "primarily
intended to result in the sale of" Trust shares within the
meaning of the Rule, such payments are authorized under 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 Trust shares, shares of other
funds, or other investments; (ii) the costs of the preparation
and setting in type of all prospectuses and statements of
additional information and the costs of printing, and mailing of
all prospectuses and statements of additional information to
existing shareholders; (iii) the costs of the preparation,
printing, and mailing of all proxy statements and proxies,
irrespective of whether any such proxy statement includes any
item relating to, or directed toward, the sale of the Trust's
shares; (iv) all legal and accounting fees relating to the
preparation of any such reports, prospectuses, statements of
additional information, proxies, and proxy statements; (v) all
fees and expenses relating to the registration or qualification
of the Trust or its shares under the securities or "Blue Sky"
laws of any jurisdiction; (vi) all fees under the Securities Act
of 1933 and the 1940 Act, including fees in connection with any
application for exemption relating to or directed toward the sale
of the Trust's shares; (vii) all fees and assessments of the
Investment Company Institute or any successor organization,
irrespective of whether some of its activities are designed to
provide sales assistance; (viii) all costs of the preparation and
mailing of confirmations of shares sold or redeemed or share
certificates, and reports of share balances; and (ix) all costs
of responding to telephone or mail inquiries of investors.
6. Reports. While Part I of the Plan is in effect, the Trust's
sub-adviser or administrator shall report at least quarterly to
the Business Trust's Trustees in writing for their review on the
following matters: (i) all Administrator's Permitted Payments
made under Section 4 of the Plan, the identity of the Qualified
Recipient of each Payment, and the purposes for which the amounts
were expended; (ii) all costs of each item specified in Section 5
of the Plan (making estimates of such costs where necessary or
desirable) during the preceding calendar or fiscal quarter; and
(iii) all fees of the Trust to the sub-adviser or administrator
paid or accrued during such quarter.
7. Effectiveness, Continuation, Termination, and Amendment. Part
I of the Plan originally went into effect when it was approved
(i) by a vote of the Trustees of the Business Trust and of those
Trustees (the "Independent Trustees") who, at the time of such
vote, were not "interested persons" as defined in the 1940 Act of
the Business Trust and had no direct or indirect financial
interest in the operation of the Plan or in any agreements
related to the Plan, with votes cast in person at a meeting
called for the purpose of voting on the Plan; and (ii) by a vote
of holders of at least a "majority" (as so defined) of the
outstanding voting securities of the Trust. Part I of the Plan
has continued, and will, unless terminated as hereinafter
provided, continue in effect, until the November 30 next
succeeding such effectiveness, and from year to year thereafter
only so long as such continuance is specifically approved at
least annually by the Business Trust's Trustees and its
Independent Trustees with votes cast in person at a meeting
called for the purpose of voting on such continuance. Part I of
the Plan may be terminated at any time by the vote of a majority
of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the 1940 Act) of the outstanding voting
securities of the Trust. The Plan may not be amended to increase
materially the amount of payments to be made without shareholder
approval as set forth in (ii) above, and all amendments must be
approved in the manner set forth in (i) above.
8. Plan Agreements. In the case of a Qualified Recipient which
is a principal underwriter of the Trust, the Plan Agreement shall
be the agreement contemplated by Section 15(b) of the 1940 Act
since each such agreement must be approved in accordance with,
and contain the provisions required by, the Rule. In the case of
Qualified Recipients which are not principal underwriters of the
Trust, the Plan Agreements with them shall be their agreements
with the sub-adviser or administrator with respect to payments
under Part I of the Plan.
Part II
Payments Involving Trust Assets Allocated to Service Shares
9. Applicability. Part II of the Plan applies only to the class
of shares of the Trust denominated Service Shares (regardless of
whether such class is so designated or is redesignated by some
other name).
10. Definitions for Part II. Terms defined in Part I of the
Plan shall have the same meanings in this Part II, except as
otherwise defined in Part II. As used in this Part II,
"Designated Payees" shall mean broker-dealers or others selected
by the Trust's principal underwriter, Aquila Distributors, Inc.
(the "Distributor"), including but not limited to any principal
underwriter of the Trust, with which the Distributor or the Trust
has entered into written agreements ("Distributor's Plan
Agreements") and which have rendered assistance (whether direct,
administrative, or both) in the distribution and/or retention of
the Trust's shares or servicing of shareholder accounts.
"Qualified Holdings" shall mean, as to any Designated Payee, all
Trust shares beneficially owned by such Designated Payee, or
beneficially owned by its brokerage customers, other customers,
other contacts, investment advisory clients, or other clients, if
the Designated Payee was, in the sole judgment of the
Distributor, instrumental in the purchase and/or retention of
such Trust shares and/or in providing administrative assistance
or other services in relation thereto.
11. Certain Payments Permitted. Subject to the direction and
control of the Board of Trustees of the Trust, the Trust may make
payments ("Trust's Permitted Payments") to Designated Payees,
which Trust's Permitted Payments may be made directly, or through
the Distributor or shareholder servicing agent as disbursing
agent, which may not exceed, for any fiscal year of the Trust
0.25 of 1% of the average annual net assets of the Trust
represented by the Service Shares class of shares. Such payments
shall be made only out of the Trust assets allocable to the
Service Shares. For any fiscal year, the amounts paid under the
Plan to any Designated Payee when added to any amounts paid to
the same Payee in respect of the same Qualified Holdings under
the Trust's Shareholder Services Plan, shall not exceed in the
aggregate 0.25 of 1% of the average annual net asset value of
such Qualified Holdings. Appropriate adjustments shall be made
for any part or parts of a fiscal year during which payments
under this Part II of the Plan are not accruable or for any
fiscal year which is not a full fiscal year. The Distributor
shall have sole authority (i) as to the selection of any
Designated Payee or Payees; (ii) not to select any Designated
Payee; and (iii) as to the amount of Trust's Permitted Payments,
if any, to each Designated Payee provided that the total Trust's
Permitted Payments to all Designated Payees do not exceed the
amount set forth above. The Distributor 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 Designated Payee; (b) the extent to
which the Designated Payee has, at its expense, taken steps in
the shareholder servicing area, including without limitation, any
or all of the following activities: answering customer inquiries
regarding account status and history, and the manner in which
purchases and redemptions of shares of the Trust may be effected;
assisting shareholders in designating and changing dividend
options, account designations and addresses; providing necessary
personnel and facilities to establish and maintain shareholder
accounts and records; assisting in processing purchase and
redemption transactions; arranging for the wiring of funds;
transmitting and receiving funds in connection with customer
orders to purchase or redeem shares; verifying and guaranteeing
shareholder signatures in connection with redemption orders and
transfers and changes in shareholder designated accounts;
furnishing (either alone or together with other reports sent to a
shareholder by such person) monthly and year end statements and
confirmations of purchases and redemptions; transmitting, on
behalf of the Trust, proxy statements, annual reports, updating
prospectuses and other communications from the Trust to its
shareholders; receiving tabulating and transmitting to the Trust
proxies executed by shareholders with respect to meetings of
shareholders of the Trust; and providing such other related
services as the Distributor or a shareholder may request from
time to time; and (c) the possibility that the Qualified Holdings
of the Designated Payee would be redeemed in the absence of its
selection or continuance as a Designated Payee. Notwithstanding
the foregoing two sentences, a majority of the Independent
Trustees (as defined below) may remove any person as a Designated
Payee.
12. Reports. While this Part II is in effect, the Distributor
shall report at least quarterly to the Business Trust's Trustees
in writing for their review on the following matters: (i) all
Trust's Permitted Payments made under Section 11 of the Plan, the
identity of the Designated Payee of each payment, and the
purposes for which the amounts were expended; and (ii) all fees
of the Trust to the Distributor, sub-adviser or administrator
paid or accrued during such quarter. In addition, if any such
Designated Payee is an affiliated person, as that term is defined
in the Act, of the Trust, the Adviser, the Administrator or the
Distributor, such person shall agree to furnish to the
Distributor for transmission to the Board of Trustees of the
Trust an accounting, in form and detail satisfactory to the Board
of Trustees, to enable the Board of Trustees to make the
determinations of the fairness of the compensation paid to such
affiliated person, not less often than annually.
13. Effectiveness, Continuation, Termination and Amendment.
This Part II shall go into effect (i) after being approved by a
vote of Trustees, including the Independent Trustees, with votes
cast in person at a meeting called for the purpose of voting on
Part II of the Plan, and (ii) immediately preceding the first
public offering of securities of the Service Shares Class. This
Part II will, unless terminated as hereinafter provided, continue
in effect, until November 30 of each year only so long as such
continuance is specifically approved at least annually by the
Business Trust's Trustees and its Independent Trustees with votes
cast in person at a meeting called for the purpose of voting on
such continuance. This Part II may be terminated at any time by
the vote of a majority of the Independent Trustees or by the vote
of the holders of a "majority" (as defined in the 1940 Act) of
the outstanding voting securities of the Trust to which this Part
II applies. This Part II may not be amended to increase
materially the amount of payments to be made without shareholder
approval of the class or classes of shares affected by this Part
II by holders of at least a "majority" (as defined in the 1940
Act) of the outstanding voting securities of the class or classes
affected, and all amendments must be approved in the manner set
forth in (i) above.
14. Distributor's Plan Agreements. In the case of a Designated
Payee which is a principal underwriter of the Trust, the
Distributor's Plan Agreement shall be the agreement contemplated
by Section 15(b) of the 1940 Act since each such agreement must
be approved in accordance with, and contain the provisions
required by, the Rule. In the case of Designated Payees which
are not principal underwriters of the Trust, the Distributor's
Plan Agreements with them shall be their agreements with the
Distributor with respect to payments under the Plan.
15. Additional Terms and Conditions. This Part II shall also be
subject to all applicable terms and conditions of any order or
rule of the Securities and Exchange Commission governing the
creation and maintenance by the Trust of any class of shares to
which this Part II applies.
--------------------------
16. Additional Terms and Conditions. This Plan and each Part of
it shall also be subject to all applicable terms and conditions
of Rule 18f-3 under the Act as now in force or hereafter amended.
Specifically, but without limitation, the provisions of Part I
shall be deemed to be severable, within the meaning of and to the
extent required by Rule 18f-3, with respect to each outstanding
class of shares of the Fund.
Dated: [November 1, 1999]
CAPITAL CASH MANAGEMENT TRUST
SHAREHOLDER SERVICES PLAN
1. The Plan. This Shareholder Services Plan (the "Plan") is the
written plan of CAPITAL CASH MANAGEMENT TRUST (the "Trust"), a
portfolio of Capital Cash Management Trust, a Massachusetts
business trust (referred to herein as the "Business Trust"),
adopted to provide for the payment by the Service Shares of the
Trust of "service fees" within the meaning of Rule 2830 of the
Conduct Rules of the National Association of Securities Dealers,
Inc. This Plan applies only to shares of the class denominated
Service Shares (regardless of whether such class is so designated
or is redesignated by some other name).
Provisions for Service Shares (Part I)
2. Definitions. As used in Part I of this Plan, "Qualified
Recipients" shall mean broker-dealers or others selected by
Aquila Distributors, Inc. (the "Distributor"), including but not
limited to the Distributor and any other principal underwriter of
the Trust, who have, pursuant to written agreements with the
Trust or the Distributor, agreed to provide personal services to
holders of Service Shares and/or maintenance of Service Shares
shareholder accounts. "Qualified Holdings" shall mean, as to any
Qualified Recipient, all Service Shares beneficially owned by
such Qualified Recipient's customers, clients or other contacts.
"Administrator" shall mean Aquila Management Corporation, or any
successor serving as administrator of the Trust.
3. Certain Payments Permitted. Subject to the direction and
control of the Board of Trustees of the Business Trust, the Trust
may make payments ("Service Fees") to Qualified Recipients, which
Service Fees (i) may be paid directly or through the Distributor
or shareholder servicing agent as disbursing agent and (ii) may
not exceed for any fiscal year of the Trust 0.25 of 1% of the
average annual net assets of the Trust represented by the Service
Shares. Such payments shall be made only out of the Trust assets
allocable to the Service Shares. For any fiscal year, the
amounts paid under the Plan to any Qualified Recipient, when
added to any amounts paid to the same Qualified Recipient in
respect of the same Qualified Holdings under the Trust's
Distribution Plan, shall not exceed in the aggregate 0.25 of 1%
of the average annual net asset value of such Qualified
Holdings. The Distributor shall have sole authority with respect
to the selection of any Qualified Recipient or Recipients and the
amount of Service Fees, if any, paid to each Qualified Recipient,
provided that the total such Service Fees paid to all Qualified
Recipients may not exceed the amount set forth above and
provided, further, that no Qualified Recipient that sells Service
Shares may receive more than 0.25 of 1% of the average annual net
asset value of Service Shares sold by such Recipient. The
Distributor 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 and (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area with respect to holders of Service Shares,
including without limitation, any or all of the following
activities: answering customer inquiries regarding account status
and history, and the manner in which purchases and redemptions of
shares of the Trust may be effected; assisting shareholders in
designating and changing dividend options, account designations
and addresses; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records;
assisting in processing purchase and redemption transactions;
arranging for the wiring of funds; transmitting and receiving
funds in connection with customer orders to purchase or redeem
shares; verifying and guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder designated accounts; and providing such other related
services as the Distributor or a shareholder may request from
time to time. Notwithstanding the foregoing two sentences, a
majority of the Independent Trustees (as defined below) may
remove any person as a Qualified Recipient. Amounts within the
above limits accrued to a Qualified Recipient but not paid during
a fiscal year may be paid thereafter; if less than the full
amount is accrued to all Qualified Recipients, the difference
will not be carried over to subsequent years. Appropriate
adjustments shall be made for any part or parts of a fiscal year
during which payments under this Part I of the Plan are not
accruable or for any fiscal year which is not a full fiscal year.
General Provisions (Part II)
4. Reports. While this Plan is in effect, the Trust's
Distributor shall report at least quarterly to the Business
Trust's Trustees in writing for their review on the following
matters: (i) all Service Fees paid under the Plan, the identity
of the Qualified Recipient of each payment, and the purposes for
which the amounts were expended; and (ii) all fees of the Trust
to the Distributor paid or accrued during such quarter. In
addition, if any Qualified Recipient is an "affiliated person,"
as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), of the Trust, the Administrator, the
Distributor, or the investment adviser or sub-adviser of the
Trust, such person shall agree to furnish to the Distributor for
transmission to the Board of Trustees of the Business Trust an
accounting, in form and detail satisfactory to the Board of
Trustees, to enable the Board of Trustees to make the
determinations of the fairness of the compensation paid to such
affiliated person, not less often than annually.
5. Effectiveness, Continuation, Termination and Amendment. This
Plan has been approved by a vote of the Trustees, including those
Trustees who, at the time of such vote, were not "interested
persons" (as defined in the 1940 Act) of the Trust and had no
direct or indirect financial interest in the operation of this
Plan or in any agreements related to this Plan (the "Independent
Trustees"), with votes cast in person at a meeting called for the
purpose of voting on this Plan. It is effective as of the date
first above written and will continue in effect for a period of
more than one year from such date only so long as such
continuance is specifically approved at least annually as set
forth in the preceding sentence. It may be amended in like
manner and may be terminated at any time by vote of the
Independent Trustees.
6. Additional Terms and Conditions. (a) This Plan shall also be
subject to all applicable terms and conditions of Rule 18f-3
under the 1940 Act as now in force or hereafter amended.
(b) While this Plan is in effect, the selection and nomination
of those Trustees of the Trust who are not "interested persons"
of the Trust, as that term is defined in the 1940 Act, shall be
committed to the discretion of such disinterested Trustees.
Nothing herein shall prevent the involvement of others in such
selection and nomination if the final decision on any such
selection and nomination is approved by a majority of such
disinterested Trustees.
Dated: [November 1, 1999]
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
SHAREHOLDER SERVICES PLAN
1. The Plan. This Shareholder Services Plan (the "Plan") is the
written plan of CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
(the "Trust"), a portfolio of Capital Cash Management Trust, a
Massachusetts business trust (referred to herein as the "Business
Trust"), adopted to provide for the payment by the Service Shares
of the Trust of "service fees" within the meaning of Rule 2830 of
the Conduct Rules of the National Association of Securities
Dealers, Inc. This Plan applies only to shares of the class
denominated Service Shares (regardless of whether such class is
so designated or is redesignated by some other name).
Provisions for Service Shares (Part I)
2. Definitions. As used in Part I of this Plan, "Qualified
Recipients" shall mean broker-dealers or others selected by
Aquila Distributors, Inc. (the "Distributor"), including but not
limited to the Distributor and any other principal underwriter of
the Trust, who have, pursuant to written agreements with the
Trust or the Distributor, agreed to provide personal services to
holders of Service Shares and/or maintenance of Service Shares
shareholder accounts. "Qualified Holdings" shall mean, as to any
Qualified Recipient, all Service Shares beneficially owned by
such Qualified Recipient's customers, clients or other contacts.
"Administrator" shall mean Aquila Management Corporation, or any
successor serving as administrator of the Trust.
3. Certain Payments Permitted. Subject to the direction and
control of the Board of Trustees of the Business Trust, the Trust
may make payments ("Service Fees") to Qualified Recipients, which
Service Fees (i) may be paid directly or through the Distributor
or shareholder servicing agent as disbursing agent and (ii) may
not exceed for any fiscal year of the Trust 0.25 of 1% of the
average annual net assets of the Trust represented by the Service
Shares. Such payments shall be made only out of the Trust assets
allocable to the Service Shares. For any fiscal year, the
amounts paid under the Plan to any Qualified Recipient, when
added to any amounts paid to the same Qualified Recipient in
respect of the same Qualified Holdings under the Trust's
Distribution Plan, shall not exceed in the aggregate 0.25 of 1%
of the average annual net asset value of such Qualified Holdings.
The Distributor shall have sole authority with respect to the
selection of any Qualified Recipient or Recipients and the amount
of Service Fees, if any, paid to each Qualified Recipient,
provided that the total such Service Fees paid to all Qualified
Recipients may not exceed the amount set forth above and
provided, further, that no Qualified Recipient that sells Service
Shares may receive more than 0.25 of 1% of the average annual net
asset value of Service Shares sold by such Recipient. The
Distributor 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 and (b) the extent to which the Qualified
Recipient has, at its expense, taken steps in the shareholder
servicing area with respect to holders of Service Shares,
including without limitation, any or all of the following
activities: answering customer inquiries regarding account status
and history, and the manner in which purchases and redemptions of
shares of the Trust may be effected; assisting shareholders in
designating and changing dividend options, account designations
and addresses; providing necessary personnel and facilities to
establish and maintain shareholder accounts and records;
assisting in processing purchase and redemption transactions;
arranging for the wiring of funds; transmitting and receiving
funds in connection with customer orders to purchase or redeem
shares; verifying and guaranteeing shareholder signatures in
connection with redemption orders and transfers and changes in
shareholder designated accounts; and providing such other related
services as the Distributor or a shareholder may request from
time to time. Notwithstanding the foregoing two sentences, a
majority of the Independent Trustees (as defined below) may
remove any person as a Qualified Recipient. Amounts within the
above limits accrued to a Qualified Recipient but not paid during
a fiscal year may be paid thereafter; if less than the full
amount is accrued to all Qualified Recipients, the difference
will not be carried over to subsequent years. Appropriate
adjustments shall be made for any part or parts of a fiscal year
during which payments under this Part I of the Plan are not
accruable or for any fiscal year which is not a full fiscal year.
General Provisions (Part II)
4. Reports. While this Plan is in effect, the Trust's
Distributor shall report at least quarterly to the Business
Trust's Trustees in writing for their review on the following
matters: (i) all Service Fees paid under the Plan, the identity
of the Qualified Recipient of each payment, and the purposes for
which the amounts were expended; and (ii) all fees of the Trust
to the Distributor paid or accrued during such quarter. In
addition, if any Qualified Recipient is an "affiliated person,"
as that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), of the Trust, the Administrator, the
Distributor, or the investment adviser or sub-adviser of the
Trust, such person shall agree to furnish to the Distributor for
transmission to the Board of Trustees of the Business Trust an
accounting, in form and detail satisfactory to the Board of
Trustees, to enable the Board of Trustees to make the
determinations of the fairness of the compensation paid to such
affiliated person, not less often than annually.
5. Effectiveness, Continuation, Termination and Amendment. This
Plan has been approved by a vote of the Trustees, including those
Trustees who, at the time of such vote, were not "interested
persons" (as defined in the 1940 Act) of the Trust and had no
direct or indirect financial interest in the operation of this
Plan or in any agreements related to this Plan (the "Independent
Trustees"), with votes cast in person at a meeting called for the
purpose of voting on this Plan. It is effective as of the date
first above written and will continue in effect for a period of
more than one year from such date only so long as such
continuance is specifically approved at least annually as set
forth in the preceding sentence. It may be amended in like
manner and may be terminated at any time by vote of the
Independent Trustees.
6. Additional Terms and Conditions. (a) This Plan shall also be
subject to all applicable terms and conditions of Rule 18f-3
under the 1940 Act as now in force or hereafter amended.
(b) While this Plan is in effect, the selection and nomination
of those Trustees of the Trust who are not "interested persons"
of the Trust, as that term is defined in the 1940 Act, shall be
committed to the discretion of such disinterested Trustees.
Nothing herein shall prevent the involvement of others in such
selection and nomination if the final decision on any such
selection and nomination is approved by a majority of such
disinterested Trustees.
Dated: [November 1, 1999]
CAPITAL CASH MANAGEMENT TRUST
Rule 18f-3
Multiple Class Plan
Capital Cash Management Trust and Capital Cash U.S.
Government Securities Trust (the "Portfolios"), each a portfolio
of Capital Cash Management Trust (the "Trust"), have elected to
rely on Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act") in offering multiple classes of shares
in each Portfolio with differing distribution arrangements,
voting rights and expense allocations.
Pursuant to Rule 18f-3, the Board of Trustees of the
Trust has approved and adopted this written plan (the "Plan")
specifying all of the differences among the classes of shares to
be offered by the Trust. Prior to such offering, the Plan will
be filed as an exhibit to the Trust's registration statement.
The Plan sets forth the differences among the classes, including
shareholder services, distribution arrangements, expense
allocations, and conversion or exchange options.
I. Attributes of Share Classes
This section discusses the attributes of the various classes
of shares. Each share of a Portfolio represents an equal pro
rata interest in the Portfolio and has identical voting rights,
powers, qualifications, terms and conditions and, in proportion
to each share's net asset value, liquidation rights and
preferences. Each class differs in that: (a) each class has a
different class designation; (b) only the Service Share Class (as
described below) is subject to distribution fees under a plan
adopted pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1
Plan"); (c) only the Service Share Class is subject to a
shareholder services fee under a non-Rule 12b-1 shareholder
services plan (a "Shareholder Services Plan"); (d) to the extent
that one class alone is affected by a matter submitted to a vote
of the shareholders, then only that class has voting power on the
matter; (e) the expenses attributable to a specific class
("Class Expenses") are borne only by shares of that class on a
pro-rata basis; and (f) the exchange privileges may vary among
the classes. Class Expenses are limited to (i) transfer agency
fees; (ii) preparation and mailing expenses for shareholder
communications required by law, sent to current shareholders of a
class; (iii) state Blue Sky registration fees; (iv) Securities
and Exchange Commission ("SEC") registration fees; (v) trustees'
fees; (vi) expenses incurred for periodic meetings of trustees or
shareholders; and (vii) legal and accounting fees, other than
fees for income tax return preparation or income tax advice.
A. Original Shares
Each Portfolio offers Original Shares, which are sold
solely to (1) institutions, for their own account or for
accounts for which they act in a fiduciary, agency,
investment advisory or custodial capacity; (2) persons
entitled to exchange into Original Shares under the exchange
privileges of the Trust; and (3) shareholders of record on
November 1, 1999, the date on which the Trust first offered
two classes of shares; and (4) members 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 and which have entered into agreements with the
Distributor under a Portfolio's Distribution Plan.
1. Sales Loads. Original Shares will be sold without
the imposition of any sales charges.
2. Distribution and Service Fees. Original Shares
will not be subject to any distribution charges
pursuant to Rule 12b-1 or any charges applicable to an
Shareholder Services Plan.
3. Class Expenses. Class Expenses which are
attributable to a particular class of shares are
allocated to that particular class.
4. Exchange Privileges. Original Shares may differ
from Service Shares with respect to exchange privileges
among the Portfolios. Original Shares of the
Portfolios have no conversion features.
B. Service Shares
Each Portfolio offers Service Shares, which are offered
to customers of banks and other financial institutions
("Service Organizations") that typically are compensated by
service or distribution fees paid by the mutual funds
offered to their customers rather than by transaction or
other fees paid directly by such customers.
1. Sales Loads. Service Shares will be sold without
the imposition of any sales charges.
2. Distribution and Service Fees. Service Shares are
subject to a distribution fee and/or fee pursuant to a
Shareholder Services Plan equal to 0.25 of 1% of the
average daily net assets of Service Shares. The Trust,
on behalf of each Portfolio, enters into agreements
with and pays the distributor or the Service
Organization for performing certain services, some of
which could be construed as distribution assistance.
3. Class Expenses. Class Expenses which are
attributable to a particular class of shares are
allocated to that particular class.
4. Exchange Privileges. Service Shares may differ
from Original Shares with respect to exchange
privileges among the Portfolios. Service Shares of the
Portfolios have no conversion features.
C. Additional Classes
In the future, the Trust may offer additional classes
of shares which differ from the classes discussed above.
However, any additional classes of shares must be approved
by the Board, and the Plan must be amended to describe those
classes.
II. Approval of Multiple Class Plan
The Board of Trustees of the Trust, including a
majority of the independent Trustees, must approve the Plan
initially. In addition, the Board must approve any material
changes to the classes and the Plan prior to their
implementation. The Board must find that the Plan is in the best
interests of each class individually and the Trust as a whole.
In making its findings, the Board should focus on, among other
things, the relationships among the classes and examine potential
conflicts of interest among classes regarding the allocation of
fees, services, waivers and reimbursements of expenses, and
voting rights. Most significantly, the Board should evaluate the
level of services provided to each class and the cost of those
services to ensure that the services are appropriate and that the
allocation of expenses is reasonable. In accordance with the
foregoing provisions of this Section II, the Board of the Trust
has approved and adopted this Plan as of the date written above.
III. Calculation of Dividends
Because of the differences in fees paid under a Rule 12b-1
Plan and Shareholder Services Plan and the special allocation of
Class Expenses among the classes of shares of the Portfolios, the
dividends payable to shareholders of a class will differ from the
dividends payable to shareholders of the other class or classes
of that Portfolio. Dividends paid to each class of shares in the
Trust will, however, be declared and paid at the same time and,
except for the differences in expenses listed above, will be
determined in the same manner and paid in the same amounts per
outstanding shares.
IV. Expense Allocations
The methodology and procedures for calculating the net
asset value and dividends and distributions of the various
classes of shares and the proper allocation of income and
expenses among the various classes of shares are set forth in the
Memorandum (together with exhibits) of Richard F. West,
Treasurer, dated November 24, 1995, revised September 1, 1997 and
entitled "Methodologies Used In Accounting For Multiple Class
Shares."
Dated September [18], 1999
