1933 Act File No. 2-10415
1940 Act File No. 811-1
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. 87 .......... X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 28 ......................... X
STOCK AND BOND FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
x on December 31, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485.
-----------------
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a declaration
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and:
x filed the Notice required by that Rule on December 15, 1995; or
intends to file the Notice required by that Rule on or about ;
------------
or
during the most recent fiscal year did not sell any securities pursuant to
Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Matthew J. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of STOCK AND BOND FUND, INC.
is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page...............Cover Page.
Item 2. Synopsis.................Not applicable.
Item 3. Condensed Financial
Information.............Summary of Fund Expenses; Financial
Highlights; Financial Highlights - Class C
Shares; Performance Information.
Item 4. General Description of
Registrant..............General Information; Investment
Information; Investment Objectives;
Investment Policies; Investment
Limitations.
Item 5. Management of the Fund...Fund Information; Management of the Fund;
Distribution of Fund Shares; Administration
of the Fund; Brokerage Transactions.
Item 6. Capital Stock and Other
Securities..............Dividends; Capital Gains; Shareholder
Information; Voting Rights; Tax
Information; Federal Income Tax; State and
Local Taxes.
Item 7. Purchase of Securities Being
Offered.................Investing in the Fund; Share Purchases;
Minimum Investment Required; What Shares
Cost; Subaccounting Services; Certificates
and Confirmations; Net Asset Value;
Retirement Plans.
Item 8. Redemption or Repurchase.Redeeming Shares; Telephone Redemption;
Written Requests; Accounts with Low
Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page............... Cover Page.
Item 11. Table of Contents........ Table of Contents.
Item 12. General Information and
History.................General Information About the Fund; About
Federated Investors.
Item 13. Investment Objectives and
Policies................Investment Objectives and Policies;
Investment Limitations.
Item 14. Management of the Fund...Stock and Bond Fund, Inc. Management.
Item 15. Control Persons and Principal
Holders of Securities...Fund Ownership.
Item 16. Investment Advisory and Other
Services................Investment Advisory Services; Other
Services; Shareholder Services Agreement.
Item 17. Brokerage Allocation.....Brokerage Transactions.
Item 18. Capital Stock and Other
Securities..............Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered...........Purchasing Shares; Determining Net Asset
Value; Redeeming Shares.
Item 20 Tax Status...............Tax Status.
Item 21. Underwriters.............Not Applicable.
Item 22. Calculation of Performance
Data....................Total Return; Yield; Performance
Comparisons.
Item 23. Financial Statements.....Filed in Part A.
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STOCK AND BOND FUND, INC.
PROSPECTUS
The shares offered by this prospectus represent interests in an open-end,
diversified management investment company (a mutual fund) known as Stock and
Bond Fund, Inc. (the "Fund").
The investment objectives of the Fund are to provide relative safety of capital
with the possibility of long-term growth of capital and income. Consideration is
also given to current income. The Fund pursues these objectives by investing in
a professionally managed, diversified portfolio of common and preferred stocks
and other equity securities, bonds, notes, and short-term obligations.
This prospectus contains the information you should read and know before you
invest in Stock and Bond Fund, Inc. Keep this prospectus for future reference.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
The Fund has also filed a Statement of Additional Information dated December 31,
1995, with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference into this
prospectus. You may request a copy of the Statement of Additional Information or
a paper copy of this prospectus if you have received your prospectus
electronically, free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 6
FUND INFORMATION 7
- --------------------------------------------------
Management Of The Fund 7
Distribution Of Fund Shares 8
Administration Of The Fund 9
BROKERAGE TRANSACTIONS 10
- --------------------------------------------------
NET ASSET VALUE 10
- --------------------------------------------------
INVESTING IN THE FUND 10
- --------------------------------------------------
Share Purchases 10
Minimum Investment Required 11
What Shares Cost 11
Subaccounting Services 11
Certificates And Confirmations 11
Dividends 11
Capital Gains 12
Retirement Plans 12
REDEEMING SHARES 12
- --------------------------------------------------
Telephone Redemption 12
Written Requests 12
Accounts With Low Balances 13
SHAREHOLDER INFORMATION 13
- --------------------------------------------------
Voting Rights 13
TAX INFORMATION 14
- --------------------------------------------------
Federal Income Tax 14
State and Local Taxes 14
PERFORMANCE INFORMATION 14
- --------------------------------------------------
FINANCIAL HIGHLIGHTS--CLASS C SHARES 15
- --------------------------------------------------
FINANCIAL STATEMENTS 16
- --------------------------------------------------
INDEPENDENT AUDITORS' REPORT 31
- --------------------------------------------------
ADDRESSES 32
- --------------------------------------------------
</TABLE>
I
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price).................... None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering price)......... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or redemption
proceeds, as applicable)....................................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)............................... None
Exchange Fee..................................................................................... None
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)................................................................ 0.60%
12b-1 Fee........................................................................................ None
Total Other Expenses............................................................................. 0.47%
Shareholder Services Fee (after waiver) (2)......................................... 0.11%
Total Fund Operating Expenses (3)........................................................ 1.07%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.55% of average daily net assets plus 4.50% of gross income, excluding
capital gains or losses.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 1.38% absent the voluntary
waivers of a portion of the management fee and a portion of the shareholder
services fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Fund Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period................................................. $11 $34 $59 $131
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1
STOCK AND BOND FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 31.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(a)
- ---------------------------------------- --------- ---------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.25 $ 16.87 $ 15.91 $ 15.74 $ 13.60 $ 15.11
- ----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------
Net investment income 0.63 0.51 0.55 0.65 0.74 1.37
- ----------------------------------------
Net realized and unrealized gain
(loss) on investments 2.21 (0.59) 1.58 0.39 2.17 (2.22)
- ---------------------------------------- --------- ---------- --------- -------- -------- ---------
Total from investment operations 2.84 (0.08) 2.13 1.04 2.91 (0.85)
- ---------------------------------------- --------- ---------- --------- -------- -------- ---------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.62) (0.54) (0.56) (0.68) (0.77) (0.66)
- ----------------------------------------
Distributions from net realized gain
on investment transactions (0.09) -- (0.61) (0.19) -- --
- ---------------------------------------- --------- ---------- --------- -------- -------- ---------
Total distributions (0.71) (0.54) (1.17) (0.87) (0.77) (0.66)
- ---------------------------------------- --------- ---------- --------- -------- -------- ---------
Net asset value, end of period $ 18.38 $ 16.25 $ 16.87 $ 15.91 $ 15.74 $ 13.60
- ---------------------------------------- --------- ---------- --------- -------- -------- ---------
--------- ---------- --------- -------- -------- ---------
TOTAL RETURN (b) 17.99% (0.48%) 14.10% 7.94% 21.78% (5.90%)
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 1.07% 1.06% 1.04% 1.04% 1.01% 1.01%*
- ----------------------------------------
Net investment income 3.71% 3.23% 3.49% 4.15% 4.91% 5.77%*
- ----------------------------------------
Expense waiver/reimbursement (c) 0.31% 0.07% 0.20% 0.21% 0.45% 0.54%*
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period (000
omitted) $134,669 $125,382 $124,583 $95,387 $88,534 $79,003
- ----------------------------------------
Portfolio turnover 68% 45% 51% 43% 72% 49%
- ----------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1989 1988 1987 1986 1985
- ---------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.94 $ 14.89 $ 15.34 $ 15.24 $ 13.60
- ----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------
Net investment income 0.91 0.85 0.81 0.85 0.90
- ----------------------------------------
Net realized and unrealized gain
(loss) on investments 0.91 0.52 (0.24) 1.17 2.18
- ---------------------------------------- -------- -------- -------- -------- --------
Total from investment operations 1.82 1.37 0.57 2.02 3.08
- ---------------------------------------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS
- ----------------------------------------
Distributions from net investment
income (0.94) (0.86) (0.79) (0.86) (0.90)
- ----------------------------------------
Distributions from net realized gain
on investment transactions (0.71) (0.46) (0.23) (1.06) (0.54)
- ---------------------------------------- -------- -------- -------- -------- --------
Total distributions (1.65) (1.32) (1.02) (1.92) (1.44)
- ---------------------------------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 15.11 $ 14.94 $ 14.89 $ 15.34 $ 15.24
- ---------------------------------------- -------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (b) 12.46% 9.28% 3.58% 13.77% 24.09%
- ----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------
Expenses 1.01% 1.00% 1.00% 1.00% 1.30%
- ----------------------------------------
Net investment income 5.82% 5.53% 5.07% 5.43% 6.42%
- ----------------------------------------
Expense waiver/reimbursement (c) 0.51% 0.39% 0.22% 0.30% 0.27%
- ----------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------
Net assets, end of period (000
omitted) $88,367 $90,504 $92,105 $75,441 $37,792
- ----------------------------------------
Portfolio turnover 26% 131% 110% 40% 42%
- ----------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the ten month period ended October 31, 1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Fund was incorporated under the laws of the State of Maryland on October 31,
1934. On April 16, 1993, the Fund's Articles of Incorporation were amended by
Shareholders to permit the Fund to offer separate series of shares representing
interests in separate portfolios of securities. The shares in any one portfolio
may be offered in separate classes. During the fiscal year ended October 31,
1994, the Fund offered Class A and Class C Shares. On August 31, 1994, the Fund
was reorganized to terminate the separate classes of shares.
The Fund is designed for institutions, pension plans, and individuals as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio of common and preferred stocks and other equity
securities, bonds, notes, and short-term obligations. A minimum initial
investment of $25,000 over a 90-day period is required.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
The investment objectives of the Fund are to provide relative safety of capital
with the possibility of long-term growth of capital and income. Consideration is
also given to current income. The Fund pursues these investment objectives by
investing in a professionally managed, diversified portfolio of common and
preferred stocks and other equity securities, bonds, notes, and short-term
obligations. While there is no assurance that the Fund will achieve its
investment objectives, it endeavors to do so by following the investment
policies described in this prospectus. The investment objectives and the
policies and limitations described below cannot be changed without approval of
shareholders, unless otherwise noted.
INVESTMENT POLICIES
As a matter of investment policy, which may be changed without shareholder
approval, under normal circumstances, the Fund will invest at least 65% of its
total assets in stocks and bonds.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in a diversified portfolio
of common stocks, bonds, convertible securities, and preferred stocks which
provide characteristics of stability and relative safety, and marketable
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities. The Fund anticipates that it will experience characteristics
of stability and relative safety by investing primarily in securities of larger,
well-established companies which have a history of lower volatility in earnings
and price fluctuations.
COMMON STOCKS. The common stocks in which the Fund invests are selected by
the Fund's investment adviser on the basis of traditional research
techniques, including assessment of earnings and dividend growth, prospects
and the risk and volatility of the company's industry.
3
However, other factors, such as product position, market share, or
profitability, will also be considered by the Fund's investment adviser.
CONVERTIBLE SECURITIES. Convertible securities are fixed income securities
which may be exchanged or converted into a predetermined number of the
issuer's underlying common stock at the option of the holder during a
specified time period. Convertible securities may take the form of
convertible preferred stock, convertible bonds or debentures, units
consisting of "usable" bonds and warrants, or a combination of the features
of several of these securities. The investment characteristics of each
convertible security vary widely, which allows convertible securities to be
employed for different investment objectives. In selecting convertible
securities for the Fund, the Fund's investment adviser evaluates the
investment potential of the underlying security for capital appreciation.
The convertible securities in which the Fund invests will be rated
"investment grade" or of comparable quality at the time of purchase. See
"Investment-Grade Bonds."
INVESTMENT-GRADE BONDS. The bonds in which the Fund invests will be rated
investment grade (i.e., rated Baa or better by Moody's Investors Service, Inc.,
("Moody's"), BBB or better by Standard & Poor's Ratings Group ("S&P") and Fitch
Investors Service, Inc. ("Fitch"), or, if unrated, deemed to be of comparable
quality) by the Fund's investment adviser. Bonds rated BBB by S&P or Fitch or
Baa by Moody's have speculative characteristics. Changes in economic conditions
or other circumstances are more likely to lead to weakened capacity to make
principal and interest payments than higher rated bonds. If a security's rating
is reduced below the required minimum after the Fund has purchased it, the Fund
is not required to sell the security but may consider doing so. A description of
the rating categories is contained in the Appendix to the Statement of
Additional Information. (The Fund intends to restrict investments to securities
rated investment grade in the current fiscal year. However, the Fund reserves
the right to, in the future, invest in securities rated below investment grade.
The Fund will notify shareholders of such a change in investment policy prior to
its implementation.)
U.S. GOVERNMENT SECURITIES. The U.S. government securities in which the Fund
invests are either issued or guaranteed by the U.S. government, its agencies or
instrumentalities. These securities include, but are not limited to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities such as the: Farm Credit System, including the National
Bank for Cooperatives and Banks for Cooperatives; Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation; Federal National Mortgage
Association; Government National Mortgage Association; Export-Import Bank
of the United States; Commodity Credit Corporation; Federal Financing
Bank; The Student Loan Marketing Association; National Credit Union
Administration; and Tennessee Valley Authority.
The prices of fixed income securities fluctuate inversely to the direction of
interest rates.
Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith
4
and credit of the U.S. Treasury. Others for which no assurances can be given
that the U.S. government will provide financial support to the agencies or
instrumentalities, since it is not obligated to do so, are supported by:
- the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality;
- or the credit of the agency or instrumentality.
FOREIGN ISSUERS. The Fund may invest in the securities of foreign issuers which
are freely traded on United States securities exchanges or in the
over-the-counter market in the form of depositary receipts. The Fund will limit
its investments in non-ADR foreign obligations to less than 5% of its assets.
Securities of a foreign issuer may present greater risks in the form of
nationalization, confiscation, domestic marketability, or other national or
international restrictions. As a matter of practice, the Fund will not invest in
the securities of a foreign issuer if any such risk appears to the investment
adviser to be substantial.
TEMPORARY INVESTMENTS. In such proportions as, in the judgment of its
investment adviser, prevailing market conditions warrant, the Fund may, for
temporary defensive purposes, invest in:
- short-term money market instruments;
- securities issued and/or guaranteed as to payment of principal and
interest by the U.S. government, its agencies or instrumentalities; and
- repurchase agreements.
REPURCHASE AGREEMENTS. Repurchase agreements are arrangements in which
banks, broker/ dealers, and other recognized financial institutions sell
U.S. government securities or other securities to the Fund and agree at the
time of sale to repurchase them at a mutually agreed upon time and price.
The Fund or its custodian will take possession of the securities subject to
repurchase agreements and these securities will be marked to market daily.
To the extent that the original seller does not repurchase the securities
from the Fund, the Fund could receive less than the repurchase price on any
sale of such securities. In the event that such a defaulting seller filed
for bankruptcy or became insolvent, disposition of such securities by the
Fund might be delayed pending court action. The Fund believes that under the
regular procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or
disposition of such securities. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions, such as
broker/dealers, which are found by the Fund's adviser to be creditworthy.
RESTRICTED AND ILLIQUID SECURITIES. As a matter of investment policy, which may
be changed without shareholder approval, the Fund may invest up to 10% of its
total assets in restricted securities. This restriction is not applicable to
commercial paper issued under Section 4(2) of the
5
Securities Act of 1933. Restricted securities are any securities in which the
Fund may otherwise invest pursuant to its investment objectives and policies,
but which are subject to restriction on resale under federal securities law. The
Fund will limit investments in illiquid securities, including certain restricted
securities not determined by the Board of Directors ("Directors") to be liquid,
non-negotiable time deposits, and repurchase agreements providing for settlement
in more than seven days after notice, to 15% of its net assets.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend portfolio securities on a short-term or a long-term basis to
broker/dealers, banks, or other institutional borrowers of securities. The Fund
will only enter into loan arrangements with broker/dealers, banks, or other
institutions which the investment adviser has determined are creditworthy under
guidelines established by the Fund's Directors and will receive collateral in
the form of cash or U.S. government securities equal to at least 100% of the
value of the securities loaned.
There is the risk that when lending portfolio securities, the securities may not
be available to the Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more/less than the market value of the securities
on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
INVESTMENT LIMITATIONS
The Fund will not:
- borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a portfolio instrument for at least
a percentage of its cash value with an agreement to buy it back on a set
date) except, under certain circumstances, the Fund may borrow up to
one-third of the value of its net assets;
- invest more than 5% of its total assets in securities of one issuer
(except U.S. government securities);
- invest in more than 10% of the voting securities of one issuer;
- invest in more than 10% of any class of securities of one issuer;
6
- invest more than 5% of its total assets in securities of issuers that have
records of less than three years of continuous operations; or
- invest more than 5% of its assets in warrants, except under certain
circumstances.
FUND INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
BOARD OF DIRECTORS. The Fund is managed by a Board of Directors. The Directors
are responsible for managing the Fund's business affairs and for exercising all
the Fund's powers except those reserved for the shareholders. An Executive
Committee of the Board of Directors handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Directors. The adviser continually conducts investment research and supervision
for the Fund and is responsible for the purchase or sale of portfolio
instruments, for which it receives an annual fee from the Fund.
ADVISORY FEES. The Fund's adviser receives an annual investment advisory fee
equal to 0.55 of 1% of the Fund's average daily net assets, plus 4.5% of the
Fund's annual gross income, excluding any capital gains or losses. Gross
income includes interest accrued, including discount earned on U.S. Treasury
bills and agency discount notes, interest received or receivable on all
interest-bearing obligations, and dividend income. The adviser may
voluntarily choose to waive a portion of its fee or reimburse the Fund for
certain operating expenses. The adviser can terminate this voluntary waiver
of its advisory fee at any time at its sole discretion. This does not
include reimbursement to the Fund of any expenses incurred by shareholders
who use the transfer agent's subaccounting facilities. The adviser has also
undertaken to reimburse the Fund for operating expenses in excess of
limitations established by certain states.
Both the Fund and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interests. Among other things, the codes: require preclearance
and periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Directors and could
result in severe penalties.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
7
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $72 billion invested across more
than 260 funds under management and/or administration by its subsidiaries,
as of December 31, 1994, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,750
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through 4,000
financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
Joseph M. Balestrino has been the Fund's portfolio manager since October 1,
1994. Mr. Balestrino joined Federated Investors in 1986 and has been a Vice
President of the Fund's investment adviser since 1995. Mr. Balestrino was an
Assistant Vice President of the investment adviser from 1991 until 1995 and
served as an Investment Analyst of the investment adviser from 1989 until
1991. Mr. Balestrino is a Chartered Financial Analyst and received his
Master's Degree in Urban and Regional Planning from the University of
Pittsburgh.
Susan M. Nason has been the Fund's portfolio manager since March 1, 1995.
Ms. Nason joined Federated Investors in 1987 and has been a Vice President
of the Fund's investment adviser since 1993. Ms. Nason served as an
Assistant Vice President of the investment adviser from 1990 until 1992. Ms.
Nason is a Chartered Financial Analyst and received her M.B.A. in Finance
from Carnegie Mellon University.
Peter R. Anderson has been the Fund's portfolio manager since September,
1995. Mr. Anderson joined Federated Investors in 1972 as, and is presently,
a Senior Vice President of the Fund's investment adviser. Mr. Anderson is a
Chartered Financial Analyst and received his M.B.A. in Finance from the
University of Wisconsin.
Timothy E. Keefe has been the Fund's portfolio manager since September,
1995. Mr. Keefe joined Federated Investors in 1987 and has been an Assistant
Vice President of the Fund's investment adviser since 1993. Mr. Keefe served
as an Investment Analyst of the investment adviser from 1991 until 1993, and
from 1987 until 1991, he acted as a Marketing Representative in the Broker
Dealer Department. Mr. Keefe is a Chartered Financial Analyst and received
his M.B.A. in Business Administration from the University of Pittsburgh.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for shares. Federated
Securities Corp. is located at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. It is a Pennsylvania corporation organized on November
14, 1969, and is the principal distributor for a number of investment companies.
Federated Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may make payments up to 0.25 of 1.00% of the
average daily net asset value of the Fund to obtain certain personal services
for shareholders and to maintain shareholder accounts. Under the Shareholder
Services Agreement, Federated Shareholder Services will either perform
shareholder services directly
8
or will select financial institutions to perform shareholder services. From time
to time and for such periods as deemed appropriate, the amount stated above may
be reduced voluntarily. Under the Shareholder Services Agreement, Federated
Shareholder Services will either perform shareholder services directly or will
select financial institutions to perform shareholder services. Financial
institutions will receive fees based upon shares owned by their clients or
customers. The schedules of such fees and the basis upon which fees will be paid
will be determined from time to time by the Fund and Federated Shareholder
Services.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to payments made
pursuant to the Shareholder Services Agreement, Federated Securities Corp. and
Federated Shareholder Services, from their own assets, may pay financial
institutions supplemental fees for the performance of substantial sales
services, distribution-related support services, or shareholder services. The
support may include sponsoring sales, educational and training seminars at
recreational-type facilities for their employees, providing sales literature and
engineering computer software programs that emphasize the attributes of the
Fund. Such assistance will be predicated upon the amount of shares the financial
institution sells or may sell, and/or upon the type and nature of sales or
marketing support furnished by the financial institution. Any payments made by
the distributor may be reimbursed by the Fund's adviser or its affiliates.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate which relates
to the average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors ("Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE FEDERATED FUNDS
------------------ -----------------------------------
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company, ("State Street Bank") Boston,
Massachusetts is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, Massachusetts is transfer agent and dividend disbursing agent for the
Fund.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Deloitte &
Touche LLP, 2500 One PPG Place, Pittsburgh, Pennsylvania 15222-5401.
9
BROKERAGE TRANSACTIONS
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. In selecting among firms
believed to meet these criteria, the adviser may give consideration to those
firms which have sold or are selling shares of the Fund and other funds
distributed by Federated Securities Corp. The adviser makes decisions on
portfolio transactions and selects brokers and dealers subject to review by the
Directors.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets of the Fund, less
liabilities, by the number of shares outstanding.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is open. Shares may
be purchased either by wire or mail.
To purchase shares, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken over the telephone.
The Fund reserves the right to reject any purchase request.
BY WIRE. To purchase shares by Federal Reserve Wire, call the Fund to place an
order. The order is considered received immediately. Payment by federal funds
must be received before 3:00 p.m. (Eastern time) on the next business day
following the order. Federal funds should be wired as follows: Federated
Services Company c/o State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Stock and Bond Fund, Inc.; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
Number or Order Number; Nominee or Institution Name; and ABA #011000028. Shares
cannot be purchased by wire on holidays when wire transfers are restricted.
Questions on wire purchases should be directed to your shareholder services
representative at the telephone number listed on your account statement.
BY MAIL. To purchase shares by mail, send a check made payable to Stock and
Bond Fund, Inc. to: Federated Services Company, P.O. Box 8600, Boston,
Massachusetts 02266-8600. Orders by mail are considered received after payment
by check is converted into federal funds. This is generally the next business
day after the check is received.
10
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $25,000 plus any non-affiliated
bank or broker's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. An
institutional investor's minimum investment will be calculated by combining all
accounts it maintains with the Fund. Accounts established through a non-
affiliated bank or broker may be subject to a smaller minimum investment.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. Investors who purchase
shares through a non-affiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday through Friday,
except on: (i) days on which there are not sufficient changes in the value of
the Fund's portfolio securities that its net asset value might be materially
affected; (ii) days during which no shares are tendered for redemption and no
orders to purchase shares are received; and (iii) the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
shares in a fiduciary, agency, custodial, or similar capacity may charge or pass
through subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which may be
related to the ownership of shares. This prospectus should, therefore, be read
together with any agreement between the customer and the institution with regard
to the services provided, the fees charged for those services, and any
restrictions and limitations imposed. State securities laws may require certain
financial institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the transfer agent.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Quarterly confirmations are sent to report dividends paid during
that quarter.
DIVIDENDS
Dividends are declared and paid quarterly to all shareholders invested in the
Fund on the record date. Unless shareholders request cash payments by writing to
the Fund, dividends are automatically reinvested in additional shares on payment
dates at the ex-dividend date net asset value without a sales charge. All
shareholders on the record date are entitled to the dividend. If shares are
redeemed
11
or exchanged prior to the record date or purchased after the record date, those
shares are not entitled to that quarter's dividend.
CAPITAL GAINS
Capital gains realized by the Fund, if any, will be distributed at least once
every twelve months.
RETIREMENT PLANS
Shares of the Fund can be purchased as an investment for retirement plans or for
IRA accounts. For further details, contact Federated Securities Corp., and
consult a tax adviser.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their shares by telephoning the Fund before 4:00 p.m.
(Eastern time). The proceeds will normally be wired the following business day,
but in no event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. Proceeds from
redemption requests received on holidays when wire transfers are restricted will
be wired the following business day. Questions about telephone redemptions on
days when wire transfers are restricted should be directed to your shareholder
services representative at the telephone number listed on your account
statement. If at any time, the Fund shall determine it necessary to terminate or
modify this method of redemption, shareholders would be promptly notified.
An authorization form permitting the transfer agent or the Fund to accept
telephone requests must first be completed. Authorization forms and information
on this service are available from Federated Securities Corp. Telephone
redemption instructions may be recorded. If reasonable procedures are not
followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund name, the account number,
and the share or dollar amount requested. If Share certificates have been
issued, they should be sent unendorsed with the written request by registered or
certified mail to: Federated Services Company, P.O. Box 8600, Boston,
Massachusetts 02266-8600.
12
SIGNATURES. Shareholders requesting a redemption of any amount to be sent to an
address other than that on record with the Fund, or a redemption payable other
than to the shareholder of record must have signatures on written redemption
requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934, as amended.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share gives the shareholder one vote in Director elections and other
matters submitted to shareholders for vote. All shares of each portfolio or
class in the Fund have equal voting rights, except that only shares of that
particular portfolio or class are entitled to vote in matters affecting that
portfolio or class.
As a Maryland corporation, the Fund is not required to hold annual shareholder
meetings. Shareholder approval will be sought only for certain changes in the
Fund's operation and for the election of Directors under certain circumstances.
13
Directors may be removed by the Directors or by shareholders at a special
meeting. A special meeting of shareholders shall be called by the Directors upon
the written request of shareholders owning at least 25% of the Fund's
outstanding shares entitled to vote.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional shares. Distributions representing long-term capital gains, if
any, will be taxable to shareholders as long-term capital gains no matter how
long the shareholders have held the shares. No federal income tax is due on any
dividends earned in an IRA or qualified retirement plan until distributed.
STATE AND LOCAL TAXES
Fund shares are exempt from personal property taxes imposed by counties,
municipalities and school districts in Pennsylvania.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises the total return and yield for shares.
Total return represents the change, over a specific period of time, in the value
of an investment in shares after reinvesting all income and capital gain
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by shares
over a thirty-day period by the maximum offering price per share of shares on
the last day of the period. This number is then annualized using semi-annual
compounding. The yield does not necessarily reflect income actually earned by
shares and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
The Fund is sold without a sales charge or other similar non-recurring charges.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
14
STOCK AND BOND FUND, INC.
FINANCIAL HIGHLIGHTS--CLASS C SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Independent Auditors' Report on page 31.
<TABLE>
<CAPTION>
PERIOD ENDED PERIOD ENDED
AUGUST 31, OCTOBER 31,
1994(a) 1993(b)
- -------------------------------------------------------- ------------ ------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.84 $16.18
- --------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------
Net investment income 0.23 0.38
- --------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.26) 0.48
- -------------------------------------------------------- ------ ------
Total from investment operations (0.03) 0.86
- -------------------------------------------------------- ------ ------
LESS DISTRIBUTIONS
- --------------------------------------------------------
Distributions from net investment income (0.40) (0.20)
- -------------------------------------------------------- ------ ------
Net asset value, end of period $16.41 $16.84
- -------------------------------------------------------- ------ ------
------ ------
TOTAL RETURN (c) 0.17% 5.54%
- --------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------
Expenses 1.95%* 2.04%*
- --------------------------------------------------------
Net investment income 2.38%* 2.01%*
- --------------------------------------------------------
Expense waiver/reimbursement (d) -- 0.20%*
- --------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------
Net assets, end of period (000 omitted) $ 573 $ 96
- --------------------------------------------------------
Portfolio turnover 45% 51%
- --------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from November 1, 1993 to August 31, 1994
(date share class ceased operations).
(b) Reflects operations for the period from April 19, 1993 (Start of
performance) to October 31, 1993.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
15
STOCK AND BOND FUND, INC.
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--41.6%
- -------------------------------------------------------------------------
CONSUMER DURABLES--2.1%
-------------------------------------------------------
16,200 Eastman Kodak Co. $ 1,014,525
-------------------------------------------------------
33,500 Mattel, Inc. 963,125
-------------------------------------------------------
37,600 Volvo, ADR 855,400
------------------------------------------------------- ------------
Total 2,833,050
------------------------------------------------------- ------------
CONSUMER NON-DURABLES--3.7%
-------------------------------------------------------
14,100 Avon Products, Inc. 1,002,863
-------------------------------------------------------
21,200 IBP, Inc. 1,269,350
-------------------------------------------------------
19,700 Philip Morris Cos., Inc. 1,664,650
-------------------------------------------------------
8,100 RJR Nabisco Holdings Corp. 249,075
-------------------------------------------------------
24,100 Reebok International Ltd. 819,400
------------------------------------------------------- ------------
Total 5,005,338
------------------------------------------------------- ------------
CONSUMER SERVICES--0.4%
-------------------------------------------------------
9,800 Gannett Co., Inc. 532,875
------------------------------------------------------- ------------
ELECTRONIC TECHNOLOGY--5.4%
-------------------------------------------------------
14,600 Hewlett-Packard Co. 1,352,325
-------------------------------------------------------
15,500 Intel Corp. 1,083,062
-------------------------------------------------------
10,000 International Business Machines Corp. 972,500
-------------------------------------------------------
15,100 (a) Litton Industries, Inc. 598,338
-------------------------------------------------------
22,900 Lockheed Martin Corp. 1,560,063
-------------------------------------------------------
14,800 Raytheon Co. 645,650
-------------------------------------------------------
25,400 Rockwell International Corp. 1,130,300
------------------------------------------------------- ------------
Total 7,342,238
------------------------------------------------------- ------------
</TABLE>
16
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------
ENERGY MINERALS--2.7%
-------------------------------------------------------
21,700 Chevron Corp. $ 1,014,475
-------------------------------------------------------
12,100 Exxon Corp. 924,137
-------------------------------------------------------
27,600 Occidental Petroleum Corp. 593,400
-------------------------------------------------------
15,200 Texaco, Inc. 1,035,500
------------------------------------------------------- ------------
Total 3,567,512
------------------------------------------------------- ------------
FINANCE--8.1%
-------------------------------------------------------
27,749 Allstate Corp. 1,019,776
-------------------------------------------------------
14,900 American Express Co. 605,313
-------------------------------------------------------
20,800 Bank of Boston Corp. 925,600
-------------------------------------------------------
10,200 CIGNA Corp. 1,011,075
-------------------------------------------------------
15,000 Chemical Banking Corp. 853,125
-------------------------------------------------------
22,200 Citicorp 1,440,225
-------------------------------------------------------
18,714 Dean Witter, Discover & Co. 931,021
-------------------------------------------------------
8,400 First Interstate Bancorp 1,083,600
-------------------------------------------------------
26,600 Mellon Bank Corp. 1,333,325
-------------------------------------------------------
18,000 Providian Corp. 706,500
-------------------------------------------------------
18,866 Travelers Group, Inc. 952,733
------------------------------------------------------- ------------
Total 10,862,293
------------------------------------------------------- ------------
HEALTH SERVICES--0.5%
-------------------------------------------------------
12,800 Smithkline Beecham Corp., ADR 664,000
------------------------------------------------------- ------------
HEALTH TECHNOLOGY--3.4%
-------------------------------------------------------
11,900 American Home Products Corp. 1,054,638
-------------------------------------------------------
18,900 Becton, Dickinson & Co. 1,228,500
-------------------------------------------------------
18,800 Bristol-Myers Squibb Co. 1,433,500
-------------------------------------------------------
</TABLE>
17
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
-------------------------------------------------------
16,000 Merck & Co., Inc. $ 920,000
------------------------------------------------------- ------------
Total 4,636,638
------------------------------------------------------- ------------
INDUSTRIAL SERVICES--0.8%
-------------------------------------------------------
26,600 Baker Hughes, Inc. 522,025
-------------------------------------------------------
13,000 (a) Western Atlas, Inc. 570,375
------------------------------------------------------- ------------
Total 1,092,400
------------------------------------------------------- ------------
NON-ENERGY MINERALS--1.5%
-------------------------------------------------------
16,400 Aluminum Co. of America 836,400
-------------------------------------------------------
19,200 Phelps Dodge Corp. 1,216,800
------------------------------------------------------- ------------
Total 2,053,200
------------------------------------------------------- ------------
PROCESS INDUSTRIES--2.0%
-------------------------------------------------------
15,800 Du Pont (E.I.) de Nemours & Co. 985,525
-------------------------------------------------------
12,700 Eastman Chemical Co. 755,650
-------------------------------------------------------
34,300 Praxair, Inc. 926,100
------------------------------------------------------- ------------
Total 2,667,275
------------------------------------------------------- ------------
PRODUCER MANUFACTURING--5.0%
-------------------------------------------------------
17,300 (a) FMC Corp. 1,239,112
-------------------------------------------------------
21,200 General Electric Co. 1,340,900
-------------------------------------------------------
7,400 ITT Corp. 906,500
-------------------------------------------------------
7,900 Loews Corp. 1,158,338
-------------------------------------------------------
15,400 Philips Electronics N.V., ADR 594,825
-------------------------------------------------------
22,100 Textron, Inc. 1,519,375
------------------------------------------------------- ------------
Total 6,759,050
------------------------------------------------------- ------------
RETAIL TRADE--1.3%
-------------------------------------------------------
24,100 American Stores Co. 719,988
-------------------------------------------------------
</TABLE>
18
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
-------------------------------------------------------
29,900 Sears, Roebuck & Co. $ 1,016,600
------------------------------------------------------- ------------
Total 1,736,588
------------------------------------------------------- ------------
TECHNOLOGY SERVICES--1.1%
-------------------------------------------------------
5,000 (a) DST Systems, Inc. 105,000
-------------------------------------------------------
28,100 General Motors Corp., Class E 1,324,212
------------------------------------------------------- ------------
Total 1,429,212
------------------------------------------------------- ------------
TRANSPORTATION--0.4%
-------------------------------------------------------
8,100 Consolidated Rail Corp. 556,875
------------------------------------------------------- ------------
UTILITIES--3.2%
-------------------------------------------------------
23,500 AT&T Corp. 1,504,000
-------------------------------------------------------
8,500 CMS Energy Corp. 234,812
-------------------------------------------------------
13,900 (a) Columbia Gas System, Inc. 535,150
-------------------------------------------------------
15,700 Enron Corp. 539,687
-------------------------------------------------------
14,800 FPL Group, Inc. 619,750
-------------------------------------------------------
36,000 MCI Communications Corp. 897,750
------------------------------------------------------- ------------
Total 4,331,149
------------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $43,015,880) 56,069,693
------------------------------------------------------- ------------
------------
PREFERRED STOCKS--4.3%
- -------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.0%
-------------------------------------------------------
203,800 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 1,273,750
------------------------------------------------------- ------------
FINANCE--1.6%
-------------------------------------------------------
29,000 Merrill Lynch & Co., MTG, Inc., STRYPES, Series MGIC,
$3.12 1,562,375
-------------------------------------------------------
9,700 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 601,400
------------------------------------------------------- ------------
Total 2,163,775
------------------------------------------------------- ------------
</TABLE>
19
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
PREFERRED STOCKS--CONTINUED
- -------------------------------------------------------------------------
PRODUCER MANUFACTURING--1.7%
-------------------------------------------------------
168,200 Westinghouse Electric Corp., PEPS, Series C, $1.30 $ 2,350,931
------------------------------------------------------- ------------
TOTAL PREFERRED STOCKS (IDENTIFIED COST $6,233,439) 5,788,456
------------------------------------------------------- ------------
------------
CORPORATE BONDS--13.9%
- -------------------------------------------------------------------------
CONSUMER DURABLES--1.1%
-------------------------------------------------------
$ 1,000,000 Chrysler Auburn Hills, Deb., 12.00%, 5/1/2020 1,504,770
------------------------------------------------------- ------------
CONSUMER NON-DURABLES--0.9%
-------------------------------------------------------
1,281,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 1,244,620
------------------------------------------------------- ------------
EDUCATION--0.8%
-------------------------------------------------------
1,000,000 Harvard University, Deb., 8.125%, 4/15/2007 1,126,680
------------------------------------------------------- ------------
ENERGY MINERALS--1.5%
-------------------------------------------------------
1,000,000 Exxon Capital Corp., Deb., 7.875%, 4/15/1996 1,009,460
-------------------------------------------------------
1,000,000 Occidental Petroleum Corp., Sr. Note, 11.75%, 3/15/2011 1,070,350
------------------------------------------------------- ------------
Total 2,079,810
------------------------------------------------------- ------------
FINANCE--5.8%
-------------------------------------------------------
1,000,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 1,099,910
-------------------------------------------------------
1,250,000 CNA Financial Corp., Deb., 7.25%, 11/15/2023 1,187,300
-------------------------------------------------------
1,300,000 Equitable Cos., Inc., Sr. Note, 9.00%, 12/15/2004 1,488,526
-------------------------------------------------------
1,000,000 Ford Motor Credit Co., Note, 6.85%, 8/15/2000 1,021,140
-------------------------------------------------------
1,000,000 Lehman Brothers Holdings, Inc., Note, 5.04%, 12/15/1996 986,090
-------------------------------------------------------
1,000,000 Norwest Financial, Inc., Note, 6.23%, 9/1/1998 1,006,490
-------------------------------------------------------
1,000,000 Santander Finance Issuance, Bank Guarantee, 7.875%,
4/15/2005 1,070,110
------------------------------------------------------- ------------
Total 7,859,566
------------------------------------------------------- ------------
HEALTH SERVICES--0.9%
-------------------------------------------------------
1,000,000 Columbia/HCA Healthcare Corp., Note, 9.00%, 12/15/2014 1,193,430
------------------------------------------------------- ------------
</TABLE>
20
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
- -------------------------------------------------------------------------
PRODUCER MANUFACTURING--0.8%
-------------------------------------------------------
$ 1,000,000 General Electric Co., Deb., 7.875%, 5/1/1996 $ 1,009,700
------------------------------------------------------- ------------
RETAIL TRADE--0.8%
-------------------------------------------------------
1,000,000 Penney (J.C.) Co., Inc., Deb., 9.45%, 7/15/2002 1,125,790
------------------------------------------------------- ------------
SOVEREIGN GOVERNMENT--0.5%
-------------------------------------------------------
500,000 Kingdom of Sweden, Deb., 10.25%, 11/1/2015 652,210
------------------------------------------------------- ------------
UTILITIES--0.8%
-------------------------------------------------------
1,000,000 Michigan Bell Telephone Co., Deb., 7.85%, 1/15/2022 1,108,830
------------------------------------------------------- ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $22,777,371) 18,905,406
------------------------------------------------------- ------------
------------
COLLATERALIZED MORTGAGE OBLIGATIONS--0.7%
- -------------------------------------------------------------------------
1,000,000 Prudential Home Mortgage Security 1993-32, Class A-6,
7.50%, 10/25/2022 996,950
------------------------------------------------------- ------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(IDENTIFIED COST $957,500) 996,950
------------------------------------------------------- ------------
------------
GOVERNMENT OBLIGATIONS--21.7 %
- -------------------------------------------------------------------------
GOVERNMENT AGENCIES SECURITIES--1.7%
-------------------------------------------------------
500,000 Federal Home Loan Bank System, Deb., 4.21%, 1/15/1998 472,460
-------------------------------------------------------
1,500,000 Federal Home Loan Mortgage Corp., Deb., 4.13%,
3/25/1996 1,488,105
-------------------------------------------------------
350,000 Federal National Mortgage Association, 5.86%, 6/1/1998 347,994
------------------------------------------------------- ------------
Total 2,308,559
------------------------------------------------------- ------------
MORTGAGE-BACKED SECURITIES--5.8%
-------------------------------------------------------
1,376,866 Federal Home Loan Mortgage Corp., Pool G50030, 8.50%,
8/1/1996 1,387,606
-------------------------------------------------------
183,621 Federal Home Loan Mortgage Corp., Pool M10771, 8.50%,
4/1/1996 185,053
-------------------------------------------------------
178,066 Federal Home Loan Mortgage Corp., Pool M10914, 8.50%,
5/1/1996 179,454
-------------------------------------------------------
190,312 Federal Home Loan Mortgage Corp., Pool M10975, 8.50%,
5/1/1996 191,796
-------------------------------------------------------
130,307 Federal Home Loan Mortgage Corp., Pool M11105, 8.50%,
6/1/1996 131,323
-------------------------------------------------------
100,063 Federal Home Loan Mortgage Corp., Pool M11145, 8.50%,
5/1/1996 100,843
-------------------------------------------------------
</TABLE>
21
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
GOVERNMENT OBLIGATIONS--CONTINUED
- -------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
-------------------------------------------------------
$ 12,791 Federal Home Loan Mortgage Corp., Pool M11179, 8.50%,
6/1/1996 $ 12,891
-------------------------------------------------------
365,551 Federal Home Loan Mortgage Corp., Pool M11243, 8.50%,
7/1/1996 368,403
-------------------------------------------------------
63,857 Federal Home Loan Mortgage Corp., Pool M11318, 8.50%,
7/1/1996 64,355
-------------------------------------------------------
7,278 Federal Home Loan Mortgage Corp., Pool M19004, 8.50%,
5/1/1997 7,335
-------------------------------------------------------
137,079 Federal Home Loan Mortgage Corp., Pool M90043, 8.50%,
4/1/1996 138,148
-------------------------------------------------------
108,107 Federal Home Loan Mortgage Corp., Pool M90048, 8.50%,
5/1/1996 108,950
-------------------------------------------------------
647,233 Federal National Mortgage Association, Pool 124009,
9.00%, 11/1/2021 676,352
-------------------------------------------------------
902,775 Federal National Mortgage Association, Pool 50659,
7.00%, 11/1/2007 895,427
-------------------------------------------------------
37,065 Federal National Mortgage Association, Pool 50796,
7.50%, 9/1/2023 37,470
-------------------------------------------------------
433,038 Government National Mortgage Association, Pool 299165,
9.50%, 12/15/2020 462,532
-------------------------------------------------------
936,003 Government National Mortgage Association, Pool 369457,
8.00%, 9/15/2024 963,484
-------------------------------------------------------
996,068 Government National Mortgage Association, Pool 385622,
6.50%, 5/15/2024 968,348
-------------------------------------------------------
861,076 Government National Mortgage Association, Pool 392923,
9.50%, 2/15/2025 919,724
------------------------------------------------------- ------------
Total 7,799,494
------------------------------------------------------- ------------
TREASURY SECURITIES--14.2%
-------------------------------------------------------
4,000,000 United States Treasury Bond, 11.625%, 11/15/2004 5,534,080
-------------------------------------------------------
3,540,000 United States Treasury Bond, 7.25%, 5/15/2016 3,882,884
-------------------------------------------------------
6,460,000 United States Treasury Bond, 8.875%, 2/15/2019 8,349,550
-------------------------------------------------------
1,070,000 United States Treasury Bond, 9.375%, 2/15/2006 1,337,532
------------------------------------------------------- ------------
Total 19,104,046
------------------------------------------------------- ------------
TOTAL GOVERNMENT OBLIGATIONS (IDENTIFIED COST
$21,385,708) 29,212,099
------------------------------------------------------- ------------
------------
</TABLE>
22
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------- ------------------------------------------------------- ------------
<C> <S> <C>
(b)REPURCHASE AGREEMENT--16.3%
- -------------------------------------------------------------------------
$21,975,000 J.P. Morgan Securities, Inc., 5.90%, dated 10/31/1995,
due 11/1/1995 (at amortized cost) $ 21,975,000
------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $116,344,898)(c) $132,947,604
------------------------------------------------------- ------------
------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $116,344,898.
The net unrealized appreciation of investments on a federal tax basis
amounts to $16,602,706 which is comprised of $17,394,200 appreciation and
$791,494 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($134,668,796) at October 31, 1995.
<TABLE>
<S> <C>
The following acronyms are used throughout this portfolio:
ADR --American Depository Receipt
PEPS --Participating Equity Preferred Stock
STRYPES --Structured Yield Product Exchangeable for Stock
</TABLE>
(See Notes which are an integral part of the Financial Statements)
23
STOCK AND BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ----------------------------------------------------
Investments in repurchase agreement $ 21,975,000
- ----------------------------------------------------
Investments in securities 110,972,604
- ---------------------------------------------------- ------------
Total investments in securities, at value
(identified and tax cost $116,344,898) $132,947,604
- ------------------------------------------------------------------
Income receivable 1,089,338
- ------------------------------------------------------------------
Receivable for investments sold 1,770,297
- ------------------------------------------------------------------
Receivable for shares sold 112,674
- ------------------------------------------------------------------
Prepaid expenses 7,392
- ------------------------------------------------------------------ ------------
Total assets 135,927,305
- ------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------
Payable for investments purchased $ 979,154
- ----------------------------------------------------
Payable for shares redeemed 109,042
- ----------------------------------------------------
Payable to Bank 113,014
- ----------------------------------------------------
Accrued expenses 57,299
- ---------------------------------------------------- ------------
Total liabilities 1,258,509
- ------------------------------------------------------------------ ------------
NET ASSETS for 7,327,906 shares outstanding $134,668,796
- ------------------------------------------------------------------ ------------
------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------
Paid in capital $106,005,023
- ------------------------------------------------------------------
Net unrealized appreciation of investments 16,602,706
- ------------------------------------------------------------------
Accumulated net realized gain on investments 9,527,064
- ------------------------------------------------------------------
Undistributed net investment income 2,534,003
- ------------------------------------------------------------------ ------------
Total Net Assets $134,668,796
- ------------------------------------------------------------------ ------------
------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ------------------------------------------------------------------
$134,668,796 / 7,327,906 shares outstanding $ 18.38
- ------------------------------------------------------------------ ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
24
STOCK AND BOND FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------
Dividends $ 1,580,455
- -------------------------------------------------------------------
Interest 4,530,147
- ------------------------------------------------------------------- -----------
Total income 6,110,602
- -------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------
Investment advisory fee $ 979,379
- -------------------------------------------------------
Administrative personnel and services fee 125,000
- -------------------------------------------------------
Custodian fees 45,676
- -------------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 99,653
- -------------------------------------------------------
Directors'/Trustees' fees 9,666
- -------------------------------------------------------
Auditing fees 16,445
- -------------------------------------------------------
Legal fees 12,377
- -------------------------------------------------------
Portfolio accounting fees 41,369
- -------------------------------------------------------
Shareholder services fee 320,244
- -------------------------------------------------------
Share registration costs 23,736
- -------------------------------------------------------
Printing and postage 56,085
- -------------------------------------------------------
Insurance premiums 3,986
- -------------------------------------------------------
Taxes 19,719
- -------------------------------------------------------
Miscellaneous 4,364
- ------------------------------------------------------- ----------
Total expenses 1,757,699
- -------------------------------------------------------
Waivers--
- --------------------------------------------
Waiver of investment advisory fee $(215,192)
- --------------------------------------------
Waiver of shareholder services fee (178,558)
- -------------------------------------------- ---------
Total waivers (393,750)
- ------------------------------------------------------- ----------
Net expenses 1,363,949
- ------------------------------------------------------------------- -----------
Net investment income 4,746,653
- ------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------------
Net realized gain on investments 9,527,257
- -------------------------------------------------------------------
Net change in unrealized appreciation of investments 7,067,004
- ------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments 16,594,261
- ------------------------------------------------------------------- -----------
Change in net assets resulting from operations $21,340,914
- ------------------------------------------------------------------- -----------
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
25
STOCK AND BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCTOBER 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------
OPERATIONS--
- ----------------------------------------------------
Net investment income $ 4,746,653 $ 3,988,625
- ----------------------------------------------------
Net realized gain (loss) on investments ($9,527,257
and $1,349,184, respectively, as computed for
federal tax purposes) 9,527,257 1,349,184
- ----------------------------------------------------
Net change in unrealized appreciation (depreciation) 7,067,004 (5,913,664)
- ---------------------------------------------------- ------------ ------------
Change in net assets resulting from operations 21,340,914 (575,855)
- ---------------------------------------------------- ------------ ------------
NET EQUALIZATION (DEBITS) CREDITS-- (98,118) 26,597
- ---------------------------------------------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------
Distributions from net investment income:
- ----------------------------------------------------
Class A Shares (4,670,579) (4,128,685)
- ----------------------------------------------------
Class C Shares -- (13,593)
- ----------------------------------------------------
Distributions from net realized gains (700,551) --
- ---------------------------------------------------- ------------ ------------
Change in net assets resulting from
distributions to shareholders (5,371,130) (4,142,278)
- ---------------------------------------------------- ------------ ------------
SHARE TRANSACTIONS--
- ----------------------------------------------------
Proceeds from sale of shares 28,842,050 38,530,728
- ----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 3,810,223 2,833,419
- ----------------------------------------------------
Cost of shares redeemed (39,237,007) (35,969,675)
- ---------------------------------------------------- ------------ ------------
Change in net assets resulting from share
transactions (6,584,734) 5,394,472
- ---------------------------------------------------- ------------ ------------
Change in net assets 9,286,932 702,936
- ----------------------------------------------------
NET ASSETS:
- ----------------------------------------------------
Beginning of period 125,381,864 124,678,928
- ---------------------------------------------------- ------------ ------------
End of period (including undistributed net
investment income of $2,534,003 and $2,556,047,
respectively) $134,668,796 $125,381,864
- ---------------------------------------------------- ------------ ------------
------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
26
STOCK AND BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Stock and Bond Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, open-end,
no-load, management investment company. Previously, the Fund provided two
classes of shares ("Class A Shares" and "Class C Shares"). On May 19, 1994, the
Board of Directors ( the "Directors") authorized the combination of Class C
Shares with Class A Shares, the termination of all contracts entered into by the
Fund on behalf of Class C shares, and the amendment of the Articles of
Incorporation to reclassify Class A Shares and Class C Shares as unclassified
shares. In connection with these actions, as of August 31, 1994, the "Class C
Shares" were no longer offered.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Fund to monitor, on a
daily basis, the market value of each repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price to
be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the
"Directors"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as
amended (the "Code").
27
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
EQUALIZATION--The Fund follows the accounting practice known as
equalization, in which a portion of the proceeds from sales and costs of
redemptions of fund shares equivalent, on a per share basis, equal to the
amount of undistributed net investment income on the date of the
transaction, is credited or charged to undistributed net investment income.
As a result, undistributed net investment income per share is unaffected by
sales or redemptions of fund shares.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1995, there were 2,000,000,000 shares of $0.001 par value capital
stock authorized : Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, YEAR ENDED
1995 OCTOBER 31, 1994
------------------------ -------------------------
CLASS A SHARES SHARES DOLLARS SHARES DOLLARS
- ---------------------------------------------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold 1,746,255 28,842,050 2,338,641 $ 37,487,658
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 233,136 3,810,223 174,458 2,825,356
- ----------------------------------------------------
Shares redeemed (2,369,562) (39,237,007) (2,181,393) (34,829,553)
- ---------------------------------------------------- ---------- ------------ ----------- ------------
Net change resulting from Class A share
transactions (390,171) (6,584,734) 331,706 $ 5,483,461
- ---------------------------------------------------- ---------- ------------ ----------- ------------
---------- ------------ ----------- ------------
</TABLE>
28
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, YEAR ENDED
1995 OCTOBER 31, 1994
------------------------ -------------------------
CLASS C SHARES SHARES DOLLARS SHARES DOLLARS
- ---------------------------------------------------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold -- -- 64,355 $ 1,043,070
- ----------------------------------------------------
Shares issued to shareholders in payment of
distributions declared -- -- 497 8,063
- ----------------------------------------------------
Shares redeemed -- -- (70,562) (1,140,122)
- ---------------------------------------------------- ---------- ------------ ----------- ------------
Net change resulting from Class C share
transactions -- -- (5,710) ($ 88,989)
- ---------------------------------------------------- ---------- ------------ ----------- ------------
---------- ------------ ----------- ------------
Net change resulting from fund share transactions (390,171) (6,584,734) 325,996 $ 5,394,472
- ---------------------------------------------------- ---------- ------------ ----------- ------------
---------- ------------ ----------- ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to (a) a maximum of .55 of 1% of the average daily net
assets of the Fund, and (b) 4.5% of the gross income of the Fund, excluding
capital gains or losses.
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/ or reimbursement at any time at its
sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. This fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors
for the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to .25 of 1% of daily average net assets of the Fund for the period. This
fee is to obtain certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive a portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its
sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("Fserv") serves as transfer and dividend disbursing agent
for the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
29
STOCK AND BOND FUND, INC.
- --------------------------------------------------------------------------------
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees/Directors of the
Trust/Corporation are Officers and Directors or Trustees of the above
companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
PURCHASES $ 77,996,628
- ------------------------------------------------------------------ ------------
SALES $105,043,890
- ------------------------------------------------------------------ ------------
</TABLE>
30
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
STOCK AND BOND FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Stock and Bond Fund, Inc. as of October 31,
1995, the related statement of operations for the year then ended, and the
statement of changes in net assets for the years October 31, 1995 and 1994, and
the financial highlights (see pages 2 and 15) for the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
October 31, 1995, by correspondence with the custodian and broker. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of Stock and Bond Fund,
Inc. as of October 31, 1995, the results of its operations, the changes in its
net assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
December 15, 1995
31
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Stock and Bond Fund, Inc. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ----------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ----------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ----------------------------------------------------------------------------------
Custodian
State Street Bank and Trust
Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ----------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ----------------------------------------------------------------------------------
Independent Auditors
Deloitte & Touche LLP 2500 One PPG Place
Pittsburgh, Pennsylvania 15222-5401
- ----------------------------------------------------------------------------------
</TABLE>
32
- --------------------------------------------------------------------------------
STOCK AND BOND FUND, INC.
PROSPECTUS
An Open-End,
Diversified Management
Investment Company
December 31, 1995
[FEDERATED SECURITIES CORP. LOGO]
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 86101A104
8012905A-A (12/95) [RECYCLED PAPER LOGO]
RECYCLED
PAPER
STOCK AND BOND FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of Stock and Bond Fund, Inc., (the "Fund"), dated December 31,
1995. This Statement is not a prospectus itself. You may request a copy of
a prospectus or a paper copy of this Statement of Additional Information,
if you have received it electronically, free of charge by calling 1-800-
235-4669.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December 31, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
GENERAL INFORMATION ABOUT THE FUND2
INVESTMENT OBJECTIVES AND POLICIES2
TYPES OF INVESTMENTS 2
OBLIGATIONS OF FOREIGN ISSUERS 2
TEMPORARY INVESTMENTS 3
MONEY MARKET INSTRUMENTS 3
WHEN-ISSUED AND DELAYED DELIVERY
TRANSACTIONS 3
LENDING PORTFOLIO SECURITIES 4
REVERSE REPURCHASE AGREEMENTS 4
RESTRICTED AND ILLIQUID SECURITIES
5
PORTFOLIO TURNOVER 6
INVESTMENT LIMITATIONS 6
SELLING SHORT AND BUYING ON MARGIN
6
ISSUING SENIOR SECURITIES AND
BORROWING MONEY 7
DIVERSIFICATION OF INVESTMENTS 7
ACQUIRING SECURITIES 7
INVESTING IN NEW ISSUERS 7
SELLING SECURITIES 8
INVESTING IN COMMODITIES,
COMMODITY CONTRACTS, OR REAL
ESTATE 8
UNDERWRITING 8
LENDING CASH OR SECURITIES 8
CONCENTRATION OF INVESTMENTS 8
INVESTING IN WARRANTS 8
INVESTING IN ISSUERS WHOSE
SECURITIES ARE OWNED BY OFFICERS
AND DIRECTORS OF THE FUND 9
INVESTING IN RESTRICTED SECURITIES
9
INVESTING IN ILLIQUID SECURITIES 9
STOCK AND BOND FUND, INC. MANAGEMENT
10
FUND OWNERSHIP 21
DIRECTORS' COMPENSATION 22
DIRECTOR LIABILITY 23
INVESTMENT ADVISORY SERVICES 24
ADVISER TO THE FUND 24
ADVISORY FEES 24
STATE EXPENSE LIMITATIONS 24
BROKERAGE TRANSACTIONS 25
OTHER RELATED SERVICES 26
OTHER SERVICES 26
FUND ADMINISTRATION 26
CUSTODIAN AND PORTOFOLIO
RECORDKEEPER 27
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT 27
INDEPENDENT AUDITORS 27
SHAREHOLDER SERVICES AGREEMENT 27
PURCHASING SHARES 28
CONVERSION TO FEDERAL FUNDS 28
DETERMINING NET ASSET VALUE 28
DETERMINING MARKET VALUE OF
SECURITIES 29
REDEEMING SHARES 29
REDEMPTION IN KIND 30
TAX STATUS 30
THE FUND'S TAX STATUS 30
SHAREHOLDERS' TAX STATUS 31
CAPITAL GAINS 31
TOTAL RETURN 31
YIELD 32
PERFORMANCE COMPARISONS 32
DURATION 35
ABOUT FEDERATED INVESTORS 35
MUTUAL FUND MARKET 36
INSTITUTIONAL 36
TRUST ORGANIZATIONS 37
BROKER/DEALERS AND BANK
BROKER/DEALER SUBSIDIARIES 37
APPENDIX 37
GENERAL INFORMATION ABOUT THE FUND
Stock and Bond Fund, Inc., ("the Fund") was incorporated under the laws of
the State of Maryland on October 31, 1934. The name of the Fund was Boston
Foundation Fund Incorporated prior to January 11, 1985 . On April 16, 1993,
the shareholders voted to permit the Fund to offer separate series and classes
of shares. During the fiscal year ended October 31, 1994, the Fund offered
Class A Shares and Class C Shares. On August 31, 1994, a reorganization of
the Fund was completed to eliminate the separate classes of shares.
INVESTMENT OBJECTIVES AND POLICIES
The Fund's investment objectives are to provide relative safety of capital
with the possibility of long-term growth of capital and income. Consideration
is also given to current income. The investment objectives cannot be changed
without approval of shareholders.
As a matter of investment policy, under normal circumstances, the Fund will
invest at least 65% of its total assets in stocks and bonds.
TYPES OF INVESTMENTS
The Fund invests primarily in a diversified portfolio of common and preferred
stocks and other equity securities, bonds, notes, U.S. government securities,
repurchase agreements, short-term obligations and instruments secured by any
of these obligations.
OBLIGATIONS OF FOREIGN ISSUERS
Obligations of a foreign issuer may present greater risks than investments in
U.S. securities, including higher transaction costs as well as the imposition
of additional taxes by foreign governments. In addition, investments in
foreign issuers may include additional risks associated with less complete
financial information about the issuers, less market liquidity, and political
instability. Future political and economic developments, the possible
imposition of withholding taxes on interest income, the possible seizure or
nationalization of foreign holdings, the possible establishment of exchange
controls, or the adoption of other governmental restrictions might adversely
affect the payment of principal and interest on obligations of foreign
issuers. As a matter of practice, the Fund will not invest in the obligations
of a foreign issuer if any such risk appears to the Fund's adviser to be
substantial.
TEMPORARY INVESTMENTS
The Fund may also invest in temporary investments from time to time for
defensive purposes.
MONEY MARKET INSTRUMENTS
The Fund may invest in money market instruments such as:
oinstruments of domestic and foreign banks and savings and loans if they
have capital, surplus, and undivided profits of over $100,000,000, or
if the principal amount of the instrument is federally insured; or
ocommercial paper rated A-1 by Standard and Poor's Ratings Group, Prime-
1 by Moody's Investors Service, Inc., or F-1 by Fitch Investors
Service, Inc.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund engages in when-issued and delayed delivery transactions only for the
purpose of acquiring portfolio securities consistent with the Fund's
objectives and policies, not for investment leverage. These transactions are
made to secure what is considered to be an advantageous price or yield for the
Fund. Settlement dates may be a month or more after entering into these
transactions, and the market values of the securities purchased may vary from
the purchase prices. No fees or other expenses, other than normal transaction
costs, are incurred. However, liquid assets of the Fund sufficient to make
payment for the securities to be purchased are segregated on the Fund's
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled. As a matter of operating
policy, which may be changed without shareholder approval, the Fund does not
intend to engage in when-issued and delayed delivery transactions to an extent
that would cause the segregation of more than 20% of the total value of its
assets.
LENDING PORTFOLIO SECURITIES
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities increase,
the borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends or
interest paid on such securities. Loans are subject to termination at the
option of the Fund or the borrower. The Fund may pay reasonable administrative
and custodial fees in connection with a loan and may pay a negotiated portion
of the interest earned on the cash or equivalent collateral to the borrower or
placing broker. The Fund does not have the right to vote securities on loan,
but would terminate the loan and regain the right to vote if that were
considered important with respect to the investment.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements under certain
circumstances. This transaction is similar to borrowing cash. In a reverse
repurchase agreement, the Fund transfers possession of a portfolio instrument
to another person, such as a financial institution, broker, or dealer, in
return for a percentage of the instrument's market value in cash, and agrees
that on a stipulated date in the future, the Fund will repurchase the
portfolio instrument by remitting the original consideration plus interest at
an agreed upon rate. The use of reverse repurchase agreements may enable the
Fund to avoid selling portfolio instruments at a time when a sale may be
deemed to be disadvantageous, but the ability to enter into reverse repurchase
agreements does not ensure that the Fund will be able to avoid selling
portfolio instruments at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market daily
and are maintained until the transaction is settled.
RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law and is generally sold to institutional investors, such as the
Fund, who agree that they are purchasing the paper for investment purposes and
not with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) commercial paper is normally resold to
other institutional investors like the Fund through or with the assistance of
the issuer or investment dealers who make a market in Section 4(2) commercial
paper, thus providing liquidity.
The ability of the Board of Directors ("Directors") to determine the liquidity
of certain restricted securities is permitted under a Securities and Exchange
Commission ("SEC") Staff position set forth in the adopting release for Rule
144A under the Securities Act of 1933 (the "Rule"). The Rule is a non-
exclusive safe-harbor for certain secondary market transactions involving
securities subject to restrictions on resale under federal securities laws.
The Rule provides an exemption from registration for resales of otherwise
restricted securities to qualified institutional buyers. The Rule was expected
to further enhance the liquidity of the secondary market for securities
eligible for resale under the Rule. The Fund believes that the Staff of the
SEC has left the question of determining the liquidity of all restricted
securities to the Directors. The Directors may consider the following criteria
in determining the liquidity of certain restricted securities:
o the frequency of trades and quotes for the security;
o the number of dealers willing to purchase or sell the security and the
number of other potential buyers;
o dealer undertakings to make a market in the security; and
o the nature of the security and the nature of the marketplace trades.
PORTFOLIO TURNOVER
The Fund normally holds or disposes of portfolio securities in order to work
toward its investment objectives. Securities held by the Fund are selected
because they are considered to represent real value and will be held or
disposed of accordingly. The Fund's investment adviser will not generally seek
profits through short-term trading. The Fund will not attempt to set or meet a
portfolio turnover rate since any turnover would be incidental to transactions
undertaken in an attempt to achieve the Fund's investment objectives. For the
fiscal years ended October 31, 1995 and 1994, the portfolio turnover rates
were 68% and 45%, respectively.
INVESTMENT LIMITATIONS
SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities, except as permitted by its
investment objectives and policies, and except that the Fund may enter
into reverse repurchase agreements and otherwise borrow up to one-third
of the value of its net assets including the amount borrowed, as a
temporary, extraordinary or emergency measure or to facilitate management
of the portfolio by enabling the Fund to meet redemption requests when
the liquidation of portfolio instruments would be inconvenient or
disadvantageous. This practice is not for investment leverage. The Fund
will not purchase any portfolio instruments while any borrowings
(including reverse repurchase agreements) are outstanding.
DIVERSIFICATION OF INVESTMENTS
The Fund will not invest more than 5% of the value of its total assets in
the securities of any one issuer, except U.S. government securities;
invest in more than 10% of the voting securities of one issuer; or invest
in more than 10% of any class of securities of one issuer.
ACQUIRING SECURITIES
The Fund will not invest in securities issued by any other investment
company or investment trust except in regular open-market transactions or
as part of a plan of merger or consolidation. It will not invest in
securities of a company for the purpose of exercising control or
management.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations.
SELLING SECURITIES
The Fund may not sell any security or evidence of interest therein unless
it is owned by the Fund and available for delivery.
INVESTING IN COMMODITIES, COMMODITY CONTRACTS, OR REAL ESTATE
The Fund will not invest in commodities, commodity contracts, or real
estate.
UNDERWRITING
The Fund will not engage in underwriting or agency distribution of
securities issued by others.
LENDING CASH OR SECURITIES
The Fund will not lend any assets except portfolio securities. The
purchase of corporate or government bonds, debentures, notes or other
evidences of indebtedness shall not be considered a loan for purposes of
this limitation.
CONCENTRATION OF INVESTMENTS
The Fund will not invest more than 25% of the value of its total assets
in securities of companies in any one industry.
INVESTING IN WARRANTS
The Fund will not invest more than 5% of its assets in warrants,
including those acquired in units or attached to other securities. To
comply with certain state restrictions, the Fund will limit its
investment in such warrants not listed on recognized stock exchanges to
2% of its total assets. (If state restrictions change, this latter
restriction may be revised without notice to shareholders.) For purposes
of this investment restriction, warrants acquired by the Fund in units or
attached to securities may be deemed to be without value.
The above limitations cannot be changed without shareholder approval. The
following limitations, however, may be changed by the Directors without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND DIRECTORS OF
THE FUND
The Fund will not purchase or retain the securities of any issuer in
which the officers and Directors of the Fund or its investment adviser
own a substantial financial interest.
INVESTING IN RESTRICTED SECURITIES
The Fund will not invest more than 10% of its total assets in securities
subject to restrictions on resale under the Securities Act of 1933,
except for commercial paper issued under Section 4(2) of the Securities
Act of 1933 and certain other restricted securities which meet the
criteria for liquidity as established by the Directors. To comply with
certain state restrictions, the Fund will limit these transactions to 5%
of its total assets. (If state restrictions change, this latter
restriction may be revised without shareholder approval or notification.)
INVESTING IN ILLIQUID SECURITIES
The Fund will not invest more than 15% of its net assets in illiquid
securities, including repurchase agreements providing for settlement more
than seven days after notice and certain restricted securities not
determined by the Directors to be liquid. To comply with certain state
restrictions, the Fund will limit these transactions to 10% of its net
assets. (If state restrictions change, this latter restriction may be
revised without shareholder approval or notification.)
If a percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from any change in value or net
assets will not result in a violation of such restriction.
The Fund did not borrow money or lend portfolio securities in excess of 5% of
the value of its net assets during the last fiscal year and has no present
intent to do so in the coming fiscal year.
In addition, to comply with certain state restrictions, the Fund will not
invest in oil, gas, or other mineral leases, nor will it invest in real estate
limited partnerships. If state restrictions change, these limitations may be
revised without notice to shareholders.
STOCK AND BOND FUND, INC. MANAGEMENT
Officers and Directors are listed with their addresses, birthdates, present
positions with Stock and Bond Fund, Inc., and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Director and President
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director, Trustee, or Managing General Partner of
the Funds. Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President of the Company .
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Director
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's Hospital
of Pittsburgh; Director, Trustee, or Managing General Partner of the Funds;
formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Director
President, Investment Properties Corporation; Senior Vice-President, John R.
Wood and Associates, Inc., Realtors; President, Northgate Village Development
Corporation; Partner or Trustee in private real estate ventures in Southwest
Florida; Director, Trustee, or Managing General Partner of the Funds;
formerly, President, Naples Property Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Director
Director and Member of the Executive Committee, Michael Baker, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice Chairman and
Director, PNC Bank, N.A., and PNC Bank Corp. and Director, Ryan Homes, Inc.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Director
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director, Trustee,
or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Director
Professor of Medicine and Member, Board of Trustees, University of Pittsburgh;
Medical Director, University of Pittsburgh Medical Center - Downtown; Member,
Board of Directors, University of Pittsburgh Medical Center; formerly,
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Director, Trustee, or Managing General Partner of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Director
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Counsel, Horizon
Financial, F.A., Western Region.
Peter E. Madden
Seacliff
562 Bellevue Avenue
Newport, RI
Birthdate: March 16, 1942
Director
Consultant; State Representative, Commonwealth of Massachusetts; Director,
Trustee, or Managing General Partner of the Funds; formerly, President, State
Street Bank and Trust Company and State Street Boston Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Director
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or
Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Director
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Director
Professor, International Politics and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., and U.S. Space Foundation; Chairman, Czecho Management Center;
Director, Trustee, or Managing General Partner of the Funds; President
Emeritus, University of Pittsburgh; founding Chairman, National Advisory
Council for Environmental Policy and Technology and Federal Emergency
Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Director
Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Executive Vice President of the
Funds; Director, Trustee, or Managing General Partner of some of the Funds.
Mr. Donahue is the son of John F. Donahue, Director and President of the
Company.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research, Ltd.;
Executive Vice President and Director, Federated Securities Corp.; Trustee,
Federated Services Company; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; President,
Executive Vice President and Treasurer of some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, and Trustee, Federated Investors;
Trustee, Federated Advisers, Federated Management, and Federated Research;
Director, Federated Research Corp. and Federated Global Research Corp.;
Trustee, Federated Services Company; President and Trustee, Federated
Shareholder Services; Director, Federated Securities Corp.; Executive Vice
President and Secretary of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of
the Funds; Director or Trustee of some of the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President and Trustee, Federated Investors; Vice President,
Federated Shareholder Services; Treasurer of some of the Funds.
* This Director is deemed to be an "interested person" as defined in the
Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of the Board of
Directors handles the responsibilities of the Board of Directors between
meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Equity Funds; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 3-5 Years; Federated U.S. Government Securities Fund: 5-10 Years; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate U.S.
Government Fund, Inc.; Fortress Municipal Income Fund, Inc.; Fortress Utility
Fund, Inc.; Fund for U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust; Insurance Management Series;
Intermediate Municipal Trust; International Series, Inc.; Investment Series
Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty U.S. Government Money Market Trust; Liberty Term Trust, Inc. - 1999;
Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran Funds;
Peachtree Funds; The Planters Funds; RIMCO Monument Funds; Star Funds; The
Starburst Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Targeted
Duration Trust; Tax-Free Instruments Trust; Trust for Financial Institutions;
Trust For Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
FUND OWNERSHIP
Officers and Directors own less than 1% of the Fund's outstanding shares.
As of December 4, 1995, the following shareholder of record owned 5% or more
of the outstanding shares of the Fund: Alltel Corp Thrift Plan, Nations Bank,
Trustee, San Francisco, California, owned approximately 942,187 shares
(11.98%).
DIRECTORS' COMPENSATION
AGGREGATE
NAME, COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
CORPORATION CORPORATION * FROM FUND COMPLEX +
John F. Donahue $ 0 $ 0 for the Fund
Director and President 68 other investment companies in the
Fund Complex
Thomas G. Bigley $ 956 $ 20,688 for the Fund
Director 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $ 1,236 $ 117,202 for the Fund
Director 64 other investment companies in the
Fund Complex
William J. Copeland $ 1,236 $ 117,202 for the Fund and
Director 64 other investment companie in the
Fund Complex
James E. Dowd $ 1,236 $ 117,202 for the Fund and
Director 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $ 1,125 $ 106,460 for the Fund and
Director 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $ 1,236 $ 117,202 for the Fund and
Director 64 other investment companies in the
Fund Complex
Peter E. Madden $ 956 $ 90,563 for the Fund and
Director 64 other investment companies in the
Fund Complex
Gregor F. Meyer $ 1,125 $ 106,460 for the Fund and
Director 64 other investment companies in the
Fund Complex
John E. Murray, Jr. $ 674 $ 0 for the Fund and
Director 69 other investment companies in the
Fund Complex
Wesley W. Posvar $ 1,125 $ 106,460 for the Fund and
Director 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $ 1,125 $ 106,460 for the Fund and
Director 64 other investment companies in the
Fund Complex
* Information is furnished for the fiscal year ended October 31, 1995.
+ The information is provided for the last calendar year.
DIRECTOR LIABILITY
The Corporation's Articles of Incorporation provide that the Directors will
not be liable for errors of judgment or mistakes of fact or law. However, they
are not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
ADVISER TO THE FUND
The Fund's investment adviser is Federated Management. It is a subsidiary of
Federated Investors. All the voting securities of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, his wife, and his
son, J. Christopher Donahue.
The adviser shall not be liable to the Fund or any shareholder for any losses
that may be sustained in the purchase, holding, or sale of any security or for
anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
imposed upon it by its contract with the Fund.
ADVISORY FEES
For its advisory services, Federated Management receives an annual investment
advisory fee as described in the prospectus. During the fiscal years ended
October 31, 1995, 1994, and 1993, the Fund's adviser earned $979,379,
$945,715, and $834,842, respectively, of which $215,192, $98,828, and
$222,090, respectively, was voluntarily waived because of undertakings to
limit the Fund's expenses. All advisory fees were computed on the same basis
as described in the prospectus.
STATE EXPENSE LIMITATIONS
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes and extraordinary expenses) exceed
2 1/2% per year of the first $30 million of average net assets, 2% per
year of the next $70 million of average net assets, and 1 1/2% per year
of the remaining average net assets, the adviser will reimburse the Fund
for its expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser will
be limited, in any single fiscal year, by the amount of the investment
advisory fee. This arrangement is not part of the advisory contract and
may be amended or rescinded in the future.
BROKERAGE TRANSACTIONS
The adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Fund or to the
adviser and may include: advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services.
Research services provided by brokers and dealers may be used by the adviser
or its affiliates in advising the Fund and other accounts. To the extent that
receipt of these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their expenses.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage
and research services provided.
During the fiscal years ended October 31, 1995, 1994, and 1993, the Fund paid
total brokerage commissions of $84,056, $41,256, and $69,262, respectively.
As of October 31, 1995, the Fund owned $952,733 of securities of Travelers
Inc. (Smith Barney) and $931,021 of securities of Dean Witter, two of its
regular brokers that derive more than 15% of gross revenues from securities-
related activities.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the adviser, investments of the type the Fund
may make may also be made by those other accounts. When the Fund and one or
more other accounts managed by the adviser are prepared to invest in, or
desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the adviser
to be equitable to each. In some cases, this procedure may adversely affect
the price paid or received by the Fund or the size of the position obtained or
disposed of by the Fund. In other cases, however, it is believed that
coordination and the ability to participate in volume transactions will be to
the benefit of the Fund.
OTHER RELATED SERVICES
Affiliates of the adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of shares of funds offered by Federated Securities Corp.
OTHER SERVICES
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated Administrative
Services Inc., also a subsidiary of Federated Investors, served as the Fund's
administrator. (For purposes of this Statement of Additional Information,
Federated Administrative Services and Federated Administrative Services, Inc.,
may hereinafter collectively be referred to as the "Administrators".) For the
fiscal year ended October 31, 1995, Federated Administrative Services earned
$125,000. For the fiscal year ended October 31, 1994, the Administrators
collectively earned $207,503. For the fiscal year ended October 31, 1993,
Federated Administrative Services, Inc. earned $291,137. Dr. Henry J.
Gailliot, an officer of Federated Management, the adviser to the Fund, holds
approximately 20%, of the outstanding common stock and serves as a director
of Commercial Data Services, Inc., a company which provides computer
processing services to Federated Administrative Services.
CUSTODIAN AND PORTOFOLIO RECORDKEEPER
State Street Bank and Trust Company, ("State Street Bank") Boston,
Massachusetts is custodian for the securities and cash of the Fund. It also
provides certain accounting and recordkeeping services with respect to the
Fund's portfolio investments.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
As transfer agent, Federated Services Company, maintains all necessary
shareholder records. For its services, the transfer agent receives a fee based
on the size, type, and number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
The independent auditors for the Fund are Deloitte & Touche LLP, 2500 One PPG
Place, Pittsburgh, Pennsylvania 15222-5014.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder Services
and to financial institutions to cause services to be provided to shareholders
by a representative who has knowledge of the shareholder's particular
circumstances and goals. These activities and services may include, but are
not limited to: providing office space, equipment, telephone facilities, and
various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and
assisting clients in changing dividend options, account designations, and
addresses. By adopting the Shareholder Services Agreement, the Directors
expect that the Fund will benefit by (1) providing personal services to the
shareholders; (2) investing shareholder assets with a minimum of delay and
administrative detail; (3) enhancing shareholder recordkeeping systems; and
(4) responding promptly to shareholder's requests and inquiries concerning
their accounts. For the fiscal year ended October 31, 1995, the Fund paid
shareholder services fees in the amount of $320,244 of which $178,558 was
waived, all of which were paid to financial institutions.
PURCHASING SHARES
Shares are sold at their net asset value without a sales charge on days the
New York Stock Exchange is open for business. The procedure for purchasing
shares is explained in the respective prospectus under "Investing in the
Fund."
CONVERSION TO FEDERAL FUNDS
The Fund's transfer agent acts as the shareholder's agent in depositing checks
and converting them to federal funds.
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on which net asset value
is calculated by the Fund are described in the prospectus.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Fund's portfolio securities are determined as follows:
o for equity securities, according to the last sale price on a national
securities exchange, if available;
o in the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;
o for bonds and other fixed income securities, at the last sale price on a
national securities exchange if available, otherwise as determined by an
independent pricing service;
o for short-term obligations, according to the mean between the bid and
asked prices as furnished by an independent pricing service; or
o for all other securities, at fair value as determined in good faith by
the Directors.
Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may reflect institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data.
REDEEMING SHARES
The Fund redeems shares at the next computed net asset value after the Fund
receives the redemption request. Redemption procedures and any fees are
explained in the prospectus under "Redeeming Shares." Although the Fund's
transfer agent does not charge for telephone redemptions, it reserves the
right to charge a fee for the cost of wire-transferred redemptions of less
than $5,000.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or 1% of
the Fund's net asset value, whichever is less, for any one shareholder within
a 90-day period. Any redemption beyond this amount will also be in cash unless
the Directors determine that payments should be in kind. In such a case, the
Fund will pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way that net asset value is determined. The
portfolio instruments will be selected in a manner that the Directors deem
fair and equitable. Redemption in kind is not as liquid as a cash redemption.
If redemption is made in kind, shareholders receiving their securities and
selling them before their maturity could receive less than the redemption
value of their securities and could incur transaction costs.
TAX STATUS
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code, as amended,
applicable to regulated investment companies and to receive the special tax
treatment afforded to such companies. To qualify for this treatment, the Fund
must, among other requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
o derive less than 30% of its gross income from the sale of securities held
less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends and capital gains
received as cash or additional shares. The dividends received deduction for
corporations will apply to ordinary income distributions to the extent the
distribution represents amounts that would qualify for the dividends received
deduction to the Fund if the Fund were a regular corporation and to the extent
designated by the Fund as so qualifying. These dividends and any short-term
capital gains are taxable as ordinary income.
CAPITAL GAINS
Long-term capital gains distributed to shareholders will be treated as
long-term capital gains regardless of how long shareholders have held the
shares.
TOTAL RETURN
The Fund's average annual total returns for the one-year, five-year, and ten-
year periods ended October 31, 1995, were 17.99%, 11.99% and 9.90%,
respectively.
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is computed
by multiplying the number of shares owned at the end of the period by the
maximum offering price per share at the end of the period. The number of
shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the period
by any additional shares, assuming the quarterly reinvestment of all dividends
and distributions.
YIELD
The Fund's SEC yield for the thirty-day period ended October 31, 1995, was
3.64%.
The yield for the Fund is determined by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the
Fund over a thirty-day period by the maximum offering price per share of the
Fund on the last day of the period. This value is then annualized using semi-
annual compounding. This means that the amount of income generated during the
thirty-day period is assumed to be generated each month over a twelve-month
period and is reinvested every six months. The yield does not necessarily
reflect income actually earned by the Fund because of certain adjustments
required by the Securities and Exchange Commission and, therefore, may not
correlate to the dividends or other distributions paid to shareholders. To the
extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the
Fund, performance will be reduced for those shareholders paying those fees.
PERFORMANCE COMPARISONS
The Fund's performance depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio securities;
o changes in the Fund's expenses; and
o various other factors.
The Fund's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings and
offering price per share are factors in the computation of yield and total
return.
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of any
index used, prevailing market conditions, portfolio compositions of other
funds, and methods used to value portfolio securities and compute offering
price. The financial publications and/or indices which the Fund uses in
advertising may include:
STANDARD & POOR'S RATING GROUP DAILY STOCK PRICE INDEX OF 500 COMMON
STOCKS is a composite index of common stocks in industry,
transportation, and financial and public utility companies, and compares
total returns of funds whose portfolios are invested primarily in common
stocks. In addition, the index assumes reinvestment of all dividends
paid by stocks listed on its index. Taxes due on any of these
distributions are not included nor are brokerage or other fees
calculated in these figures.
SALOMON BROTHERS AAA-AA CORPORATES calculates total returns of
approximately 775 issues, which include long-term, high-grade domestic
corporate taxable bonds, rated AAA-AA, with maturities of twelve years
or more. It also includes companies in industry, public utilities, and
finance.
LIPPER ANALYTICAL SERVICES, INC., ranks funds in various categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific
period of time. From time to time, the Fund will quote its Lipper
ranking in advertising and sales literature.
LEHMAN BROTHERS GOVERNMENT/CORPORATE (TOTAL) is comprised of
approximately 5,000 issues which include non-convertible bonds publicly
issued by the U.S. government or its agencies; corporate bonds
guaranteed by the U.S. government and quasi-federal corporations; and
publicly issued, fixed rate, non-convertible domestic bonds of
companies in industry, public utilities, and finance. The average
maturity of these bonds approximates nine years. Tracked by Lehman
Brothers, Inc., the index calculates total returns for one-month, three-
month, twelve-month, and ten-year periods and year-to-date.
S&P 500/LEHMAN BROTHERS GOVERNMENT/CORPORATE (WEIGHTED INDEX) AND THE
S&P 500/ LEHMAN BROTHERS GOVERNMENT (WEIGHTED INDEX) combine the
components of a stock-oriented index and a bond-oriented index to obtain
results which can be compared to the performance of a managed fund. The
indices' total returns will be assigned various weights depending upon
the Fund's current asset allocation.
MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their risk-
adjusted returns. The maximum rating is five stars, and ratings are
effective for two weeks.
Investors may also consult the fund evaluation consulting universe listed
below. Consulting universes may be composed of pension, profit-sharing,
commingled, endowment/foundation and mutual funds.
SEI BALANCED UNIVERSE is composed of 916 portfolios managed by 390
managers representing $86 billion in assets. To be included in the
universe, a portfolio must contain a 5% minimum commitment in both
equity and fixed income securities.
Advertisements and other sales literature for the Fund may quote total returns
which are calculated on non-standardized base periods. These total returns
also represent the historic change in the value of an investment in the Fund
based on quarterly reinvestment of dividends over a specified period of time.
DURATION
Duration is a commonly used measure of the potential volatility in the price
of a bond, other fixed income security, or in a portfolio of fixed income
securities, prior to maturity. Volatility is the magnitude of the change in
the price of a bond relative to a given change in the market rate of interest.
A bond's price volatility depends on three primary variables: the bond's
coupon rate; maturity date; and the level of market yields of similar fixed-
income securities. Generally, bonds with lower coupons or longer maturities
will be more volatile than bonds with higher coupons or shorter maturities.
Duration combines these variables into a single measure.
Duration is calculated by dividing the sum of the time-weighted values of the
cash flows of a bond or bonds, including interest and principal payments, by
the sum of the present values of the cash flows.
When the Fund invests in mortgage pass-through securities, its duration will
be calculated in a manner which requires assumptions to be made regarding
future capital prepayments. A more complete description of this calculation is
available upon request from the Fund.
ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is reflected
in its investment decision making-structured, straightforward, and consistent.
This has resulted in a history of competitive performance with a range of
competitive investment products that have gained the confidence of thousands
of clients and their customers.
The company's disciplined security selection process is firmly rooted in sound
methodologies backed by fundamental and technical research. Investment
decisions are made and executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the equity sector, Federated Investors has more than 25 years' experience.
As of December 31, 1994, Federated Investors managed 15 equity funds totaling
approximately $4 billion in assets across growth, value, equity income,
international, index and sector (i.e. utility) styles. Federated Investors'
value-oriented management style combines quantitative and qualitative analysis
and features a structured, computer-assisted composite modeling system that
was developed in the 1970s.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated Investors' international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $2 trillion to the more than 5,500 funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds for a
variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated Investors meets the needs of more than 4,000 institutional
clients nationwide by managing and servicing separate accounts and mutual
funds for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment and
financial advisors. The marketing effort to these institutional clients is
headed by John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust divisions
of the top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President, Broker/Dealer Division.
*source: Investment Company Institute
APPENDIX
STANDARD AND POOR'S RATINGS GROUP CORPORATE BOND RATINGS
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's
Ratings Group ("S&P"). 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 higher rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
NR--NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate
a particular type of obligation as a matter of policy.
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATINGS
AAA--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
AA--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
BAA--Bonds which are rated Baa are considered as medium grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and, in fact, have speculative characteristics as well.
NR--Not rated by Moody's.
Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa through B in corporate bond rating system. The modifier
1 indicates that the security ranks in the higher end of its generic ranking
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating
category.
FITCH INVESTORS SERVICE, INC., LONG-TERM DEBT RATINGS
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,
although not quite as strong as bonds rated AAA. Because bonds rated in the
AAA and AA categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated F-1+.
A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB--Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds
and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than bonds with higher
ratings.
NR--NR indicates that Fitch does not rate the specific issue.
PLUS (+) OR MINUS (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus
and minus signs, however, are not used in the AAA category.
STANDARD AND POOR'S RATINGS GROUP COMMERCIAL PAPER RATINGS
A-1--This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
MOODY'S INVESTORS SERVICE, INC., COMMERCIAL PAPER RATINGS
PRIME-1- Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
o Leading market positions in well established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
o Broad margins in earning coverage of fixed financial charges and high
internal cash generation.
o Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2- Issuers rated Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short- term promissory obligations. This
will normally be evidenced by many of the characteristics cited above, but to
a lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
FITCH INVESTORS SERVICE, INC., SHORT-TERM RATINGS
F-1+ --(Exceptionally Strong Credit Quality). Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1--(Very Strong Credit Quality). Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.
F-2--(Good Credit Quality). Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the F-1+ and F-1 categories.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
Cusip 86101A104
8012905B (12/95)
(a) Financial Statements (Filed in Part A);
(b) Exhibits:
(1) Conformed Copy of the Charter of the Registrant as amended
+;
(2) Copies of the By-Laws of the Registrant as amended +;
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant (1);
(5) Conformed copy of the Investment Advisory Contract of the
Registrant (13);
(6) (i) Conformed Copy of Distributors Contract (12);
(ii) The Registrant hereby incorporates the conformed copy
of the specimen Mutual Funds Sales and Service Agreement;
Mutual Funds Service Agreement; and Plan Trustee/Mutual
Funds Service Agreement from Item 24 (b) (6) of the Cash
Trust Series II Registration Statement on Form N-1A, filed
with the Commission on July 24, 1995. (File Numbers 33-
38550 and 811-6269).
(7) Not applicable;
(8) (i) Conformed copy of the Custodian Contract (13);
(9) (i) Conformed copy of Administrative Services Agreement
(13);
(ii) Conformed copy of Shareholder Services Agreement
(13);
(iii) Conformed copy of Transfer Agency and Service
Agreement (13);
(iv) The responses described in Item 24 (b) (6)
are hereby incorporated by reference
(10) Not applicable;
(11) Copy of the Consent of Independent Auditors;+
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 49 filed on Form N-1A December 21, 1979.(File Nos. 2-10415
and 811-1)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 69 filedon Form N-1A February 22, 1988. (File Nos. 2-
10415 and 811-1)
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 83 filed on Form N-1A December 28, 1993.(File Nos. 2-10415
and 811-1)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 85 filed on Form N-1A December 29, 1994.(File Nos. 2-10415
and 811-1)
(12) Not applicable;
(13) Not applicable;
(14) Not applicable;
(15) Not applicable;
(16) Copy of Schedule for Computation of Fund Performance Data
(7);
(17) Copy of Financial Data Schedule +;
(18) Not applicable;
(19) Conformed copy of Power of Attorney +;
Item 25..................Persons Controlled by or Under Common
Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of December 4, 1995
Shares of Capital Stock 4,209
($0.001 per share par value)
Item 27. Indemnification (13)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of Federated Management, the
investment adviser, see the section entitled "Fund Information -
Management of the Fund" in Part A. The affiliations with the
Registrant of three of the Trustees and three of the Officers of the
investment adviser and their business addresses are included in
Part B of this Registration Statement under "Stock and Bond Fund,
Inc., Fund Management." The remaining Trustee of the investment
adviser, his position with the investment adviser, and, in
parentheses, his principal occupation is: Mark D. Olson (Partner,
Wilson, Halbrook & Bayard), 107 W. Market Street, Georgetown,
Delaware 19947.
+ All exhibits have been filed electronically.
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 71 filed on Form N-1A February 23, 1989. (File Nos. 2-
10415 and 811-1)
13. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 85 filed on Form N-1A December 29, 1994.(File Nos. 2-10415
and 811-1)
The remaining Officers of the investment adviser are: William D.
Dawson, III, Henry A. Frantzen, J. Thomas Madden, and Mark L.
Mallon, Executive Vice Presidents; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, Drew J. Collins, Jonathan C.
Conley and J. Alan Minteer, Senior Vice Presidents; J. Scott
Albrecht, Joseph M. Balestrino, Randall A. Bauer, David A. Briggs,
Kenneth J. Cody, Deborah A. Cunningham, Michael P. Donnelly, Linda
A. Duessel, Mark E. Durbiano, Kathleen M. Foody-Malus, Thomas M.
Franks, Edward C. Gonzales, Timothy E. Keefe, Stephen A. Keen, Mark
S. Kopinski, Jeff A. Kozemchak, Marian R. Marinack, Susan M. Nason,
Mary Jo Ochson, Robert J. Ostrowski, Frederick L. Plautz, Jr.,
Charles A. Ritter, James D. Roberge, Frank Semack, William F. Stotz,
Sandra L. Weber, and Christopher H. Wiles, Vice Presidents; Thomas
R. Donahue, Treasurer; and Stephen A. Keen, Secretary. The business
address of each of the Officers of the investment adviser is
Federated Investors Tower, Pittsburgh, PA 15222-3779. These
individuals are also officers of a majority of the investment
advisers to the Funds listed in Part B of this Registration
Statement.
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the following
open-end investment companies: American Leaders Fund, Inc.; Annuity
Management Series; Arrow Funds; Automated Government Money Trust;
BayFunds; The Biltmore Funds; The Biltmore Municipal Funds;
Blanchard Funds; Blanchard Precious Metals Fund, Inc.; Cash Trust
Series, Inc.; Cash Trust Series II; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund;
Federated Equity Funds; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated High Yield Trust;
Federated Income Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term Municipal Trust;
Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated Total Return Series, Inc.;
Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 3-5 Years; Federated U.S. Government Securities Fund: 5-10
Years;First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal
Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S.
Government Securities, Inc.; Government Income Securities, Inc.;
High Yield Cash Trust; Independence One Mutual Funds; Insurance
Management Series; Intermediate Municipal Trust; International
Series Inc.; Investment Series Funds, Inc.; Investment Series Trust;
Liberty Equity Income Fund, Inc.; Liberty High Income Bond Fund,
Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Utility Fund, Inc.; Liquid
Cash Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money Market
Trust; The Monitor Funds; Municipal Securities Income Trust;
Newpoint Funds; 111 Corcoran Funds; Peachtree Funds; The Planters
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star Funds;
The Starburst Funds; The Starburst Funds II; Stock and Bond Fund,
Inc.; Targeted Duration Trust; Tax-Free Instruments Trust; Tower
Mutual Funds; Trust for Financial Institutions; Trust for Government
Cash Reserves; Trust for Short-Term U.S. Government Securities;
Trust for U.S. Treasury Obligations; The Virtus Funds; Vision Group
of Funds, Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter for
the following closed-end investment company: Liberty Term Trust,
Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive ViceExecutive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
John W. McGonigle Director, Federated Executive Vice
Federated Investors Tower Securities Corp. President and
Pittsburgh, PA 15222-3779 Secretary
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary, Treasurer
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:
Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Services Company P.O. Box 8600
("Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and Portofolio
Recordkeeper")
Federated Administrative Services Federated Investors Tower
("Administrator") Pittsburgh, PA 15222-3779
Federated Management Federated Investors Tower
("Adviser") Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600
Item 31. Management Services: Not applicable
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Directors and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, STOCK AND BOND FUND, INC.,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the
27th day of December, 1995.
STOCK AND BOND FUND, INC.
BY: /s/ J. Crilley Kelly
J. Crilley Kelly, Assistant Secretary
Attorney in Fact for John F. Donahue
December 27, 1995
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
NAME TITLE DATE
By:/s/ J. Crilley Kelly
J. Crilley Kelly Attorney In Fact December 27, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* President and Director
(Chief Executive Officer)
David M. Taylor* Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Director
John T. Conroy, Jr.* Director
William J. Copeland* Director
James E. Dowd* Director
Lawrence D. Ellis, M.D.* Director
Edward L. Flaherty, Jr.* Director
Peter E. Madden* Director
Gregor F. Meyer* Director
John E. Murray, Jr.* Director
Wesley W. Posvar* Director
Marjorie P. Smuts* Director
Exhibit (11) under N-1A
Exhibit 23 under 601/Reg SK
INDEPENT AUDITORS' CONSENT
To the Board of Trustees of
Stock and Bond Fund, Inc.
We consent to the use in Post-Effective Amendment No. 87 to Registration
Statement (No 2-10415) of STOCK AND BOND FUND, INC. of our report dated
December 15, 1995, appearing in the Prospectus, which is a part of such
Registration Statement, and to the reference to us under the heading
"Financial Highlights" in the Prospectus.
By:DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Pittsburgh, Pennsylvania
Exhibit 2 under Form N-1A
Exhibit 3(b) under Item 601/Reg S-K
BY-LAWS
of
INCOME FOUNDATION FUND, INCORPORATED
(As Amended to May 20, 1969)
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. ANNUAL MEETINGS. The Annual Meeting of the Stockholders
of the Corporation shall be held on the second Monday of March of each year,
unless such day is a legal holiday, in which case the meeting shall be held at
the same time on the next succeeding business day which is not a legal holiday.
The business to be transacted at the Annual Meeting shall include the election
of directors, consideration and action upon the reports of officers and
directors, and any such other business within the power of the corporation.
Section 2. SPECIAL MEETINGS. Special Meetings of Stockholders may be
called by the President or by a majority of the Board of Directors; and shall be
called by the President, Secretary or any Director at the request in writing of
the holders of not less than 25% of the outstanding voting shares of the
Corporation. Any such request shall state the purposes of the proposed meeting.
Section 3. PLACE OF MEETING. All meetings of the Stockholders shall
be held at the office of the Corporation in Baltimore, Maryland, Boston,
Massachusetts, or Pittsburgh, Pennsylvania, or at any other places within or
without the State of Maryland as may be fixed by the party or parties making the
call as stated in the notice thereof.
Section 4. NOTICE. Not less than ten or more than ninety days before
the date of every Annual or Special Meeting of Stockholders the Secretary or an
Assistant Secretary shall give to each Stockholder of record notice of such
meeting by mail, telegraph, cable or radio. Such notice shall be deemed to have
been given when deposited in the mail or with a telegraph or cable office or
radio station for transmission to the Stockholder at his address appearing on
the books of the Corporation. It shall not be necessary to set forth the
business proposed to be transacted in the notice of any Annual Meeting except
that any proposal to amend the Charter of the Corporation shall be set forth in
such notice. Notice of a Special Meeting shall state the purpose or purposes
for which it is called.
Section 5. QUORUM. At all meetings of the Stockholders the presence
in person or by proxy of Stockholders entitled to cast a majority in number of
votes shall be necessary to constitute a quorum for the transaction of business.
In the absence of a quorum at any meeting a majority of those Stockholders
present in person or by proxy may adjourn the meeting from time to time to be
held at the same place without further notice than by announcement to be given
at the meeting until a quorum, as above defined, shall be present, whereupon any
business may be transacted which might have been transacted at the meeting
originally called had the same been held at the time so called.
Section 6. VOTING. At all meetings of Stockholders each Stockholder
of the Corporation shall be entitled to one vote for each share of voting stock
standing in his name on the books of the Corporation on the date for the
determination of Stockholders entitled to vote at such meeting.
Section 7. PROXIES. Any Stockholder entitled to vote at any meeting of
Stockholders may vote either in person or by proxy, but no proxy which is dated
more than eleven months before the meeting named therein shall be accepted.
Every proxy shall be in writing subscribed by the Stockholder or his duly
authorized attorney and dated, but need not be sealed, witnessed or
acknowledged. All proxies shall be filed with and verified by the Secretary, or
an Assistant Secretary of the Corporation or if the meeting shall so decide, by
the Secretary of the Meeting.
Section 8. ORDER OF BUSINESS. At all meetings of Stockholders the
order of business shall be as follows:
(a) Call to order.
(b) Election of a Chairman and appointment of a Secretary if
necessary.
(c) Presentation of proof of the due calling of the meeting - a
certificate of the Secretary or affidavit of any other person who
mailed or gave the notice being conclusive proof of service of
such notice and the mode therein stated.
(d) Presentation and examination of proxies.
(e) Reading and settlement of the Minutes of the previous meeting.
(f) Reports of Officers and Committees
(g) If an Annual Meeting or a Meeting called for that purpose, the
election of Directors.
(h) Unfinished business.
(i) New business.
(j) Adjournment.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. POWERS. The Board of Directors shall have control and
management of the affairs, business and properties of the Corporation. They
shall have and exercise in the name of the Corporation and on behalf of the
Corporation all rights and privileges legally exercisable by the Corporation
except as otherwise provided by law, the Charter, or by these By-Laws.
Section 2. NUMBER, QUALIFICATIONS, MANNER OF ELECTION AND TERM OF
OFFICE. The number of Directors of the Corporation shall be as fixed from time
to time by a majority of the entire Board of Directors by shall be no less than
three nor more than twenty. Directors need not be Stockholders. The Board of
Directors may from time to time by a majority of the entire Board increase or
decrease the number of Directors to such number as they deem expedient not to be
less than three nor more than twenty, however, and fill the vacancies so
created. The term of office of a Director shall not be affected by any decrease
in the number of Directors made by the Board pursuant to the foregoing
authorization. The Members of the Board of Directors shall be elected by the
Stockholders at the Annual Meeting of Stockholders. Each Director shall hold
office until the Annual Meeting next held after his election and until the
election and qualification of his successor.
Section 3. PLACE OF MEETINGS. The Board of Directors may hold its
meetings at such place or places within or without the State of Maryland as the
Board may from time to time determine.
Section 4. ANNUAL MEETINGS. The Board of Directors shall meet for
the election of Officers and any other business as promptly as may conveniently
be done after the adjournment of the Annual Meeting of Stockholders.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such intervals and on such dates as the Board may
from time to time designate.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at such times and at such places as may be designated at
the call of such meeting. Special meetings shall be called by the Secretary or
Assistant Secretary at the request of the President or any Director.
Section 7. NOTICE. The Secretary or Assistant Secretary shall give at
least two days before the meeting notice of each meeting of the Board of
Directors, whether Annual, Regular or Special, to each member of the Board by
mail, telegram or telephone to his last known address. It shall not be necessary
to state the purpose or business to be transacted in the notice of any Annual or
Regular meeting. The notice of a Special meeting shall state the purpose or
purposes for which it is called. Personal attendance at any meeting by a
Director other than to protest the validity of said meeting shall constitute a
waiver of the foregoing requirement of notice.
Section 8. CONDUCT OF MEETINGS AND BUSINESS. The Board of Directors
may adopt such rules and regulations for the conduct of their meetings and the
management of the affairs of the Corporation as they may deem proper and not
inconsistent with applicable law, the Charter of the Corporation or these By-
Laws.
Section 9. QUORUM. Two Directors shall constitute a quorum unless the
board shall consist of more than six members in which case one-third of the
total membership of the Board shall constitute a quorum. In the absence of a
quorum at any meeting a majority of Directors present may adjourn the meeting
from day to day or for such longer periods as they may designate without notice
other than by announcement at the meeting.
Section 10. RESIGNATIONS. Any Director of the Corporation may resign at
any time by mailing or delivering, or transmitting by radio, telegraph or cable,
written notice to the President or to the Secretary of the Corporation. The
resignation of any Director shall take effect at the time specified therein,
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 11. REMOVAL. At any meeting of Stockholders duly called for the
purpose any Director may by the vote of a majority of all of the shares of stock
outstanding and entitled to vote be removed from office. At the same meeting
the vacancy in the Board of Directors may be filled by the election of a
Director to serve for the remainder of the term and until the election and
qualification of his successor.
Section 12. VACANCIES. If the office of a Director becomes vacant
for any reason whatsoever such vacancy may be filled by the Board of Directors
by a vote of a majority of the remaining Directors. The Stockholders may,
however, at any time during the term of such Director elect some other person to
fill said vacancy and thereupon the election by the Board shall by superseded,
and such election by the Stockholders shall be deemed a filling of the vacancy
and not a removal and may be made at any meeting called for that purpose.
Section 13. COMPENSATION OF DIRECTORS. The Directors shall not
receive any stated salary for their services as Directors, but by Resolution of
the Board of Directors a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any Director from serving the Corporation in any other capacity, as and
Officer, Agent or otherwise, and receiving compensation therefor.
Section 14. INFORMATION ACTION BY DIRECTORS. Any Action required or
permitted to be taken at any annual, regular or special meeting of the Board of
Directors may be taken without a meeting if a written consent to such action is
signed by all members of the Board and such written consent if filed with the
Minutes of proceedings of the Board.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE. The
Board of Directors, by resolution passed by a vote of at least a majority of the
whole Board, may appoint an Executive Committee, which shall consist of Two (2)
or more Directors, which number shall include the President who shall, ex
officio, be a member thereof, to serve during the pleasure of the Board.
Section 2. VACANCIES IN EXECUTIVE COMMITTEE. Vacancies occurring in
the Executive Committee from any cause shall be filled by the Board of Directors
at any Meeting thereof by a vote of the majority of the whole Board. It shall
at all times be the duty of the Board of Directors to keep the membership of the
Executive Committee filled.
Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD. All action by the
Executive Committee shall be reported to the Board of Directors at its Meeting
next succeeding such action.
Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The Executive Committee
shall fix its own rules of procedure not inconsistent with these By-Laws or with
any directions of the Board of Directors. It shall meet at such times and
places and upon such notice as shall be provided by such rules or by a
resolution of the Board of Directors. The presence of a majority shall
constitute a quorum for the transaction of business, and in every case an
affirmative vote of a majority of all the members of the Committee present shall
be necessary for the taking of any action.
Section 5. POWERS OF EXECUTIVE COMMITTEE. During the intervals
between the Meetings of the Board of Directors the Executive Committee, except
as limited by the By-Laws of the Corporation or by specific directions of the
Board of Directors, shall possess and may exercise all the powers of the Board
of Directors in the management and direction of the business and conduct of the
affairs of the Corporation in such manner as the Executive Committee shall deem
for the best interests of the Corporation, and shall have power to authorize the
Seal of the Corporation to be affixed to all instruments and documents requiring
same. Notwithstanding the foregoing, the Executive Committee shall not have the
power to elect Directors, elect or remove any Officer, declare dividends, issue
stock, or recommend to Stockholders any action requiring Stockholder approval.
Section 6. OTHER COMMITTEES. From time to time the Board of Directors
may appoint any other Committee or Committees for any purpose or purposes to the
extent lawful, which shall have such powers as shall be specified in the
resolution of appointment.
Section 7. COMPENSATION. The members of any duly appointed Committee
shall receive such compensation and/or fees as from time to time may be fixed by
the Board of Directors.
Section 8. INFORMAL ACTION BY EXECUTIVE COMMITTEE OR OTHER COMMITTEES.
Any action required or permitted to be taken at any meeting of the
Executive Committee or any other duly appointed Committee may be taken without a
meeting if written consent to such action is signed by all Members of such
Committee and such written consent is filed with the minutes of the proceedings
of such Committee.
Section 9. ADVISORY BOARD. The Directors may appoint an Advisory
Board to consist in the first instance of not less than three (3) members.
Members of such Advisory Board shall not be Directors or Officers and need not
be Stockholders. Members of this Board shall hold office for such period as the
Directors may by resolution provide. Any Member of such Board may resign
therefrom by written instrument signed by him which shall take effect upon
delivery to the Directors. The Advisory Board shall have no legal powers and
shall not perform functions of Directors in any manner, said Board being
intended to act merely in an advisory capacity. Such Advisory Board shall meet
at such times and upon such notice as the Board of Directors may by resolution
provide. The compensation of the Members of the advisory Board, if any, shall
be as determined by the Board of Directors.
ARTICLE IV
OFFICERS
Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be
a President, one or more Vice Presidents, a Treasurer and a Secretary. The
Board of Directors may elect a Chairman of the Board of Directors and elect or
appoint such other Officers or agents as the business of the Corporation may
require including one or more Assistant Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers. The same person may hold any
two officers except those of President and Vice President.
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Officers
shall be elected annually by the Board of Directors at its Annual Meeting
following the Annual Meeting of Stockholders. Each Officer shall hold office
until the Annual Meeting the next year and until the election and qualification
of his successor. Any vacancy in any of the offices may be filled for the
unexpired portion of the term by the Board of Directors at any Regular or
Special Meeting of the Board. The Chairman of the Board of Directors, if there
be a Chairman, and the President shall be chosen from among the Directors. The
Board of Directors may elect or appoint additional Officers or agents at any
Regular or Special Meeting of the Board.
Section 3. REMOVAL. Any Officer elected by the Board of Directors may
be removed with or without cause at any time upon a vote of the majority of the
entire Board of Directors. Any other employee of the Corporation may be removed
or dismissed at any time by the President.
Section 4. RESIGNATIONS. Any Officer may resign at any time by giving
written notice to the Board of Directors. Any such resignation shall take
effect at the date of receipt of each notice or at any later time specified
therein, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any Office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in these By-Laws for
regular election or appointment to such Office.
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors, if there be a Chairman, shall preside at the meetings of
Stockholders and of the Board of Directors. He shall receive such information
and reports as he may request from the Officers of the Corporation. He shall
counsel and advise the President on matters of major importance.
Section 7. PRESIDENT. The President shall be the chief executive
officer of the Corporation. He shall, unless other provisions are made therefor
by the Board or Executive Committee, employ and define the duties of all
employees of the Corporation, shall have the power to discharge any such
employees, shall exercise his general supervision over the affairs of the
Corporation and shall perform such other duties as may be assigned to him from
time to time by the Board of Directors. In the absence of the Chairman of the
Board of Directors the President shall preside at all meetings of Stockholders
and of the Board of Directors.
Section 8. VICE PRESIDENTS. The Vice President (or if more than one,
the senior Vice President) in the absence of the President shall perform all
duties and may exercise any of the powers of the President subject to the
control of the Board. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Board of Directors or the
Executive Committee.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept
in books provided for the purpose the Minutes of the Meetings of the
Stockholders, and of the Board of Directors; shall see that all Notices are duly
given in accordance with the provisions of these By-Laws and as required by Law;
shall be custodian of the records and of the Seal of the Corporation and see
that the Seal is affixed to all Documents the execution of which on behalf of
the Corporation under its Seal is duly authorized; shall keep directly or
through a transfer agent a register of the post office address of each
Stockholder, and make all proper changes in such register, retaining and filing
his authority for such entries; shall see that the books, reports, statements,
certificates and all other documents and records required by law are properly
kept and filed; and in general shall perform all duties incident to the office
of Secretary and such other duties as may, from time to time, be assigned to him
by the Board of Directors or the Executive Committee.
Section 10. TREASURER. The Treasurer shall have supervision of the
custody of the funds and securities of the Corporation, subject to the Charter
of the Corporation and applicable law. He shall submit to the Annual Meeting of
Stockholders a statement of the financial condition of the Corporation and
whenever required by the Board of Directors shall make and render a statement of
the accounts of the Corporation and such other statements as may be required.
He shall cause to be kept in books of the Corporation a full and accurate
account of all monies received and paid out for the account of the Corporation.
He shall perform such other duties as may be from time to time assigned to him
by the Board of Directors or by the Executive Committee.
Section 11. ASSISTANT VICE PRESIDENTS. The Assistant Vice President
or Vice Presidents of the Corporation shall have such authority and perform such
duties as may be assigned to them by the Board of Directors, the Executive
Committee, or the President of the Corporation.
Section 12 ASSISTANT SECRETARIES
AND ASSISTANT TREASURERS. The Assistant Secretary
or Secretaries and the Assistant Treasurer or Treasurers shall perform the
duties of the Secretary and of the Treasurer respectively, in the absence of
those Officers and shall have such further powers and perform such other duties
as may be assigned to them respectively by the Board of Directors or the
Executive Committee or by the President.
Section 13. SALARIES. The salaries of the Officers shall be fixed from
time to time by the Board of Directors. No Officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 1. CERTIFICATES. All certificates of stock shall be signed by
the President or any Vice President and by the Treasurer or Secretary or any
Assistant Treasurer or Assistant Secretary and sealed with the Seal of the
Corporation. The signatures may be either manual or facsimile or any other form
of Seal. Certificates fro shares for which the Corporation has appointed and
independent Transfer Agent and Registrar shall not be valid unless countersigned
by such Transfer Agent and registered by such Registrar. In case any Officer
who has signed any certificate ceases to be an Officer of the Corporation before
the certificate is issued, the certificate may nevertheless be issued by the
Corporation with the same effect as if the Officer had not ceased to be such
Officer as of the date of its issuance. Stock certificates shall be in such
form and not inconsistent with laws or the Charter or these By-Laws as may be
determined by the Board of Directors.
Section 2. TRANSFER OF SHARES. Shares of stock shall be transferable on
the books of the Corporation by the holder thereof in person or by duly
authorized attorney upon surrender of the certificate representing the shares to
be transferred properly endorsed.
Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Board
of Directors may fix in advance a date as the record date for the purpose of
determining Stockholders entitled to notice of or to vote at any Meeting of
Stockholders or Stockholders to receive payment of any dividend. Such date
shall in any case not be more than 40 days and in case of a Meeting of
Stockholders not less than 10 days prior to the date on which the particular
action requiring such determination of Stockholders is to be taken. In lieu of
fixing a record date the Board of Directors may provide that the stock transfer
books of the Corporation shall be closed for a stated period not to exceed in
any case 20 days. If the stock transfer books are closed for the purpose of
determining Stockholders entitled to notice of or to vote at a Meeting of
Stockholders such books shall be closed for at least 10 days immediately
preceding such meeting.
Section 4. LOST, DESTROYED OR MUTILATED CERTIFICATES. In case any
certificate of stock is lost, mutilated or destroyed, the Board of Directors may
issue a new certificate in place thereof upon indemnity to the Corporation
against loss and upon such other terms and conditions as the Board may deem
advisable.
Section 5. TRANSFER AGENT AND REGISTRAR: REGULATIONS. The Board of
Directors shall have power and authority to make all such rules and regulations
as they may deem expedient concerning the issuance, transfer and registration of
certificates of stock and may appoint a Transfer Agent and/or Registrar of
certificates of stock, and may require all such stock certificates to bear the
signature of such transfer Agent and/or Registrar.
ARTICLE VI
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. AGREEMENTS, ETC. The Board of Directors or the Executive
Committee may authorize any Officer or Officers, or Agent or Agents of the
Corporation to enter into any Agreement or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to the specific instances; and, unless so authorized by the Board of
Directors or by the Executive Committee or by these By-Laws, no Officer, Agent
or Employee shall have any power or authority to bind the Corporation by any
Agreement or engagement or to pledge its credit or to render it liable
pecuniarily for any purpose or to any amount.
Section 2. CHECKS, DRAFTS, ETC. All checks, drafts or orders for
the payment of money, notes and other evidences of indebtedness shall be signed
by such Officer or Officers, Employee or Employees, or Agent or Agents as shall
be from time to time designated by the Board of Directors or the Executive
Committee.
Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF SECURITIES. All
endorsements, assignments, stock powers or other instruments of transfer of
securities standing in the name of the Corporation or its nominee or directions
for the transfer of securities belonging to the Corporation shall be made by
such Officer or Officers, Employee or Employees, or Agent or Agents as may be
authorized by the Board of Directors or the Executive Committee.
Section 4. EVIDENCE OF AUTHORITY. Anyone dealing with the Corporation
shall be fully justified in relying on a copy of a resolution of the Board of
Directors or of any Committee thereof empowered to act in the premises which is
certified as true by the Secretary or an Assistant Secretary under the seal of
the Corporation.
ARTICLE VII
BOOKS AND RECORDS
Section 1. LOCATION. The books and records of the Corporation,
including the stock ledger or ledgers, may be kept in or outside the State of
Maryland at such office or Agency of the Corporation as may be from time to time
determined by the Board of Directors.
ARTICLE VIII
MISCELLANEOUS
Section 1. SEAL. The Seal of the Corporation shall be a disk
inscribed with the words - "Income Foundation Fund, Incorporated - Incorporated
Maryland 1934."
Section 2. FISCAL YEAR. The Fiscal Year of the Corporation shall
begin on the first day January in each year.
Section 3. WAIVER OF NOTICE. Whenever under the provisions of these
By-Laws or of any law, the Stockholders or Directors or Members of the Executive
Committee or other Committee are authorized to hold any meeting after notice
after the lapse of any prescribed period of time, such meeting may be held
without notice or without such lapse of time by the written waiver of notice
signed by every person entitled to notice shall be present at such meeting.
ARTICLE IX
AMENDMENTS
These By-Laws or any of them or any additional or amended By-Laws may be
altered or repealed and new By-Laws may be adopted at any Regular Meeting of the
Board of Directors without notice or at any Special Meeting the notice of which
shall set forth the terms of the proposed amendment, by a vote of the majority
of the entire Board. This Article IX, however, may itself be amended only at a
Regular Meeting of the Stockholders without notice or at a Special Meeting of
the Stockholders, the notice of which shall set forth the terms of the proposed
amendment, by the holders of a majority of the share entitled to vote in person
or by proxy at such Meeting.
BOSTON FOUNDATION FUND, INCORPORATED
AMENDMENT TO BY-LAWS
(Effective September 19, 1969)
ARTICLE VIII
. . . . . . . . . . . . . . . .
"Section 1. SEAL. The Seal of the Corporation shall be a disk
inscribed with the words "BOSTON FOUNDATION FUND, INCORPORATED - Incorporated
Maryland 1934".
. . . . . . . . . . . . . . . . . . . .
BOSTON FOUNDATION FUND INCORPORATED
AMENDMENT TO BY-LAWS
(Effective February 11, 1971)
ARTICLE I
MEETING OF STOCKHOLDERS
Section 1. ANNUAL MEETINGS. The Annual Meeting of the Stockholders
of the Corporation shall be held on the fourth Monday in April in each year
unless such day is a legal holiday, in which case the meeting shall be held at
the same time on the next succeeding business day which is not a legal holiday.
The business to be transacted at the Annual Meeting shall include the election
of Directors, consideration and action upon the reports of Officers and
Directors, and any other business within the power of the Corporation.
Section 2. SPECIAL MEETINGS. Special Meetings of Stockholders may be
called by the President, Chairman of the Board of Directors or by the Board of
Directors; and shall be called by the President, Secretary or any Director at
the request in writing of the holders of not less than 25% of the outstanding
voting shares of the Corporation. Any such request shall state the purposes of
the proposed meeting.
Section 8. INFORMAL ACTION BY STOCKHOLDERS. Any action required or
permitted to be taken at any meeting of Stockholders may be taken without a
meeting, if a consent in writing, setting forth such action, is signed by all
the Stockholders entitled to vote on the subject matter thereof, and such
consent is filed with the records of the Corporation.
ARTICLE II
BOARD OF DIRECTORS
Section 9. QUORUM. A majority of the total membership of the Board of
Directors shall constitute a quorum at any meeting of the Board of Directors.
The action of a majority of Directors present at any meeting at which a quorum
is present shall be the action of the Board of Directors unless the concurrence
of a greater proportion is required for such action by statute, the Charter of
the Corporation, or these By-Laws. In the absence of a quorum at any meeting, a
majority of Directors present may adjourn the meeting from day to day or for
such longer periods as they may designate without further notice other than by
announcement at the meeting.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE. The
Board of Directors, by resolution passed by a vote of at least a majority of the
entire Board, may appoint an Executive Committee, which shall consist of two (2)
or more Directors, which number shall include the Chairman of the Board of
Directors who shall, ex officio, be a member thereof, to serve at the pleasure
of the Board.
ARTICLE IV
OFFICERS
Section 1. GENERAL PROVISIONS. The Officers of the Corporation shall be
a Chairman of the board of Directors, a President, one or more Vice Presidents,
a Treasurer and a Secretary. The Board of Directors shall elect the Chairman of
the Board of Directors and elect or appoint such other Officers or Agents as the
business of the Corporation may require including one or more Assistant Vice
Presidents, one or more Assistant Secretaries and one or more Assistant
Treasurers. The same person may hold any two offices except those of President
and Vice President.
Section 2. ELECTION, TERM OF OFFICER AND QUALIFICATIONS. The
Officers shall be elected annually by the Board of Directors at its Annual
Meeting following the Annual Meeting of Stockholders. Each Officer shall hold
office until the Annual Meeting in the next year and until the election and
qualification of his successor. Any vacancy in any of the officers may be
filled for the unexpired portion of the term by the Board of Directors at any
Regular or Special Meeting of the Board. The Chairman of the Board of Directors
and the President shall be chosen from among the Directors. The Board of
Directors may elect or appoint additional Officers or Agents at any regular or
Special Meeting of the Board.
Section 3. REMOVAL. Any Officer elected by the Board of Directors may
be removed with or without cause at any time upon the vote of the majority of
the entire Board of Directors. Any other employee of the Corporation may be
removed or dismissed at any time by the Chairman of the Board of Directors.
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors shall be the chief executive officer of the Corporation. He
shall, unless other provisions are made therefor by the Board or Executive
Committee, employ and define the duties of all employees of the Corporation,
shall have the power to discharge and such employees, shall exercise general
supervision over the affairs of the Corporation and shall perform such other
duties as may be assigned to him from time to time by the Board of Directors.
He shall preside at the meetings of Stockholders and of the Board of Directors.
Section 7. PRESIDENT. The President in the absence of the Chairman
of the Board of Directors shall perform all duties and may exercise any of the
powers of the Chairman of the Board of Directors subject to the control of the
Board. He shall counsel and advise the Chairman of the Board on matters of
major importance. In the absence of the Chairman of the Board of Directors, the
President shall preside at all meetings of Stockholders and of the Board of
Directors.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 1. CERTIFICATES. All certificates of stock shall be signed by
the President or Vice President and by the Treasurer or Secretary or any
Assistant Treasurer or Assistant Secretary and sealed with the Seal of the
Corporation. The signatures may be either manual or facsimile or any other form
of Seal. Certificates for shares for which the Corporation has appointed an
independent Transfer Agent and Registrar shall not be valid unless countersigned
by such Transfer Agent and registered by such Registrar. In case any Officer
who has signed any certificate ceases to be an Officer of the Corporation before
the certificate is issued, the certificate may nevertheless be issued by the
Corporation with the same effect as if the Officer had not ceased to be such
Officer as of the date of its issuance. Stock certificates shall be inform not
inconsistent with the law or the Charter or these By-Laws as may be determined
by the Board of Directors.
BOSTON FOUNDATION FUND INCORPORATED
AMENDMENT TO BY-LAWS
(Effective November 16, 1971)
ARTICLE V
SHARES AND THEIR TRANSFER
Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Board
of Directors may fix in advance a date as the record date for the purpose of
determining Stockholders entitled to notice of or to vote at any Meeting of
Stockholders or Stockholders to receive payment of any dividend. Such date
shall in any case not be more than 60 days and in case of a Meeting Stockholders
not less than 10 days prior to the date on which the particular action requiring
such determination of Stockholders is to be taken. In lieu of fixing a record
the Board of Directors may provide that the stock transfer books of the
Corporation shall be closed for a stated period not to exceed in any case 20
days. If the stock transfer books are closed for the purpose of determining
Stockholders entitled to notice of or to vote at a Meeting of Stockholders such
books shall be closed for at least 10 days immediately preceding such meeting.
BOSTON FOUNDATION FUND INCORPORATED
AMENDMENT TO BY-LAWS
(Effective November 8, 1977)
ARTICLE II
BOARD OF DIRECTORS
Section 13. COMPENSATION OF DIRECTORS. The Directors may receive a
stated salary for their services as Directors, and by resolution of the Board of
Directors a fixed feed and expenses of attendance may be allowed for attendance
at each meeting. Nothing herein contained shall be construed to preclude any
Director from serving the Corporation in any other capacity as an officer, agent
or otherwise, and receiving compensation therefor.
BOSTON FOUNDATION FUND INCORPORATED
AMENDMENT TO BY-LAWS
Effective February 17, 1984
ARTICLE III
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE.
The Board of Directors, by resolution passed by a vote of at least a
majority of the entire Board, may appoint an Executive Committee, which shall
consist of two (2) or more Directors.
ARTICLE IV
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS.
The Officers shall be elected annually by the Board of Directors at its
Annual Meeting following the Annual Meeting of the Shareholders. Each Officer
shall hold office until the Annual Meeting in the next year and until the
election and qualification of his successor. Any vacancy in any of the officers
may be filled for the unexpired portion of the term by the Board of Directors at
any Regular or Special Meeting of the Board. The Board of Directors may elect
or appoint additional Officers or agents at any Regular of Special Meeting of
the Board.
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS.
The Chairman of the Board of Directors shall be the chief executive officer
of the Corporation. he shall, unless other provisions are made therefor by the
Board or Executive Committee, employ and define the duties of all employees of
the Corporation, shall have the power to discharge any such employees, shall
exercise general supervision over the affairs of the Corporation and shall
perform such other duties as may be assigned to him from time to time by the
Board of Directors. He shall preside at the meetings of Shareholders and the
Board of Directors.
Section 7. PRESIDENT.
The President in the absence of the Chairman of the Board of Directors
shall perform all duties and may exercise any of the powers of the Chairman of
the Board of Directors subject to the control of the Board. He shall counsel
and advise the Chairman of the Board on matters of major importance. In the
absence of the Chairman of the Board of Directors, the President shall preside
at all meetings of Shareholders and of the Board of Directors.
FEDERATED STOCK AND BOND FUND, INC.
AMENDMENT TO BY-LAWS
(Effective January 11, 1985)
ARTICLE VIII
. . . . . . . . . . . . . . . .
"Section 1. SEAL. The Seal of the Corporation shall be a disk
inscribed with the words "FEDERATED STOCK AND BOND FUND, INC. - Incorporated
Maryland 1934".
. . . . . . . . . . . . . . . . . . . .
FEDERATED STOCK AND BOND FUND, INC.
Amendment to the By-Laws
Effective January 28, 1986)
ARTICLE I
MEETING OF STOCKHOLDERS
Section 1. ANNUAL MEETINGS. The Annual Meeting of the Corporation
shall be held on the fourth Tuesday in October or at some other time in each
year unless such day is a legal holiday, in which case the meeting shall be held
at the same time on the next succeeding business day which is not a legal
holiday. The business to be transacted at the Annual Meeting shall include the
election of Directors, consideration and action upon the reports of Officers and
Directors, and any other business with in the power of the Corporation.
FEDERATED STOCK AND BOND FUND, INC.
Amendment to the By-Laws
Effective January 29, 1986
ARTICLE IV
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors, if there be a Chairman, shall president at the meetings of
Shareholders and of the Board of Directors. He shall receive such information
and reports as he may request from the Officers of the Corporation. He shall
counsel and advise the President on matters of major importance.
Section 7. PRESIDENT. The President shall be the chief executive
officer of the Corporation. He shall, unless other provisions are made therefor
by the Board or Executive Committee, employ and define the duties of all
employees of the Corporation, shall have the power to discharge any such
employees, shall exercise general supervision over the affairs of the
Corporation and shall perform such other duties as may be assigned to him from
time to time by the Board of Directors. In the absence of the Chairman of the
Board of Directors, the President shall preside at all meetings of Shareholders.
Amendment to the By-Laws as Restated and Amen
FEDERATED STOCK & BOND FUND, INC.
Effective February 2, 1987
ARTICLE IV
OFFICERS
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors shall be the chief executive officer of the Corporation. He
shall, unless other provisions are made therefor by the Board or Executive
Committee, employ and define the duties of all employees of the Corporation,
shall have the power to discharge any such employees, shall exercise general
supervision over the affairs of the Corporation and shall perform such other
duties as may be assigned to him from time to time by the Board of Directors.
He shall preside at the meetings of Shareholders and the Board of Directors. In
the absence of the Chairman of the Board of Directors, the President or an
officer or Director appointed by the Chairman, shall preside at all meetings of
Shareholders.
Section 7. PRESIDENT. The President, in the absence of the Chairman
of the Board of Directors, shall perform all duties and may exercise any of the
powers of the Chairman of the Board of Directors subject to the control of the
Board. He shall counsel and advise the Chairman of the Board on matters of
major importance and shall perform such other duties as may be assigned from
time to time by the Board of Directors.
FEDERATED STOCK & BOND FUND, INC.
AMENDMENT TO BY-LAWS
Effective August 28, 1987
ARTICLE I
MEETING OF SHAREHOLDERS
Section 1. ANNUAL MEETINGS. An annual meeting of shareholders shall be
held only in those years in which one of the following is required to be acted
on by shareholders under the Investment Company Act of 1940: (1) Election of
Directors; (2) Approval of the Investment Advisory Contract; (3) Ratification of
the selection of independent public accountants; and (4) Approval of a
Distribution Agreement. At reach annual meeting Directors shall also be
elected, and any other proper business within the power of shareholders may be
transacted. An annual meeting shall be held on a date and at a time designated
by the Board of Directors.
FEDERATED STOCK AND BOND FUND, INC.
AMENDMENT TO BY-LAWS
(Effective August 31, 1990)
ARTICLE VIII
MISCELLANEOUS
Section 2. FISCAL YEAR. The fiscal year of the fund shall be the
period of twelve months ending on the last day of October in each calendar year.
STOCK AND BOND FUND, INC.
BY-LAWS
ARTICLE I
MEETING OF SHAREHOLDERS
Section 1. ANNUAL MEETINGS. The Corporation is not required to hold
an annual meeting of Shareholders is any year in which the election of Directors
is not required to be acted upon under the Investment Company Act of 1940. If
the Corporation is required to hold a meeting of Shareholders to elect
Directors, the meeting shall ,be designated the annual meeting of the
Shareholders for that year. If an annual meeting of Shareholders is held, it
shall be held at a date and time determined by the Board of Directors within 120
days after the occurrence of the event requiring the meeting. Any other
business may be considered at the meeting.
Section 2. SPECIAL MEETING. Special Meetings of Shareholders of the
Company or of a particular Series or Class may be called by the Chairman, or by
the Board of Directors; and shall be called by the Secretary whenever order by
the Chairman, any Director, or as requested in writing by shareholders entitled
to cast at least 10% of the voter shares entitled to be cast at the meetings.
Such request shall state the purpose of such meeting and the matters proposed to
be acted on thereat. and no other business shall be transacted at any such
special meeting. The Secretary shall inform such Shareholders of the reasonably
estimated costs of preparing and mailing the notice of the meeting, and upon
payment to the Corporation of such costs, the Secretary shall give not less than
ten nor more than 90 days' notice of the meeting. Unless required by
Shareholders entitled to cast a majority of all the votes entitled to be cast at
the meeting, a special meeting need not be called to consider any matter which
is substantially the same as a matter voted on at by special meeting of the
Shareholders held during the preceding 12 months.
Section 3. PLACE OF MEETINGS. All meetings of the Shareholders of the
Corporation or a particular Series or Class, shall be held at the office of the
Corporation in Pittsburgh, Pennsylvania, or at such other place within or
without the State of Maryland as may be fixed by the Board of Directors.
Section 4. NOTICE. Not less than ten nor more than ninety days before
the date of every Annual or Special Meeting of Shareholders the Secretary or an
Assistant Secretary shall give to each Shareholder of record of the Corporation
or of the relevant Series or Class written notice of such meeting. Such notice
shall be deemed to have been given when mailed to the Shareholder at his address
appearing on the books of the Corporation, which shall be maintained separately
for the shares of each Series or Class. It shall not be necessary to set forth
the business proposed to be transacted in the notice of any Annual Meeting
except that any proposal to amend the Charter of the Corporation shall be set
forth in such notice. Notice of a Special Meeting shall state the purpose or
purposes for which it is called.
Section 5. QUORUM. The presence in person or by proxy of holders of
one-third of the share of stock of the Corporation entitled to vote without
regard to class shall constitute a quorum at any meeting of the shareholders,
except with respect to any matter which by law required the approval of one or
more classes of stock, in which case the presence in the person or by proxy of
the holders of one-third of the shares of stock of each class entitled to vote
on the matter shall constitute a quorum.
In the absence of a quorum at any meeting, a majority of those Shareholders
present in person or by proxy may adjourn the meeting from time to time to a
date not later than 120 days after the original record date without further
notice than by announcement to be given at the meeting until a quorum, as above
defined, shall be present. Any business may be transacted at the adjourned
meeting which might have been transacted at the meeting originally called had
the same been held at the time so called.
Section 6. VOTING. At all meetings of Shareholders each Shareholder
shall be entitled to one vote or fraction thereof for each Share or fraction
thereof standing in his name on the books of the Corporation on the date for the
determination of Shareholders entitled to vote at such meeting. All shares of
each portfolio or class in the Corporation have equal voting rights, except that
in matters affecting only a particular portfolio or class, only shares of that
portfolio or class are entitled to vote.
Section 7. PROXIES. Any Shareholder entitled to vote at any meeting of
Shareholders may vote either in person or by proxy, but no proxy which is dated
more than eleven months before the meeting named therein shall be accepted.
Every proxy shall be in writing and signed by the Shareholder or his duly
authorized attorney in fact and dated, but need not be sealed, witnessed or
acknowledged.
Section 8. INFORMAL ACTION BY SHAREHOLDERS. Any action required or
permitted to be taken at any meeting of Shareholders may be taken without a
meeting, if a consent in writing, setting forth such action, is signed by all
the Shareholders entitled to vote on the subject matter thereof, and such
consent is filled with the records of the Corporation.
ARTICLE II
BOARD OF DIRECTORS
Section 1. POWERS. The business and affairs of the Corporation shall
be managed under the directors of its Board of Directors. All powers of the
Corporation may be exercised by or under the authority of the Board of Directors
except as conferred on or reserved to the Shareholders by law, by the Charter or
by these By-Laws.
Section 2. NUMBER, QUALIFICATIONS, MANNER OF ELECTION AND TERM OF
OFFICE. The number of Directors of the Corporation can be changed from time to
time to not less than three or the number of Shareholders, whichever is less,
nor more than twenty. Directors need dot be Shareholders. The term of office
of a Director shall not be affected by any decrease in the number of Directors
made by the Board pursuant to the foregoing authorization. Each Director shall
hold office until the Annual Meeting next held after he becomes a director and
until the election and qualification of his successor.
Section 3. PLACE OF MEETING. The Board of Directors may hold its
meetings at such place or places within or without the State of Maryland as the
Board or as the person or persons requesting said meeting to be called may from
time to time determine.
Section 4. ANNUAL MEETINGS. The Board of Directors shall meet
annually for the election of Officers and any other business.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such intervals and on such dates as the Board may
from time to time designate, provided that any Director who is absent when such
designation is made shall be given notice of the designation.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at such times and at such places as may be designated at
the call of such meeting. Special meetings shall be called by the Secretary or
Assistant Secretary at the request of the Chairman or any Director. If the
Secretary when so requested refuses or fails for more than twenty-four hours to
call such meeting, the Chairman or such Director may in the name of the
Secretary call such meeting by giving due notice in the required manner when
notice is given by the Secretary.
Section 7. NOTICE. The Secretary or Assistant Secretary shall give,
at least two days before the meeting, notice of each meeting of the Board of
Directors, whether Annual, Regular or Special, to each member of the Board by
mail, telegram or telephone to his last known address. It shall not be
necessary to state the purpose or business to be transacted in the notice of any
meeting. Personal attendance at any meeting by a Director other than to protest
the validity of said meeting shall constitute a waiver of the foregoing
requirement of notice. In addition, notice of a meeting need not be given if a
written waiver of notice executed by such Director before or after the Meeting
is filed with the records of the meeting.
Section 8. CONDUCT OF MEETINGS AND BUSINESS. The Board of Directors
may adopt such rules and regulations for the conduct of their meetings and the
management of the affairs of the Corporation as they may deem proper and not
inconsistent with applicable law, the Charter of the Corporation or these By-
Laws.
Section 9. QUORUM. One-third of the entire Board of Directors but not
less than two directors shall constitute a quorum at any meeting of the Board of
Directors. The action of a majority of Directors present at any meeting at
which a quorum is present shall be the action of the Board of Directors unless
the concurrence of a greater proportion is required for such action by statute,
the Charter of the Corporation, or these By-Laws. In the absence of a quorum at
any meeting a majority of Directors present may adjourn the meeting from day to
day or for such longer periods as they may designate until a quorum shall be
present. Notice of any adjourned meeting need not be given other than by
announcement at the meeting.
Section 10. RESIGNATIONS. Any Director of the Corporation may resign at
any time by written notice to the Chairman of the Board of Directors or to the
Secretary of the Corporation. The resignation of any Director shall take effect
at the time specified therein or, if no time is specified, when received by the
Corporation. Unless otherwise specified therein, acceptance of such resignation
shall not be necessary to make it effective.
Section 11. REMOVAL. At any meeting of Shareholders duly call for the
purpose, any Director may by the vote of a majority of all of the Shares
entitled to vote be removed from office. At the same meeting, the vacancy in the
Board of Directors may be filled by the election of a Director to serve until
the next annual meeting of Shareholders and the election and qualification of
his successor.
Section 12. VACANCIES. Except as otherwise provided by law, any
vacancy occurring in the Board of Directors for any cause other than by reason
of an increase in the number of Directors may be filled by a majority of the
remaining members of the Board Directors although such majority is less than a
quorum and any vacancy occurring by reason of an increase in the number of
Directors may be filled by action of a majority of the entire Board of
Directors. A Director elected by the Board to fill a vacancy shall be elected
to hold office until the next Annual Meeting of Shareholders and until his
successor is duly elected and qualifies.
Section 13. COMPENSATION OF DIRECTORS. The Directors may receive
compensation for their services as Directors as determined by the Board of
Directors and expenses of attendance at each Meeting. Nothing herein contained
shall be construed to preclude any Director from serving the Corporation in any
other capacity, as an Officer, Agent or otherwise, and receiving compensation
therefor.
Section 14. INFORMAL ACTION BY DIRECTORS. Any action required or
permitted to be taken at any Annual, Regular or Special Meeting of the Board of
Directors may be taken without a meeting if a written consent to such action is
signed by all members of the Board and such written consent is filed with the
minutes of proceedings of the Board.
Section 15. TELEPHONE CONFERENCE. Members of the Board of Directors
or any committee thereof may participate in a meeting of the Board or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other
at the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
EXECUTIVE AND OTHER COMMITTEES
Section 1. APPOINTMENT AND TERM OF OFFICE OF EXECUTIVE COMMITTEE. The
Board of Director may appoint an Executive Committee, which shall consist of two
(2) or more Directors.
Section 2. VACANCIES IN EXECUTIVE COMMITTEE. Vacancies occurring in
the Executive Committee from any cause may be filled by the Board of Directors.
Section 3. EXECUTIVE COMMITTEE TO REPORT TO BOARD. All action by the
Executive Committee shall be reported to the Board of Directors at tits Meeting
next succeeding such action.
Section 4. PROCEDURE OF EXECUTIVE COMMITTEE. The Executive Committee
shall fix its own rules of procedure not inconsistent with these By-Laws or with
any directions of the Board of Directors. It shall meet at such times and
places and upon such notice as shall be provided by such rules or by resolution
of the Board of Directors. The presence of a majority shall constitute a quorum
for the transaction of business, and in every case the affirmative vote of a
majority of the members of the Committee present shall be necessary for the
taking of any action.
Section 5. POWERS OF EXECUTIVE COMMITTEE. During the intervals
between the Meetings of the Board of Directors the Executive Committee, except
as limited by law or by specific directions of the Board of Directors, shall
possess and may exercise all the powers of the Board of Directors in the
management and direction of the business and conduct of the affairs of the
Corporation.
Section 6. OTHER COMMITTEES. From time to time the Board of Directors
may appoint any other Committee or Committees which shall have such powers as
shall be specified in the resolution of appointment and may be delegated by law.
Section 7. COMPENSATION. The members of any duly appointed Committee
shall receive such compensation as from time to time may be fixed by the Board
of Directors and reimbursement of expenses.
Section 8. INFORMAL ACTION BY EXECUTIVE COMMITTEE OR OTHER COMMITTEES.
Any action required or permitted to be taken at any meeting of the
Executive Committee or any other duly appointed Committee may be taken without a
meeting if written consent to such action is signed by all Members of such
Committee and such written consent is filed with the minutes of the proceedings
of such Committee.
Section 9. ADVISORY BOARD The Directors may appoint an Advisory Board
to consist in the first instance of not less than three (3) members. members of
such Advisory Board shall not be Directors or Officers and need not be
Shareholders. Members of this Board shall hold office for such period as the
Directors may by resolution provide. Any Member of such Board may resign
therefrom by written instrument signed by him which shall take effect upon
delivery to the Directors. The Advisory Board shall have no legal powers and
shall not perform functions of Directors in any manner, said Board being
intended to act merely in an advisory capacity. Such Advisory Board shall meet
at such times and upon such notice as the Board of Directors may by resolution
provide. The compensation of the Members of the Advisory Board, if any, shall
be determined by the Board of Directors.
ARTICLE IV
OFFICERS
Section 1. GENERAL PROVISION. The Officers of the Corporation shall be
a Chairman, a President, one or more Vice Presidents, a Treasurer, and a
Secretary. The Board of Directors may elect or appoint other Officers or
agents, including one or more Assistant Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers. The same person may hold any
two officers except those of President and Vice President.
Section 2. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The
Officers shall be elected annually by the Board of Directors at its Annual
Meeting. Each Officer shall hold office for one year and until the election and
qualification of his successor. Any vacancy in any of the offices may be filled
for the unexpired portion of the term by the Board of Directors at any Regular
or Special Meeting of the Board. The Board of Directors may elect or appoint
additional Officers or agents at any Regular or Special Meeting of the Board.
Section 3. REMOVAL. Any Office elected by the Board Directors may be
removed with or without cause at any time by the Board of Directors. Any other
employee of the Corporation may be removed or dismissed at any time by the
President.
Section 4. RESIGNATIONS. Any Officer may resign at any time by giving
written notice to the Board of Directors. Any such resignation shall take
effect at the time specified therein or, if no time is specified, at the time of
receipt. Unless otherwise specified therein, acceptance of such resignation
shall not be necessary to make it effective.
Section 5. VACANCIES. A vacancy in any Office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in these By-Laws for
regular election or appointment to such Office.
Section 6. CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the
Board of Directors, if there be a Chairman, shall preside at the meetings of
Shareholders and of the Board of Directors. He shall receive such information
and reports as he may request from the Officers of the Corporation. He shall
counsel and advise the President on matters of major importance.
Section 7. PRESIDENT. The Chairman for Stock and Bond Fund, Inc.
shall be the chief executive officer of the Corporation. he shall, unless other
provisions are made therefor by the Board or Executive Committee, employ and
define the duties of all employees of the Corporation, shall the power to
discharge any such employees, shall exercise general supervision over the
affairs of the Corporation and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors. In the absence of
the Chairman of the Board of Directors, the President or an officer or Director
appointed by the President, shall preside at all meetings of Shareholders.
Section 8. VICE PRESIDENTS. The Vice President (or if more than one,
the senior Vice President) in the absence of the President shall perform all
duties and may exercise any of the powers of the President subject to the
control of the Board. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Board of Directors, the
Executive Committee, or the President.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept
in books provided for the purpose the Minutes of the Meetings of the
Shareholders, and of the Board of Directors; shall see that all Notices are duly
given in accordance with the provisions of these By-Laws and as required by Law;
shall be custodian of the records and of the Seal of the Corporation and see
that the Seal is affixed to all Documents the execution of which on behalf of
the Corporation under its Seal is duly authorized; shall keep directly or
through a transfer agent a register of the post office address of each
Shareholder, and make all proper changes in such register, retaining and filing
his authority for such entries; shall see that the books, reports, statements,
certificates and all other documents and records required by law are properly
kept and filed; and in general shall perform all duties incident to the office
of Secretary and such other duties as may, from time to time, be assigned to him
by the Board of Directors, the Executive Committee, or the President.
Section 10. TREASURER. The Treasurer shall have supervision of the
custody of all funds and securities of the Corporation, subject to applicable
law. He shall perform such other duties as may be from time to time assigned to
him by the Board of Directors, the Executive Committee, or the President.
Section 11. ASSISTANT VICE PRESIDENTS. The Assistant Vice President
or Vice Presidents of the Corporation shall have such authority and perform such
duties as may be assigned to them by the Board of Directors, the Executive
Committee, or the President of the Corporation.
Section 12 ASSISTANT SECRETARIES
AND ASSISTANT TREASURERS. The Assistant Secretary
or Secretaries and the Assistant Treasurer or Treasurers shall perform the
duties of the Secretary and of the Treasurer respectively, in the absence of
those Officers and shall have such further powers and perform such other duties
as may be assigned to them respectively by the Board of Directors or the
Executive Committee or by the President.
Section 13. SALARIES. The salaries of the Officers shall be fixed from
time to time by the Board of Directors. No Officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
Corporation.
ARTICLE V
SHARES AND THEIR TRANSFER
Section 1. CERTIFICATES. All share certificates shall be signed by the
Chairman, the President, or any Vice President and by the Treasurer or Secretary
or any Assistant Treasurer or Assistant Secretary and may be sealed with the
seal of the Corporation. The signatures may be either manual or facsimile or
any other form of Seal. Certificates for shares for which the Corporation has
appointed an independent Transfer Agent and Registrar shall not be valid unless
countersigned by such Transfer Agent and registered by such Registrar. In case
any Officer who has signed any certificate ceases to be an Officer of the
Corporation before the certificate is issued, the certificate may nevertheless
be issued by the Corporation with the same effect as if the Officer had not
ceased to be such Officer as of the date of its issuance. Stock certificates
shall be inform not inconsistent with the law or the Charter or these By-Laws as
may be determined by the Board of Directors.
Section 2. TRANSFER OF SHARES. Shares of each Series and Class shall be
transferable on the books of the Corporation by the holder thereof in person or
by duly authorized attorney upon surrender of the certificate representing the
shares to be transferred properly endorsed.
Section 3. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Board
of Directors may fix in advance a date as the record date for the purpose of
determining Shareholders entitled to notice of or to vote at any Meeting of
Shareholders or Shareholders to receive payment of any dividend. Such date
shall in any case not be more than 90 days and in case of a Meeting of
Shareholders not less than 10 days prior to the date on which the particular
action requiring such determination of Shareholders is to be taken. In lieu of
fixing a record date the Board of Directors may provide that the stock transfer
books of the Corporation shall be closed for a stated period not to exceed in
any case 20 days. If the stock transfer books are closed for the purpose of
determining Shareholders entitled to notice of or to vote at a Meeting of
Shareholders such books shall be closed for at least 10 days immediately
preceding such meeting.
Section 4. LOST, DESTROYED OR MUTILATED CERTIFICATES. In case any
certificate of stock is lost, mutilated or destroyed, the Board of Directors may
issue a new certificate in place thereof upon indemnity to the Corporation
against loss and upon such other terms and conditions as the Board may deem
advisable.
Section 5. TRANSFER AGENT AND REGISTRAR: REGULATIONS. The Board of
Directors shall have power and authority to make all such rules and regulations
as they may deem expedient concerning the issuance, transfer and registration of
certificates of stock and may appoint a Transfer Agent and/or Registrar of
certificates of stock, and may require all such stock certificates to bear the
signature of such transfer Agent and/or Registrar.
ARTICLE VI
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. AGREEMENTS, ETC. The Board of Directors or the Executive
Committee may authorize any Officer or Officers, or Agent or Agents of the
Corporation to enter into any Agreement or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to the specific instances; and, unless so authorized by the Board of
Directors or by the Executive Committee or by these By-Laws, no Officer, Agent
or Employee shall have any power or authority to bind the Corporation by any
Agreement or engagement or to pledge its credit or to render it liable
pecuniarily for any purpose or to any amount.
Section 2. CHECKS, DRAFTS, ETC. All checks, drafts or orders for
the payment of money, notes and other evidences of indebtedness shall be signed
by such Officer or Officers, Employee or Employees, or Agent or Agents as shall
be from time to time designated by the Board of Directors or the Executive
Committee, or as may be specified in or pursuant to the agreement between the
Corporation on behalf of any Series of Class and the Bank or Trust Company
appointed as custodian.
Section 3. ENDORSEMENTS, ASSIGNMENTS AND TRANSFER OF SECURITIES. All
endorsements, assignments, stock powers or other instruments of transfer of
securities standing in the name of the Corporation or its nominee or directions
for the transfer of securities belonging to the Corporation shall be made by
such Officer or Officers, Employee or Employees, or Agent or Agents as may be
authorized by the Board of Directors or the Executive Committee.
ARTICLE VII
BOOKS AND RECORDS
Section 1. LOCATION. The books and records of the Corporation,
including the Stock ledger or ledgers, may be kept in or outside the State of
Maryland at such office or Agency of the Corporation as may be from time to time
determined by the Board of Directors.
ARTICLE VIII
MISCELLANEOUS
Section 1. SEAL. The Seal of the Corporation shall consist of a
flat-faced die with the word "Maryland," together with the name of the
Corporation and the year of its organization cut or engraved thereon, but unless
otherwise required by the Board of Directors, the Seal shall not be necessary to
be placed in, and its absence shall not impair the validity of, any document,
instrument or other paper executed and delivered by or on behalf of the
Corporation.
Section 2. FISCAL YEAR. The Fiscal Year of the Corporation shall be
designated from time to time by the Board of Directors.
ARTICLE IX
INDEMNIFICATION
Section 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation
shall indemnify its directors to the fullest extent that indemnification of
directors is permitted by the Maryland General Corporation Law. The Corporation
shall indemnify its officers to the same extent as its directors and to such
further extent as is consistent with law. The Corporation shall indemnify its
directors and officers who while serving as directors or officers also serve at
the request of the Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another corporation, partnership joint venture,
trust, other enterprise or employee benefit plan to the fullest extent
consistent with law. The indemnification and other rights provided by this
Article shall continue as to a person who has ceased to be a director of officer
and shall inure to the benefit of the heirs, executors and administrators of
such a person. This Article shall not protect any such person against any
liability to the Corporation or any Shareholder thereof to which such person
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 ("disabling conduct").
Section 2. ADVANCES. Any current or former director or officer of the
Corporation seeking indemnification within the scope of this Article shall be
entitled to advances from the Corporation for payment of the reasonable expenses
incurred by him in connection with the matter as to which he is seeking
indemnification in the manner and to the fullest extent permissible under the
Maryland General Corporation Law. The person seeking indemnification shall
provide to the Corporation a written affirmation of his good faith belief that
the standard of conduct necessary for indemnification by the Corporation has
been met and a written undertaking to repay any such advance if it should
ultimately be determined that the standard of conduct has not been met, In
addition, at least one of the following additional conditions shall be met: (a)
the person seeking indemnification shall provide a security in form and amount
acceptable to the Corporation for his undertaking; (b) the Corporation is
insured against losses arising by reason of the advance, or (c) a majority of a
quorum of directors of the Corporation who are neither 'interested persons' as
defined in Section 2(a)(19) of the Investment Company Act of 1940,a s amended,
not parties to the proceeding ("disinterested non-party directors"), or
independent legal counsel, in a written opinion, shall be determined, based on a
review of fact readily available to the Corporation at the time the advance is
proposed to be made, that there is reason to believe that the person seeking
indemnification will ultimately be found to be entitled to indemnification.
Section 3. PROCEDURE. At the request of any person claiming
indemnification under this Article, the Board of Directors shall determine or
cause to be determined, in a manner consistent with the Maryland General
Corporation Law, whether the standards required by this Article have been met.
Indemnification shall be made only following: (a) a final decision on the merits
by a court or other body before whom the proceeding was brought that the person
to be indemnified was not liable by reason of disabling conduct or (b) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct by (i) the vote of a majority of a quorum of disinterested
non-party directors or (ii) an independent legal counsel in a written opinion.
Section 4. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Employees and
agents who are not officers or directors of the Corporation may be indemnified,
and reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract, subject to any
limitations imposed by the Investment Company Act of 1940.
Section 5. OTHER RIGHTS. The Board of Directors may make further
provisions consistent with law for indemnification and advance of expenses to
directors, officers, employees and agents by resolution, agreement or otherwise.
The indemnification provided by this Article IX shall not be deemed exclusive of
any other right, with respect to indemnification or otherwise, to which those
seeking indemnification may be entitled under any insurance or other agreement
or resolution of Shareholders or disinterested directors or otherwise.
Section 6. AMENDMENTS. References in this Article are to the
Maryland General Corporation Law and to the Investment Company Act of 1940, as
from time to time amended. No amendment of these By-Laws shall effect any right
of any person under this Article based on any event, omission or proceeding
prior to the amendment.
ARTICLE X
AMENDMENTS
Section 1. The Board of Directors shall have the power to alter, amend
Exhibit 1 under Form N-1A
Exhibit 3(a) under Item 601/Reg S-K
INCOME FOUNDATION FUND, INCORPORATED
ARTICLES OF RESTATEMENT OF CHARTER
(Under Section 13)
INCOME FOUNDATION FUND, INCORPORATED, a Maryland corporation, having its
principal office in Baltimore City County, Maryland, (hereinafter called the
"Corporation") hereby certifies to the State Tax Commission of Maryland that:
FIRST: The Corporation desires to restate its Charter as
presently in effect.
SECOND: That the provisions of the Charter presently in effect are
as follows:
FIRST: That Income Foundations Fund, Incorporation was duly
incorporated under the laws of the State of Maryland on October 31st, 1934 and
that the subscribers, DAVID W. BARTON, WILLIAM H. GORDON and NICHOLAS G.
PENNMAN, III, the post office address of each being Mercantile Trust Building,
Baltimore, Maryland, and all of full legal age, constitute all of the
incorporators who signed the original Certificate of Incorporation.
SECOND: The name of the corporation (hereinafter called the
Corporation), is the INCOME FOUNDATION FUND, INCORPORATED.
THIRD: The purpose or purposes for which the Corporation is formed,
and the business or objects to be carried on and promoted by it, are as
follows:
(1) To purchase or otherwise acquire, hold for investment or otherwise,
sell, exchange or otherwise dispose of securities (which term "securities"
shall for the purpose of this Article, without limitation of the generality
thereof, be deemed to include any stocks, shares, bonds, debentures, notes,
mortgages or other obligations, and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or subscribe for
the same or representing any other rights or interests therein or in any
property or assets) created or issued by any persons, firms, associations,
corporations, syndicates, combinations, organizations, governments or
subdivisions thereof, and generally to deal in any such securities; and to
exercise, as owner or holder of any securities, all rights, powers and
privileges in respect thereof; provided, however, that the Corporation
shall not -
(a) Purchase any securities or evidences of interest therein on
"margin", that is to say in a transaction in which it has borrowed all
or a portion of the purchase price and pledged the purchased
securities, or evidences of interest therein as collateral for the
amount so borrowed;
(b) Contract to sell any security or evidence of interest therein
except to the extent that the same shall be owned by the Corporation
and be available for delivery in satisfaction of any such sale;
(c) Borrow any money or mortgage or pledge any of its property,
real or personal;
(d) Purchase the securities of any issuer if such purchase at the
time thereof would cause more than five percent (5%) of the total
assets of the Corporation (taken at market value) to be invested in
the securities of such issuer. The foregoing limitation shall not
apply to investments in Government securities as defined in the
Investment Company Act of 1940;
(e) Purchase securities of any issuer if such purchase at the time
thereof would cause more than ten per cent (10%) of any class of
securities of such issuer to be held by the Corporation. For this
purpose all outstanding bonds and other evidences of indebtedness
shall be deemed to be a single class of securities of the issuer, and
all kinds of stock of an issuer preferred over the common stock as to
dividends or in liquidation shall be deemed to constitute a single
class regardless of relative priorities, series designations,
conversion rights and other differences;
(f) Purchase securities issued by any other investment company of
investment trust except by purchase in the open market where no
commission or profit to a sponsor or dealer results from such purchase
other than the customary broker's commission, or except when such
purchase, though not made in the open market, is part of a plan or
merger or consolidation;
(g) Invest more than 5% of the assets of the Corporation in
securities of any issuer which has a record of less than three (3)
years continuous operation including, however, in such three (3) years
the operation of any predecessor company or companies, partnership or
individual enterprise if the issuer whose securities are proposed as
an investment for funds of the Corporation has come into existence as
a result of a merger, consolidation, reorganization, or the purchase
of substantially all the assets of such predecessor company or
companies, partnership or individual enterprise;
(h) Purchase or retain in its portfolio any securities issued by an
issuer any of whose officers, directors, trustees, or security-holders
is an officer or director of the Corporation, or is a member, officer,
director or trustee of the Investment Adviser of the Corporation, if
after the purchase of the securities of such issuer by the Corporation
one or more of such persons owns beneficially more than one-half of
one per cent (1/2%) of the shares or securities, or both (all taken at
market value), of such issuer, and such persons owning more than one-
half of one per cent (1/2%) of such shares or securities together own
beneficially more than five per cent (5%) of such shares or
securities, or both (all taken at market value);
(i) Invest in commodities, commodity contracts or real estate;
(j) Engage in underwriting or agency distribution of securities
issued by others;
(k) Lend any of the assets of the Corporation to any person for any
purpose whatsoever provided, however, that the purchase of holding of
bonds, debentures, notes, certificates of indebtedness, or other
securities of any issuer acquired at original issue or otherwise shall
not be prohibited by this sub-paragraph.
(2) To issue and sell shares of its own capital stock and any
certificates, receipts, warrants or other instruments representing rights
to receive, purchase or subscribe for the same, or representing any
interest therein, in such amounts, on such terms and conditions, for such
purposes and for such prices, now or hereafter permitted by the laws of
Maryland and by this Certificate of Incorporation, as its Board of
Directors may determine.
(3) To purchase or otherwise acquire (without the vote or consent of the
holders of any class of stock of the Corporation), hold, dispose of,
transfer, reissue or cancel its own securities (including shares of its
capital stock of any class), in any manner and to the extent now or
hereafter permitted by the laws of said State and by this Certificate of
Incorporation.
(4) To sponsor, issue or in any manner further a plan or plans of
savings or investment. In connection with any such plan the Corporation
may enter into contracts with other deposits of monies with the Corporation
or with some other designated payee, or with a trustee under an Indenture
of Trust to which the Corporation is a party. Such sums to be used in the
manner, to the extent, and under the conditions used in the manner, to the
extent, and under the conditions set out in the contract and/or in the Deed
of Trust for the purchase of securities, (which may be stock of the
Corporation).
(5) To conduct its business in all its branches at one or more offices
in Maryland and elsewhere in any part of the world, without restriction or
limit as to extent, and to acquire, use, hold, and dispose of, in any
manner and for any purpose now or hereafter permitted by the laws of said
therein, in said State or elsewhere, subject to the laws of the State or
country in which located.
(6) To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates, or, to the extent now or
hereafter permitted by the laws of Maryland, as a member of, or as the
owner or holder of any stock of, or shares or interest in, any firm,
association, corporation, trust or syndicate; and in connection therewith
to make or enter into such deeds or contracts with any persons, firms,
associations, corporations, syndicates, governments or subdivisions
thereof, and to do such acts and things and to exercise such powers, as a
natural person could lawfully make, enter into, do or exercise.
(7) To do any and all such further acts and things and to exercise any
and all such further powers as may be necessary, appropriate or desirable
for the accomplishment, carrying out or attainment of all or any of the
foregoing purposes or objects.
The foregoing objects and purposes shall, except as otherwise expressly
provided, be in no way limited or restricted by reference to , or inference
from, the terms of any other clause of this or any other Article of this
Certificate of Incorporation, and shall each be regarded as independent, and
construed as powers as well as objects and powers shall not be construed to
limit or restrict in any manner the meaning of general terms or the general
powers of the Corporation now or hereafter conferred by the laws of the State
of Maryland, nor shall the expression of one thing be deemed to exclude
another though it be of like nature, not expressed.
FOURTH: The post office address of the place at which the
principal office of the Corporation in the State of Maryland will be located
is 32 South Street, Baltimore, Maryland.
The name of the Corporation's resident agent in charge of said
principal office is DAVID W. BARTON, whose post office address is 32 South
Street, Baltimore, Maryland, Said resident agent is a citizen of the State of
Maryland and actually resides therein.
FIFTH:
(1) The total amount of the authorized capital stock of the
Corporation is $2,000,000., consisting of 20,000,000 shares of Common Stock of
the par value of ten cents (10c) per share, all of one class.
(2) At all times each Stockholder of the Corporation shall be
entitled to one vote for each share of stock standing in his name on the books
of the Corporation.
(3)
(a) Each Stockholder of the Corporation shall be entitled to
require the Corporation to purchase all or nay part of the shares of such
Stockholder at the net asset value thereof (as hereinafter defined in Section
(10) of Article SEVENTH hereof) as determined by or on behalf of the Board of
Directors. Certificates representing shares to be so purchased shall be
presented at the office of the Custodian, duly endorsed or accomplished by a
proper instrument of transfer, together with a request that the Corporation
purchase the shares represented thereby. If the date of deposit is a day
other than Saturday upon which a determination of net asset value as of the
close of business is required by Section (10) of Article SEVENTH hereof to be
made, or is made, and if such shares are deposited prior 12:00 o'clock noon
then the purchase price shall be the net asset value as of the close of
business on the first day upon which a determination of the net asset value is
so made or required to be made next succeeding the date on which such shares
are so deposited. Payment for such shares shall be made by the Corporation to
the Stockholder within seven (7) days after the date upon which the shares are
deposited. If the determination of the purchase price is postponed beyond the
date on which it would normally occur by reason of a declaration by the Board
of Directors suspending determination of the net asset value pursuant to
Section (10) of Article SEVENTH the right of the Stockholder to have his
shares purchased by the Corporation shall be similarly suspended and he may
withdraw his certificate or certificates from deposit if he so elects; or if
he does not so elect the purchase price shall be the net asset value of shares
deposited determined as of the close of business upon the first day after the
suspension upon which such a determination is made.
(b) The Corporation may, however, purchase shares of the
Corporation by agreement with the owner thereof (i) at a price not exceeding
the net asset value per share at the time the purchase or contract of purchase
is made, or (ii) a price not exceeding the net asset value per share to become
effective at some later time.
(4) Subject to the exceptions noted below the Corporation shall pay
and distribute in each fiscal year such amounts (hereinafter called "income
distributions") which are approximately equal to the net income, exclusive of
profits of losses realized on the sale of securities or other property, for
such fiscal year, determined by the Board of Directors in accordance with good
accounting practice (which in the discretion of the Board may be adjusted for
net amounts included as accrued net income in the price of shares of the
Corporation issued or repurchased). In the event the net income of the
Corporation exceeds the amount distributed by less than one cent per share
outstanding at the record date for the final dividend, of Directors may also
in its dissertation pay and distribute additional amounts (hereinafter called
"capital gains distributions") which shall not substantially exceed the excess
of profits over losses on sale of securities or other property for such fiscal
year. The record dates to determine the Stockholders entitled to each
distribution and the dates of payment thereof shall be as determined by the
Board of Directors. Under no circumstances shall the Board of Directors cause
any distribution to be made from the paid-in surplus of the Corporation.
Inasmuch as the computation of net income and capital gains for Federal income
tax purposes may vary from the computation thereof on the books, the
provisions of this Section (4) of Article FIFTH shall be interpreted to give
to the Board of Directors power in its discretion to distribute for any fiscal
year as income distributions and as capital gains distributions, respectively,
amounts sufficient to enable the Corporation to avoid or reduce liability for
taxes.
(5) The Board of Directors shall have power at any time, and from
time to time, to declare any distributions authorized by Section (4) of this
Article FIFTH, payable at the election of the Stockholders (whether exercised
before or after the declaration of the distribution) either in cash or in
shares of capital stock, provided that the sum of (i) the cash distributions
actually paid to any Stockholder and (ii) the net asset value of the shares
which that Stockholder elects to receive, in effect at such time at or after
the election as the Board of Directors may specify shall not exceed the full
amount of cash to which that Stockholder would be entitled if he elected to
receive only cash. In the case of a distribution payable in cash or shares of
capital stock at the election of a Stockholder, the Board of Directors may
prescribe whether a Stockholder failing to express his election before a given
time shall be deemed to have elected to take shares rather than cash, or to
take cash rather than shares, or to take shares with cash adjustment for
fractions.
(6) Notwithstanding any provision of law requiring any action to be
taken or authorized by the affirmative vote of the holders of a designated
proportion of the shares of stock of the Corporation, or to be otherwise taken
or authorized by a vote of the Stockholders, such action shall be effective
and valid if taken or authorized by the affirmative vote of the holders of a
majority of the total number of shares of all classes outstanding and entitled
to vote thereon, except as otherwise provided in this Certificate of
Incorporation, or any amendment hereto.
(7) No holder of any class of stock of the Corporation shall, as
such holder, have any right to purchase or subscribe for any shares of the
capital stock of the Corporation of any class which it may issue or sell
(whether out of the number of shares authorized by this Certificate of
Incorporation, or by any amendment hereto, or out of any shares of capital
stock of the Corporation acquired by it after the issue thereof).
(8) All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of the Certificate of
Incorporation.
SIXTH: The number of Directors of the Corporation shall be eight
(8), and the names of those at the time in office are as follows: DAVID W.
BARTON, JOHN F. DONAHUE, THOMAS J. DONNELLY, CHARLES A. FAGAN, JR., JOSEPH A.
HAGUE, F. BARTON HARVEY, WILLIAM L. JACOB and JAMES E. MUTRIE.
SEVENTH: The following provisions are hereby adopted for the
purpose of defining, limiting and regulating the powers of the Corporation and
of the Directors and Stockholders:
(1) The By-Laws of the Corporation may fix the number of Directors
at a number greater than that named in this Certificate of Incorporation,
provided that in no case shall the number of Directors be less than three, and
may authorize the Board of Directors, by the vote of a majority of the entire
Board of Directors, to increase or decrease the number of Directors fixed by
this Certificate of Incorporation or by the By-Laws within a limit specified
in the By-Laws, and to fill the vacancies created by any increase in the
number of Directors. Unless otherwise provided by the By-Laws of the
Corporation, the Directors of the Corporation need not be Stockholders
therein.
(2) The Board of Directors shall have power, if, authorized by the
By-Laws, to designate be resolution or resolutions adopted by a majority of
the whole Board of Directors, one or more committees, each committee to
consist of two or more of the Directors of the Corporation, which to the
extent provided in said resolutions or in the By-Laws of the Corporation and
permitted by the laws of Maryland, shall have an may exercise any or all of
the powers of the Board of Directors in the management of the business and
affairs of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
(3) The Board of Directors shall, subject to the laws of Maryland,
have power to determine from time to tome what conditions and regulations any
accounts and books of the Corporation or any of them shall be open to
inspection of the Stockholders; and no Stock holder shall have any right to
inspect any account or book or document of the Corporation except as conferred
by the laws of Maryland unless and until authorized so to do by resolution of
the Board of Directors or of the Stockholders; provided, however, that the
Corporation shall mail to Stockholders semi-annual financial statements of the
Corporation and such other financial information as may be from time to time
prescribed by the Investment Company Act of 1940 and the rules and regulations
of the Securities and Exchange Commission.
(4) Any Director, or any officer, elected or appointed by the Board
o Directors or by any committee of said Board, or by the Stockholders or
otherwise, may be removed at any time, with or without cause, in such lawful
manner as may be provided in the By-Laws of the Corporation.
(5) If the By-Laws so provide, the Board of Directors of the
Corporation shall have power to hold their meetings, to have an office or
offices and, subject to the provisions of the laws of Maryland, to keep the
books of the Corporation, outside of said State at such places as may from
time to time be designated by them.
(6) The Corporation shall at all times cause its securities to be
held by a Trustee or Custodian which shall be a Bank or Trust Company have an
aggregate capital, surplus and undivided profit (as shown in its last
published report) of at least Two Million ($2,000,000.) Dollars. The Trustee
or Custodian shall also receive all monies due to the Corporation and shall
deposit same in its banking department Corporation and shall deposit same in
its banking department or elsewhere as the Board of Directors may direct. The
Board of Directors may at its discretion enter into agreements with the
Trustee or Custodian authorizing it to act as agent for the Corporation in the
disbursement of dividends, purchase and sale of securities, redemption of the
Corporation's securities, delivery of proxies, maintenance of books and
accounts and the performance of such other services as the Board may deem
advisable. All agreements with the trustee or Custodian shall be subject to
applicable State law, this Certificate of Incorporation, the By-Laws of the
Corporation and the Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission. In the event of
the resignation, removal or inability of such Trustees or Custodian to serve,
the Corporation hereinabove mentioned shall be delivered directly to such
successor Custodian. In the event no such successor Trustee or Custodian can
be found the Board of Directors of the Corporation shall call a Special
Meeting of Stockholders to determine whether the Corporation shall be
liquidated or shall function without a Trustee or Custodian.
(7) Shares of stock in other corporations shall be voted by such
officer or officers of the Corporation as the Board of Directors shall
designate for the purpose, or by a proxy or proxies thereunto duly authorized
by the Board of Directors, except as otherwise ordered by vote of the holders
of a majority of the shares of the Corporation outstanding and entitled to
vote in respect thereto.
(8)
(a) The Corporation shall not deal with its officers or Directors
or any firm of which any officer or Director may be a member or with any
corporation or joint-stock association of which any of the Corporation's
officers or Directors may be an officer or Director, as principals in making
purchases of securities (other than stock or other securities which may be
issued by the Corporation) or in making sales of securities purchased (other
than such stock or other securities issued by the Corporation), nor shall the
Corporation make any loan to any of its officers or Directors or any firm of
which any officer or Director may be a member or any corporation or joint-
stock association of which any of the Corporation's officers or Directors may
be an officer or Director, but any officer or Director of this Corporation,
either directly or through a partnership, association or corporation, may act
as broker and may accept the customary brokerage commissions in the purchase
and/or sale of securities for account of the Corporation, and may purchase or
sell, or act as banker or dealer or agent in connection with the sale of
stock, warrants and any other securities which may be issued by the
Corporation, and may be an officer and/or Director and/or Stockholder of any
corporation the securities of which may be owned by the Corporation, and each
and every person who may become an officer or Director of this Corporation is
hereby relieved from any liability that might otherwise exist from contracting
as aforesaid with this Corporation for the benefit of himself or any
partnership, association or corporation in which he may be interested.
(b) Subject only to the provisions of Subdivision (a) of this
paragraph (8), and Director of officer individually, or any firm of which and
Director of officer may be a member, or any corporation or joint-stock
association of which any Director of officer may be an officer, director or
stockholder, may be a party to, or may be pecuniarily or otherwise interested
in, any contract of transaction of the Corporation, and in the absence of
fraud no contract or other transaction shall be thereby affected or
invalidated; provided, that in case a Director, or a firm, corporation or
association of which a Director is a member, officer or director is so
interested, such fact shall be disclosed or shall have been known to the Board
of Directors or a majority thereof. Any Director of the Corporation who is so
interested or who is also a director of officer of such other corporation or
association or a member of such firm which is so interested, may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of the Corporation which shall authorize any such contract or transaction with
like force and effect as if he were not such director or officer of such other
corporation or association or not so interested or a member of a firm so
interested.
(c) The Corporation may enter into exclusive or non-exclusive
underwriting contract or contracts for the sale of its shares whereby the
Corporation may either agree to sell shares to the Underwriter or appoint such
Underwriter as its sales agent for such shares. The Underwriter or any
company contracting with the Underwriter may at the discretion of the Board of
Directors act as Sponsor of a plan or plans for the accumulation of shares of
the Corporation. From time to time the Corporation may also enter into
contracts for investment advisory, management and administrative services.
The terms and conditions, methods of authorization, renewal, amendment and
termination of the aforesaid contracts shall be as determined at the
discretion of the Board of Directors subject, however, to the provisions of
this Certificate of Incorporation, the By-Laws of the Corporation, applicable
State law, and the Investment Company Act of 1940 and the rules and
regulations of the Securities and Exchange Commission.
(9) The Board of Directors of the Corporation is empowered to
authorize the issuance from time to time of shares of its stock of any class
for such cash consideration as said Board of Directors may deem advisable
provided that said cash consideration, exclusive of any commissions or
discounts, shall not be less than the net asset value thereof, as hereinafter
determined in Section (10) of Article SEVENTH hereof, and in no event less
than the par value of said shares. When an underwriting contract is in effect
pursuant to Section (8)(c) of Article SEVENTH the time of sale shall be the
time when an unconditional order is placed with the Underwriter, unless the
order is an unconditional order to be executed at the public offering price to
be established by a calculation of net asset value later to become effective,
in which event the time of sale shall be the time when such net asset value
becomes effective. Such contract may provide for the sale of shares either at
a price based on the net asset value in effect when the order is placed with
the Underwriter or at a price based on such later effective net asset value.
No shares shall be sold by the Corporation (although shares previously
contracted to be sold may be issued upon payment therefor) during any period
when the determination of net asset value is suspended by declaration of the
Board of Directors pursuant to the provisions of Section (10) of the Article
SEVENTH hereof. In connection with the acquisition by merger or otherwise of
all or substantially all the assets of another investment company, corporation
or trust, the Board of Directors may issue or cause to be issued shares of the
Corporation and accept in payment thereof such assets at market value in lieu
of cash, provided that such assets are of the character in which the Board of
Directors are permitted to invest the funds of the Corporation.
(10) The net asset value of each share of the Corporation
outstanding shall be determined by the Board of Directors as of the close of
business on each business day (which term shall, wherever it appears in this
instrument, be deemed to mean each day when the New York Stock Exchange is
open). The power and duty to determine net asset value may be delegated by
the Board of Directors from time to time to one or more of the directors and
officers of the Corporation, to the other party to any contract entered into
pursuant to sub-paragraph (c) of Section (8) of Article SEVENTH hereof, or to
the Custodian or a transfer agent. The net asset value determined as of the
close of business on any particular business day shall become effective for
the purposes of Section (9) of Article SEVENTH and Section (3) of Article
FIFTH hereof at such hour, not later than the opening of business on the New
York Stock Exchange the next following business day, as may from time to time
be fixed by the Board of Directors. The Board of Directors may also determine
or cause to be determined the net asset value as of any particular time in
addition to the closing time of each day when the New York Stock Exchange is
open and fix the hour of that day when the net asset value so determined shall
become effective. Such additional or interim determination may be made either
by appraisal or by calculation or estimate. Any such calculation or estimate
shall be based on changes in the market value of representative or selected
securities or on changes in recognized market averages since the last closing
appraisal, and made in a manner which in the opinion of the Board of Directors
will fairly reflect the changes in the net asset value. At any time when the
New York Stock Exchange is closed (other than customary week-end and holiday
closings), the Board of Directors may cause the net asset value to be
determined by appraising all securities at last sale prices, or at not more
than the current asked not less than the current bid prices, in the over-the-
counter or other markets, and all other assets at fair value in the best
judgment of the Board of Directors may fix the time when the net asset value
so determined shall become effective. In each case the net asset value shall
remain effective until a new asset value shall be so determined and become
effective.
The Board of Directors may declare a suspension of the determination
of net asset value for the whole or any part of any period (a) during which
the new York Stock Exchange is closed other than customary weekend and holiday
closings, (b) during which trading on the New York Stock Exchange is
restricted, (c) during which an emergency exists as a result of which disposal
by the Corporation of securities owned by it is not reasonably practicable, or
it is not reasonably practicable for the Corporation fairly to determine the
value of its net assets, or (d) during such other periods as the Securities
and Exchange Commission may by order permit for the protection of security
holders of the Corporation provided that applicable rules and regulations of
the Securities and Exchange Commission shall govern as to whether the
conditions prescribed in (b) or (c) exist. Such suspension shall take effect
at such time as the Board of Directors shall specify but not later than the
close of business on the business day next following the declaration, and
thereafter there shall be no determination of net asset value until the Board
of Directors shall declare the suspension at an end, except that the
suspension shall terminate in any event on the first day on which said stock
exchange shall have reopened or the period specified in (b) or (c) shall have
expired (as to which in the absence of an official ruling by the Securities
and Exchange Commission or succeeding authority, the determination of the
Board of Directors shall be conclusive).
The net asset value of each share of the Corporation as of any
particular time shall be the quotient (adjusted in the event of a fractional
cent, in such manner as may be determined by the Board of Directors) obtained
by dividing the value, as of such time, of the net assets of the Corporation
(i.e., the value of the assets of the Corporation less its liabilities
exclusive of capital and surplus) by the total number of shares outstanding
(exclusive of treasury shares) at such time, all determined and computed as
follows:
A. The assets of the Corporation shall be deemed to include (a)
all cash on hand, on deposit, or on call, including any interest
accrued thereon, (b) all bonds, bills and notes and accounts
receivable, (c) all shares of stock, subscription rights and other
securities, including without limitation, bonds, certificates and
noted of the United States Government owned or contracted for by the
Corporation, other than its own capital stock, (d) all stock and
cash dividends or distributions receivable by the Corporation which
have been declared and are ex-dividend to shareholders of record at
or before the time as of which the net asset value is being
determined, (e) all interest accrued on any interest-bearing
securities owned by the Corporation and (f) all other property of
every kind and nature including prepaid expenses; the valued of such
assets to be determined as follows:
(i) The value of any cash on hand, on deposit, or on call,
bills and notes and accounts receivable, prepaid expenses, cash
dividends and interest declared or accrued as aforesaid and not
yet received, shall be deemed to be the face amount thereof
unless the Board of Directors shall have determined that any
such item is not worth the face amount thereof, in which event
the value thereof shall be determined in good faith by the
Board of Directors;
(ii) The value of any share of stock, subscription right or
other security which shall be listed or dealt in upon the New
York Stock Exchange or upon the American Stock Exchange shall
be determined by taking the closing sale price (or lacking any
sales, not less than the closing bid price not more than the
closing asked price therefor) on the date as of which the net
asset value is being determined, all as reported by any report
in common use or authorized by the New York Stock Exchange or
the American Stock Exchange, as the case may be;
(iii) The value of any share of stock, subscription right
or other security which shall not be listed or dealt in on
either of such Exchanges, shall be determined in the manner
described in the next preceding sub-paragraph if listed or
dealt in on any other Exchange; and,
(iv) In the case of any share of stock or subscription right or
property for which no price quotations are available as above
provided, the value thereof shall be determined from time to
time in such manner as the Board of Directors shall from time
to time deem appropriate.
B. The liabilities of the Corporation shall be deemed to include
(a) all bills and notes and account payable, (b) all administrative
expenses payable and/or accrued, (including investment advisory,
management and administrative services fees), (c) all contractual
obligations for the payment of money or property, including the
amount of any unpaid dividends upon the Corporation's shares,
declared to shareholders of record at or before the time as of which
the net asset value is being determined, (d) all reserves authorized
or approved by the Board of Directors for taxes or contingencies,
and (e) all other liabilities of the Corporation of whatsoever kind
and nature except liabilities represented by outstanding capital
stock and surplus of the Corporation.
C. For the purposes hereof -
(i) Share of the Corporation sold shall be deemed to become
outstanding at the close of business on the day on which the
contract of sale is made, and the sale price thereof (less
commission, if any, and less any stamp or other tax payable by
the Corporation in connection with the issuance thereof) shall
thereupon be deemed an asset of the Corporation.
(ii) Shares of the Corporation tendered for purchase by the
Corporation under sub-paragraphs (a) and (b) of Section (3)
Article FIFTH shall be deemed to be outstanding at the close of
business on the day as of which the purchase price is
determined, and thereafter shall be deemed treasury stock and,
until paid the price thereof shall be deemed to be a liability
of the Corporation.
(iii) Credits and contractual obligations payable to the
Corporation in foreign currency and liabilities and contractual
obligations payable by the Corporation in foreign currency
shall be taken at the current cable rate of exchange as nearly
as practicable at the time as of which the net asset value is
computed.
(11) No officer or director of the Corporation or of any investment
advisory company or management company not the Corporation itself nor such
investment advisory or management company shall take long or short positions
in respect of any shares of stock issued by this Corporations provided that:
(a) Nothing herein shall prevent the Corporation or any Underwriter
from purchasing from the Corporation shares of stock issued by the Corporation
provided that order to purchase from the Corporation are entered with the
Corporation by the Corporation or such Underwriter upon receipt by it of
purchase orders for the shares of stock of the Corporation and provided such
purchases are not in excess of purchase order received by such Corporation or
Underwriter;
(b) Nothing herein shall prevent the Corporation or any distributor
or underwriter from maintaining a market for the shares of stock issued by the
Corporation in the capacity of agent for the Corporation;
(c) Nothing herein shall prevent the purchase from the Corporation
of shares of stock of the Corporation by the Officers or Directors of the
Corporation or of any investment advisory company, management company or
underwriter or distributor of the Corporation at the prices available to the
public at the moment of such purchase or to the extent that any such person is
a Stockholder at the price available to Stockholders of the Corporation
generally at the moment of such purchase.
(12) In addition to the powers and authorities conferred upon them
by this Certificate of Incorporation or by statute, the Board of Directors may
exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject nevertheless to the provisions of
applicable State law, this Certificate of Incorporation, the By-Laws of the
Corporation, the Investment Company Act of 1940, as amended, and the rules and
regulations of the Securities and Exchange Commission.
EIGHTH: All subscription rights, warrants, regular stock dividends and
any rights and property received by the Corporation upon its investments may
be sold, availed of or retained in the discretion of the Board of Directors.
The Board of Directors shall have full power, in accordance with good
accounting practice, to determine what is principal and what is income, all
subject to any applicable provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Securities and Exchange
Commission.
NINTH: From time to time, when authorized by a majority vote of the
outstanding stock of the Corporation, any of the provisions of this
Certificate of Incorporation may be amended, altered or repealed, (except in
any amendment which authorizes the issuance of any class of stock other than
common stock or changes or permits the change of the terms of any of the then
outstanding stock by classification, reclassification or otherwise, which
amendments may only be authorized by a vote of three-fourths of the entire
outstanding stock of the Corporation), and other provisions authorized by the
statutes of the State of Maryland at the time in force may be added or
inserted in the manner at the time prescribed by said statutes, and all rights
at any time conferred upon the Stockholders of the Corporation by its
Certificate of Incorporation are granted subject to the provisions of this
Article NINTH.
THIRD: The provisions set forth in paragraph SECOND above are all the
provisions of the Charter of the Corporation presently in effect.
FOURTH: The Restatement of the Charter of the Corporation has been
authorized by a majority of the entire Board of Directors of the Corporation
at a meeting duly convened and held on March 21, 1960.
FIFTH: No amendment of the Charter of the Corporation is being
effected by these Articles of Restatement of Charter except as specifically
permitted by Section 13 of Article 23 of the Code of Public General Laws of
Maryland.
IN WITNESS WHEREOF INCOME FOUNDATION FUND, INCORPORATED, has caused these
presents to be signed in its name and on its behalf by its President, or one
of its Vice-Presidents and its corporation seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries, on March 21,
1960.
ATTEST INCOME FOUNDATION FUND, INCORPORATED
/s/ Ralph A. Alexander By: /s/ John F. Donahue
Secretary John F. Donahue, President
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on March 21, 1960, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania in and for the County of
Allegheny, personally appeared JOHN F. DONAHUE, President of INCOME FOUNDATION
FUND, INCORPORATED, a Maryland Corporation, and in the name and on behalf of
said Corporation acknowledged the foregoing Articles of Restatement of Charter
to be the corporate act of said Corporation and at the same time personally
appeared RALPH A. ALEXANDER and made oath in due form of law that he was
Secretary of the meeting of the Board of Directors of said Corporation which
the Restatement of Charter of the Corporation as therein set forth was
approved, and that the matters and facts set forth in said Articles of
Restatement of Charter are true to the best of his knowledge, information and
belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Helen B. Walters
Notary Public
INCOME FOUNDATION FUND, INCORPORATED
ARTICLES OF REDUCTION
(Under Section 31)
INCOME FOUNDATION FUND, INCORPORATED, a Maryland corporation having its
principal office in Baltimore City County, Maryland, (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The stated capital of the Corporation is hereby reduced from
$1,254,735.7714 to $1,164,619.1465.
SECOND:
(a) The amount of stated capital of the Corporation prior to
reduction is $1,254,735.7714, of which the total amount $1,254,735.7714, in
amount, is represented by 12,547,357.714 shares of the par value of $ .10 per
share of Common stock.
(b) The amount of the reduction of the stated capital of the
Corporation hereby made is $90,116.6249, all of which represents a reduction
in the stated capital of the Common stock.
(c) The method of effecting such reduction is by retiring
901,166.249 shares of the Common stock held by the Corporation.
(d) The amount of stated capital of the Corporation as hereby
reduced is $1,164,619.1465, of which $1,164,619.1465 in amount is represented
by 11,646,191.465 issued shares of the par value of $ .10 per share of Common
stock.
THIRD: The Board of Directors of the Corporation at a meeting duly
convened and held on March 10, 1964, duly authorized the reduction in the
stated capital of the Corporation hereinabove set forth.
IN WITNESS WHEREOF, INCOME FOUNDATION FUND, INCORPORATION has caused
these presents to be signed in its name and on its behalf by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries, on March 12,
1964.
INCOME FOUNDATION FUND, INCORPORATED
By: /s/ John D. Donahue
John F. Donahue, President
ATTEST:
/s/ Edward C. Gonzales
Edward C. Gonzales, Ass't. Secretary
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on March 12, 1964, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania in and for the County of
Allegheny, personally appeared JOHN F. DONAHUE, President of INCOME FOUNDATION
FUND, INCORPORATED, a Maryland Corporation, and in the name and on behalf of
said Corporation acknowledged the foregoing Articles of Reduction to be the
corporate act of said Corporation and at the same time personally appeared
EDWARD C. GONZALES, Assistant Secretary, and made oath in due form of law that
he was Assistant Secretary of the meeting of the Board of Directors of said
Corporation which the reduction of the stated capital of the corporation
therein set forth was authorized, and that the matters and facts set forth in
said Articles of Reduction are true to the best of his knowledge, information
and belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Helen B. Walters
Notary Public
INCOME FOUNDATION FUND, INCORPORATED
ARTICLES OF REDUCTION
(Under Section 31)
INCOME FOUNDATION FUND, INCORPORATED, a Maryland corporation having its
principal office in Baltimore City County, Maryland, (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The stated capital of the Corporation is hereby reduced from
$1,534,288.0606 to $1,394,320.4525.
SECOND:
(a) The amount of stated capital of the Corporation prior to
reduction is $1,534,288.0606, of which the total amount $1,534,288.0606, in
amount, is represented by 15,342,880.606 shares of the par value of $ .10 per
share of Common stock.
(b) The amount of the reduction of the stated capital of the
Corporation hereby made is $139,967.6081, all of which represents a reduction
in the stated capital of the Common stock.
(c) The method of effecting such reduction is by retiring
901,166.249 shares of the Common stock held by the Corporation.
(d) The amount of stated capital of the Corporation as hereby
reduced is $1,394,320.4525, of which $1,394,320.4525 in amount is represented
by 13,943,204.525 issued shares of the par value of $ .10 per share of Common
stock.
THIRD: The Board of Directors of the Corporation at a meeting duly
convened and held on November 17, 1965, duly authorized the reduction in the
stated capital of the Corporation hereinabove set forth.
IN WITNESS WHEREOF, INCOME FOUNDATION FUND, INCORPORATION has caused
these presents to be signed in its name and on its behalf by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries, on February 25,
1966.
INCOME FOUNDATION FUND, INCORPORATED
By: /s/ John D. Donahue
John F. Donahue, President
ATTEST:
/s/ Charles A. Fagan, III
Charles A. Fagan, III, Assistant. Secretary
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on February 25, 1966, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania in and for the County of
Allegheny, personally appeared JOHN F. DONAHUE, President of INCOME FOUNDATION
FUND, INCORPORATED, a Maryland Corporation, and in the name and on behalf of
said Corporation acknowledged the foregoing Articles of Reduction to be the
corporate act of said Corporation and at the same time personally appeared
CHARLES A. FAGAN, III, Assistant Secretary, and made oath in due form of law
that he was Assistant Secretary of the meeting of the Board of Directors of
said Corporation which the reduction of the stated capital of the corporation
therein set forth was authorized, and that the matters and facts set forth in
said Articles of Reduction are true to the best of his knowledge, information
and belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Helen B. Walters
Notary Public
My Commission Expires February 5, 1967
INCOME FOUNDATION FUND, INCORPORATED
ARTICLES OF AMENDMENT
(Under Sections 11-12)
INCOME FOUNDATION FUND, INCORPORATED, a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by striking out
paragraph (1) of ARTICLE FIFTH which presently reads as follows:
"(1) The total amount of the authorizes capital stock of the Corporation
is $2,000,000, consisting of 20,000,000 shares of Common stock of a par
value of ten cents (10 cents) per share, all of one class."
and inserting in place thereof a new paragraph (1) to read as follows:
"(1) The total amount of the authorized capital stock of the Corporation
is $10,000,000, consisting of 20,000,000 shares of Common Stock of the
par value of fifty-cents ($.50) per share, all of one class. Each share
of Common stock of the Corporation of the par value of ten cents (10
cents) per share issued and outstanding or held i the treasury of the
Corporation is hereby reclassified and changed into one-fifth (1/5th) of
one fully-paid and non-assessable share of Common Stock of the
Corporation of the par value of fifty-cents ($.50) each, and each holder
of record of one or more shares of Common Stock of the Corporation of the
par value of ten cents (10 cents) per share as of the close of business
on the date that Articles of Amendment setting forth this amendment to
the charter of the Corporation are filed and accepted for record by the
State Department of Assessments and Taxation of Maryland shall be
entitled to receive, as soon as practicable upon surrender of a
certificate for such shares of the Common Stock of a par value of ten
cents (10 cents) per share, a certificate or certificates representing
one-fifth of one share of Common Stock of the par value of fifty cents
($.50) per share for each one share of Common Stock of the par value of
ten cents (10 cents) per share represented by the certificate of such
holder."
SECOND: The Board of Directors of Corporation at a meeting duly convened
and held on November 17, 1965 adopted a resolution in which was set forth the
foregoing amendment to the Charter declaring that the said amendment of the
Charter was advisable and directing that it be submitted for action thereon at
the Annual Meeting of Stockholders of the Corporation to be held on March 14,
1966 or at any adjournment or adjournments thereof.
THIRD: Notice setting forth the said amendment of the Charter and
stating that the purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all stockholders entitled to
vote thereon; and like notice was given to all stockholders of the Corporation
not entitled to vote thereon, whose contract rights as expressly set forth in
the Charter would be altered by the amendment.
FOURTH: The amendment of the Charter of the Corporation as herein set
forth was approved by the Stockholders of the Corporation at the Annual
Meeting of the Stockholders, held on March 14, 1966 by the affirmative vote of
three-fourths of each class of stock entitled to vote thereon, as required by
the Charter of the Corporation.
FIFTH: The amendment of the Charter of the Corporation as hereinabove
set forth has been duly advised by the Board of Directors and approved by the
Stockholders of the Corporation.
SIXTH:
(a)The total number of shares of all classes of stock of the
Corporation heretofore authorized and the number and par value of the shares
of each class are as follows:
20,000,000 shares of Common Stock of a par value of ten cents
(10 cents) per share;
(b)The total number of shares of all classes of stock of the
Corporation as increased, and the number and par value of the shares o f each
class, are as follows:
20,000,000 shares of Common Stock of a par value of fifty cents
($.50) per share;
(c)The capital stock of the Corporation is not divided into
classes.
IN WITNESS WHEREOF, INCOME FOUNDATION FUND, INCORPORATED has caused
these presents to be signed in its name and on its behalf by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries on March 14,
1996
ATTEST INCOME FOUNDATION FUND INCORPORATED
/s/ V. William Efthim By: /s/ John F, Donahue
Secretary President
CORPORATE SEAL
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on March 14, 1966, before me, the subscriber, a
Notary Public of the Commonwealth of Massachusetts in and for the County of
Suffolk, personally appeared JOHN F. DONAHUE, President of INCOME FOUNDATION
FUND, INCORPORATED, a Maryland Corporation, and in the name and on behalf of
said Corporation acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation and at the same time personally appeared V.
WILLIAM EFTHIM, and made oath in due form of law that he was Secretary of the
meeting of the stockholders of said corporation at which the amendment of the
Charter of the Corporation therein set forth was approved, and that the
matters and facts set forth in said Articles of Amendment are true to the best
of his knowledge, information and belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Helen A. Magoon
Notary Public
My Commission Expires October 27, 1972
SEAL
INCOME FOUNDATION FUND, INCORPORATED
ARTICLES OF AMENDMENT
(Under Sections 11-12)
INCOME FOUNDATION FUND, INCORPORATED, a Maryland Corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended as follows:
1. By striking out Section (3)(a) of Article FIFTH and
substituting in its place the following:
"FIFTH; (3)(a) Each Stockholder of the Corporation shall be
entitled to require the Corporation to purchase all or any part of the shares
of such Stockholder at the net asset value thereof (as hereinafter defined in
Section (10) of Article SEVENTH hereof) as determined by or on behalf of the
Board of Directors. Certificates representing shares to be so purchased shall
be presented at the office of the Custodian, duly endorsed or accompanied by a
proper instrument of transfer, together with a request that the Corporation
purchase the shares represented thereby. If the date of deposit is a day
other than Saturday upon which a determination of net asset value as of the
close of business is required by Section (10) of this Article SEVENTH to be
made, or is made, and if such shares are deposited prior to the close of
business of the New York Stock Exchange the redemption price shall be the net
asset value as of the close of business on such day. If the day of deposit is
not such a day, or such shares are deposited after the close of business of
the New York Stock Exchange, then the redemption price shall be the net asset
value as of the close of business on the first day upon which a determination
of the net asset value is so made or required to be made next succeeding the
date on which such shares are so deposited. Payment for such shares shall be
made by the Corporation to the Stockholder within seven (7) days after the
date upon which the shares are deposited. If the determination of the
purchase price is postponed beyond the date on which it would normally occur
by reason of a declaration by the Board of Directors suspending determination
of the net asset value pursuant to Section (10) of Article SEVENTH the right
of the Stockholder to have his shares purchased by the Corporation shall be
similarly suspended and he may withdraw his certificate or certificates from
deposit if he so elects; or if does not so elect the purchase price shall be
determined as of the close of business upon the first day after the suspension
upon which a determination is made."
SECOND:The Board of Directors of the Corporation on February 12, 1969
adopted a resolution in which was set forth the foregoing amendments to the
Charter declaring that the said amendments of the Charter were advisable and
directing that they be submitted for action thereon at the Annual Meeting of
Stockholders of the Corporation to be held on March 10, 1996 or at any
adjournment or adjournments thereof.
THIRD: Notice setting forth the said amendments of the Charter and
stating that the purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all stockholders entitled to
vote thereon; and like notice was given to all stockholders of the Corporation
not entitled to vote thereon, who contract rights as expressly set forth in
the Charter would be altered by the amendments.
FOURTH:The amendments of the Charter of the Corporation as herein set
forth were approved by the Stockholders of the Corporation at the Annual
Meeting of Stockholder, held on March 10, 1969, by all voted entitled to be
cast thereon as required by the Articles of Incorporation.
FIFTH: The amendments of the Charter of the Corporation as hereinabove
set forth have been duly advised by the Board of Directors and approved by the
Stockholders of the Corporation.
IN WITNESS WHEREOF, INCOME FOUNDATION FUND, INCORPORATION has caused
these presents to be signed in its name and on its behalf by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries, on March 12,
1969.
ATTEST: INCOME FOUNDATION FUND, INCORPORATED
/s/Charles A. Fagan, III By: /s/ John F. Donahue
Assistant Secretary President
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on March 12, 1969, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania in and for the County of
Allegheny, personally appeared JOHN F. DONAHUE, President of INCOME FOUNDATION
FUND, INCORPORATED, a Maryland Corporation, and in the name and on behalf of
said Corporation acknowledged the foregoing Articles of Amendment to be the
corporate act of said Corporation; and at the same time personally appeared
CHARLES A. FAGAN, III, Assistant Secretary, and made oath in due form of law
that he was Assistant Secretary of the meeting of the stockholders of said
Corporation which the amendments of the Charter of Corporation therein set
forth were approved, and that the matters and facts set forth in said Articles
of Amendment are true to the best of his knowledge, information and belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Helen M. Fisher
Notary Public
INCOME FOUNDATION FUND, INCORPORATED
ARTICLES OF AMENDMENT
(Under Sections 11-12)
INCOME FOUNDATION FUND, INCORPORATED, a Maryland Corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Deportment of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended as follows:
1. By striking out Article SECOND and substituting in its place
the following:
"SECOND: The name of the corporation (hereinafter called the
Corporation), is BOSTON FOUNDATION FUND, INCORPORATED."
SECOND:The Board of Directors of the Corporation on August 12, 1969,
adopted a resolution in which was set forth the foregoing amendment to the
Charter declaring that the said amendment of the Charter was advisable and
directing that it be submitted for action thereon at a Special Meeting of
Stockholders of the Corporation to be held on September 19, 169, or a any
adjournment or adjournments thereof.
THIRD: Notice setting forth the said amendments of the Charter and
stating that the purpose of the meeting of the stockholders would be to take
action thereon, was given, as required by law, to all stockholders entitled to
vote thereon; and like notice was given to all stockholders of the Corporation
not entitled to vote thereon, who contract rights as expressly set forth in
the Charter would be altered by the amendments.
FOURTH:The amendments of the Charter of the Corporation as herein set
forth were approved by the affirmative vote of a majority of each class of
stock entitled to vote thereon at the Special Meeting of the Stockholders,
held on September 19, 1969.
FIFTH: The amendments of the Charter of the Corporation as hereinabove
set forth have been duly advised by the Board of Directors and approved by the
Stockholders of the Corporation.
IN WITNESS WHEREOF, INCOME FOUNDATION FUND, INCORPORATION has caused
these presents to be signed in its name and on its behalf by its President or
one of its Vice Presidents and its corporate seal to be hereunto affixed and
attested by its Secretary or one of its Assistant Secretaries, on September
19, 1969.
ATTEST: INCOME FOUNDATION FUND, INCORPORATED
/s/John W. McGonigle By: /s/ Clifford E. Brown
Assistant Secretary Vice President
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on September 19, 1969, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania in and for the County of
Allegheny, personally appeared CLIFFORD E. BROWN, Vice President of INCOME
FOUNDATION FUND, INCORPORATED, a Maryland Corporation, and in the name and on
behalf of said Corporation acknowledged the foregoing Articles of Amendment to
be the corporate act of said Corporation; and at the same time personally
appeared JOHN W. MCGONIGLE, and made oath in due form of law that he was
Secretary of the meeting of the stockholders of said Corporation which the
amendment of the Charter of Corporation therein set forth was approved, and
that the matters and facts set forth in said Articles of Amendment are true to
the best of his knowledge, information and belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Helen M. Fisher
Notary Public
ARTICLES OF AMENDMENT
OF
CHARTER
OF
BOSTON FOUNDATION FUND INCORPORATED
Boston Foundation Fund Incorporated, a Maryland Corporation, formerly
known as Income Foundation Fund Incorporated, having its principal office in
Maryland in the City of Baltimore, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: The Charter of the Corporation is hereby amended as follows:
I
By striking out the first sentence of Section (10) of Article SEVENTH and
inserting the following in its place:
"The net asset value of each share of the Corporation outstanding shall
be determined on each business day the New York Stock Exchange is open at
the time designated by the Board of Directors as they shall in their sole
discretion determine. Such time shall be referred to in this instruments
as 'the close of business' or 'the closing time.'"
II
By striking out Subparagraphs A. (ii), (iii) and (iv) of the third
paragraph of Section (10) of Article SEVENTH and inserting the following in
place thereof:
"A. (ii) The value of any shares of stock, subscription right or other
security shall be determined in accordance with the requirements of the
Investment Company Act of 1940 from time to time in such manner as the
Board of Directors from time to time deems appropriate."
SECOND:The Board of Directors of the Corporation on January 31, 1979,
duly adopted resolutions in which were set forth the foregoing amendments to
the Charter of the Corporation, declaring that said amendments of the Charter
of the Corporation as proposed were advisable and directing that they be
submitted for action thereon by the stockholders of the Corporation.
THIRD: The amendments of the Charter of the Corporation as hereinabove
set forth were approved by the stockholders of the Corporation by the
affirmative vote of a majority of each class of stock entitled to vote thereon
at the Annual Meeting of Stockholders held April 25, 1979.
FOURTH:The amendments of the Charter of the Corporation as hereinabove
set forth have been duly advised by the Board of Directors and approved by the
stockholders of the Corporation.
IN WITNESS WHERE, BOSTON FOUNDATION FUND INCORPORATED has caused these
presents to be signed in its name and on its behalf by its President and its
corporate seal to be hereunto affixed and attested by its Secretary on this
25th day of April 1979.
BOSTON FOUNDATION FUND INCORPORATED
By: /s/ Richard B. Fisher
Richard B. Fisher, Vice President
(Corporate Seal)
Attest:
/s/ John W. McGonigle
John W. McGonigle, Secretary
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on April 25, 1979, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania in and for the County of
Allegheny, personally appeared JOHN F> DONAHUE, Chairman of BOSTON FOUNDATION
FUND INCORPORATED, a Maryland Corporation, and in the name and on behalf of
said Corporation acknowledged the foregoing Articles of Amendment to be the
corporate act of said corporation; and at the same time personally appeared
JOHN W. McGONIGLE, Secretary of the Corporation, and made oath in due form of
law that the Shareholders of said Corporation adopted by unanimous consent
pursuant to Maryland law the approval of the amendment of the Charter of the
Corporation therein set forth, and that the matters and facts set forth in
said Articles of Amendment are true to the best of his knowledge, information
and belief.
WITNESS my hand and Notarial seal, the day and year last above written.
/s/ Loretta Yagesh
Notary Public
ARTICLES OF AMENDMENT
OF
BOSTON FOUNDATION FUND, INCORPORATED
approved and received for record by the State Department of Assesments and
Taxation of Maryland May 7, 1979 at 11:00 o'clock A.M. as in conformity with
law and ordered recorded.
Recorded in Liber 24444, folio one of the Charter Records of the State
Department of Assessments and Taxation of Maryland
Bonus tax paid $ Recording fee paid $ 20.00 Special Fee paid $
------ -- --- -----
To the clerk of the Superior Court of Baltimore City
IT IS HEREBY CERTIFIED, that the within instrument, together with all
indorsements thereon, has been received, approved and recorded by the State
Department of Assessments and Taxation of Maryland.
AS WITNESS my hand and seal of the said Department at Baltimore.
/s/ William J. Simmons
ARTICLES OF AMENDMENT
OF
CHARTER
OF
BOSTON FOUNDATION FUND INCORPORATED
Boston Foundation Fund Incorporated, a Maryland Corporation, formerly
known as Income Foundation Fund Incorporated, having its principal office in
Baltimore city, Maryland (the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended as follows:
I
By striking out Article SECOND and inserting the following in its place:
"The name of the corporation (the "Corporation") is Federated Stock and
Bond Fund, Inc."
II
Inserting an Article TENTH:
"The Fund acknowledges that Federated Investors, Inc. has reserved the
right to grant the non-exclusive use of the name 'Federated' or any
derivative thereof to any other investment company, investment adviser,
distributor, or other business enterprise, and to withdraw from the Fund
the use of the name, 'Federated'."
SECOND:The Board of Directors of the Corporation on September 28, 1984,
duly adopted resolutions in which were set forth the foregoing amendments to
the Charter of the Corporation, declaring that said amendments of the Charter
of the Corporation as proposed were advisable and directing that they be
submitted for action thereon by the stockholders of the Corporation.
THIRD: The amendments of the Charter of the Corporation as hereinabove
set forth were approved by the stockholders of the Corporation by the
affirmative vote of a majority of each class of stock entitled to vote thereon
at the Special Meeting of Stockholders held January 11, 1985
FOURTH:The amendments of the Charter of the Corporation as hereinabove
set forth have been duly advised by the Board of Directors and approved by the
stockholders of the Corporation.
IN WITNESS WHERE, BOSTON FOUNDATION FUND INCORPORATED has caused these
presents to be signed in its name and on its behalf by its Vice President and
its corporate seal to be hereunto affixed and attested by its Assistant
Secretary on this 24th day of January, 1985.
BOSTON FOUNDATION FUND INCORPORATED
By: /s/ Richard B. Fisher
Richard B. Fisher, Vice President
(Corporate Seal)
Attest:
/s/ Byron F. Bowman
Byron F. Bowman, Asst. Secretary
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF ALLEGHENY )
I hereby certify that on January 24, 1985, before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania, in and for the County of
Allegheny, personally appeared Richard B. Fisher and Byron F. Bowman, Vice
President and Assistant Secretary of Boston Foundation Fund Incorporated,
respectively, who swore under oath, that the matters and facts set forth in
the foregoing Amendment are true and correct.
WITNESS my hand and Notarial seal or stamp the day and year last above
written.
/s/ Loretta Yagesh
Notary Public
FEDERATED STOCK AND BOND FUND, INC.
ARTICLES OF RESTATEMENT OF CHARTER
Federated Stock and Bond Fund, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland,
that:
1. The Corporation desires to restate its Charter as currently in effect.
2. The provisions of the Charter which are currently in effect, stated in
accordance with the provisions of Section 2-608 of the Corporations and
Associations Article, are as follows:
FIRST: That Federated Stock and Bond Fund, Inc. was fully incorporated
as Income Foundation Fund, Incorporated under the laws of the State of
Maryland on October 31st, 1934 and that the sucbscribers, DAVID W. BARTON,
WILLIAM H. GORDON AND NICHOLAS. PENNIMAN, III, the post office address of each
being Mercantile Trust Building, Baltimore, Maryland, and all of full legal
age, constitute all of the incorporators who signed the original Certificate
of Incorporation.
SECOND:The name of the corporation (the "Corporation") is Federated
Stock and Bond Fund, Inc.
THIRD: The purpose or purposes for which the Corporation is formed, and
the business or objects to be carried on and promoted by it, are as follows:
(1) To purchase or otherwise acquire, hold for investment or otherwise,
sell, exchange or otherwise dispose of securities (which term "securities"
shall for the purpose of this Article, without limitation of the generality
thereof, be deemed to include any stocks, shares, bonds, debentures, notes,
mortgages or other obligations, and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or subscribe for
the same or representing any other rights or interest therein or in any
property or assets) created or issued by any persons, firms, associations,
corporations, syndicates, combinations, organizations, governments or
subdivisions thereof, and generally to deal in any such securities; and to
exercise, as owner or holder of any securities, all rights, powers and
privileges in respect thereof; provided, however, that the Corporation shall
not -
(a) Purchase any securities or evidences of interest therein on
"margin", that is to say in a transaction in which it has borrowed all or a
portion of the purchase price and pledged the purchased securities, or
evidences of interest therein as collateral for the amount so borrowed;
(b) Contract to sell any security or evidence of interest therein
except to the extent that the same shall be owned by the Corporation and be
available for delivery in satisfaction of any such sale;
(c) Borrow any money or mortgage or pledge any of its
property, real or personal;
(d) Purchase the securities of any issuer if such purchase at the
time thereof would cause more than five per cent (5%) of the total assets of
the Corporation (taken at market value) to be invested in the securities of
such issuer. The foregoing limitation shall not apply to investments in
Governments securities as defined in the Investment Company Act of 1940;
(e) Purchase securities of any issuer if such purchase at the time
thereof would cause more that ten per cent (10%) of any class of securities of
such issuer to be held by the Corporation. For this purpose all outstanding
bonds and other evidences of indebtedness shall be deemed to be a single class
of securities of the issuer, and all kinds of stock of an issuer preferred
over the common stock as to dividends or in liquidation shall be deemed to
constitute a single class regardless of relative priorities, series
designations, conversion rights and other differences;
(f) Purchase securities issued by any other investment company
or investment trust except by purchase in the open market where no commission
or profit to a sponsor or dealer results from such purchase other than the
customary broker's commission, or except when such purchase, though not made
in the open market, is part of a plan of merger or consolidation;
(g) Invest more than 5% of the assets of the in securities of any
issuer which has a record of less than three (3) years continuous operation
including, however, in such three (3) years the operation of any predecessor
company or companies, partnership or individual enterprise if the issuer whose
securities are proposed as an investment for funds of the Corporation has come
into existence as a result of a merger, consolidation, reorganization, or the
purchase of substantially all the assets of such predecessor company or
companies, partnership or individual enterprise;
(h) Purchase or retain in its portfolio any securities issued by an
issuer any of whose officers, directors, trustees, or security-holders is an
officer or director of the Corporation, or is a member, officer, director or
trustee of the Investment Adviser of the Corporation, of after the purchase of
the securities of such issuer by the Corporation one or more of such persons
owns beneficially more than one-half of one per cent (1/2%) of the shares or
securities, or both (all taken at market value ), of such issuer, and such
persons owning more than one-half of one per cent (1/2%) of such shares or
securities together own beneficially more than five per cent (5%) of such
shares or securities, or both (all taken at market value);
(i) Invest in commodities, commodity contracts or real estate;
(j) Engage in underwriting or agency distribution of
securities issued by others;
(k) Lend any of the assets of the Corporation to any person for any
purpose whatsoever provided, however, that the purchase or holding of bonds,
debentures, notes, certificates of indebtedness, or other securities of any
issuer acquired at original issue or otherwise shall not be prohibited by this
subparagraph.
(2) To issue and sell shares of its own capital stock and any
certificates, receipts, warrants or other instruments or representing rights
to receive, purchase or subscribe for the same, or representing any interest
therein, in such amounts, on such terms and conditions, for such purposes and
for such prices, now or hereafter permitted by the laws of Maryland and by
this Certificate of Incorporation, as its Board of Directors may determine.
(3) To purchase or otherwise acquire (without the vote or consent of the
holders of any class of stock of the Corporation), hold, dispose of, transfer,
reissue or cancel its own securities (including shares of its capital stock of
any class), in any manner and to the extent now or hereafter permitted by the
laws of said State and by this Certificate of Incorporation.
(4) To sponsor, issue or in any manner further a plan or plans of
savings or investment. In connection with any such plan the Corporation may
enter into contracts with others whereby such others will agree to make
periodic or other deposits of monies with the Corporation or with some other
designated payee, or with a trustee under an Indenture of Trust to which the
Corporation is a party. Such sums to be used in the manner, to the extent,
and under the conditions set out in the contract and/or in the Deed of Trust
for the purchase of securities, (which may be stock of the Corporation).
(5) To conduct its business in all its branches at one or more offices
in Maryland and elsewhere in any part of the world, without restriction or
limit as to extent, and to acquire, use, hold, and dispose of, in any manner
and for any purpose now or hereafter permitted by the laws of said State, any
real or personal property, or any rights or interests therein, in said State
or elsewhere, subject to the laws of the State or county in which located.
(6) To carry out all or any of the foregoing objects and purposes as
principal or agent, and alone or with associates, or to the extent now or
hereafter permitted by the laws of Maryland, as a member of, or as the owner
or holder of any stock of, or shares or interest in, any firm, association,
corporation, trust or syndicate; and in connection therewith to make or enter
into such deeds or contracts with any persons, firms, associations,
corporations, syndicates, governments or subdivisions thereof, and to do such
acts and things and to exercise such powers, as a natural person could
lawfully make, enter into, do or exercise.
(7) To do any and all such further acts and things and to exercise any
and all such other powers as may be necessary, appropriate or desirable for
the accomplishment, carrying out or attainment of all or any of the foregoing
purposes or objects.
The foregoing objects and purposes shall, except as otherwise
expressly provided, be in no way limited or restricted by reference to, or
inference from, the terms of any other clause of this or any other Article of
this Certificate of Incorporation, and shall each be regarded as independent,
and construed as powers as well as objects and purposes, and the enumeration
of specific purposes, objects and powers shall not be construed to limit or
restrict in any manner the meaning of general terms or the general powers of
the Corporation now or hereafter conferred by the laws of the State of
Maryland, nor shall the expression of one thing be deemed to exclude another
though it be of like nature, not express.
FOURTH:The post office address of the place at which the principal
office of the Corporation in the State of Maryland is 32 South Street,
Baltimore, Maryland.
The name of the Corporation's resident agent in charge of said principal
office is The Corporation Trust Incorporation, whose post office address is 32
South Street, Baltimore, Maryland, which is a corporation organized and
existing under the laws of the State of Maryland.
FIFTH: (1) The total amount of the authorized capital stock of the
Corporation is $10,000,000, consisting of 20,000,000, shares of Common Stock
of the par value of fifty-cents (4.50) per share, all of one class.
(2) At all times each Stockholder of the Corporation shall be
entitled to one vote for each share of stock standing in his name on the books
of the Corporation.
(3) (a) Each Stockholder of the Corporation shall be entitled to
require the Corporation to purchase all or any part of the shares of such
Stockholder at the net asset value thereof (as hereinafter defined in Section
(10) of Article SEVENTH hereof) as determined by or on behalf of the Board of
Directors. Certificates representing shares to be so purchased shall be
presented at the office of the Custodian, duly endorsed or accompanied by a
proper instrument of transfer, together with a request that the Corporation
purchase the shares represented thereby. If the date of deposit is a day
other than Saturday upon which a determination of net asset value as of the
close of business is required by Section (10) of this Article SEVENTH to be
made, and if such shares are deposited prior to the close of business of the
New York Stock Exchange the redemption price shall be the net asset value as
of the close of business on such day. If the day of deposit is not such a
day, or such shares are deposited after the close of business on the New York
Stock Exchange, then the redemption price shall be the net asset value as of
the close of business on the first day upon which a determination of the net
asset value is so made or required to be made next succeeding the date on
which such shares are so deposited. Payment for such shares shall be made by
the Corporation to the Stockholder within seven (7) days after the date upon
which the shares are deposited. If the determination of the purchase price is
postponed beyond the date on which it would normally occur by reason of
declaration by the Board of Directors suspending determination of the net
asset value pursuant to Section (10) of this Article SEVENTH the right of the
Stockholder to have his shares purchased by the Corporation shall be similarly
suspended and he may withdraw his certificate or certificates from deposit if
he so elects, or if he does not so elect the purchase price shall be the net
asset value of shares deposited determined as of the close of business upon
the first day after the suspension upon which such a determination is made.
(b) The Corporation may, however, purchase shares of the
Corporation by agreement with the owner thereof (i) at a price not exceeding
the net asset value per share at the time the purchase or contract of purchase
is made, or (ii) a price not exceeding the net asset value per share to become
effective at some later time.
(4) Subject to the exception noted below the Corporation shall pay
and distribute in each fiscal year such amounts (hereinafter called "income
distributions") which are approximately equal to the net income, exclusive of
profits or losses realized on the sale of securities or other property, for
such fiscal year, determined by the Board of Directors in accordance with good
accounting practice (which in the discretion of the Board may be adjusted for
net amounts included as accrued net income in the price of shares of the
Corporation issued or repurchased). In the event the net income of the
Corporation exceeds the net amount distributed by less than one cent per share
outstanding at the record date for the final dividend, such excess may be
distributed in the following year. The Board of Directors may also in its
discretion pay and distribute additional amounts (hereinafter call "capital
gains distributions") which shall not substantially exceed the excess of
profits over losses on sale of securities or other property for such fiscal
year. The record dates to determine the Stockholders entitled to each such
distribution and the dates of payment thereof shall be as determined by the
Board of Directors. Under no circumstances shall the Board Directors cause
any distribution to be made from the paid-in surplus of the Corporation.
Inasmuch as the computation of net income and capital gains for General income
tax purposes may vary from the computation thereof on the books, the
provisions of this Section (4) of Article FIFTH shall be interpreted to give
the Board of Directors power in its discretion to distribute for any fiscal
year as income distributions and as capital gains distributions, respectively,
amounts sufficient to enable the Corporation to avoid or reduce liability for
taxes.
(5) The Board of Directors shall have power at any time, and from
time to time, to declare any distributions authorized by Section (4) of this
Article FIFTH, payable at the election of the Stockholders (whether exercised
before or after declaration of the distribution) either in cash or in shares
of capital stock, provided that the sum of (i) the cash distributions actually
paid to any Stockholder and (ii) the net asset value of the shares which that
Stockholder elects to receive, in effect at such time at or after the election
as the Board of Directors may specify shall not exceed the full amount of cash
to which that Stockholder would be entitled if he elected to receive only
cash. In the case of s distribution payable in cash or shares of capital
stock at the election of a Stockholder, the Board of Directors may prescribe
whether a Stockholder failing to express his election before a given time
shall be deemed to have elected to take shares rather than cash, or to take
cash rather than shares, or to take shares with cash adjustment for fractions.
(6) Notwithstanding any provision of law requiring any action to be
taken or authorized by the affirmative vote of the holders of a designated
proportion of the shares of stock of the Corporation, or to be otherwise taken
or authorized by a vote of the Stockholders, such action shall be effective
and valid if taken or authorized by the affirmative vote of the holders of a
majority of the total number of shares of all classes outstanding and entitled
to vote thereon, except as otherwise provided in this Certificate of
Incorporation, or any amendment hereto.
(7) No holder of any class of stock of the Corporation shall, as
such holder, have any right to purchase or subscribe for any shares of the
capital stock of the Corporation of any class which it may issue or sell
(whether out of the number of shares authorized by this Certificate of
Incorporation, or by any amendment hereto, or out of any shares of capital
stock of the Corporation acquired by it after the issue thereof).
(8) All persons who shall acquire stock in the Corporation shall
acquire the same subject to the provisions of the Certificate of
Incorporation.
SIXTH: The number of Directors of the Corporation shall be eight
(8), and the names of those at the time in office are as follows: JOHN F.
DONAHUE, WILLIAM J. COPELAND, JAMES E. DOWD, EDWARD L. FLAHERTY, JR., J.
JOSEPH MALONEY, JR., GREGOR F. MEYER. WESLEY W. POSVAR, AND MARJORIE P. SMUTS.
SEVENTH: The following provisions are hereby adopted for the
purpose of defining, limiting and regulating the powers of the Corporation and
of the Directors and Stockholders:
(1) The By-Laws of the Corporation may fix the number of Directors
at a number greater than that named in this Certificate of Incorporation,
provided that in no case shall the number of Directors be less than three, and
may authorize the Board of Directors, by the vote of a majority of the entire
Board of Directors, to increase or decrease the number of Directors fixed by
this Certificate of Incorporation or by the By-Laws within a limit specified
in the By-Laws, and to fill the vacancies created by any increase in the
number of Directors. Unless otherwise provided by the By-Laws of the
Corporation, the Directors of the Corporation need not be Stockholders
therein.
(2) The Board of Directors shall have power, if, authorized by the
By-Laws, to designate be resolution or resolutions adopted by a majority of
the whole Board of Directors, one or more committees, each committee to
consist of two or more of the Directors of the Corporation, which to the
extent provided in said resolutions or in the By-Laws of the Corporation and
permitted by the laws of Maryland, shall have an may exercise any or all of
the powers of the Board of Directors in the management of the business and
affairs of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it.
(3) The Board of Directors shall, subject to the laws of Maryland,
have power to determine from time to tome what conditions and regulations any
accounts and books of the Corporation or any of them shall be open to
inspection of the Stockholders; and no Stock holder shall have any right to
inspect any account or book or document of the Corporation except as conferred
by the laws of Maryland unless and until authorized so to do by resolution of
the Board of Directors or of the Stockholders; provided, however, that the
Corporation shall mail to Stockholders semi-annual financial statements of the
Corporation and such other financial information as may be from time to time
prescribed by the Investment Company Act of 1940 and the rules and regulations
of the Securities and Exchange Commission.
(4) Any Director, or any officer, elected or appointed by the Board
o Directors or by any committee of said Board, or by the Stockholders or
otherwise, may be removed at any time, with or without cause, in such lawful
manner as may be provided in the By-Laws of the Corporation.
(5) If the By-Laws so provide, the Board of Directors of the
Corporation shall have power to hold their meetings, to have an office or
offices and, subject to the provisions of the laws of Maryland, to keep the
books of the Corporation, outside of said State at such places as may from
time to time be designated by them.
(6) The Corporation shall at all times cause its securities to be
held by a Trustee or Custodian which shall be a Bank or Trust Company have an
aggregate capital, surplus and undivided profit (as shown in its last
published report) of at least Two Million ($2,000,000.) Dollars. The Trustee
or Custodian shall also receive all monies due to the Corporation and shall
deposit same in its banking department Corporation and shall deposit same in
its banking department or elsewhere as the Board of Directors may direct. The
Board of Directors may at its discretion enter into agreements with the
Trustee or Custodian authorizing it to act as agent for the Corporation in the
disbursement of dividends, purchase and sale of securities, redemption of the
Corporation's securities, delivery of proxies, maintenance of books and
accounts and the performance of such other services as the Board may deem
advisable. All agreements with the trustee or Custodian shall be subject to
applicable State law, this Certificate of Incorporation, the By-Laws of the
Corporation and the Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission. In the event of
the resignation, removal or inability of such Trustees or Custodian to serve,
the Corporation hereinabove mentioned shall be delivered directly to such
successor Custodian. In the event no such successor Trustee or Custodian can
be found the Board of Directors of the Corporation shall call a Special
Meeting of Stockholders to determine whether the Corporation shall be
liquidated or shall function without a Trustee or Custodian.
(7) Shares of stock in other corporations shall be voted by such
officer or officers of the Corporation as the Board of Directors shall
designate for the purpose, or by a proxy or proxies thereunto duly authorized
by the Board of Directors, except as otherwise ordered by vote of the holders
of a majority of the shares of the Corporation outstanding and entitled to
vote in respect thereto.
(8)(a) The Corporation shall not deal with its officers or
Directors or any firm of which any officer or Director may be a member or with
any corporation or joint-stock association of which any of the Corporation's
officers or Directors may be an officer or Director, as principals in making
purchases of securities (other than stock or other securities which may be
issued by the Corporation) or in making sales of securities purchased (other
than such stock or other securities issued by the Corporation), nor shall the
Corporation make any loan to any of its officers or Directors or any firm of
which any officer or Director may be a member or any corporation or joint-
stock association of which any of the Corporation's officers or Directors may
be an officer or Director, but any officer or Director of this Corporation,
either directly or through a partnership, association or corporation, may act
as broker and may accept the customary brokerage commissions in the purchase
and/or sale of securities for account of the Corporation, and may purchase or
sell, or act as banker or dealer or agent in connection with the sale of
stock, warrants and any other securities which may be issued by the
Corporation, and may be an officer and/or Director and/or Stockholder of any
corporation the securities of which may be owned by the Corporation, and each
and every person who may become an officer or Director of this Corporation is
hereby relieved from any liability that might otherwise exist from contracting
as aforesaid with this Corporation for the benefit of himself or any
partnership, association or corporation in which he may be interested.
(b) Subject only to the provisions of Subdivision (a) of this
paragraph (8), and Director of officer individually, or any firm of which and
Director of officer may be a member, or any corporation or joint-stock
association of which any Director of officer may be an officer, director or
stockholder, may be a party to, or may be pecuniarily or otherwise interested
in, any contract of transaction of the Corporation, and in the absence of
fraud no contract or other transaction shall be thereby affected or
invalidated; provided, that in case a Director, or a firm, corporation or
association of which a Director is a member, officer or director is so
interested, such fact shall be disclosed or shall have been known to the Board
of Directors or a majority thereof. Any Director of the Corporation who is so
interested or who is also a director of officer of such other corporation or
association or a member of such firm which is so interested, may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of the Corporation which shall authorize any such contract or transaction with
like force and effect as if he were not such director or officer of such other
corporation or association or not so interested or a member of a firm so
interested.
(c) The Corporation may enter into exclusive or non-exclusive
underwriting contract or contracts for the sale of its shares whereby the
Corporation may either agree to sell shares to the Underwriter or appoint such
Underwriter as its sales agent for such shares. The Underwriter or any
company contracting with the Underwriter may at the discretion of the Board of
Directors act as Sponsor of a plan or plans for the accumulation of shares of
the Corporation. From time to time the Corporation may also enter into
contracts for investment advisory, management and administrative services.
The terms and conditions, methods of authorization, renewal, amendment and
termination of the aforesaid contracts shall be as determined at the
discretion of the Board of Directors subject, however, to the provisions of
this Certificate of Incorporation, the By-Laws of the Corporation, applicable
State law, and the Investment Company Act of 1940 and the rules and
regulations of the Securities and Exchange Commission.
(9) The Board of Directors of the Corporation is empowered to
authorize the issuance from time to time of shares of its stock of any class
for such cash consideration as said Board of Directors may deem advisable
provided that said cash consideration, exclusive of any commissions or
discounts, shall not be less than the net asset value thereof, as hereinafter
determined in Section (10) of Article SEVENTH hereof, and in no event less
than the par value of said shares. When an underwriting contract is in effect
pursuant to Section (8)(c) of Article SEVENTH the time of sale shall be the
time when an unconditional order is placed with the Underwriter, unless the
order is an unconditional order to be executed at the public offering price to
be established by a calculation of net asset value later to become effective,
in which event the time of sale shall be the time when such net asset value
becomes effective. Such contract may provide for the sale of shares either at
a price based on the net asset value in effect when the order is placed with
the Underwriter or at a price based on such later effective net asset value.
No shares shall be sold by the Corporation (although shares previously
contracted to be sold may be issued upon payment therefor) during any period
when the determination of net asset value is suspended by declaration of the
Board of Directors pursuant to the provisions of Section (10) of the Article
SEVENTH hereof. In connection with the acquisition by merger or otherwise of
all or substantially all the assets of another investment company, corporation
or trust, the Board of Directors may issue or cause to be issued shares of the
Corporation and accept in payment thereof such assets at market value in lieu
of cash, provided that such assets are of the character in which the Board of
Directors are permitted to invest the funds of the Corporation.
(10) The net asset value of each share of the Corporation
outstanding shall be determined on each business day the New York Stock
Exchange is open at the time designated by the Board of Directors as they
shall in their sole discretion determine. Such time shall be referred to in
this instrument as "the close of business" or "the closing time." The power
and duty to determine net asset value may be delegated by the Board of
Directors from time to time to one or more of the directors and officers of
the Corporation, to the other arty to any contract entered into pursuant to
subparagraph (c) of Section (8) of Article SEVENTH hereof, or to the Custodian
or a transfer agent. The net asset value determined as of the close of
business on any particular business day shall become effective for the
purposes of Section (9) of Article SEVENTH and Section (3) of Article FIFTH
hereof at such hour, not later than the opening of business on the New York
Stock Exchange the next following business day, as may from time to time be
fixed by the Board of Directors. The Board of Directors may also determine or
cause to be determined the net asset value as of any particular time in
addition to the closing time of each day when the New York Stock Exchange is
open and fix the hour of that day when the net asset value so determined shall
become effective. Such additional or interim determination may be made either
by appraisal or by calculation or estimate. Any such calculation or estimate
shall be based on changes in the market value of representative or selected
securities or on changes in recognized market averages since the last closing
appraisal, and made in a manner which in the opinion of the Board of Directors
will fairly reflect the changes in the net asset value. At any time when the
New York Stock Exchange is closed (other than customary week-end and holiday
closings), the Board of Directors may cause the net asset value to be
determined by appraising all securities at last sale prices, or at not more
than the current asked not less than the current bid prices, in the over-the-
counter or other markets, and all other assets at fair value in the best
judgment of the Board of Directors may fix the time when the net asset value
so determined shall become effective. In each case the net asset value shall
remain effective until a new asset value shall be so determined and become
effective.
The Board of Directors may declare a suspension of the determination
of net asset value for the whole or any part of any period (a) during which
the new York Stock Exchange is closed other than customary weekend and holiday
closings, (b) during which trading on the New York Stock Exchange is
restricted, (c) during which an emergency exists as a result of which disposal
by the Corporation of securities owned by it is not reasonably practicable, or
it is not reasonably practicable for the Corporation fairly to determine the
value of its net assets, or (d) during such other periods as the Securities
and Exchange Commission may by order permit for the protection of security
holders of the Corporation provided that applicable rules and regulations of
the Securities and Exchange Commission shall govern as to whether the
conditions prescribed in (b) or (c) exist. Such suspension shall take effect
at such time as the Board of Directors shall specify but not later than the
close of business on the business day next following the declaration, and
thereafter there shall be no determination of net asset value until the Board
of Directors shall declare the suspension at an end, except that the
suspension shall terminate in any event on the first day on which said stock
exchange shall have reopened or the period specified in (b) or (c) shall have
expired (as to which in the absence of an official ruling by the Securities
and Exchange Commission or succeeding authority, the determination of the
Board of Directors shall be conclusive).
The net asset value of each share of the Corporation as of any
particular time shall be the quotient (adjusted in the event of a fractional
cent, in such manner as may be determined by the Board of Directors) obtained
by dividing the value, as of such time, of the net assets of the Corporation
(i.e., the value of the assets of the Corporation less its liabilities
exclusive of capital and surplus) by the total number of shares outstanding
(exclusive of treasury shares) at such time, all determined and computed as
follows:
(i) The value of any cash on hand, on deposit, or on call,
bills and notes and accounts receivable, prepaid expenses, cash
dividends and interest declared or accrued as aforesaid and not
yet received, shall be deemed to be the face amount thereof
unless the Board of Directors shall have determined that any
such item is not worth the face amount thereof, in which event
the value thereof shall be determined in good faith by the
Board of Directors;
(a) Nothing herein shall prevent the Corporation or any Underwriter
from purchasing from the Corporation share of stock issued by the Corporation
provided that order to purchase from the Corporation are entered with the
Corporation by the Corporation or such Underwriter upon receipt by it of
purchase orders for the shares of stock of the Corporation and provided such
purchases are not in excess of purchase orders received by such Corporation or
Underwriter.
(b) Nothing herein shall prevent the Corporation or any distributor
or underwriter from maintaining a market for the shares of stock issued by the
Corporation in the capacity of agent for the Corporation;
(c) Nothing herein shall prevent the purchase from the Corporation
of shares of stock of the Corporation by the Officers or Directors of the
Corporation or of any investment advisory company, management company or
underwriter or distributor of the Corporation at the prices available to the
public at the moment of such purchase or to the extent that any such person is
a Stockholder at the price available to Stockholders of the Corporation
generally at the moment of such purchase.
(12) In addition to the powers and authorities conferred upon them
by this Certificate of Incorporation or by statute, the Board of Directors may
exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject nevertheless to the provisions of
applicable State law, this Certificate of Incorporation, the By-Laws of the
Corporation, the Investment Company Act of 1940, as amended, and the rules and
regulations of the Securities and Exchange Commission.
EIGHTH: All subscription rights, warrants, regular stock dividends and
any rights and property received by the Corporation upon its investments may
be sold, availed of or retained in the discretion of the Board of Directors.
The Board of Directors shall have full power, in accordance with good
accounting practice, to determine what is principal and what is income, all
subject to any applicable provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Securities and Exchange
Commission.
NINTH: From time to time, when authorized by a majority vote of the
outstanding stock of the Corporation, any of the provisions of this
Certificate of Incorporation may be amended, altered or repealed, (except in
any amendment which authorizes the issuance of any class of stock other than
common stock or changes or permits the change of the terms of any of the then
outstanding stock by classification, reclassification or otherwise, which
amendments may only be authorized by a vote of three-fourths of the entire
outstanding stock of the Corporation), and other provisions authorized by the
statutes of the State of Maryland at the time in force may be added or
inserted in the manner at the time prescribed by said statutes, and all rights
at any time conferred upon the Stockholders of the Corporation by its
Certificate of Incorporation are granted subject to the provisions of this
Article NINTH.
TENTH:The Fund acknowledges that Federated Investors, Inc. has
reserved the right to grant the non-exclusive use of the name "Federated" or
any derivative thereof to any other investment company, investment adviser,
distributor, or other business enterprise, and to withdraw from the Fund the
use of the name, "Federated."
3. The Charter is not amended by these Article of Restatement.
4. These Articles of Restatement have been approved by a majority of the
entire Board of Directors of the Corporation..
IN WITNESS WHEREOF, FEDERATED STOCK AND BOND FUND, INC. has caused these
Article of Restatement to be signed in its name and on its behalf by its Vice-
President and attested to by its Secretary on December 17, 1986.
FEDERATED STOCK AND BOND FUND, INC.
By: /s/ Edward C. Gonzalez
Edward C. Gonzales
Vice President
Attested:
/s/ John W. McGonigle
John W. McGonigle, Secretary
THE UNDERSIGNED, Vice-President of Federated Stock and Bond Fund, Inc.
who executed on behalf of the Corporation on the foregoing Articles of
Restatement, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf the Corporation, that the foregoing Articles of
Restatement are the corporate act of the Corporation and further certifies
that, to the best of his knowledge, information and belief, the matters and
facts set forth therein with respect to the approval thereof are true in all
material respects, under the penalties of perjury.
/s/ Edward C. Gonzales
Edward C. Gonzales
Vice President
ARTICLES OF AMENDMENT
OF
FEDERATED STOCK AND BOND FUND, INC.
APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESMENTS AND
TAXATION OF MARYLAND DECEMBER 23, 1986 AT 12:08 O'CLOCK P.M. AS IN CONFORMITY
WITH LAW AND ORDERED RECORDED.
ORGANIZATION AND RECORDING SPECIALS
CAPITALIZATION FEE PAID FEE PAID FEE PAID
$ $ $40.00 $
TO THE CLERK OF THE SUPERIOR COURT OF BALTIMORE CITY.
IT IS HEREBY CERTIFIED THAT THE WITHIN INSTRUMENT TOGETHER WITH ALL
INDORSEMENTS THEREON HAS BEE RECEIVED, APPROVED AND RECORDED BY THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND.
RECORDED IN THE RECORDS OF THE
STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF MARYLAND IN LIBER. FOLIO
FEDERATED STOCK AND BOND FUND, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
Federated Stock and Bond Fund, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland,
that:
1. The Charter of the Corporation is hereby amended and restated in its
entirety by replacing the present Articles of Incorporation with the
following:
FIRST: That Federated Stock and Bond Fund, Inc. was fully incorporated
as Income Foundation Fund, Incorporated under the laws of the State of
Maryland on October 31st, 1934 and that the sucbscribers, DAVID W. BARTON,
WILLIAM H. GORDON AND NICHOLAS. PENNIMAN, III, the post office address of each
being Mercantile Trust Building, Baltimore, Maryland, and all of full legal
age, constitute all of the incorporators who signed the original Certificate
of Incorporation.
SECOND:The name of the corporation is FEDERATED STOCK AND BOND FUND,
INC. (the "Corporation").
THIRD: The purpose for which the Corporation is formed is to act as an
open-end investment company of the management type registered as such with the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940 and to exercise and generally enjoy all of the powers, rights and
privileges granted to, or conferred upon, corporations by the General Laws of
the State of Maryland.
FOURTH:The post office address of the principal office and the office of
the resident agent of the Corporation in the State of Maryland is 32 South
Street, Baltimore Maryland 21202. The resident agent of the Corporation in
the state of Maryland is THE CORPORATION TRUST INCORPORATED, which is a
corporation organized and existing under the laws of the State of Maryland.
FIFTH: The total number of shares of stock which the Corporation shall
have authority to issue is 2,000,000,000 shares of Capital Stock, all of one
class, of the par value of $0.001 per share, and of the aggregate value of
$2,000,000 (hereinafter referred to as "Shares").
SIXTH (a) The number of Directors of the Corporation shall be eight,
or such other number as may be from time to time fixed in the manner provided
by the By-Laws of the Corporation but shall never be less than three (3).
(b) The names of the Directors presently in office are as
follows:
John F. Donahue J. Joseph Maloney, Jr.
William J. Copeland Gregor F. Meyer
James E. Dowd Wesley W. Posvar
Edward L. Flaherty, Jr. Marjorie P. Smuts
SEVENTH: The Board of Directors is empowered to authorize the issuance
from time to time of Shares of the Corporation, whether now or hereafter
authorized; provided, however, that the consideration per Share to be received
by the Corporation upon the issuance or sale of any Shares shall be the net
asset value per Share determined in accordance with the requirements of the
Investment Company Act of 1940 and the applicable rules and regulations of the
Securities and Exchange Commission.
EIGHTH:(a) To the extent the Corporation has funds or property
legally available therefor, each Shareholder of the Corporation shall have the
right at such times as may be permitted by the Corporation, but no less
frequently than one each week, to require the Corporation to redeem all or any
part of his Shares at a redemption price equal to the net asset value per
Share next determined after the Shares are tendered for redemption; said
determination of the net asset value per Share to be made in accordance with
the requirements of the Investment Company Act of 1940 and the applicable
rules and regulations of the Securities and Exchange Commission.
Notwithstanding the foregoing, the Corporation may postpone payment or
deposit of the redemption price and may suspend the right of the Shareholders
to require the Corporation to redeem Shares pursuant to the applicable rules
and regulations, or any order, of the Securities and Exchange Commission.
(b) The Corporation shall have the right, exercisable at the
discretion of the Board of Directors, to redeem Shares of any Shareholder for
their then current net asset value per Share if at such time the Shareholder
owns Shares having an aggregate net asset value of less than $250.00.
(c) Each Share is subject to redemption by the
Corporation at the redemption price computed in the manner set forth in
section (a) of Article EIGHTH of this Charter at any time if the Board of
Directors, in its sole discretion, determines that failure to do redeem may
result in the Corporation being classified as a "personal holding company"
within the meaning of the Internal Revenue Code of 1986, as amended from time
to time.
(d) Transfer of Shares will be recorded on the stock transfer
records of the Corporation at the request of the holders thereof at any time
during normal business hours of the Corporation unless the Board of Directors
of the Corporation determines, in its sole discretion, that allowing such
transfer may result in the Corporation being classified as a "personal holding
company" within the meaning of the Internal Revenue Code of 1986, as amended
from time to time.
NINTH: The following provisions are hereby adopted for the purpose of
defining, limiting and regulating the powers of the Corporation and of the
Directors and Shareholders:
(a) No Shareholder shall have any pre-emptive or preferential right
of subscription to any Shares of any class whether now or hereafter
authorized. The Board of Directors may issue Shares without offering the same
either in whole or in part to the Shareholders.
(b) Shares may be purchased, held and disposed of by the officers
and Directors of the Corporation, by partnerships of which any such officer or
Director if the Corporation may be an officer or director. Except as above
set forth, or authorized by the Securities and Exchange Commission, the
officers and Directors of the Corporation and partnerships or corporations
which are affiliates of the officers or Directors may not deal with the
Corporation as principals in the purchase or sale of any securities or other
property.
(c) The Corporation may enter into exclusive or non-exclusive
underwriting contracts or contracts for the sale of its Shares and may also
enter into contracts for investment advisory, management and administrative
services. The terms and conditions, methods of authorization, renewal,
amendment and determination of the aforesaid contracts shall be as determined
at the discretion of the Board of Directors; subject, however, to the
provisions of the Charter of the Corporation, the By-Laws of the Corporation,
applicable state law, and the Investment Company Act of 1940 and the rules and
regulations of the Securities and Exchange Commission.
(d) Subject to and in compliance with the provisions of the
Maryland General Corporation Law respecting interested director transactions,
the Corporation may enter into a written underwriting contract, management
contracts fro research and advisory services with I.F.F. Research Corp. or its
parent, affiliates or subsidiaries thereof, or their respective successors, or
otherwise do business with such corporation, notwithstanding the fact that one
or more of the Directors of the Corporation and some or all of its officers
are, have been, or may become Directors, officers, employees or stockholders
of I.F.F. Research Corp. or its parent, affiliates or subsidiaries or
successors, and in the absence of actual fraud the Corporation may deal freely
with I.F.F. Research Corp. or its parent, affiliates, subsidiaries or
successors, and neither such underwriting contract, management contract or
contract for research and advisory services nor any other contract or
transaction between the Corporation and I.F.F> Research Corp.. of its parent,
affiliates, subsidiaries or successors shall be invalidated or in any way
affected thereby, nor shall any Director or officer of the Corporation be
liable to the Corporation or to any Shareholder or creditor of the Corporation
or to any other person for any loss incurred under or by reason of any such
contract or transaction. Notwithstanding the foregoing, no officer or
Director or underwriter or investment adviser of the Corporation shall be
protected against any liability to the Corporation or to its security holders
to which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
(e) Every person who is or has been a Director, officer, employee
or agent of the Corporation and persons who serve at the Corporation's request
as Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall be indemnified by the
Corporation to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by him in connection with any
debt, claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind in which he becomes involved as a party or otherwise by
virtue of his being or having been a Director, officer, employee or agent of
the Corporation or of another corporation, partnership, joint venture, trust
or other enterprise at the request of the Corporation and against amounts paid
or incurred by him in the settlement thereof; provided that no indemnification
shall be provided hereunder to a Director, officer, employee or agent against
any liability to the Corporation or its Shareholders by reason willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
(f) The Board of Directors shall, subject to the laws of
Maryland, have the power to determine, from time to time, whether and to what
extent and at what times and places and under what conditions and regulations
any accounts and books of the Corporation, or any of them, shall be opened to
the inspection of Shareholders.
(g) Notwithstanding any provision of law requiring a greater
proportion than a majority of the votes of all classes or of any class of
Shares entitled to be cast, the Corporation may take or authorize any such
action upon the concurrence of a majority of the aggregate number of the
Shares entitled to be cast thereon.
(h) The Corporation reserves the right from time to time to make
any amendment of its Charter now or hereafter authorized by law, including any
amendment which alters the contract rights, as expressly set forth in its
Charter, of any outstanding Shares.
(i) In addition to the powers and authority conferred upon
them by the Charter of the Corporation or By-Laws, the Board of Directors may
exercise all such powers and authority and do all such acts and things as may
be exercised or done by the Corporation, subject, nevertheless, to the
provisions of applicable state law and the Charter and By-Laws of the
Corporation.
(j) The Board of Directors is expressly authorized to
determine what constitutes net profits, earnings, surplus or net assets in
excess of capital, and to determine what accounting periods shall be used by
the Corporation for any purpose, whether annual or any other period, including
daily; to set apart out of any funds of the Corporation such reserves for such
purposes as it shall determine and to abolish the same to declare and pay
dividends and distributions in cash, securities or other property from surplus
or any funds legally available therefor, at such intervals (which may be as
frequently as daily) or on such other periodic basis, as it shall determine;
to declare such dividends or distributions by means of a formula or other
method of determination, at meetings held less frequently than the frequency
of the effectiveness of such declarations to establish payment dates for
dividends or any other distributions on any basis, including dates occurring
less frequently than the effectiveness of declarations thereof; and to provide
for the payment of declared dividends on a date earlier or later than the
specified payment date in the case of Shareholders redeeming their entire
ownership of Shares.
TENTH: The Corporation acknowledges that Federated Investors, Inc. has
reserved the right to grant the non-exclusive use of the name "Federated" or
any derivative thereof to any other investment company, investment adviser,
distributor, or other business enterprise, and to withdraw from the
Corporation the use of the name, "Federated."
ELEVENTH: The duration of the Corporation shall be perpetual.
2. Upon effectiveness of these Articles of Amendment and Restatement the par
value of each Share shall be changed from $0.50 per Share to $0.001 per Share.
Each certificate representing Shares of the par value of $0.50 per Share shall
be deemed to represent the same number of Shares of the par value of $0.001
per Share.
3. The amendments set forth in these Articles of Amendment and Restatement
have been duly advised by the Board of Directors and approved by the
Shareholders of the Corporation by the vote required by law and by the
original Articles of Incorporation.
4. The aggregate par value of the Capital Stock of the Corporation has not
been increased by these Articles of Amendment and Restatement.
IN WITNESS WHEREOF, FEDERATED STOCK AND BOND FUND, INC. has caused these
Articles of Amendment Restatement to be signed in its name and on its behalf
by its President and attested to by its Secretary on March 23, 1987.
Federated Stock And Bond Fund, Inc.
By: /s/ John F. Donahue
John F. Donahue
President
Attested:
/s/ John W. McGonigle
John W. McGonigle, Secretary
THE UNDERSIGNED, President of Federated Stock and Bond Fund, Inc. who
executed on behalf of the Corporation on the foregoing Articles of Amendment
and Restatement, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf the Corporation, that the foregoing
Articles of Amendment and Restatement are the corporate act of the Corporation
and further certifies that, to the best of his knowledge, information and
belief, the matters and facts set forth therein with respect to the approval
thereof are true in all material respects, under the penalties of perjury.
/s/ John F. Donahue
John F. Donahue
President
ARTICLES OF AMENDMENT
OF
FEDERATED STOCK AND BOND FUND, INC.
Federated Stock and Bond Fund, Inc., a Maryland corporation (the
"Corporation"), having its principal office in Baltimore, Maryland, hereby
certifies tot he State Department of Assessments and Taxation that:
FIRST: The Charter of the Corporation is hereby amended by deleting Article
SECOND and substituting in lieu thereof the following
SECOND:The name of the Corporation is Stocks and Bond Fund, Inc. (the
"Corporation").
SECOND: The Charter of the Corporation is hereby amended by deleting Article
FIFTH of the Charter and substituting in lieu thereof the following:
FIFTH: (a) The Corporation is authorized to issue 2,000,000,000
shares of common stock, par value $0.001 per share. The aggregate par value
of all shares which the Corporation is authorized to issue is $2,000,000.
Subject to the following paragraph, the authorized shares are classified as
separate classes of common stock, with 750,000,000 classified into each of
Class A and Class C Shares, and 500,000,000 unclassified shares.
(b) The Board of Directors is authorized to classify or to
reclassify (i.e., into series and classes of series), from time to time, any
unissued shares of stock of the Corporation, whether now or hereafter
authorized, by setting, changing or eliminating the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividend,
qualifications or terms or conditions of or rights to require redemption of
the stock.
Unless otherwise provided by the Board of Directors prior to the issuance
of the stock, the shares of each class or series of stock shall be subject to
the following:
(i) The Board of Directors may redesignate a class or
series of stock whether or not shares of such class or series are issued and
outstanding, provided that such redesignation does not affect the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividend, qualifications or terms or conditions of redemption of such class or
series of stock.
(ii) The assets attributable to each class or series may
be invested in a common investment portfolio. The assets and liabilities and
the income and expenses of each class or series of the Corporation's stock may
vary among classes or series. The income or gain and the expenses or
liabilities of the Corporation shall be allocated to each class or series of
stock as determined by or under the director of the Board of Directors.
(iii) Shares of each class or series of stock shall be
entitled to such dividend or distributions, in stock or in cash or bother, as
may be declared from time to time by the Board of Directors with respect to
such class or series. Dividend or distributions shall be paid on shares of a
class or series of stock only out of the assets belonging to that class or
series.
(iv) In the event of the liquidation or dissolution of the
Corporation, the stockholders of a class or series of the Corporation's stock
shall be entitled to receive, as a class or series, out of the assets of the
Corporation available for distribution to stockholders, the assets belonging
to that class or series less the liabilities allocated to that class or
series. The assets so distributable to the stockholders of a class or series
shall be distributed among such stockholders in proportion to the number of
shares of that class or series held by them and recorded on the books of the
Corporation. In the event that there are any assets available for
distribution that are not attributable to any particular class or series in
proportion to the net asset value of the respective classes or series.
(v) All holders of shares of stock shall vote as a single
class or series except with respect to any matter which affects only one or
more classes or series of stock, in which case only the holders of shares of
the classes or series affected shall be entitled to vote.
(c) The Corporation may issue fractional shares. Any
fractional share shall carry proportionately all the rights of a whole share,
excepting any right to receive a certificate evidencing such fractional share,
but including, without limitation, the right to voted and the right to receive
dividends.
THIRD: The Charter of the Corporation is hereby amended by deleting Article
EIGHTH of the Charter and substituting in lieu thereof the following:
EIGHTH:(a) To the extent the Corporation has funds or property legally
available therefor, each shareholder of the Corporation shall have the right
at such times as may be permitted by the Corporation, but no less frequently
than once a week, to require the Corporation to redeem all or any part of its
shares at a redemption price equal to the net asset value per share next
determined after the shares are tendered for redemption less any applicable
charges as determined by the Board of Directors; said determination of the
net asset value per share to be made in accordance with the requirements of
the Investment Company Act of 1940 and the applicable rules and regulations of
the Securities and Exchange Commission.
Notwithstanding the foregoing, the Corporation may postpone payment or
deposit of the redemption price and may suspend the right of the shareholder s
to require the Corporation to redeem shares of any class or series pursuant to
the applicable rules and regulations, or any order, of the Securities and
Exchange Commission.
(b) The Corporation shall have the right, exercisable at the
discretion of the Board of Directors, to redeem shares of any class or series
of any shareholder for their then current net asset value per share for such
class or series if at such time the shareholder owns shares having an
aggregate net asset value of less than $250.00.
(c) Each share is subject to redemption by the Corporation at
the redemption price computed in the manner set forth in section (a) of
Article EIGHTH of this Charter at any time if the Board of Directors, in its
sole discretion, determines that failure to do redeem may result in the
Corporation being classified as a "personal holding company" within the
meaning of the Internal Revenue Code of 1986, as amended from time to time.
(d) Transfer of shares will be recorded on the stock transfer
records of the Corporation at the request of the holders thereof at any time
during normal business hours of the Corporation unless the Board of Directors
of the Corporation determines, in its sole discretion, that allowing such
transfer may result in the Corporation being classified as a "personal holding
company" within the meaning of the Internal Revenue Code of 1986, as amended
from time to time.
FOURTH: The amendments were advised by the Board of Directors and approved
by the shareholders.
IN WITNESS WHEREOF, Federated Stock and Bond Fund, Inc. has caused these
Articles of Amendment to be signed in its name and on its behalf by its Vice
President and attested by its Assistant Secretary on April 28, 1993. The
undersigned Vice President acknowledges these Articles of Amendment to be the
corporate act of the Corporation and states to the best of his knowledge,
information and belief that the matters and facts set forth herein with
respect to authorization and approval are true in all material respects and
that this statement is made under the penalties of perjury.
WITNESS: FEDERATED STOCK AND BOND FUND, INC.
/s/S. Elliot Cohen By: /s/J. Christopher Donahue
Assistant Secretary Vice President
ARTICLES OF AMENDMENT
OF
FEDERATED STOCK AND BOND FUND, INC.
APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESMENTS AND
TAXATION OF MARYLAND MARCH 31, 1987 AT 12:35 O'CLOCK P.M. AS IN CONFORMITY
WITH LAW AND ORDERED RECORDED.
ORGANIZATION AND RECORDING SPECIALS
CAPITALIZATION FEE PAID FEE PAID FEE PAID
$ $ 22.00 $
TO THE CLERK OF THE SUPERIOR COURT OF BALTIMORE CITY.
IT IS HEREBY CERTIFIED THAT THE WITHIN INSTRUMENT TOGETHER WITH ALL
INDORSEMENTS THEREON HAS BEE RECEIVED, APPROVED AND RECORDED BY THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND.
RECORDED IN THE RECORDS OF THE
STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF MARYLAND IN LIBER. FOLIO
ARTICLES OF RESTATEMENT
OF
STOCK AND BOND FUND, INC.
Stock and Bond Fund, Inc., a Maryland corporation (the "Corporation"),
having A principal office in Baltimore, Maryland, hereby certifies tot he
State Department of Assessments and Taxation that:
FIRST: The Corporation desires to restate its Charter as currently in
effect. The Charter is restated as follows:
SECOND: The name of the corporation is Stock and Bond, Inc. (the
"Corporation").
THIRD: The purpose for which the Corporation is formed is to act as an
open-end investment company of the management type registered as such with the
Securities and Exchange Commission pursuant to the Investment Company Act of
1940 and to exercise and generally to enjoy all of the powers, rights and
privileges grants to, or conferred upon, corporations by the General Laws of
the State of Maryland now or hereafter in force.
FOURTH: The post office address of the principal office and the office of
the resident agent of the Corporation in the State of Maryland is 32 South
Street, Baltimore, Maryland 21202. The resident agent of the Corporation in
the state of Maryland is THE CORPORATION TRUST INCORPORATED, which is a
corporation organized and existing under the laws of the State of Maryland.
FIFTH: (a) The Corporation is authorized to issue 2,000,000,000 shares of
common stock, + par value $0.001 per share. The aggregate par value of all
shares which the Corporation is authorized to issue if $2,000,000/ Subject to
the following paragraph, the authorized shares are classified as separate
classes of common stock, with 750,000,000 classified into each of Class A and
Class C Shares, and 500,000,000 unclassified shares.
(b) The Board of Directors is authorized to classify or to
reclassify (i.e., into series and classes of series), from time to time, any
unissued shares of stock of the Corporation, whether now or hereafter
authorized, by setting, changing or eliminating the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of or rights to require redemption of
the stock.
Unless otherwise provided by the Board of Directors prior to the issuance
of the stock, the shares of each class or series of stock shall be subject to
the following:
(i) The Board of Directors may redesignate a class or series of
stock whether or not shares of such class or series are issued and
outstanding, provided that such redesignation does not affect the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms or conditions of redemption of such class
or series of stock.
(ii) The assets attributable to each class or series may be
invested in a common investment portfolio. The assets and liabilities and the
income and expenses of each class or series of the Corporation's stock shall
be determined separately and, accordingly, the net asset value of shares of
the Corporation's stock may vary among classes or series. The income or gain
and the expenses or liabilities of the Corporation shall be allocated to each
class or series of stock as determined by or under the direction of the Board
of Directors.
(iii) Shares of each class or series of stock shall be entitled
to such dividends or distributions, in stock or in cash or both, as may be
declared from time to time by the Board of Directors with respect to such
class or series. Dividends or distributions shall be paid on shares of a
class or series of stock only out of the assets belonging to that class or
series.
(iv) In the event of the liquidation or dissolution of the
Corporation, the stockholders of a class or series of the Corporation's stock
shall be entitled to receive, as a class or series, out of the assets of the
Corporation available for distribution to stockholders, the assets belonging
to that class or series less the liabilities allocated to the class or series.
The assets so distributable to the stockholders of a class or series shall be
distributed among such stockholders in proportion to the number of shares that
class or series held by them and recorded on the books of the Corporation. In
the event that there are any assets available for distribution that are not
attributable to any particular class or series of stock, such assets shall be
allocated to all classes and series in proportion to the net asset value of
the respective classes or series.
(v) All holders of shares of stock shall vote as a single class
or series except with respect to any matter which affects only one or more
classes or series of stock, in which case only the holders of shares of the
classes or series affected shall be entitled to vote.
(c) The Corporation may issue fractional shares. Any fractional
share shall carry proportionately all the rights of a whole or share,
excepting any right to receive a certificate evidencing such fractional share,
but including, without limitation, the right to vote and the right to receive
dividends..
SIXTH: (a) The number of Directors of the Corporation shall be eight, or
such other number as may be from time to time fixed in the manner provided by
the By-Laws of the Corporation by shall never be less than three (3).
(b) The names of the Directors who are currently in office are as
follows:
John F. Donahue Edward L. Flaherty, Jr.
John To Conroy, Jr. Peter E. Madden
William J. Copeland Gregor F. Meyer
J. Christopher Donahue Wesley W. Posvar
James E. Dowd Marjorie P. Smuts
Lawrence D. Ellis, M.D.
SEVENTH: The Board of Directors is empowered to authorize the issuance from
time to time of shares of the Corporation, whether now or hereafter
authorized; provided, however, that the consideration per share to be received
by the Corporation upon the issuance or sale of any shares shall be the net
asset value per share determined in accordance with the requirements of the
Investment Company Act of 1940 and the applicable rules and regulations of the
Securities and Exchange Commission.
EIGHTH: (a) To the extent the Corporation has funds or property legally
available therefor, each shareholder of the Corporation shall have the right
at such times as may be permitted by the Corporation, but no less frequently
than once each week, to require the Corporation to redeem all or any part of
its shares at a redemption price equal to the net asset value per share next
determined after the shares are tendered for redemption less any applicable
charges as determined by the Board of Directors; said determination of the net
asset value per share to be made in accordance with the requirements of the
Investment Company Act of 1940 and the applicable rules and regulations of the
Securities and Exchange Commission.
Notwithstanding the foregoing, the Corporation may postpone payment or
deposit of the redemption price and may suspend the right of the shareholders
to require the Corporation to redeem shares of any class or series pursuant to
the applicable rule and regulations, or any order, of the Securities and
Exchange Commission.
(b) The Corporation shall have the right, exercisable at the
discretion of the Board of Directors, to redeem shares of any class or series
of any shareholder for their then current net asset value per share for such
class or series if at such time the shareholder owns shares having an
aggregate net asset value of less than $250.000.
(c) Each share is subject to redemption by the Corporation at the
redemption price computed in the manner set forth in subparagraph (a) of
Article EIGHTH of this Charter at any time if the Board of Directors, in its
sole discretion, determines that failure to so redeem may result in the
Corporation being classified as a "personal holding company" within the
meaning of the Internal Revenue Code of 1986, as amended from time to time.
(d) Transfer of shares will be recorded on the stock transfer
records of the Corporation at the request of the holders thereof at any time
during normal business hours of the Corporation unless the Board of Directors
of the Corporation determines, in its sole discretion, that allowing such
transfer may result in the Corporation being classified as a "personal holding
company" with the meaning the Internal Revenue Code of 1986, as amended from
time to time.
NINTH: The following provisions are hereby adopted for the purposes of
defining, limiting and regulating the powers of the Corporation and of the
Directors and shareholders:
(a) No shareholder shall have any pre-emptive or preferential right
of subscription to any shares of any class or series whether now or hereafter
authorized. The Board of Directors may issue shares without offering the same
in either whole or in part to the shareholders.
(b) Shares may be purchased, held and disposed of by the officers
and Directors of the Corporation, by partnerships of which any such officer or
director may be a member and by corporations of which any officer or Director
of the Corporation may be an officer or director. Except as above set forth,
or authorized by the Securities and Exchange Commission, the officers and
Directors of the Corporation and partnerships or corporations which are
affiliates of the officers or Directors may not deal with the Corporation as
principals in the purchase or sale or any securities or other property.
(c) The Corporation may enter into exclusive or nonexclusive
underwriting contracts or contracts for the sale of its shares and may also
enter into contracts for investment advisory management and administrative
services. The terms and conditions, methods of authorization, renewal,
amendment and termination of the aforesaid contracts shall be as determined at
the discretion of the Board of Directors; subject, however, to the provisions
of the Charter of the Corporation, the By-Laws of the Corporation, applicable
state law, and the Investment Company Act of 1940 and the rules and
regulations of the Securities and Exchange Commission.
(d) Subject to and in compliance with the provisions of the
Maryland General Corporation Laws respecting interested director transactions,
the Corporation may enter into a written underwriting contract, management
contracts for research and advisory services with I.F.F. Research Corp. or its
parent, affiliates or subsidiaries thereof, or their respective successors, or
otherwise do business with such corporation, notwithstanding the fact that one
or more of the Directors of the Corporation and some or all of its officers
are, have been, or may become Directors, officers, employees or stockholders
of I.F.F. Research Corp. or its parent, affiliates or subsidiaries or
successors, and in the absence of actual fraud the Corporation may deal freely
with I.F.F. Research Corp. or its parent, affiliates or subsidiaries or
successors, and neither such underwriting contract, management contract or
contract for research and advisory services not any other contract or
transaction between the Corporation and I.F.F. Research Corp. or its parent,
affiliates, subsidiaries or successors shall be invalidated or in any way
affected thereby, nor shall any Director or officer of the Corporation be
liable to the Corporation or to any shareholder or creditor of the Corporation
or to any other person for any loss incurred under or by reason of any such
contract or transaction. Notwithstanding the foregoing, no officer or
Director or underwriter or investment adviser of the Corporation shall be
protected against any liability to the Corporation or to its security holders
to which he would otherwise by subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
(e) Every person who is or has been a Director, officer, employee
or agent of the Corporation and persons who serve at the Corporation's request
as Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall be indemnified by the
Corporation to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by him in connection with any
debt, claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind in which he becomes involved as a party or otherwise
by virtue of the Corporation or of another corporation, partnership, joint
venture, trust or other enterprise at the request of the Corporation and
against amounts paid or incurred by him in the settlement thereof; provided
that no indemnification shall be provided hereunder to a Director, officer,
employee or agent against any liability to the Corporation or its shareholders
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involve in the conduct of his office.
(f) The Board of Directors shall, subject to the laws of Maryland,
have the power to determine, from time to time, whether and to what extent and
at what times and places and under what conditions and regulations any
accounts and books of the Corporation, or any of them shall be open to the
inspection of the shareholder.
(g) Notwithstanding any provision of law requiring a greater
proportion than a majority of the votes of any or all classes or series of
shares entitled to be cast, to take or authorize any action, the Corporation
may take or authorize any such action upon the concurrence of a majority of
the aggregate number of the votes entitled to be cast thereon.
(h) The Corporation reserves the right from time to time to make
any amendment to its Charter now or hereafter authorized by law, including any
amendment which alters the contract rights, as expressly set forth in its
Charter, or any outstanding shares or any class or series.
(i) In addition to the powers and authority conferred upon them by
the Charter of the Corporation or By-Laws, the Board of Directors may exercise
all such powers and authority and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the provisions
of applicable state law and the Charter and By-Laws of the Corporation.
(j) The Board of Directors is expressly authorized to determine
what constitutes net profits, earnings, surplus or net assets in excess of
capital, and to determine what accounting periods shall be used by the
Corporation for any purpose, whether annual or any other period, including
daily; to set apart out of any funds of the Corporation such reserves for such
purposes as it shall determine and to abolish the same; to declare and pay
dividend and distributions in cash, securities or other property from surplus
or any funds legally available therefor at such intervals (which may be as
frequently as daily) or on such other periodic basis, as it shall determine
for any class or series of the Corporation; to declare such dividend or
distributions for any class or series of the Corporation by means of a formula
or other method of determination, at meetings held less frequently than the
frequency of the effectiveness of such declarations; to establish payment
dates for dividends or any other distributions for any class or series of the
Corporation on any basis, including dates occurring less frequently than the
effectiveness of declarations thereof; and to provide for the payment of
declared dividends on a date earlier or later than the specified payment date
in the case of shareholders of such series or class redeeming their entire
ownership of shares.
TENTH: The Corporation acknowledges that Federated Investors, Inc. has
reserved the right to grant the non-exclusive use of the name "Federated" or
any derivative thereof to any other investment company, investment adviser,
distributor, or other business enterprise, and to withdraw from the
Corporation the use of the name, "Federated."
ELEVENTH: The duration of the Corporation shall be perpetual.
SECOND:The restatement of the Charter was approved by a majority of the
entire Board of Directors.
THIRD: The provisions set forth in these Articles of Restatement are all
the provisions of the Charter currently in effect. The current address of the
principal office of the Corporation, the name and address of the Corporation's
current resident agent and the number of directors of the Corporation and the
names of those currently in office are as stated above.
FOURTH:The charter is not amended by these Articles of Restatement.
IN WITNESS WHEREOF, Stock and Bond Fund, Inc. has caused these Article of
Restatement to be signed in its name and on its behalf by its Vice president
and attested by its Assistant Secretary on April 28, 1993. The undersigned
Vice President acknowledges these Articles of Restatement to be the corporate
act of the Corporation and states to the best of his knowledge, information
and belief that the matters and facts set forth herein with respect to
authorization and approval are true in all material respects and that this
statement is made under the penalties of perjury.
WITNESS STOCK AND BOND FUND, INC.
/s/ S. Elliot Cohen /s/ J. Christopher Donahue
Assistant Secretary Vice President
ARTICLES OF AMENDMENT
OF
STOCK AND BOND FUND, INC.
APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESMENTS AND
TAXATION OF MARYLAND APRIL 29, 1993 AT 2:18 O'CLOCK P.M. AS IN CONFORMITY WITH
LAW AND ORDERED RECORDED.
ORGANIZATION AND RECORDING SPECIALS
CAPITALIZATION FEE PAID FEE PAID FEE PAID
$ $ 20.00 $
TO THE CLERK OF THE SUPERIOR COURT OF BALTIMORE CITY.
IT IS HEREBY CERTIFIED THAT THE WITHIN INSTRUMENT TOGETHER WITH ALL
INDORSEMENTS THEREON HAS BEE RECEIVED, APPROVED AND RECORDED BY THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND.
RECORDED IN THE RECORDS OF THE
STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF MARYLAND IN LIBER. FOLIO
STOCK AND BOND FUND, INC.
ARTICLES SUPPLEMENTARY
STOCK AND BOND FUND, INC., a Maryland corporation having its principal
offices in Baltimore, Maryland (hereinafter called the "Corporation"), hereby
certifies:
FIRST: The Board of Directors hereby reclassifies 750,000,000 of the
authorized shares of Class C Shares of the Corporation as 750,000,000
shares of unclassified shares.
SECOND: The shares of Common Stock reclassified hereby shall have the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as set forth in Article FIFTH, paragraph (b) of the
Corporation's charter and shall be subject to all provisions of the
charter relating to stock of the Corporation generally.
THIRD: The stock has been reclassified by the Board of Directors under
the authority contained in the charter of the Corporation.
IN WITNESS WHEREOF, Stock and Bond Fund, Inc. has caused these presents
to be signed in its name and on its behalf by its President and witnessed by
its Assistant Secretary on September 8, 1994.
The undersigned, J. Christopher Donahue, President of the Corporation,
hereby acknowledges in the name and on behalf of the Corporation the foregoing
Articles Supplementary to be its corporate act and further certifies to the
best of his knowledge, information and belief, that the matters and facts set
forth herein with respect to the authorization and approval hereof are true in
all material respects and that this statement is made under the penalties of
perjury.
ATTEST: STOCK AND BOND FUND, INC.
/s/J. Crilley Kelly By: /s/ J. Christopher Donahue
J. Crilley Kelly J. Christopher Donahue
Assistant Secretary President
Exhibit 19 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of STOCK AND BOND FUND, INC., and the
Deputy General Counsel of Federated Investors, and each of them, their true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for them and in their names, place and stead, in any and all
capacities, to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, by means of the
Securities and Exchange Commission's electronic disclosure system known as
EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to sign and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue President December 1, 1995
John F. Donahue and Director
(Chief Executive Officer)
/s/David M. Taylor Treasurer December 1, 1995
David M. Taylor (Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Director December 1, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Director December 1, 1995
John T. Conroy, Jr.
/s/ William J. Copeland Director December 1, 1995
William J. Copeland
/s/ James E. Dowd Director December 1, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Director December 1, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Director December 1, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Director December 1, 1995
Peter E. Madden
/s/ Gregor F. Meyer Director December 1, 1995
Gregor F. Meyer
/s/ John E. Murray Director December 1, 1995
John E. Murray
/s/ Wesley W. Posvar Director December 1, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Director December 1, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 1st day of December, 1995.
/s/ Marie M. Hamm
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<NUMBER> 001
<NAME> Stock and Bond Fund, Inc.
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Oct-31-1995
<PERIOD-END> Oct-31-1995
<INVESTMENTS-AT-COST> 116,344,898
<INVESTMENTS-AT-VALUE> 132,947,604
<RECEIVABLES> 2,972,309
<ASSETS-OTHER> 7,392
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 135,927,305
<PAYABLE-FOR-SECURITIES> 979,154
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 279,355
<TOTAL-LIABILITIES> 1,258,509
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 106,005,023
<SHARES-COMMON-STOCK> 7,327,906
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<ACCUMULATED-NII-CURRENT> 2,534,003
<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 134,668,796
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<EXPENSES-NET> 1,363,949
<NET-INVESTMENT-INCOME> 4,746,653
<REALIZED-GAINS-CURRENT> 9,527,257
<APPREC-INCREASE-CURRENT> 7,067,004
<NET-CHANGE-FROM-OPS> 21,340,914
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,670,579
<DISTRIBUTIONS-OF-GAINS> 700,551
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,746,255
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<SHARES-REINVESTED> 233,136
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<ACCUMULATED-GAINS-PRIOR> 700,358
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 979,379
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,757,699
<AVERAGE-NET-ASSETS> 128,297,361
<PER-SHARE-NAV-BEGIN> 16.250
<PER-SHARE-NII> 0.630
<PER-SHARE-GAIN-APPREC> 2.210
<PER-SHARE-DIVIDEND> 0.620
<PER-SHARE-DISTRIBUTIONS> 0.090
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 18.380
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
