1933 Act File No. 2-65447
1940 Act File No. 811-2956
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. 31 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 X
Amendment No. 24 X
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
(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 May 31, 1994 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange
Commission a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, and:
filed the Notice required by that Rule on
_________________; or
intends to file the Notice required by that Rule on or
about ____________; or
X 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:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of LIBERTY
U.S. GOVERNMENT MONEY MARKET TRUST 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 Summary of Trust Expenses.
Item 3. Condensed Financial
Information Financial Highlights.
Item 4. General Description of
Registrant Performance Information;
General Information; Liberty
Family of Funds; Investment
Information; Investment
Objective; Investment
Policies; Investment
Limitations.
Item 5. Management of the Trust Trust Information; Management
of the Trust; Distribution of
Trust Shares; Administration
of the Trust.
Item 6. Capital Stock and Other
Securities Dividends; Capital Gains;
Shareholder Information;
Voting Rights; Massachusetts
Partnership Law; Tax
Information; Federal Income
Tax; Pennsylvania Corporate
and Personal Property Taxes.
Item 7. Purchase of Securities Being
Offered Net Asset Value; Investing in
the Trust; Share Purchases;
Minimum Investment Required;
What Shares Cost; Systematic
Investment Program;
Certificates and
Confirmations; Conversion to
Federal Funds; Retirement
Plans; Exchange Privilege;
Requirements for Exchange; Tax
Consequences; Making an
Exchange.
Item 8. Redemption or Repurchase Redeeming Shares; Through a
Financial Institution;
Directly From the Trust;
Contingent Deferred Sales
Charge; Systematic Withdrawal
Program; 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
Trust.
Item 13. Investment Objectives and
Policies Investment Objective and
Policies.
Item 14. Management of the Fund....... See Part A - Management
of the Trust; The Funds.
Item 15. Control Persons and Principal
Holders of Securities See Part A. Trust Ownership.
Item 16. Investment Advisory and Other
Services Investment Advisory Services;
Administrative Services;
Shareholder Services Plan.
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 See Part A. Distribution of
Trust Shares.
Item 22. Calculation of Yield Quotations
of Money Market Funds Yield; Effective Yield;
Performance Comparisons.
Item 23. Financial Statements Financial Statements
(Incorporated by reference to
Annual Report of Registrant
dated March 31, 1994 (File
Nos. 2-65447 and 811-2956).
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
PROSPECTUS
A no-load, open-end, diversified management investment company (a mutual fund)
investing in short-term U.S. government securities to achieve stability of
principal and current income consistent with stability of principal.
AN INVESTMENT IN THE TRUST IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE TRUST ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; THERE CAN BE NO ASSURANCE THAT THE TRUST WILL BE ABLE TO DO SO.
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.
This prospectus contains the information you should read and know before you
invest in Liberty U.S. Government Money Market Trust (the "Trust"). Keep this
prospectus for future reference.
The Trust has also filed a Statement of Additional Information dated May 31,
1994, with the Securities and Exchange Commission. The information contained in
the Statement of Additional Information is incorporated by reference in this
prospectus. You may request a copy of the Statement of Additional Information
free of charge by calling 1-800-235-4669. To obtain other information or to make
inquiries about the Trust, contact your financial institution.
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 May 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF TRUST EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
LIBERTY FAMILY OF FUNDS 3
- ------------------------------------------------------
INVESTMENT INFORMATION 4
- ------------------------------------------------------
Investment Objective 4
Investment Policies 4
Acceptable Investments 4
Instruments of Banks and Savings
and Loan Associations 5
Repurchase Agreements 5
When-Issued and Delayed Delivery
Transactions 5
Investment Limitations 5
Regulatory Compliance 5
NET ASSET VALUE 6
- ------------------------------------------------------
INVESTING IN THE TRUST 6
- ------------------------------------------------------
Share Purchases 6
Through a Financial Institution 6
Directly From the Distributor 6
Minimum Investment Required 7
What Shares Cost 7
Systematic Investment Program 7
Certificates and Confirmations 7
Dividends 7
Conversion to Federal Funds 7
Capital Gains 7
Retirement Plans 8
EXCHANGE PRIVILEGE 8
- ------------------------------------------------------
Requirements for Exchange 8
Tax Consequences 8
Making an Exchange 9
Telephone Instructions 9
REDEEMING SHARES 9
- ------------------------------------------------------
Through a Financial Institution 9
Directly From the Trust 10
By Writing a Check 10
By Telephone 10
By Mail 10
Signatures 10
Contingent Deferred Sales Charge 11
Systematic Withdrawal Program 11
Accounts with Low Balances 11
TRUST INFORMATION 12
- ------------------------------------------------------
Management of the Trust 12
Board of Trustees 12
Officers and Trustees 12
Trust Ownership 15
Trustee Liability 15
Investment Adviser 15
Advisory Fees 15
Adviser's Background 16
Other Payments to
Financial Institutions 16
Distribution of Trust Shares 16
Administration of the Trust 16
Administrative Services 16
Shareholder Services Plan 17
Custodian 17
Transfer Agent and 17
Dividend Disbursing Agent 17
Legal Counsel 17
Independent Public Accountants 17
SHAREHOLDER INFORMATION 17
- ------------------------------------------------------
Voting Rights 17
Massachusetts Partnership Law 17
TAX INFORMATION 18
- ------------------------------------------------------
Federal Income Tax 18
Pennsylvania Corporate and Personal
Property Taxes 18
PERFORMANCE INFORMATION 18
- ------------------------------------------------------
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................................................................... None
Maximum Sales Load 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) (1)............................................... None
Redemption Fee (as a percentage of amount
redeemed, if applicable)............................................................................... None
Exchange Fee............................................................................................. None
ANNUAL TRUST OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee........................................................................................... 0.49%
12b-1 Fee................................................................................................ None
Total Other Expenses..................................................................................... 0.59%
Shareholder Services Fee (2)............................................................. 0.05%
Total Trust Operating Expenses (3)............................................................. 1.08%
</TABLE>
- ---------
(1) See "Contingent Deferred Sales Charge" on page 11.
(2)The maximum shareholder services fee is 0.25%.
(3)The Total Trust Operating Expenses in the table above are based on expenses
expected during the fiscal year ending March 31, 1995. The Total Trust
Operating Expenses were 1.01% for the fiscal year ended March 31, 1994.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE TRUST WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "TRUST 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 period..... $11 $34 $60 $132
</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.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Arthur Andersen & Co., the Trust's
independent public accountants. Their report dated May 13, 1994 on the Trust's
financial statements for the year ended March 31, 1994, and on the following
table for each of the ten years in the period ended March 31, 1994 is included
in the Annual Report dated March 31, 1994, which is incorporated by reference.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------
INCOME FROM
INVESTMENT
OPERATIONS
- --------------------
Net investment
income 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.05 0.07 0.09
- -------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- --------------------
Dividends to
shareholders from
net investment
income (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (0.05) (0.07) (0.09)
- -------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN* 2.34% 2.71% 4.66% 7.11% 8.24% 7.44% 6.07% 5.48% 7.16% 9.50%
- --------------------
RATIOS TO AVERAGE
NET ASSETS
- --------------------
Expenses 1.01% 1.04% 1.03% 1.01% 1.02% 1.01% 1.01% 1.01% 0.98% 0.88%
- --------------------
Net investment
income 2.31% 2.69% 4.59% 6.89% 7.94% 7.19% 5.90% 5.39% 6.95% 9.11%
- --------------------
SUPPLEMENTAL DATA
- --------------------
Net assets, end of
period (000
omitted)
$805,907
$919,883
$1,173,685
$1,393,380
$1,443,347
$1,386,704
$1,358,694
$1,467,182
$2,069,333
$2,989,596
- --------------------
</TABLE>
* Based on net asset value which does not include the sales load or contingent
deferred sales charge, if applicable.
Further information about the Trust's performance is contained in the Trust's
Annual Report, dated March 31, 1994, which can be obtained free of charge.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust, formerly AARP U.S. Government Money Market Trust, was established as
a Massachusetts business trust under a Declaration of Trust dated August 30,
1979. The Trust's address is Liberty Center, Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. The Trust invests in U.S. government
obligations maturing in one year or less. A minimum initial investment of $500
is required, except for retirement plans.
The Trust attempts to stabilize the value of a share at $1.00. Trust shares are
currently sold and redeemed at that price.
LIBERTY FAMILY OF FUNDS
- --------------------------------------------------------------------------------
This Trust is a member of a family of mutual funds, collectively known as the
Liberty Family of Funds. The other funds in the Family are:
American Leaders Fund, Inc., providing growth of capital and income
through high-quality stocks;
Capital Growth Fund, providing appreciation of capital primarily through
equity securities;
Fund for U.S. Government Securities, Inc., providing current income
through long-term U.S. government securities;
International Equity Fund, providing long-term capital growth and income
through international securities;
International Income Fund, providing a high level of current income
consistent with prudent investment risk through high-quality debt
securities denominated primarily in foreign currencies;
Liberty Equity Income Fund, Inc., providing above-average income and
capital appreciation through income-producing equity securities;
Liberty High Income Bond Fund, Inc., providing high current income through
high-yielding, lower-rated corporate bonds;
Liberty Municipal Securities Fund, Inc., providing a high level of current
income exempt from federal regular income tax through municipal bonds;
Liberty Utility Fund, Inc., providing current income and long-term growth
of income, primarily through electric, gas and communication utilities;
Limited Term Fund, providing a high level of current income consistent
with minimum fluctuation in principal value through investment grade
securities;
_ Limited Term Municipal Fund, providing a high level of current income
exempt from federal regular income tax consistent with the preservation
of principal, primarily limited to municipal securities;
_ Michigan Intermediate Municipal Trust, providing current income exempt
from federal regular income tax and the personal income taxes imposed by
the state of Michigan and Michigan municipalities, primarily through
Michigan municipal securities;
_ Pennsylvania Municipal Income Fund, providing current income exempt from
federal regular income tax and the personal income taxes imposed by the
Commonwealth of Pennsylvania, primarily through Pennsylvania municipal
securities;
_ Strategic Income Fund, providing a high level of current income,
primarily through domestic and foreign corporate debt obligations;
Tax-Free Instruments Trust, providing current income consistent with
stability of principal and exempt from federal income tax, through
high-quality, short-term municipal securities; and
World Utility Fund, providing total return through securities issued by
domestic and foreign companies in the utilities industries.
Prospectuses for these funds are available by writing to Federated Securities
Corp.
Each of the funds may also invest in certain other types of securities as
described in each fund's prospectus.
The Liberty Family of Funds provides flexibility and diversification for an
investor's long-term investment planning. It enables an investor to meet the
challenges of changing market conditions by offering convenient exchange
privileges which give access to various investment vehicles and by providing the
investment services of a proven, professional investment adviser.
Shareholders participating in The Liberty Account are designated as Liberty Life
Members. Liberty Life Members are exempt from sales charges on future purchases
in and exchanges between any funds in the Liberty Family of Funds, as long as
they maintain a $500 balance in one of the Liberty Funds.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Trust is stability of principal and current
income consistent with stability of principal. The Trust pursues this investment
objective by investing in a portfolio of U.S. government obligations maturing in
one year or less. The average maturity of U.S. government securities in the
Trust's portfolio, computed on a dollar-weighted basis, will be 90 days or less.
While there is no assurance that the Trust will achieve its investment
objective, it endeavors to do so by following the investment policies described
in this prospectus. The investment objective and the policies and limitations
described below cannot be changed without approval of shareholders.
INVESTMENT POLICIES
ACCEPTABLE INVESTMENTS. The U.S. government securities in which the Trust
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;
notes, bonds, and discount notes of U.S. government agencies or
instrumentalities such as Federal Farm Credit Banks, Federal Home Loan
Banks, Federal National Mortgage Association, and Government National
Mortgage Association; and
short-term instruments of banks and savings and loan associations in which
the principal is fully insured by the Bank Insurance Fund or the Savings
Association Insurance Fund, both of which are administered by the Federal
Deposit Insurance Corporation.
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 and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities 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.
INSTRUMENTS OF BANKS AND SAVINGS AND LOAN ASSOCIATIONS. The short-term
instruments of banks and savings and loan associations which the Trust can
purchase will comprise no more than 20% of the Trust's total assets. These
instruments may be less marketable than other instruments purchased by the
Trust.
REPURCHASE AGREEMENTS. The U.S. government securities in which the Trust
invests may be purchased pursuant to repurchase agreements. Repurchase
agreements are arrangements in which banks, broker/dealers, and other
recognized financial institutions sell U.S. government or other securities
to the Trust and agree at the time of sale to repurchase them at a mutually
agreed upon time and price.
As a matter of investment practice which can be changed without shareholder
approval, the Trust will not invest more than 10% of its net assets in
securities which are illiquid, including repurchase agreements providing
for settlement in more than seven days after notice.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase
short-term U.S. government obligations on a when-issued or delayed delivery
basis. In when-issued and delayed delivery transactions, the Trust relies on the
seller to complete the transaction. The seller's failure to complete the
transaction may cause the Trust to miss a price or yield considered to be
advantageous.
INVESTMENT LIMITATIONS
The Trust will not borrow money or pledge securities except, under certain
circumstances, the Trust may borrow up to one-third of the value of its total
assets and pledge up to 10% of the value of those assets to secure such
borrowings.
REGULATORY COMPLIANCE
The Trust may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940, as amended. In particular, the Trust
will comply with the various requirements of Rule 2a-7, which regulates money
market mutual funds. The Trust
will determine the effective maturity of its investments, according to Rule
2a-7. The Trust may change these operational policies to reflect changes in the
laws and regulations without the approval of its shareholders.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust attempts to stabilize the net asset value of its shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net asset
value per share is determined by subtracting total liabilities from total assets
and dividing the remainder by the number of shares outstanding. The Trust, of
course, cannot guarantee that its net asset value will always remain at $1.00
per share.
INVESTING IN THE TRUST
- --------------------------------------------------------------------------------
SHARE PURCHASES
Trust shares are sold on days on which the New York Stock Exchange is open.
Shares of the Trust may be purchased through a financial institution which has a
sales agreement with the distributor or directly from the distributor, Federated
Securities Corp. In connection with the sale of Trust shares, Federated
Securities Corp. may, from time to time, offer certain items of nominal value to
any shareholder or investor. The Trust reserves the right to reject any purchase
request.
THROUGH A FINANCIAL INSTITUTION. An investor may call his financial institution
(such as a bank or an investment dealer) to place an order to purchase shares of
the Trust. Orders through a financial institution are considered received when
the Trust receives payment by wire or converts payment by check from the
financial institution into federal funds. It is the financial institution's
responsibility to transmit orders promptly.
DIRECTLY FROM THE DISTRIBUTOR. An investor may place an order to purchase
shares directly from the distributor. To do so:
complete and sign the new account form available from the Trust;
enclose a check made payable to Liberty U.S. Government Money Market
Trust; and
mail both to Federated Services Company, P.O. Box 8604, Boston, MA
02266-8604.
Orders by mail are considered received after payment by check is converted by
the transfer agent's bank, State Street Bank and Trust Company ("State Street
Bank") into federal funds. This is generally the next business day after State
Street Bank receives the check.
To purchase shares of the Trust directly from the distributor by wire, call the
Trust. All information needed will be taken over the telephone, and the order is
considered received when State Street Bank receives payment by wire. Federal
funds should be wired as follows: State Street Bank and Trust Company, Boston,
Massachusetts 02105; Attention: Mutual Fund Servicing Division; For Credit to:
Liberty U.S. Government Money Market Trust; Title or Name of Account; Wire Order
Number and/or Account Number. Shares cannot be purchased by wire on Columbus
Day, Veteran's Day, or Martin Luther King Day.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Trust is $500 unless the investment is in
a retirement plan, in which case the minimum initial investment is $50.
Subsequent investments must be in amounts of at least $100, except for
retirement plans which must be in amounts of at least $50.
WHAT SHARES COST
Trust shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Trust.
The net asset value is determined at 12:00 noon (Eastern time) and 4:00 p.m.
(Eastern time), Monday through Friday, except on: (i) days on which there are
not sufficient changes in the value of the Trust'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, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
SYSTEMATIC INVESTMENT PROGRAM
Once a Trust account has been opened, shareholders may add to their investment
on a regular basis in a minimum amount of $100. Under this program, funds may be
automatically withdrawn periodically from the shareholder's checking account and
invested in Trust shares. A shareholder may apply for participation in this
program through his financial institution or directly through the Trust.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Trust, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
in writing to Federated Services Company.
Monthly confirmations are sent to report transactions such as purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Trust unless cash
payments are requested by contacting Federated Services Company. Shares
purchased before 12:00 noon (Eastern time) earn dividends that day.
CONVERSION TO FEDERAL FUNDS
It is the Trust's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds before shareholders begin to
earn dividends. Federated Services Company acts as the shareholder's agent in
depositing checks and converting them to federal funds.
CAPITAL GAINS
Since the Trust's policy is, under normal circumstances, to hold portfolio
securities to maturity and to value portfolio securities at amortized cost, it
does not expect any capital gains or losses. If the Trust
does experience gains, however, it could result in an increase in dividends.
Capital losses could result in a decrease in dividends. If for some
extraordinary reason the Trust realizes net long-term capital gains, it will
distribute them at least once every 12 months.
RETIREMENT PLANS
Shares of the Trust can be purchased as an investment for retirement plans or
for IRA accounts. For further details, including prototype retirement plans,
contact the Trust and consult a tax adviser.
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
The Securities and Exchange Commission has promulgated Rule 11a-3 under the
Investment Company Act of 1940 which allows shareholders to exchange all or some
of their shares for shares in other funds in the Liberty Family of Funds. Trust
Shareholders may also exchange into certain Funds advised by subsidiaries of
Federated Investors ("Federated Funds"), which are sold with a sales charge
different from that of the Trust's or with no sales charge and which are advised
by subsidiaries or affiliates of Federated Investors. These exchanges are made
at net asset value plus the difference between the Trust's sales charge already
paid and any sales charge of the Fund into which the shares are exchanged, if
higher. Neither the Trust nor any of the Funds in the Liberty Family of Funds
imposes any additional fees on exchanges.
The Securities and Exchange Commission has also issued an order exempting the
Trust from certain provisions of the Investment Company Act of 1940. The order
allows certain other Funds that are not advised by subsidiaries or affiliates of
Federated Investors, which do not have a sales charge, to exchange their shares
for Trust shares on a basis other than their current offering price. These
exchanges may be made to the extent that such shares were acquired in a prior
exchange, at net asset value, for shares of a Federated Fund carrying a sales
charge.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange shares having a net asset value
of at least $500. Before the exchange, the shareholder must receive a prospectus
of the fund for which the exchange is being made.
This privilege is available to shareholders resident in any state in which the
fund shares being acquired may be sold. Upon receipt of proper instructions and
required supporting documents, shares submitted for exchange are redeemed and
the proceeds invested in shares of the other fund. The exchange privilege may be
terminated at any time. Shareholders will be notified of the termination of the
exchange privilege.
Further information on the exchange privilege and prospectuses for the Liberty
Family of Funds or certain Federated Funds are available by contacting the
Trust.
TAX CONSEQUENCES
An exercise of the exchange privilege is treated as a sale for federal income
tax purposes. Depending on the circumstances, a capital gain or loss may be
realized.
MAKING AN EXCHANGE
Instructions for exchanges for the Liberty Family of Funds or certain Federated
Funds may be given in writing or by telephone. Written instructions may require
a signature guarantee. Shareholders of the Trust may have difficulty in making
exchanges by telephone through brokers and other financial institutions during
times of drastic economic or market changes. If a shareholder cannot contact his
broker or financial institution by telephone, it is recommended that an exchange
request be made in writing and sent by overnight mail to Federated Services
Company--P.O. Box 8604, Boston, Massachusetts 02266-8604.
TELEPHONE INSTRUCTIONS. Telephone instructions made by the investor may be
carried out only if a telephone authorization form completed by the investor is
on file with the Trust. Telephone exchange instructions may be recorded. If the
instructions are given by a broker, a telephone authorization form completed by
the broker must be on file with the Trust. Shares may be exchanged between two
funds by telephone only if the two funds have identical shareholder
registrations. If reasonable procedures are not followed by the Trust, it may be
liable for losses due to unauthorized or fraudulent telephone instructions.
Any shares held in certificate form cannot be exchanged by telephone but must be
forwarded to Federated Services Company--P.O. Box 8604, Boston, Massachusetts
02266-8604, and deposited to the shareholder's account before being exchanged.
Telephone instructions will be processed as of 4:00 p.m. (Eastern time) and must
be received by the Trust before that time for shares to be exchanged the same
day. Shareholders exchanging into a fund will not receive any dividend that is
payable to shareholders of record on that date. This privilege may be modified
or terminated at any time.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Trust redeems shares at their net asset value next determined after the
Trust receives the redemption request. Redemptions will be made on days on which
the Trust computes its net asset value. Redemptions can be made through a
financial institution or directly from the Trust. Redemption requests must be
received in proper form.
THROUGH A FINANCIAL INSTITUTION
A shareholder may redeem shares of the Trust by calling his financial
institution (such as a bank or an investment dealer) to request the redemption.
Shares will be redeemed at the net asset value next determined after the Trust
receives the redemption request from the financial institution. The financial
institution is responsible for promptly submitting redemption requests and
providing proper written redemption instructions to the Trust. The financial
institution may charge customary fees and commissions for this service.
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 should be considered.
The financial institution which maintains investor accounts with the Trust must
do so on a fully disclosed basis unless it accounts for share ownership periods
used in calculating the contingent deferred sales charge (see "Contingent
Deferred Sales Charge"). In addition, advance payments made
to financial institutions may be subject to reclaim by the Distributor for
accounts transferred to financial institutions which do not maintain investor
accounts on a fully disclosed basis and do not account for share ownership
periods (see "Other Payments to Financial Institutions").
DIRECTLY FROM THE TRUST
BY WRITING A CHECK. At the shareholder's request, Federated Services Company
will establish a checking account for redeeming Trust shares. The cost for
providing and processing checks will be $10.00 per checkbook of twenty checks.
Liberty Life Members shall not be subject to such fee. To obtain checks, contact
the Trust.
With a Trust checking account, shares may be redeemed simply by writing a check
for $100 or more. The redemption will be made at the net asset value on the date
that Federated Services Company presents the check to the Trust. A check may not
be written to close an account. In addition, if a shareholder wishes to redeem
shares and have the proceeds available, a check may be written and negotiated
through the shareholder's bank. Checks should never be sent to State Street Bank
to redeem shares. Cancelled checks are returned to the shareholder within 6 to 8
weeks.
BY TELEPHONE. Shareholders who have not purchased through a financial
institution may redeem their shares of the Trust by telephoning the Trust.
Telephone redemption instructions may be recorded. The proceeds will be mailed
to the shareholder's address of record or wire transferred to the shareholder's
account at a domestic commercial bank that is a member of the Federal Reserve
System, normally within one business day, but in no event longer than seven days
after the request. The minimum amount for a wire transfer is $1,000. If at any
time the Trust shall determine it necessary to terminate or modify these methods
of redemption, shareholders would be promptly notified.
Authorization forms permitting the Trust to accept telephone requests must first
be completed. Authorization forms and information on these services are
available from Federated Securities Corp. If reasonable procedures are not
followed by the Trust, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
A daily dividend is paid on shares redeemed if the redemption request is
received after 12:00 noon (Eastern time). However, the proceeds are not wired
until the following business day. Redemption requests received before 12:00 noon
(Eastern time) will be paid the same day but will not be entitled to that day's
dividend.
BY MAIL. Any shareholder may redeem Trust shares by sending a written request
to Federated Services Company, P.O. Box 8604, Boston, Massachusetts 02266-8604.
The written request should include the shareholder's name, the Trust name, the
account number, and the Share or dollar amount requested, and should be signed
exactly as the shares are registered. If share certificates have been issued,
they must be properly endorsed and should be sent by registered or certified
mail with the written request. Shareholders should call the Trust for assistance
in redeeming by mail.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Trust, 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.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Trust 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.
CONTINGENT DEFERRED SALES CHARGE
Shareholders who purchased shares with the proceeds of a redemption of shares of
a mutual fund sold with a sales charge and not distributed by Federated
Securities Corp. prior to June 1, 1994, will be charged a contingent deferred
sales charge by the Trust's distributor of .50 of 1% for redemptions made within
one year of purchase. Purchases under the program made after that date will not
be subject to any type of contingent deferred sales charge.
The contingent deferred sales charge will not be imposed in connection with
redemptions by the Trust of accounts with low balances or when a redemption
results from a return under the following circumstances: (i) a total or partial
distribution from a qualified plan, other than an IRA, Keogh Plan, or a
custodial account, following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account, after the beneficial owner
attains age 59-1/2; or (iii) from the death or disability of the beneficial
owner. The exemption from the contingent deferred sales charge for qualified
plans, an IRA, Keogh Plan or a custodial account does not extend to account
transfers, rollovers, and other redemptions made for purposes of reinvestment.
SYSTEMATIC WITHDRAWAL PROGRAM
If a shareholder's account has a value of at least $10,000, a Systematic
Withdrawal Program may be established whereby automatic redemptions are made
from the account and transferred electronically to any commercial bank, savings
bank, or credit union that is an Automated Clearing House (ACH) member. A
shareholder may apply for participation in this program through his financial
institution.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem shares in any account, except retirement plans, and pay the proceeds to
the shareholder if the account balance falls below the required minimum value of
$500 due to shareholder redemptions. 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.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees (the
"Trustees"). The Trustees are responsible for managing the Trust's business
affairs and for exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
OFFICERS AND TRUSTEES. Officers and Trustees are listed with their addresses,
principal occupations, and present positions, including any affiliation with
Federated Advisers, Federated Investors, Federated Securities Corp., Federated
Services Company, Federated Administrative Services, and the Funds (as defined
in the Statement of Additional Information).
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C>
John F. Donahue*\ Chairman and Chairman and Trustee, Federated Investors; Chairman and
Federated Investors Trustee Trustee, Federated Advisers, Federated Management, and
Tower Federated Research; Director, AEtna Life and Casualty
Pittsburgh, PA Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds; formerly, Director,
The Standard Fire Insurance Company. Mr. Donahue is the
father of J. Christopher Donahue, President of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties Corporation; Senior Vice
Wood/IPC Commercial President, John R. Wood and Associates, Inc., Realtors;
Department President, Northgate Village Development Corporation; General
John R. Wood and Partner or Trustee in private real estate ventures in
Associates, Inc., Southwest Florida; Director, Trustee, or Managing General
Realtors Partner of the Funds; formerly, President, Naples Property
3255 Tamiami Trail North Management, Inc.
Naples, FL
William J. Copeland Trustee Director and Member of the Executive Committee, Michael
One PNC Plaza Baker, Inc.; Director, Trustee, or Managing General Partner
23rd Floor of the Funds; formerly, Vice Chairman and Director, PNC Bank
Pittsburgh, PA N.A. and PNC Bank Corp and Director, Ryan Homes, Inc.
</TABLE>
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C>
James E. Dowd Trustee Attorney-at-law; Director, The Emerging Germany Fund, Inc.;
571 Hayward Mill Road Director, Trustee, or Managing General Partner of the Funds,
Concord, MA formerly, Director, Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and Internist, Presbyterian and
3471 Fifth Avenue Montefiore Hospitals; Clinical Professor of Medicine and
Suite 1111 Trustee, University of Pittsburgh; Director, Trustee, or
Pittsburgh, PA Managing General Partner of the Funds.
Edward L. Flaherty, Jr.\ Trustee Attorney-at-law; Partner, Meyer and Flaherty; Director, Eat'N
5916 Penn Mall Park Restaurants, Inc. and Statewide Settlement Agency, Inc.;
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Edward C. Gonzales* Vice President, Vice President, Treasurer, and Trustee, Federated Investors;
Federated Investors Treasurer, and Vice President and Treasurer, Federated Advisers, Federated
Tower Trustee Management and Federated Research; Executive Vice President,
Pittsburgh, PA Treasurer, and Director, Federated Securities Corp.;
Chairman, Treasurer, and Trustee, Federated Administrative
Services; Trustee, Federated Services Company; Trustee or Di-
rector of some of the Funds; Vice President and Treasurer of
the Funds.
Peter E. Madden Trustee Consultant; State Representative, Commonwealth of
225 Franklin Street Massachusetts; Director, Trustee, or Managing General Partner
Boston, MA of the Funds; formerly, President, State Street Bank and
Trust Company and State Street Boston Corporation, and
Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer and Flaherty; Chairman,
5916 Penn Mall Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.;
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds;
formerly, Vice Chairman, Horizon Financial, F.A.
</TABLE>
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
<S> <C> <C>
Wesley W. Posvar Trustee Professor, Foreign Policy and Management Consultant; Trustee,
1202 Cathedral of Carnegie Endowment for International Peace, RAND Corporation,
Learning Online Computer Library Center, Inc., and U.S. Space
University of Pittsburgh Foundation; Chairman, Czecho Slovak Management Center;
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds;
formerly, President, Emeritus, University of Pittsburgh;
formerly, Chairman, National Avisory Council for Environ-
mental Policy and Technology.
Marjorie P. Smuts Trustee Public relations/marketing consultant; Director, Trustee, or
4905 Bayard Street Managing General Partner of the Funds.
Pittsburgh, PA
J. Christopher Donahue President President and Trustee, Federated Investors and Federated
Federated Investors Administrative Services; Trustee, Federated Advisers,
Tower Federated Management, and Federated Research; Trustee,
Pittsburgh, PA Federated Services Company; President or 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,
Chairman and Trustee of the Trust.
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors;
Federated Investors Chairman and Director, Federated Securities Corp.; President
Tower or Vice President of the Funds; Director or Trustee of some
Pittsburgh, PA of the Funds.
John W. McGonigle Vice President and Vice President, Secretary, General Counsel and Trustee,
Federated Investors Secretary Federated Investors; Vice President, Secretary and Trustee,
Tower Federated Advisers, Federated Management, and Federated
Pittsburgh, PA Research; Executive Vice President, Secretary, and Trustee,
Federated Administrative Services; Trustee, Federated
Services Company; Executive Vice President and Director,
Federated Securities Corp.; Vice President and Secretary of
the Funds.
</TABLE>
<TABLE>
<S> <C> <C>
POSITION WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
John A. Staley, IV Vice President Vice President and Trustee, Federated Investors; Executive
Federated Investors Vice President, Federated Securities Corp.; President and
Tower Trustee, Federated Advisers, Federated Management and
Pittsburgh, PA Federated Research; Vice President of the Funds; Director,
Trustee, or Managing General Partner of some of the Funds;
formerly Vice President, The Standard Fire Insurance Company
and President of its Federated Research Division.
</TABLE>
*This Trustee is deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940, as amended.
\Members of the Trust's Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board of
Trustees between meetings of the Board.
The Funds referred to above are set forth in the Statement of Additional
Information.
TRUST OWNERSHIP. Officers and Trustees own less than 1% of the Trust's
outstanding shares.
As of May 9, 1994 there were no shareholders of record who owned 5% or more of
the outstanding shares of the Trust.
TRUSTEE LIABILITY. The Trust's Declaration of Trust provides that the Trustees
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 ADVISER. Investment decisions for the Trust are made by Federated
Advisers (the "Adviser"), the Trust's investment adviser, subject to direction
by the Trustees. The Adviser continually conducts investment research and
supervision for the Trust and is responsible for the purchase or sale of
portfolio instruments, for which it receives an annual fee from the Trust.
ADVISORY FEES. The annual investment advisory fee is based on the Trust's
average daily net assets as shown in the chart below:
<TABLE>
<CAPTION>
ADVISORY FEE AS
% OF AVERAGE
AVERAGE DAILY NET ASSETS DAILY NET ASSETS
<S> <C>
First $500 million .50 of 1%
Second $500 million .475 of 1%
Third $500 million .45 of 1%
Fourth $500 million .425 of 1%
Over $2 billion .40 of 1%
</TABLE>
The Adviser has undertaken to reimburse the Trust for operating expenses in
excess of limitations established by certain states.
ADVISER'S BACKGROUND. Federated Advisers, 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.
Federated Advisers and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subisidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. _In addition to periodic payments
to financial institutions under the Shareholder Services Plan, certain
financial institutions may be compensated by the Adviser or its affiliates
for the continuing investment of customers' assets in certain funds,
including the Trust, advised by those entities. These payments will be made
directly by the distributor or Adviser from their assets, and will not be
made from the assets of the Trust or by the assessment of a sales charge on
shares.
DISTRIBUTION OF TRUST SHARES
Federated Securities Corp. is the principal distributor for shares of the Trust.
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.
ADMINISTRATION OF THE TRUST
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 Trust.
Federated Administrative Services provides these at an annual rate which relates
to the average aggregate daily net assets of all the Federated Funds as
specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE DAILY NET ASSETS
MAXIMUM ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
<S> <C>
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.
SHAREHOLDER SERVICES PLAN. _The Trust has adopted a Shareholder Services Plan
(the "Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Trust to obtain certain personal services
for shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Trust has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
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 such fees will be
paid will be determined, from time to time, by the Trust and Federated
Shareholder Services.
CUSTODIAN. State Street Bank and Trust Company, P.O. Box 8604, Boston,
Massachusetts 02266-8604, is custodian for the securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. _Federated Services Company, P.O.
Box 8604, Boston, Massachusetts 02266-8604 is transfer agent for the shares of
the Trust and dividend disbursing agent for the Trust.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly, 2510
Centre City Tower, Pittsburgh, Pennsylvania 15222, and Dickstein, Shapiro &
Morin, 2101 L Street, N.W., Washington, D.C. 20037.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the
Trust are Arthur Andersen & Co., 2100 One PPG Place, Pittsburgh, Pennsylvania
15222.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
operation and for the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the Trust shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the Trust's outstanding shares.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required to use its property to protect or compensate
the shareholder. On request, the Trust will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code 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 received. This applies whether dividends
and distributions are received in cash or as additional shares. No federal
income tax is due on any dividends earned in an IRA or qualified retirement plan
until distributed.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
the Trust is not subject to the Pennsylvania corporate or personal
property taxes; and
Trust shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Trust would be subject to such
taxes if owned directly by residents of those jurisdictions.
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 Trust advertises its yield and effective yield.
The yield of the Trust represents the annualized rate of income earned on an
investment in the Trust over a seven-day period. It is the annualized dividends
earned during the period on the investment, shown as a percentage of the
investment. The effective yield is calculated similarly to the yield, but, when
annualized, the income earned by an investment in the Trust is assumed to be
reinvested daily. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.
Advertisements and other sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value of
an investment in the Trust after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, the Trust may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
THIS PAGE INTENTIONALLY LEFT BLANK
THIS PAGE INTENTIONALLY LEFT BLANK
LIBERTY U.S. GOVERNMENT
MONEY MARKET TRUST
PROSPECTUS
A No-Load, Open-End, Diversified
Management Investment Company
Prospectus dated May 31, 1994
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
8062809A (5/94)
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of the Trust dated May 31, 1994. This Statement is not a
prospectus itself. To receive a copy of the prospectus, write or call
Liberty U.S. Government Money Market Trust.
LIBERTY CENTER
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated May 31, 1994
FEDERATED SECURITIES CORP.
---------------------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE TRUST 1
- ---------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------------
Types of Investments 1
When-Issued and Delayed Delivery
Transactions 1
Repurchase Agreements 1
Investment Limitations 1
THE FUNDS 2
- ---------------------------------------------------------------
INVESTMENT ADVISORY SERVICES 3
- ---------------------------------------------------------------
Adviser to the Trust 3
Advisory Fees 3
ADMINISTRATIVE SERVICES 3
- ---------------------------------------------------------------
SHAREHOLDER SERVICES PLAN 3
- ---------------------------------------------------------------
BROKERAGE TRANSACTIONS 4
- ---------------------------------------------------------------
PURCHASING SHARES 4
- ---------------------------------------------------------------
DETERMINING NET ASSET VALUE 4
- ---------------------------------------------------------------
Use of the Amortized Cost Method 4
REDEEMING SHARES 5
- ---------------------------------------------------------------
Redemption in Kind 5
TAX STATUS 6
- ---------------------------------------------------------------
The Trust's Tax Status 6
Shareholders' Tax Status 6
YIELD 6
- ---------------------------------------------------------------
EFFECTIVE YIELD 6
- ---------------------------------------------------------------
PERFORMANCE COMPARISONS 6
- ---------------------------------------------------------------
FINANCIAL STATEMENTS 7
- ---------------------------------------------------------------
GENERAL INFORMATION ABOUT THE TRUST
- --------------------------------------------------------------------------------
Liberty U.S. Government Money Market Trust (the "Trust") was established as a
Massachusetts business trust under a Declaration of Trust dated August 30, 1979.
The name of the Trust was AARP U.S. Government Money Market Trust prior to April
16, 1985.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The Trust's investment objective is stability of principal and current income
consistent with stability of principal.
TYPES OF INVESTMENTS
The Trust invests in short-term U.S. government securities. The investment
policies and the objective stated above cannot be changed without approval of
shareholders.
VARIABLE RATE U.S. GOVERNMENT SECURITIES
Some of the short-term U.S. government securities the Trust may purchase
carry variable interest rates. These securities have a rate of interest
subject to adjustment at least annually. This adjusted interest rate is
ordinarily tied to some objective standard, such as the 91-day U.S.
Treasury bill rate.
Variable interest rates will reduce the changes in the market value of
such securities from their original purchase prices. Accordingly, the
potential for capital appreciation or capital depreciation should not be
greater than the potential for capital appreciation or capital
depreciation of fixed interest rate U.S. government securities having
maturities equal to the interest rate adjustment dates of the variable
rate U.S. government securities.
The Trust may purchase variable rate U.S. government securities upon the
determination by the Board of Trustees that the interest rate as adjusted
will cause the instrument to have a current market value that
approximates its par value on the adjustment date.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are arrangements in which the Trust purchases securities with
payment and delivery scheduled for a future time. The Trust engages in
when-issued and delayed transactions only for the purpose of acquiring portfolio
securities consistent with the Trust's investment objective and policies, not
for investment leverage.
These transactions are made to secure what is considered to be an advantageous
price and yield for the Trust. 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 expenses, other than normal transaction costs, are incurred. However,
liquid assets of the Trust sufficient to make payment for the securities to be
purchased are segregated at the trade date. These securities are marked to
market daily and maintained until the transaction is settled.
REPURCHASE AGREEMENTS
The Trust 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
Trust, the Trust 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 Trust might be
delayed pending court action. The Trust believes that under the regular
procedures normally in effect for custody of the Trust's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction would rule
in favor of the Trust and allow retention or disposition of such securities. The
Trust will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Trust's
adviser to be creditworthy pursuant to guidelines established by the Trustees.
INVESTMENT LIMITATIONS
The Trust will not change any of the investment limitations described below
without approval of shareholders.
SELLING SHORT AND BUYING ON MARGIN
The Trust will not sell any portfolio instruments short or purchase any
portfolio instruments on margin but may obtain such short-term credits as
may be necessary for clearance of purchases and sales of portfolio
instruments.
- --------------------------------------------------------------------------------
BORROWING MONEY
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in
excess of 5% of the value of its total assets or in an amount up to
one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately
selling portfolio instruments. This provision is not for investment
leverage but solely to facilitate management of the portfolio by enabling
the Trust to meet redemption requests when the liquidation of portfolio
instruments would be inconvenient or disadvantageous.
Interest paid on borrowed funds will not be available for investment. The
Trust will liquidate any such borrowings as soon as possible and may not
purchase any portfolio instruments while any borrowings are outstanding.
PLEDGING ASSETS
The Trust will not mortgage, pledge, or hypothecate its assets except to
secure permitted borrowings. In those cases, it may mortgage, pledge, or
hypothecate assets having a market value not exceeding the lesser of the
dollar amounts borrowed or 10% of the value of total assets at the time
of the borrowing.
LENDING CASH OR SECURITIES
The Trust will not lend any of its assets, except that it may purchase or
hold U.S. government obligations, including repurchase agreements,
permitted by its investment objective and policies.
ISSUING SENIOR SECURITIES
The Trust will not issue senior securities, except as permitted by its
investment objective and policies.
Except with respect to borrowing money, 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 Trust did not borrow money or pledge assets 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.
THE FUNDS
- --------------------------------------------------------------------------------
"The Funds" and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management Trust;
Automated Government Money Trust; California Municipal Cash Trust; Cash Trust
Series, Inc.; Cash Trust Series II; DG Investor Series; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated Growth Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Intermediate Government Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First Priorty
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; Insight Institutional Series ,Inc.; 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 Term Trust, Inc.-1999; Liberty U.S. Government Money Market Trust;
Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Mark Twain
Funds; Money Market Management, Inc.; Money Market Obligations Trust; Money
Market Trust; Municipal Securities Income Trust; New York Municipal Cash Trust;
111 Corcoran Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term Municipal Trust; Signet Select
Funds; Star Funds; Stock and Bond Fund, Inc.; The Starburst Funds; The Starburst
Funds II; Sunburst Funds; The Trademark Funds; 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; and World Investment Series, Inc.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE TRUST
The Trust's investment adviser is Federated Advisers (the "Adviser"). 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, his wife, and his son, J. Christopher Donahue. John F. Donahue
is Chairman and Trustee of Federated Advisers and Federated Investors, and
Chairman and Trustee of the Trust. John A. Staley, IV, is President and Trustee,
Federated Advisers, Vice President and Trustee, Federated Investors, Executive
Vice President, Federated Securities Corp., and Vice President of the Trust. J.
Christopher Donahue is Trustee, Federated Advisers, President and Trustee,
Federated Investors, President and Trustee, Federated Administrative Services,
Trustee, Federated Services Company, and President of the Trust. John W.
McGonigle is Vice President, Secretary and Trustee, Federated Advisers, Trustee,
Vice President, Secretary and General Counsel, Federated Investors, Executive
Vice President, Secretary and Trustee, Federated Administrative Services,
Trustee, Federated Services Company, Executive Vice President and Director,
Federated Securities Corp., and Vice President and Secretary of the Trust.
The Adviser shall not be liable to the Trust 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 Trust.
ADVISORY FEES
For its advisory services, the Adviser receives an annual investment advisory
fee as described in the prospectus. During the fiscal years ended March 31,
1994, 1993, and 1992, the Adviser earned $4,147,512, $5,080,154, and $6,176,806,
respectively.
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 Trust'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
Trust for its expenses over the limitation.
If the Trust'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.
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Federated Administrative Services, a subsidiary of Federated Investors, provides
administrative personnel and services to the Trust 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 Trust'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 March 31, 1994 the Administrators collectively earned $985,326. For
the fiscal years ended March 31, 1993, and 1992, Federated Administrative
Services, Inc. earned $1,103,131, and $1,321,304, respectively, none of which
was waived. John A. Staley, IV, an officer of the Trust and Dr. Henry J.
Gailliot, an officer of Federated Advisers, the adviser to the Trust, each hold
approximately 15% and 20%, respectively, of the outstanding common stock and
serve as directors of Commercial Data Services, Inc., a company which provides
computer processing services to Federated Administrative Services, Inc., and
Federated Administrative Services.
SHAREHOLDER SERVICES PLAN
- --------------------------------------------------------------------------------
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, 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. For the fiscal period ended March 31, 1994,
payments in the amount of $44,736 were made pursuant to the Shareholder Services
Plan, all of which was paid to financial institutions.
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. The Adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Board of Trustees (the "Trustees").
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Trust 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.
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.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising Federated Funds 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.
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 of
the Trust is explained in the prospectus under "Investing in the Trust."
DETERMINING NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust attempts to stabilize the value of a share at $1.00. The days on which
net asset value is calculated by the Trust are described in the prospectus.
USE OF THE AMORTIZED COST METHOD
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
The Trust's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with applicable conditions of Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed for
purposes of distribution and redemption, at $1.00 per share, taking into account
current market conditions and the Trust's investment objective.
Under the Rule, the Trust is permitted to purchase instruments which are subject
to demand features or standby commitments. As defined by the Rule, a demand
feature entitles the Trust to receive the principal amount of the instrument
from the issuer or a third party on (1) no more than 30 days' notice or (2) at
specified intervals not exceeding 397 days on no more than 30 days' notice. A
standby commitment entitles the Trust to achieve same day settlement and to
receive an exercise price equal to the amortized cost of the underlying
instrument plus accrued interest at the time of exercise.
MONITORING PROCEDURES
The Trustees' procedures include monitoring the relationship between the
amortized cost value per share and the net asset value per share based
upon available indications of market value. The Trustees will decide
what, if any, steps should be taken if there is a difference of more than
.5% between the two
- --------------------------------------------------------------------------------
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
INVESTMENT RESTRICTIONS
The Rule requires that the Trust limit its investments to instruments
that, in the opinion of the Trustees, present minimal credit risk and
that, if rated, meet the minimum rating standards set forth in the Rule.
If the instruments are not rated, the Trustees must determine that they
are of comparable quality. The Rule also requires the Trust to maintain a
dollar-weighted average portfolio maturity (not more than 90 days)
appropriate to the objective of maintaining a stable net asset value of
$1.00 per share. In addition, no instrument with a remaining maturity of
more than 397 days can be purchased by the Trust. Should the disposition
of a portfolio security result in a dollar-weighted average portfolio
maturity of more than 90 days, the Trust will invest its available cash
to reduce the average maturity to 90 days or less as soon as possible.
Shares of investment companies purchased by the Trust will meet these
same criteria and will have investment policies consistent with Rule
2a-7.
It is the Trust's usual practice to hold portfolio securities to maturity and
realize par, unless the Adviser determines that sale or other disposition is
appropriate in light of the Trust's investment objective. Under the amortized
cost method of valuation, neither the amount of daily income nor the net asset
value is affected by any unrealized appreciation or depreciation of the
portfolio.
In periods of declining interest rates, the indicated daily yield on shares of
the Trust computed by dividing the annualized daily income on the Trust's
portfolio by the net asset value computed as above may tend to be higher than a
similar computation made by using a method of valuation based upon market prices
and estimates.
In periods of rising interest rates, the indicated daily yield on shares of the
Trust computed the same way may tend to be lower than a similar computation made
by using a method of calculation based upon market prices and estimates.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Trust redeems shares at the next computed net asset value after the Trust
receives the redemption request. Redemption procedures are explained in the
prospectus under "Redeeming Shares." Although the 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
Although the Trust intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Trust's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be 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 certain transaction costs.
The Trust has elected to be governed by Rule 18f-1 of the Investment Company Act
of 1940 under which the Trust is obligated to redeem shares for any one
shareholder in cash only up to the lesser of $250,000 or 1% of the Trust's net
asset value during any 90-day period.
TAX STATUS
- --------------------------------------------------------------------------------
THE TRUST'S TAX STATUS
The Trust will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Trust must, among other
requirements:
derive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
derive less than 30% of its gross income from the sale of securities held less
than three months;
invest in securities within certain statutory limits; and
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 received as cash or
additional shares. No portion of any income dividend paid by the Trust is
eligible for the dividends received deduction available to corporations. These
dividends, and any short-term capital gains, are taxable as ordinary income.
CAPITAL GAINS
Because the Trust invests primarily for income and because it normally
holds portfolio securities to maturity, it is not expected to realize
long-term capital gains.
YIELD
- --------------------------------------------------------------------------------
The Trust's yield for the seven-day period ended March 31, 1994 was 2.56%.
The Trust calculates its yield daily, based upon the seven days ending on the
day of the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net change
excluding capital changes but including the value of any additional shares
purchased with dividends earned from the original one share and all dividends
declared on the original and any purchased shares;
dividing the net change in the account's value by the value of the account at
the beginning of the base period to determine the base period return; and
multiplying the base period return by (365/7).
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in the
Trust, the performance will be reduced for those shareholders paying those fees.
EFFECTIVE YIELD
- --------------------------------------------------------------------------------
The Trust's effective yield for the seven-day period ended March 31, 1994 was
2.59%.
The Trust's effective yield is computed by compounding the unannualized base
period return by:
adding 1 to the base period return;
raising the sum to the 365/7th power; and
subtracting 1 from the result.
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The Trust's performance depends upon such variables as:
portfolio quality;
average portfolio maturity;
type of instruments in which the portfolio is invested;
changes in interest rates on money market instruments;
changes in Trust expenses; and
the relative amount of Trust cash flow.
Investors may use financial publications and/or indices to obtain a more
complete view of the Trust'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
6
- --------------------------------------------------------------------------------
portfolio securities and compute offering price. The financial publications
and/or indices which the Trust uses in advertising may include:
LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all income dividends and capital gains distributions, if any.
From time to time, the Trust will quote its Lipper ranking in the "short-term
U.S. government funds" category in advertising and sales literature.
DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES, for example, is a
weekly quote of the average daily offering price for selected federal agency
issues maturing in 30 days.
SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30
days.
Advertisements and other sales literature for the Trust may refer to "total
return." Total return is the historic change in the value of an investment in
the Trust based on the monthly reinvestment of dividends over a specified period
of time.
From time to time as it deems appropriate, the Trust may advertise its
performance using charts, graphs, and descriptions, compared to federally
insured bank products including certificates of deposit and time deposits.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The financial statements for the fiscal year ended March 31, 1994 are
incorporated herein by reference from the Trust's Annual Report dated March 31,
1994 (File Nos. 2-65447 and 811-2956). A copy of the Annual Report may be
obtained without charge by contacting the Trust at the address listed in the
prospectus.
8062809B (5/94)
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Incorporated by reference to
Annual Report of Registrant dated March 31, 1994
(File Nos. 2-65447 and 811-2956);
(b) Exhibits:
(1) Copy of Declaration of Trust of the
Registrant as amended (1,2,3,6,9);
(2) Copy of By-Laws of the Registrant as amended
(4,7,9,10);
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of
Beneficial Interest of the Registrant (2);
(5) Copy of new Investment Advisory Contract of
the Registrant(12);
(6) Copy of Administrative Support and
Distributor's Contract of the Registrant (9);
(7) Not applicable;
(8) (i) Conformed Copy of Custodian Agreement of
the Registrant;+
(ii) Conformed Copy of Transfer Agency and
Service Agreement of the Registrant
(16);
(9) Not applicable;
(10) Not applicable;
(11) Conformed Copy of Consent of Independent
Public Accountants;+
+ All Exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's
initial Registration Statement on Form N-1 filed
September 14, 1979 (File No. 2-65447).
2. Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 2 on Form N-1 filed March 11, 1980
(File No. 2-65447).
3. Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 3 on Form N-1 filed May 16, 1980
(File No. 2-65447).
4. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 2 on Form N-1 filed May 7, 1981
(File No. 2-65447).
6. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 5 on Form N-1 filed March 31, 1983
(File No. 2-65447).
7. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 9 on Form N-1 filed May 21, 1984
(File No. 2-65447).
8. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 10 on Form N-1A filed March 28, 1985
(File No. 2-65447).
9. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 11 on Form N-1A filed May 30, 1985
(File No. 2-65447).
10. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 16 on Form N-1A filed July 15, 1987
(File No. 2-65447).
11. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 18 on Form N-1A filed July 18, 1988
(File No. 2-65447).
12. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 21 on Form N-1A filed July 28, 1989
(File No. 2-65447).
13. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 23 on Form N-1A filed July 18, 1990
(File No. 2-65447).
14. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 25 on Form N-1A filed July 19, 1991
(File No. 2-65447).
15. Response is incorporated by reference to Registrant's Post-
Effective
Amendment No. 27 on Form N-lA filed July 23, l992 (File No.
2-65447).
16. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 29 on Form N-1A filed July 26, 1993
(File No. 2-65447).
(12) Not applicable;
(13) Not applicable;
(14) (i) Copy of Keogh Plan of the
Registrant (6);
(ii) Copy of IRA Plan of the Registrant
(9);
(15) (i) Copy of Distribution Plan of the
Registrant (9);
(ii) Copy of Sales Agreement of the
Registrant (10);
(16) Schedule for Computation of Yield
Calculation (11);
(17) Power of Attorney (15);
(18) Conformed Copy of Opinion and Consent of
Counsel as to availability of
Rule 485(b);+
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 May 10, 1994
Shares of Beneficial Interest 115,926
(no par value)
Item 27. Indemnification: (14)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the
investment adviser, see the section entitled "Trust
Information - Management of the Trust" in Part A. The
affiliations with the Registrant of four of the
Trustees and one of the officers of the investment
adviser are included in Part A of this Registration
Statement under "Management of the Trust - Officers and
Trustees." 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.
The remaining officers of the investment adviser are:
William D. Dawson, III, J. Thomas Madden, and Mark L.
Mallon, Executive Vice Presidents; Henry J. Gailliot,
Senior Vice President-Economist; Peter R. Anderson,
Gary J. Madich, and J. Alan Minteer, Senior Vice
Presidents; Randall A. Bauer, Jonathan C. Conley,
Deborah A. Cunningham, Mark E. Durbiano, Roger A.
Early, Kathleen M. Foody-Malus, David C. Francis,
Thomas M. Franks, Edward C. Gonzales, Jeff A.
Kozemchek, Marian R. Marinack, John W. McGonigle,
6. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 5 on Form N-1 filed March 31, 1983
(File No. 2-65447).
9. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 11 on Form N-1A filed May 30, 1985
(File No. 2-65447).
10. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 16 on Form N-1A filed July 15, 1987
(File No. 2-65447).
11. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 18 on Form N-1A filed July 18, 1988
(File No. 2-65447).
14. Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 25 on Form N-1A filed July 19, 1991
(File No. 2-65447).
15. Response is incorporated by reference to Registrant's Post-
Effective
Amendment No. 27 on Form N-lA filed July 23, l992 (File No.
2-65447).
Gregory M. Melvin, Susan M. Nason, Mary Jo Ochson, Robert J.
Ostrowski, Charles A. Ritter, and Christopher H. Wiles, Vice
Presidents, Edward C. Gonzales, Treasurer, and John W.
McGonigle, Secretary. The business address of each of the
officers of the Federated Research Division of the
investment adviser is Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779.
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: A.T. Ohio Municipal Money
Fund; Alexander Hamilton Funds; American Leaders
Fund, Inc.; Annuity Management Series; Automated
Cash Management Trust; Automated Government Money
Trust; BayFunds; The Biltmore Funds; The Biltmore
Municipal Funds; The Boulevard Funds; California
Municipal Cash Trust; Cambridge Series Trust; Cash
Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated ARMs Fund;
Federated Exchange Fund, Ltd.; Federated GNMA
Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Intermediate Government
Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; Financial
Reserves Fund; First Priority Funds; First Union
Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress
Utility Fund, Inc.; Fountain Square Funds; Fund for
U.S. Government Securities, Inc.; Government Income
Securities, Inc.; High Yield Cash Trust;
Independence One Mutual Funds; Insight
Institutional Series, Inc.; 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; Mark Twain Funds; Marshall Funds, Inc.;
Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; The Monitor
Funds; Municipal Securities Income Trust; New York
Municipal Cash Trust; 111 Corcoran Funds; Peachtree
Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term
Municipal Trust; Signet Select Funds; SouthTrust
Vulcan Funds; Star Funds; The Starburst Funds; The
Starburst Funds II; Stock and Bond Fund, Inc.;
Sunburst Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Tower Mutual Funds; Trademark
Funds; Trust for Financial Institutions; Trust for
Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury
Obligations; Vision Fiduciary Funds, Inc.; 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, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Vice
President and
Federated Investors Tower President, and Treasurer, Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice
President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley, IV Executive Vice President Vice
President
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
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
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss 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
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
H. Joseph Kennedy 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
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
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
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
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
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki 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
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns 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
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. 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
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss 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
Solon A. Person, IV 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
Charles A. Robison 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
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ 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
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
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 8604
("Transfer Agent and Dividend Boston, MA 02266-8604
Disbursing Agent")
Federated Adminstrative Services Federated Investors Tower
("Adminstrator") Pittsburgh, PA 15222-3779
Federated Advisers Federated Investors Tower
("Adviser") Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 1723
("Custodian") Boston, MA 02105
Item 31. Management Services: Not applicable.
Item 32. Undertaking:
Registrant hereby undertakes to comply with the
provisions of Section 16(c) of the 1940 Act with
respect to the removal of Trustees 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, LIBERTY
U.S. GOVERNMENT MONEY MARKET TRUST, 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, thereunto duly authorized, all in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 26th day of
May, 1994.
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
BY: /s/Charles H. Field
Charles H. Field, Assistant Secretary
Attorney in Fact for John F. Donahue
May 26, 1994
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/Charles H. Field
Charles H. Field Attorney In Fact May 26, 1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
J. Christopher Donahue* President
Edward C. Gonzales* Vice President, Treasurer
and Trustee (Principal
Financial and Accounting
Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (11) under N-1A
Exhibit 23 under Item
601/Reg SK
ARTHUR ANDERSEN & CO.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
use in Post-Effective Amendment No. 31 to Form N-1A
Registration Statement of Liberty U.S. Government Money Market
Trust of our report dated May 13, 1994,on the financial
statements as of March 31, 1994, included in or made part of
this registration statement.
By: ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania,
May 24, 1994
Exhibit No 18 under Form N-1A
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTONPITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR.__________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
May 13, 1994
Liberty U.S. Government Money Market Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
As counsel to Liberty U.S. Government Money Market Trust
("Trust") we have reviewed Post-effective Amendment No. 31 to the
Trust's Registration Statement to be filed with the Securities
and Exchange Commission under the Securities Act of 1933 (File
No. 2-65447). The subject Post-effective Amendment will be filed
pursuant to Paragraph (b) of Rule 485 and become effective
pursuant to said Rule on May 31, 1994.
Our review also included an examination of other relevant
portions of the amended 1933 Act Registration Statement of the
Trust and such other documents and records deemed appropriate.
On the basis of this review we are of the opinion that Post-
effective Amendment No. 31 does not contain disclosures which
would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.
We hereby consent to the filing of this representation
letter as a part of the Trust's Registration Statement filed with
the Securities and Exchange Commission under the Securities Act
of 1933 and as part of any application or registration statement
filed under the Securities Laws of the States of the United
States.
Very truly yours,
Houston, Houston & Donnelly
By: /s/Thomas J. Donnelly
TJD:heh
Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It1
2. Duties of the Custodian With Respect to Property
of the Funds Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 6
2.5 Payments for Shares 7
2.6 Availability of Federal Funds 7
2.7 Collection of Income 7
2.8 Payment of Fund Moneys 8
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased. 9
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund 9
2.11 Appointment of Agents 10
2.12 Deposit of Fund Assets in Securities System 10
2.13 Segregated Account 12
2.14 Joint Repurchase Agreements 13
2.15 Ownership Certificates for Tax Purposes 13
2.16 Proxies 13
2.17 Communications Relating to Fund Portfolio
Securities 13
2.18 Proper Instructions 14
2.19 Actions Permitted Without Express Authority 14
2.20 Evidence of Authority 15
2.21 Notice to Trust by Custodian Regarding
Cash Movement. 15
3. Duties of Custodian With Respect to the Books of
Account and
Calculation of Net Asset Value and Net Income 15
4. Records 16
5. Opinion of Funds' Independent Public
Accountants/Auditors 16
6. Reports to Trust by Independent Public
Accountants/Auditors 17
7. Compensation of Custodian 17
8. Responsibility of Custodian 17
9. Effective Period, Termination and Amendment 19
10. Successor Custodian 20
11. Interpretive and Additional Provisions 21
12. Massachusetts Law to Apply 22
13. Notices 22
14. Counterparts 22
15. Limitations of Liability 22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on
Exhibit 1, as it may be amended from time to time, (the
"Trust"), which may be Massachusetts business trusts or
Maryland corporations or have such other form of
organization as may be indicated, on behalf of the
portfolios (hereinafter collectively called the "Funds" and
individually referred to as a "Fund") of the Trust, having
its principal place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania, 15222-3779, and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter
called the "Custodian", and FEDERATED SERVICES COMPANY, a
Delaware Fusiness trust company, having its principal place
of business at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, hereinafter called ("Company").
WITNESSETH: That in consideration of the mutual covenants a
nd agreements hereinafter contained, the parties hereto
agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian
of the assets of each of the Funds of the Trust. Except
as otherwise expressly provided herein, the securities
and other assets of each of the Funds shall be segregated
from the assets of each of the other Funds and from all
other persons and entities. The Trust will deliver to
the Custodian all securities and cash owned by the Funds
and all payments of income, payments of principal or
capital distributions received by them with respect to
all securities owned by the Funds from time to time, and
the cash consideration received by them for shares
("Shares") of beneficial interest/capital stock of the
Funds as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of
the Funds held or received by the Funds and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning
of Section 2.18), the Custodian shall from time to time
employ one or more sub-custodians upon the terms
specified in the Proper Instructions, provided that the
Custodian shall have no more or less responsibility or
liability to the Trust or any of the Funds on account of
any actions or omissions of any sub-custodian so employed
than any such sub-custodian has to the Custodian.
2.Duties of the Custodian With Respect to Property of the Fu
nds Held by the Custodian
2.1Holding Securities. The Custodian shall hold and phys
ically segregate for the account of each Fund all non-
cash property, including all securities owned by each
Fund, other than securities which are maintained
pursuant to Section 2.12 in a clearing agency which
acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the
Treasury, collectively referred to herein as
"Securities System", or securities which are subject
to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall
maintain records of all receipts, deliveries and
locations of such securities, together with a current
inventory thereof, and shall conduct periodic
physical inspections of certificates representing
stocks, bonds and other securities held by it under
this Contract in such manner as the Custodian shall
determine from time to time to be advisable in order
to verify the accuracy of such inventory. With
respect to securities held by any agent appointed
pursuant to Section 2.11 hereof, and with respect to
securities held by any sub-custodian appointed
pursuant to Section 1 hereof, the Custodian may rely
upon certificates from such agent as to the holdings
of such agent and from such sub-custodian as to the
holdings of such sub-custodian, it being understood
that such reliance in no way relieves the Custodian
of its responsibilities under this Contract. The
Custodian will promptly report to the Trust the
results of such inspections, indicating any shortages
or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or
discrepancies.
2.2Delivery of Securities. The Custodian shall release a
nd deliver securities owned by a Fund held by the
Custodian or in a Securities System account of the
Custodian only upon receipt of Proper Instructions,
which may be continuing instructions when deemed
appropriate by the parties, and only in the following
cases:
(1)Upon sale of such securities for the account of a
Fund and receipt of payment therefor;
(2)Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Trust;
(3)In the case of a sale effected through a Securitie
s System, in accordance with the provisions of
Section 2.12 hereof;
(4)To the depository agent in connection with tender
or other similar offers for portfolio securities
of a Fund, in accordance with the provisions of
Section 2.17 hereof;
(5)To the issuer thereof or its agent when such secur
ities are called, redeemed, retired or otherwise
become payable; provided that, in any such case,
the cash or other consideration is to be
delivered to the Custodian;
(6)To the issuer thereof, or its agent, for transfer
into the name of a Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or
nominee name of any sub-custodian appointed
pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units; provided that, in any
such case, the new securities are to be delivered
to the Custodian;
(7)Upon the sale of such securities for the account o
f a Fund, to the broker or its clearing agent,
against a receipt, for examination in accordance
with "street delivery custom"; provided that in
any such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as
may arise from the Custodian's own failure to act
in accordance with the standard of reasonable
care or any higher standard of care imposed upon
the Custodian by any applicable law or regulation
if such above-stated standard of reasonable care
were not part of this Contract;
(8)For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities
of the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case, the new
securities and cash, if any, are to be delivered
to the Custodian;
(9)In the case of warrants, rights or similar securit
ies, the surrender thereof in the exercise of
such warrants, rights or similar securities or
the surrender of interim receipts or temporary
securities for definitive securities; provided
that, in any such case, the new securities and
cash, if any, are to be delivered to the
Custodian;
(10)For delivery in connection with any loans of port
folio securities of a Fund, but only against
receipt of adequate collateral in the form of (a)
cash, in an amount specified by the Trust, (b)
certificated securities of a description
specified by the Trust, registered in the name of
the Fund or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in
proper form for transfer, or (c) securities of a
description specified by the Trust, transferred
through a Securities System in accordance with
Section 2.12 hereof;
(11)For delivery as security in connection with any b
orrowings requiring a pledge of assets by a Fund,
but only against receipt of amounts borrowed,
except that in cases where additional collateral
is required to secure a borrowing already made,
further securities may be released for the
purpose;
(12)For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the
Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The
Options Clearing Corporation and of any
registered national securities exchange, or of
any similar organization or organizations,
regarding escrow or other arrangements in
connection with transactions for a Fund;
(13)For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the
Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act,
relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or
organizations, regarding account deposits in
connection with transaction for a Fund;
(14)Upon receipt of instructions from the transfer ag
ent ("Transfer Agent") for a Fund, for delivery
to such Transfer Agent or to the holders of
shares in connection with distributions in kind,
in satisfaction of requests by holders of Shares
for repurchase or redemption; and
(15)For any other proper corporate purpose, but only
upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant
Secretary, specifying the securities to be
delivered, setting forth the purpose for which
such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of
such securities shall be made.
2.3 Registration of Securities. Securities held by the C
ustodian (other than bearer securities) shall be
registered in the name of a particular Fund or in the
name of any nominee of the Fund or of any nominee of
the Custodian which nominee shall be assigned
exclusively to the Fund, unless the Trust has
authorized in writing the appointment of a nominee to
be used in common with other registered investment
companies affiliated with the Fund, or in the name or
nominee name of any agent appointed pursuant to
Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of a
Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain
a separate bank account or accounts in the name of
each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received
by it from or for the account of each Fund, other
than cash maintained in a joint repurchase account
with other affiliated funds pursuant to Section 2.14
of this Contract or by a particular Fund in a bank
account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940,
as amended, (the "1940 Act"). Funds held by the
Custodian for a Fund may be deposited by it to its
credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or
trust company shall be qualified to act as a
custodian under the 1940 Act and that each such bank
or trust company and the funds to be deposited with
each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees/Directors
("Board") of the Trust. Such funds shall be
deposited by the Custodian in its capacity as
Custodian for the Fund and shall be withdrawable by
the Custodian only in that capacity. If requested by
the Trust, the Custodian shall furnish the Trust, not
later than twenty (20) days after the last business
day of each month, an internal reconciliation of the
closing balance as of that day in all accounts
described in this section to the balance shown on the
daily cash report for that day rendered to the Trust.
2.5Payments for Shares. The Custodian shall make such ar
rangements with the Transfer Agent of each Fund, as
will enable the Custodian to receive the cash
consideration due to each Fund and will deposit into
each Fund's account such payments as are received
from the Transfer Agent. The Custodian will provide
timely notification to the Trust and the Transfer
Agent of any receipt by it of payments for Shares of
the respective Fund.
2.6Availability of Federal Funds. Upon mutual agreement
between the Trust and the Custodian, the Custodian
shall make federal funds available to the Funds as of
specified times agreed upon from time to time by the
Trust and the Custodian in the amount of checks,
clearing house funds, and other non-federal funds
received in payment for Shares of the Funds which are
deposited into the Funds' accounts.
2.7 Collection of Income.
(1)The Custodian shall collect on a timely basis all
income and other payments with respect to
registered securities held hereunder to which
each Fund shall be entitled either by law or
pursuant to custom in the securities business,
and shall collect on a timely basis all income
and other payments with respect to bearer
securities if, on the date of payment by the
issuer, such securities are held by the Custodian
or its agent thereof and shall credit such
income, as collected, to each Fund's custodian
account. Without limiting the generality of the
foregoing, the Custodian shall detach and present
for payment all coupons and other income items
requiring presentation as and when they become
due and shall collect interest when due on
securities held hereunder. The collection of
income due the Funds on securities loaned
pursuant to the provisions of Section 2.2 (10)
shall be the responsibility of the Trust. The
Custodian will have no duty or responsibility in
connection therewith, other than to provide the
Trust with such information or data as may be
necessary to assist the Trust in arranging for
the timely delivery to the Custodian of the
income to which each Fund is properly entitled.
(2)The Custodian shall promptly notify the Trust when
ever income due on securities is not collected in
due course and will provide the Trust with
monthly reports of the status of past due income
unless the parties otherwise agree.
2.8Payment of Fund Moneys. Upon receipt of Proper Instru
ctions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian
shall pay out moneys of each Fund in the following
cases only:
(1)Upon the purchase of securities, futures contracts
or options on futures contracts for the account
of a Fund but only (a) against the delivery of
such securities, or evidence of title to futures
contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the
United States or abroad which is qualified under
the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred
to in Section 2.3 hereof or in proper form for
transfer, (b) in the case of a purchase effected
through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof
or (c) in the case of repurchase agreements
entered into between the Trust and any other
party, (i) against delivery of the securities
either in certificate form or through an entry
crediting the Custodian's account at the Federal
Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase for
the account of the Fund of securities owned by
the Custodian along with written evidence of the
agreement by the Custodian to repurchase such
securities from the Fund;
(2)In connection with conversion, exchange or surrend
er of securities owned by a Fund as set forth in
Section 2.2 hereof;
(3)For the redemption or repurchase of Shares of a Fu
nd issued by the Trust as set forth in Section
2.10 hereof;
(4)For the payment of any expense or liability incurr
ed by a Fund, including but not limited to the
following payments for the account of the Fund:
interest; taxes; management, accounting, transfer
agent and legal fees; and operating expenses of
the Fund, whether or not such expenses are to be
in whole or part capitalized or treated as
deferred expenses;
(5)For the payment of any dividends on Shares of a Fu
nd declared pursuant to the governing documents
of the Trust;
(6)For payment of the amount of dividends received in
respect of securities sold short;
(7)For any other proper purpose, but only upon receip
t of, in addition to Proper Instructions, a
certified copy of a resolution of the Executive
Committee of the Trust on behalf of a Fund
signed by an officer of the Trust and certified
by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting
forth the purpose for which such payment is to be
made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom
such payment is to be made.
2.9Liability for Payment in Advance of Receipt of Securit
ies Purchased. In any and every case where payment
for purchase of securities for the account of a Fund
is made by the Custodian in advance of receipt of the
securities purchased, in the absence of specific
written instructions from the Trust to so pay in
advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if
the securities had been received by the Custodian.
2.10Payments for Repurchases or Redemptions of Shares of
a Fund. From such funds as may be available for the
purpose of repurchasing or redeeming Shares of a
Fund, but subject to the limitations of the
Declaration of Trust/Articles of Incorporation and
any applicable votes of the Board of the Trust
pursuant thereto, the Custodian shall, upon receipt
of instructions from the Transfer Agent, make funds
available for payment to holders of shares of such
Fund who have delivered to the Transfer Agent a
request for redemption or repurchase of their shares
including without limitation through bank drafts,
automated clearinghouse facilities, or by other
means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming
shareholders.
2.11Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any
time remove) any other bank or trust company which is
itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a
custodian, as its agent to carry out such of the
provisions of this Section 2 as the Custodian may
from time to time direct; provided, however, that the
appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities
hereunder.
2.12Deposit of Fund Assets in Securities System. The Cus
todian may deposit and/or maintain securities owned
by the Funds in a clearing agency registered with the
Securities and Exchange Commission ("SEC") under
Section 17A of the Exchange Act, which acts as a
securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to
herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(1)The Custodian may keep securities of each Fund in a Securities System
provided that such securities are represented in an account
("Account")
of the Custodian in the Securities System which shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
(2)The records of the Custodian with respect to securities of the Funds
which are maintained in a Securities System shall identify by book-
entry those securities belonging to each Fund;
(3)The Custodian shall pay for securities purchased for the account of
each
Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the
making of
an entry on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall transfer
securities sold for the account of a Fund upon (i) receipt of advice
from the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the Securities
System
of transfers of securities for the account of a Fund shall identify
the
Fund, be maintained for the Fund by the Custodian and be provided to
the Trust at its request. Upon request, the Custodian shall furnish
the Trust confirmation of each transfer to or from the account of a
Fund in the form of a written advice or notice and shall furnish to
the
Trust copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of a Fund.
(4)The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited
in the Securities System;
(5)The Custodian shall have received the initial certificate, required by
Section 9 hereof;
(6)Anything to the contrary in this Contract notwithstanding, the
Custodian
shall be liable to the Trust for any loss or damage to a Fund
resulting
from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or of
any of its or their employees or from failure of the Custodian or any
such agent to enforce effectively such rights as it may have against
the Securities System; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect
to any claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or damage if
and to the extent that a Fund has not been made whole for any such
loss or damage.
(7)The authorization contained in this Section 2.12 shall not relieve the
Custodian from using reasonable care and diligence in making use
of any
Securities System.
2.13Segregated Account. The Custodian shall upon receipt
of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of
each Fund, into which account or accounts may be
transferred cash and/or securities, including
securities maintained in an account by the Custodian
pursuant to Section 2.12 hereof, (i) in accordance
with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with
the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the
Commodity Futures Trading Commission or any
registered contract market), or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions
for a Fund, (ii) for purpose of segregating cash or
government securities in connection with options
purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or
sold for a Fund, (iii) for the purpose of compliance
by the Trust or a Fund with the procedures required
by any release or releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause
(iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the
Board or of the Executive Committee signed by an
officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14Joint Repurchase Agreements. Upon the receipt of Pro
per Instructions, the Custodian shall deposit and/or
maintain any assets of a Fund and any affiliated
funds which are subject to joint repurchase
transactions in an account established solely for
such transactions for the Fund and its affiliated
funds. For purposes of this Section 2.14,
"affiliated funds" shall include all investment
companies and their portfolios for which subsidiaries
or affiliates of Federated Investors serve as
investment advisers, distributors or administrators
in accordance with applicable exemptive orders from
the SEC. The requirements of segregation set forth
in Section 2.1 shall be deemed to be waived with
respect to such assets.
2.15Ownership Certificates for Tax Purposes. The Custodi
an shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments
with respect to securities of a Fund held by it and
in connection with transfers of securities.
2.16Proxies. The Custodian shall, with respect to the se
curities held hereunder, cause to be promptly
executed by the registered holder of such securities,
if the securities are registered otherwise than in
the name of a Fund or a nominee of a Fund, all
proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly
deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Trust
all written information (including, without
limitation, pendency of calls and maturities of
securities and expirations of rights in connection
therewith and notices of exercise of call and put
options written by the Fund and the maturity of
futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the
securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall
transmit promptly to the Trust all written
information received by the Custodian from issuers of
the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or
exchange offer. If the Trust desires to take action
with respect to any tender offer, exchange offer or
any other similar transaction, the Trust shall notify
the Custodian in writing at least three business days
prior to the date on which the Custodian is to take
such action. However, the Custodian shall
nevertheless exercise its best efforts to take such
action in the event that notification is received
three business days or less prior to the date on
which action is required.
2.18Proper Instructions. Proper Instructions as used thr
oughout this Section 2 means a writing signed or
initialed by one or more person or persons as the
Board shall have from time to time authorized. Each
such writing shall set forth the specific transaction
or type of transaction involved. Oral instructions
will be deemed to be Proper Instructions if (a) the
Custodian reasonably believes them to have been given
by a person previously authorized in Proper
Instructions to give such instructions with respect
to the transaction involved, and (b) the Trust
promptly causes such oral instructions to be
confirmed in writing. Upon receipt of a certificate
of the Secretary or an Assistant Secretary as to the
authorization by the Board of the Trust accompanied
by a detailed description of procedures approved by
the Board, Proper Instructions may include
communications effected directly between electro-
mechanical or electronic devices provided that the
Board and the Custodian are satisfied that such
procedures afford adequate safeguards for a Fund's
assets.
2.19Actions Permitted Without Express Authority. The Cus
todian may in its discretion, without express
authority from the Trust:
(1)make payments to itself or others for minor expens
es of handling securities or other similar items
relating to its duties under this Contract,
provided that all such payments shall be
accounted for to the Trust in such form that it
may be allocated to the affected Fund;
(2)surrender securities in temporary form for securit
ies in definitive form;
(3)endorse for collection, in the name of a Fund, che
cks, drafts and other negotiable instruments; and
(4)in general, attend to all non-discretionary detail
s in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of each
Fund except as otherwise directed by the Trust.
2.20Evidence of Authority. The Custodian shall be protec
ted in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper
reasonably believed by it to be genuine and to have
been properly executed on behalf of a Fund. The
Custodian may receive and accept a certified copy of
a vote of the Board of the Trust as conclusive
evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination
of or any action by the Board pursuant to the
Declaration of Trust/Articles of Incorporation as
described in such vote, and such vote may be
considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
2.21Notice to Trust by Custodian Regarding Cash Movement.
The Custodian will provide timely notification to the
Trust of any receipt of cash, income or payments to
the Trust and the release of cash or payment by the
Trust.
3.Duties of Custodian With Respect to the Books of Account a
nd Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary info
rmation to the entity or entities appointed by the Board
of the Trust to keep the books of account of each Fund
and/or compute the net asset value per share of the
outstanding Shares of each Fund or, if directed in
writing to do so by the Trust, shall itself keep such
books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in
the Fund's currently effective prospectus and Statement
of Additional Information ("Prospectus") and shall advise
the Trust and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing
by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net
income among its various components. The calculations of
the net asset value per share and the daily income of a
Fund shall be made at the time or times described from
time to time in the Fund's currently effective
Prospectus.
4. Records.
The Custodian shall create and maintain all records
relating to its activities and obligations under this
Contract in such manner as will meet the obligations of
the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-
1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such
records shall be the property of the Trust and shall at
all times during the regular business hours of the
Custodian be open for inspection by duly authorized
officers, employees or agents of the Trust and employees
and agents of the SEC. In the event of termination of
this Contract, the Custodian will deliver all such
records to the Trust, to a successor Custodian, or to
such other person as the Trust may direct. The Custodian
shall supply daily to the Trust a tabulation of
securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust
and the Custodian, include certificate numbers in such
tabulations.
5. Opinion of Funds' Independent Public
Accountants/Auditors.
The Custodian shall take all reasonable action, as the
Trust may from time to time request, to obtain from year
to year favorable opinions from each Fund's independent
public accountants/auditors with respect to its
activities hereunder in connection with the preparation
of the Fund's registration statement, periodic reports,
or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public
Accountants/Auditors.
The Custodian shall provide the Trust, at such times as
the Trust may reasonably require, with reports by
independent public accountants/auditors for each Fund on
the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities
deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian for
the Fund under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may
reasonably be required by the Trust, to provide
reasonable assurance that any material inadequacies would
be disclosed by such examination and, if there are no
such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian,
as agreed upon from time to time between Company and the
Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable
care in carrying out the provisions of this Contract;
provided, however, that the Custodian shall be held to
any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of
this Contract. The Custodian shall be entitled to rely
on and may act upon advice of counsel (who may be counsel
for the Trust) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice, provided that such action is not
in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
Subject to the limitations set forth in Section 15
hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in
the issue at hand and be without liability for any action
taken or thing done by it in carrying out the terms and
provisions of this Contract in accordance with the above
standards.
In order that the indemnification provisions contained in
this Section 8 shall apply, however, it is understood
that if in any case the Trust may be asked to indemnify
or save the Custodian harmless, the Trust shall be fully
and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood
that the Custodian will use all reasonable care to
identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the
probability of such a claim for indemnification. The
Trust shall have the option to defend the Custodian
against any claim which may be the subject of this
indemnification, and in the event that the Trust so
elects it will so notify the Custodian and thereupon the
Trust shall take over complete defense of the claim, and
the Custodian shall in such situation initiate no further
legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall
in no case confess any claim or make any compromise in
any case in which the Trust will be asked to indemnify
the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered
into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action
with respect to securities, which action involves the
payment of money or which action may, in the reasonable
opinion of the Custodian, result in the Custodian or its
nominee assigned to a Fund being liable for the payment
of money or incurring liability of some other form, the
Custodian may request the Trust, as a prerequisite to
requiring the Custodian to take such action, to provide
indemnity to the Custodian in an amount and form
satisfactory to the Custodian.
Subject to the limitations set forth in Section 15
hereof, the Trust agrees to indemnify and hold harmless
the Custodian and its nominee from and against all taxes,
charges, expenses, assessments, claims and liabilities
(including counsel fees) (referred to herein as
authorized charges) incurred or assessed against it or
its nominee in connection with the performance of this
Contract, except such as may arise from it or its
nominee's own failure to act in accordance with the
standard of reasonable care or any higher standard of
care which would be imposed upon the Custodian by any
applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract. To secure any authorized charges and any
advances of cash or securities made by the Custodian to
or for the benefit of a Fund for any purpose which
results in the Fund incurring an overdraft at the end of
any business day or for extraordinary or emergency
purposes during any business day, the Trust hereby grants
to the Custodian a security interest in and pledges to
the Custodian securities held for the Fund by the
Custodian, in an amount not to exceed 10 percent of the
Fund's gross assets, the specific securities to be
designated in writing from time to time by the Trust or
the Fund's investment adviser. Should the Trust fail to
make such designation, or should it instruct the
Custodian to make advances exceeding the percentage
amount set forth above and should the Custodian do so,
the Trust hereby agrees that the Custodian shall have a
security interest in all securities or other property
purchased for a Fund with the advances by the Custodian,
which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of
the Trust instructing their purchase shall be considered
the requisite description and designation of the property
so pledged for purposes of the requirements of the
Uniform Commercial Code. Should the Trust fail to cause
a Fund to repay promptly any authorized charges or
advances of cash or securities, subject to the provision
of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use
available cash and to dispose of pledged securities and
property as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by
mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under
Section 2.12 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant
Secretary that the Board of the Trust has approved the
initial use of a particular Securities System as required
in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or
terminate this Contract in contravention of any
applicable federal or state regulations, or any provision
of the Declaration of Trust/Articles of Incorporation,
and further provided, that the Trust may at any time by
action of its Board (i) substitute another bank or trust
company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the
appropriate banking regulatory agency or upon the
happening of a like event at the direction of an
appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to
the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board
of the Trust, the Custodian shall, upon termination,
deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer,
all securities then held by it hereunder for each Fund
and shall transfer to separate accounts of the successor
custodian all of each Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a
certified copy of a vote of the Board of the Trust,
deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a
successor custodian or certified copy of a vote of the
Board shall have been delivered to the Custodian on or
before the date when such termination shall become
effective, then the Custodian shall have the right to
deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing
business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not
less than $100,000,000, all securities, funds and other
properties held by the Custodian and all instruments held
by the Custodian relative thereto and all other property
held by it under this Contract for each Fund and to
transfer to separate accounts of such successor
custodian all of each Fund's securities held in any
Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under
this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date
of termination hereof owing to failure of the Trust to
procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of
such securities, funds and other properties and the
provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force
and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the
Custodian and the Trust may from time to time agree on
such provisions interpretive of or in addition to the
provisions of this Contract as may in their joint opinion
be consistent with the general tenor of this Contract.
Any such interpretive or additional provisions shall be
in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or
additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this
Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions
thereof interpreted under and in accordance with laws of
The Commonwealth of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices
and other writings delivered or mailed postage prepaid to
the Trust at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to the Custodian at address
for SSBT only: 225 Franklin Street, Boston,
Massachusetts, 02110, or to such other address as the
Trust or the Custodian may hereafter specify, shall be
deemed to have been properly delivered or given hereunder
to the respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an
original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust of those Trusts which are business
trusts and agrees that the obligations and liabilities
assumed by the Trust and any Fund pursuant to this
Contract, including, without limitation, any obligation
or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the
relevant Fund and its assets and that the Custodian shall
not seek satisfaction of any such obligation from the
shareholders of the relevant Fund, from any other Fund or
its shareholders or from the Trustees, Officers,
employees or agents of the Trust, or any of them. In
addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against
the Trust, for whatever reasons, involving more than one
Fund, the Trust shall have the exclusive right to
determine the appropriate allocations of liability for
any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder
affixed effective as of the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES (Except those
listed below)
/s/John G. McGonigle_________ By /s/John G. Donahue_____________
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._________________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANIY
/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
Table
s c c
CONTRACT FEE
DATE INVESTMENT COMPANY SCHEDULE
12/1/93 111 Corcoran Funds 2
12/1/93 111 Corcoran Bond Fund 2
12/1/93 111 Corcoran North Carolina Municipal Securities Fund 2
12/13/93 Alexander Hamilton Funds 2
12/13/93 Alexander Hamilton Government Income Fund 2
12/13/93 Alexander Hamilton Equity Growth and Income Fund 2
12/13/93 Alexander Hamilton Fund 2
12/1/93 American Leaders Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fortress Shares 1
12/1/93 Automated Cash Management Trust 1
12/1/93 Automated Government Money Trust 1
12/1/93 California Municipal Cash Trust 1
Cambridge Series Trust 1
Has a separate Cambridge Capital Growth Portfolio 1
contract with Class A 1
SSB - included Class B 1
for fee infor- Cambridge Government Income Portfolio 1
mation purposes Class A 1
only Class B 1
Cambridge Growth Portfolio 1
Class A 1
Class B 1
Cambridge Income and Growth Portfolio 1
Class A 1
Class B 1
Cambridge Municipal Income Portfolio 1
Class A 1
Class B 1
12/1/93 Cash Trust Series, Inc. 1
12/1/93 Government Cash Series 1
12/1/93 Municipal Cash Series 1
12/1/93 Prime Cash Series 1
12/1/93 Treasury Cash Series 1
12/1/93 Cash Trust Series II 1
12/1/93 Municipal Cash Series II 1
12/1/93 Treasury Cash Series II 1
12/1/93 DG Investor Series 2
12/1/93 DG Equity Fund 2
12/1/93 DG Government Income Fund 2
12/1/93 DG Limited Term Government Income Fund 2
12/1/93 DG Municipal Income Fund 2
12/1/93 DG U.S. Government Money Market Fund 2
12/1/93 Edward D. Jones & Co. Daily Passport Cash Trust 1
12/1/93 Federated ARMs Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated U.S. Government Bond Fund 1
12/1/93 Federated Exchange Fund, Ltd. 1
12/1/93 Federated GNMA Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Government Trust 1
12/1/93 Automated Government Cash Reserves 1
12/1/93 Automated Treasury Cash Reserves 1
12/1/93 U.S. Treasury Cash Reserves 1
12/1/93 Federated Growth Trust 1
12/1/93 Federated High Yield Trust 1
12/1/93 Federated Income Securities Trust 1
12/1/93 Federated Short-Term Income Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Income Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Index Trust 1
12/1/93 Max-Cap Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Mid-Cap Fund 1
12/1/93 Mini-Cap Fund 1
12/1/93 Federated Intermediate Government Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Investment Funds 1
12/1/93 Growth Portfolio 1
12/1/93 High Quality Bond Portfolio 1
12/1/93 Pennsylvania Intermediate Municipal Income Portfolio 1
12/1/93 Value Equity Portfolio 1
12/1/93 Federated Master Trust 1
12/1/93 Federated Municipal Trust 1
12/1/93 Alabama Municipal Cash Trust 1
12/1/93 Connecticut Municipal Cash Trust 1
12/1/93 Institutional Service Shares 1
3/2/94 Maryland Municipal Cash Trust 1
12/1/93 Massachusetts Municipal Cash Trust 1
12/1/93 BayFund Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Minnesota Municipal Cash Trust 1
12/1/93 Cash Series Shares 1
12/1/93 Institutional Shares 1
12/1/93 New Jersey Municipal Cash Trust 1
12/1/93 Cash Series Shares 1
12/1/93 Institutional Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Ohio Municipal Cash Trust 1
12/1/93 Cash II Shares 1
12/1/93 Institutional Shares 1
12/1/93 Pennsylvania Municipal Cash Trust 1
12/1/93 Cash Series Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Virginia Municipal Cash Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Short-Intermediate Government Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Short-Intermediate Municipal Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Federated Short-Term U.S. Government Trust 1
12/1/93 Federated Stock Trust 1
12/1/93 Federated Tax-Free Trust 1
12/1/93 Financial Reserves Fund 1
Has a separate First Union Funds
contract with (*Not effective or currently not being offered) 1
SSB - included First Union Balanced Portfolio 1
for fee infor- Class B Investment Shares 1
mation purposes Class C Investment Shares 1
only Trust Shares 1
First Union Fixed Income Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Florida Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Georgia Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union High Grade Tax Free Portfolio (2/28/94
formerly First Union Insured Tax-Free Portfolio) 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Managed Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares* 1
First Union Maryland Municipal Bond Portfolio* 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Money Market Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union North Carolina Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares* 1
First Union South Carolina Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Tax-Free Money Market Portfolio 1
Class B Investment Shares 1
Class C Investment Shares* 1
Trust Shares 1
First Union Tennessee Municipal Bond Portfolio* 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Treasury Money Market Portfolio 1
Class B Investment Shares 1
Class C Investment Shares* 1
Trust Shares 1
First Union U.S. Government Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Utility Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Value Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
First Union Virginia Municipal Bond Portfolio 1
Class B Investment Shares 1
Class C Investment Shares 1
Trust Shares 1
12/1/93 Fixed Income Securities, Inc. 1
12/1/93 Limited Term Fund 1
12/1/93 Fortress Shares 1
12/1/93 Investment Shares 1
12/1/93 Limited Term Municipal Fund 1
12/1/93 Fortress Shares 1
12/1/93 Investment Shares 1
12/1/93 Multi-State Municipal Income Fund 1
12/1/93 Limited Maturity Government Fund 1
4/12/94 Stategic Income Fund 1
4/12/94 Class A Shares 1
4/12/94 Class C Shares 1
4/12/94 Fortress Shares 1
12/1/93 Fortress Adjustable Rate U.S. Government Fund, Inc. 1
12/1/93 Fortress Municipal Income Fund, Inc. 1
12/1/93 Fortress Utility Fund, Inc. 1
12/1/93 International Series, Inc. 1
12/1/93 International Equity Fund 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 International Income Fund 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fund for U.S. Government Securities, Inc. 1
12/1/93 Class A Shares 1
5/19/94 Class B Shares 1
12/1/93 Class C Shares 1
12/1/93 Government Income Securities, Inc. 1
Separate contract Independence One Mutual Funds
with SSB - (*Fund not effective or currently on hold). 1
included for Independence One Equity Fund* 1
fee information Investment Shares 1
purposes only Trust Shares 1
Independence One Michigan Municipal Cash Fund 1
Investment Shares 1
Trust Shares* 1
Independence One Prime Money Market Fund 1
Investment Shares 1
Trust Shares* 1
Independence One U.S. Government Securities Fund 1
Investment Shares 1
Trust Shares 1
Independence One U.S. Treasury Money Market
Fund 1
1/11/94 Insight Institutional Series, Inc.
1/11/94 Insight Adjustable Rate Mortgage Fund 1
1/11/94 Insight Limited Term Income Fund 1
1/11/94 Insight Limited Term Municipal Fund 1
1/11/94 Insight U.S. Government Fund 1
12/15/93 Insurance Management Series
12/15/93 U.S. Government Bond Fund 1
12/15/93 Corporate Bond Fund 1
12/15/93 Utility Fund 1
12/15/93 Equity Growth & Income Fund 1
12/15/93 Prime Money Fund 1
12/1/93 Intermediate Municipal Trust 1
12/1/93 Intermediate Municipal Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Ohio Intermediate Municipal Trust 1
12/1/93 Pennsylvania Intermediate Municipal Trust 1
2/16/94 California Intermediate Municipal Trust 1
12/1/93 Investment Series Fund, Inc. 1
12/1/93 Capital Growth Fund 1
12/1/93 Investment Shares 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fortress Bond Fund 1
12/1/93 Investment Series Trust 1
12/1/93 High Quality Stock Fund 1
12/1/93 Municipal Securities Income Fund 1
12/1/93 U.S. Government Bond Fund 1
12/1/93 Liberty Equity Income Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Fortress Shares 1
12/1/93 Liberty High Income Bond Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Liberty Municipal Securities Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Liberty Term Trust, Inc. - 1999 1
12/1/93 Liberty U.S. Government Money Market Trust 1
12/1/93 Liberty Utility Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Liquid Cash Trust 1
3/11/94 Managed Series Trust 1
3/11/94 Federated Managed Income Fund 1
3/11/94 Select Shares 1
3/11/94 Institutional Service Shares 1
3/11/94 Federated Managed Growth Fund 1
3/11/94 Select Shares 1
3/11/94 Institutional Service Shares 1
3/11/94 Federated Managed Growth and Income Fund 1
3/11/94 Select Shares 1
3/11/94 Institutional Service Shares 1
3/11/94 Federated Managed Aggressive Growth Fund 1
3/11/94 Select Shares 1
Institutional Service Shares 1
12/1/93 Money Market Management, Inc. 1
12/1/93 Money Market Trust 1
12/1/93 Money Market Obligations Trust 1
12/1/93 Government Obligations Fund 1
12/1/93 Prime Obligations Fund 1
12/1/93 Tax-Free Obligations Fund 1
12/1/93 Treasury Obligations Fund 1
12/1/93 Municipal Securities Income Trust 1
12/1/93 California Municipal Income Fund 1
12/1/93 Fortress Shares 1
12/1/93 Florida Municipal Income Fund 1
12/1/93 Maryland Municipal Income Fund 1
12/1/93 Michigan Municipal Income Fund 1
12/1/93 New Jersey Municipal Income Fund 1
12/1/93 New York Municipal Income Fund 1
12/1/93 Fortress Shares 1
12/1/93 Ohio Municipal Income Fund 1
12/1/93 Fortress Shares 1
12/1/93 Trust Shares 1
12/1/93 Pennsylvania Municipal Income Fund 1
12/1/93 Investment Shares 1
12/1/93 Trust Shares 1
12/1/93 Income shares 1
12/1/93 Texas Municipal Income Fund 1
12/1/93 Virginia Municipal Income Fund 1
12/1/93 New York Municipal Cash Trust 1
12/1/93 Cash II Shares 1
12/1/93 Institutional Service Shares 1
12/1/93 Portage Funds 2
12/1/93 Portage Government Money Market Fund 2
12/1/93 Investment Shares 2
12/1/93 Trust Shares 2
12/1/93 SouthTrust Vulcan Funds 2
12/1/93 Bond Fund 2
12/1/93 Stock Fund 2
12/1/93 Treasury Obligations Money Market Fund 2
12/1/93 Stock and Bond Fund, Inc. 1
12/1/93 Class A Shares 1
12/1/93 Class C Shares 1
12/1/93 Tax-Free Instruments Trust 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 The Boulevard Funds 2
12/1/93 Boulevard Blue Chip Growth Fund 2
12/1/93 Boulevard Managed Income Fund 2
12/1/93 Boulevard Managed Municipal Fund 2
12/1/93 Boulevard Strategic Balanced Fund 2
12/1/93 The Planters Funds 2
12/1/93 Tennessee Tax-Free Bond Fund 2
Has a separate Tower Mutual Funds 1
contract with Tower U.S. Government Income Fund 1
SSB - included Tower Capital Appreciation Fund 1
for fee infor- Tower Cash Reserve Fund 1
mation purposes Tower Louisiana Municipal Income Fund 1
only Tower Total Return Bond Fund 1
Tower U.S. Treasury Money Market Fund 1
12/1/93 Trademark Funds 2
12/1/93 Trademark Equity Fund 2
12/1/93 Trademark Government Income Fund 2
12/1/93 Trademark Kentucky Municipal Bond Fund 2
12/1/93 Trademark Short-Intermediate Government Fund 2
12/1/93 Trust for Financial Institutions 1
12/1/93 Government Qualifying Liquidity Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Short-Term Government Qualifying Liquidity Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Government Money Market Fund 1
12/1/93 Institutional Service Shares 1
12/1/93 Institutional Shares 1
12/1/93 Trust for Government Cash Reserves 1
12/1/93 Trust for Short-Term U.S. Government Securities 1
12/1/93 Trust for U.S. Treasury Obligations 1
Has separate Vision Fiduciary Funds, Inc. 1
contracts with Vision Fiduciary Money Market Fund 1
SSB - included Vision Group of Funds, Inc. 1
for fee informa- Vision Growth and Income Fund 1
tion purposes Vision Money Market Fund 1
only Vision New York Tax-Free Fund 1
Vision New York Tax-Free Money Market Fund 1
Vision Treasury Money Market Fund 1
Vision U.S. Government Securities Fund 1
2/24/94 World Investment Series, Inc. 1
2/24/94 World Utility Fund 1
2/24/94 Class A Shares 1
2/24/94 Fortress Shares 1
Schedule 1
STATE STREET BANK
CUSTODY /
PORTFOLIO RECORD KEEPING
FEE SCHEDULE
Federated Investors
- Federated Funds -
I. Custody Services
Maintain Custody of fund assets. Settle portfolio purchases
and sales. Report buy and sell fails. Determine and
collect portfolio income. Make cash disbursements and
report cash transactions. Monitor corporate actions.
ANNUAL FEES
ASSET
First $500 Million 1.0 Basis Point
Excess .5 Basis Point
Minimum fee per year $15,000
Maximum fee per year $90,000
Wire Fees $2.70 per wire
Settlements:
Each DTC Commercial Paper $9.00
Each DTC Transaction $9.00
Each Federal Reserve Book Entry Transaction (Repo) $4.50
Each Repo with Banks Other than State Street Bank $7.50
Each Physical Transaction (NY/Boston, Private Placement)
$21.75
Each Option Written/Exercised/Expired $18.75
Each Stock Loan Transaction $12.00
Each Book Entry Muni (Sub-custody) Transaction $15.00
Index Fund/ETD Cost + 15%
II. Portfolio Record keeping / Fund Accounting Services
Maintain investment ledgers, provide selected portfolio
transactions, position and income reports. Maintain general
ledger and capital stock accounts. Prepare daily trial
balance. Provide selected general ledger reports.
Calculate net asset value daily. Securities yield or market
value quotations will be provided to State Street by the
fund or via State Street Bank automated pricing services.
ANNUAL FEES
ASSET
First $250 Million 2.0 Basis Points
Next $250 Million 1.5Basis Points
Next $250 Million 1.0 Basis Point
Excess .5 Basis Point
Minimum fee per year $39,000
Maximum fee per year $120,000
Additional class of shares per year $12,000
III. Multicurrency Horizon Remote Service
July 1, 1993 - July 1, 1995 No Charge
Post July 1, 1995 $5,000 per portfolio
per year
$ 500 per portfolio
per year
for each additional
class
IV. Out-Of-Pocket Expenses
Pricing Fees
Telephone
Postage & Insurance
Armored carrier costs
Legal fees
Supplies related to fund records
Processing validation certificates
Forms, envelopes, Xerox copies, supplies, etc.
Travel and setup expenses related to Horizon Remote
Lease and multiplex switching lines related to Horizon
Remote
V. Special Services
Fees for activities of a non-recurring nature such as fund
consolidation or reorganization, extraordinary security
shipments and the preparation of special reports will be
subject to negotiation.
VI. Coupon Clipping
Monitoring for calls and processing for each monthly issue
held
Monthly Charge $5.00
VII. Balance Credit
A balance credit equal to 75% of the average balance in the
custodian account for the month billed times the 30-day T-
Bill Rate on the last Monday of the month billed will be
applied against Section I through V above.
VIII. Term of the Contract
The parties agree that this fee schedule shall become
effective June 1, 1993 and will remain in effect until it is
revised as a result of negotiations initiated by either
party.
FEDERATED SERVICES CO. STATE STREET BANK & TRUST CO.
By James J. Dolan By: Frank J. Sidoti, Jr.
President Vice President
January 24, 1994 December 15, 1993
Schedule 2
STATE STREET BANK
CUSTODY FEE SCHEDULE
Federated Investors
- Bank Proprietary Funds -
I. Custody Services
Maintain Custody of fund assets. Settle portfolio purchases
and sales. Report buy and sell fails. Determine and
collect portfolio income. Make cash disbursements and
report cash transactions. Monitor corporate actions.
ANNUAL FEES
ASSET
First $500 Million 1.0 Basis Point
Excess .5 Basis Point
Minimum fee per year $15,000
Wire Fees $2.70 per wire
Settlements:
Each DTC Commercial Paper $9.00
Each DTC Transaction $9.00
Each Federal Reserve Book Entry Transaction (Repo) $4.50
Each Repo with Banks Other than State Street Bank $7.50
Each Physical Transaction (NY/Boston, Private Placement)
$21.75
Each Option Written/Exercised/Expired $18.75
Each Stock LoanTransaction $12.00
Each Book Entry Muni (Sub-custody) Transaction $15.00
Index Fund/ETD Cost + 15%
II. Multicurrency Horizon Remote Service
July 1, 1993 - July 1, 1995 No Charge
Post July 1, 1995 $5,000 per portfolio
per year
$ 500 per portfolio
per year
for each additional
class
III. Out-Of-Pocket Expenses
Telephone
Postage & Insurance
Armored carrier costs
Legal fees
Supplies related to fund records
Processing validation certificates
Forms, envelopes, Xerox copies, supplies, etc.
IV. Special Services
Fees for activities of a non-recurring nature such as fund
consolidation or reorganization, extraordinary security
shipments and the preparation of special reports will be
subject to negotiation.
V. Coupon Clipping
Monitoring for calls and processing for each monthly issue
held
Monthly Charge $5.00
VI. Balance Credit
A balance credit equal to 75% of the average balance in the
custodian account for the month billed times the 30-day T-
Bill Rate on the last Monday of the month billed will be
applied against Section I through IV above.
VII. Term of the Contract
The parties agree that this fee schedule shall become
effective June 1, 1993 and will remain in effect until it is
revised as a result of negotiations initiated by either
party.
FEDERATED SERVICES CO. STATE STREET BANK & TRUST CO.
By James J. Dolan By: Frank J. Sidoti, Jr.
President Vice President
January 24, 1994 December 15, 1993
