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. 34 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 26 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, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on May 15, 1995 ; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of LIBERTY U.S.
GOVERNMENT MONEY MARKET TRUST (the "Trust"), which consists of one
investment portfolio with two classes of shares: (1) Class A Shares; and
(1) Class B Shares, and 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 (1,2).
Item 2. Synopsis Synopsis; Summary of Trust Expenses
(1,2).
Item 3. Condensed Financial
Information Financial Highlights (1,2).
Item 4. General Description of
Registrant Performance Information; Liberty
Family of Funds; Investment
Information; Investment Objective;
Investment Policies; Investment
Limitations (1,2).
Item 5. Management of the Trust Trust Information; Management of the
Trust; Distribution of Shares;
Administration of the Trust (1,2).
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 (1,2).
Item 7. Purchase of Securities Being
Offered Net Asset Value; Investing in the
Trust; How To Purchase Shares;
Purchasing Shares Through A
Financial Institution; Purchasing
Shares By Wire; Purchasing Shares By
Check; Systematic Investment
Program; Certificates and
Confirmations; Exchange Privilege;
Requirements for Exchange; Tax
Consequences; Making an Exchange
(1,2)
.
Item 8. Redemption or Repurchase How To Redeem Shares; Redeeming
Shares Through a Financial
Institution; Redeeming Shares By
Telephone;Redeeming Shares By Mail;
Special Redemption Features;
Contingent Deferred Sales Charge;
Elimination of Contingent Deferred
Sales Charge;Systematic Withdrawal
Program; Accounts with Low Balances
(1,2).
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....... Liberty U.S. Government Money Market
Trust Management.
Item 15. Control Persons and Principal
Holders of Securities Trust Ownership.
Item 16. Investment Advisory and Other
Services Investment Advisory Services;
Administrative Services;
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 Distribution Plan (2); Shareholder
Services Plan.
Item 22. Calculation of Yield Quotations
of Money Market Funds Yield; Effective Yield; Performance
Comparisons.
Item 23. Financial Statements Financial Statements (Financial
Statements are incorporated by
reference to Annual Report of
Registrant dated March 31, 1995)
(File Nos. 2-65447 and 811-2956).
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
CLASS A SHARES
CLASS B SHARES
COMBINED PROSPECTUS
The shares of Liberty U.S. Government Money Market Trust (the "Trust") represent
interests in an open-end, diversified management investment company (a mutual
fund) that seeks current income by investing in a professionally managed
diversified portfolio limited to U.S. government securities.
The Trust offers two classes of shares. Class A Shares are offered at net asset
value; Class B Shares are designed primarily for temporary investment as part of
an investment program in the Liberty Family of Funds Class B Shares, and unlike
shares of most money market funds, are offered at net asset value, plus an
annual distribution fee, an annual service fee, and a declining contingent
deferred sales charge on redemtions made within six years.
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 OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. 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.
This prospectus contains the information you should read and know before you
invest in the Trust. Keep this prospectus for future reference.
The Trust has also filed a Combined Statement of Additional Information dated
May 31, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined 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, 1995
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Summary of Trust Expenses......................................................1
Financial Highlights...........................................................3
Synopsis.......................................................................5
Liberty Family of Funds........................................................6
Investment Information.........................................................7
Investment Objective.........................................................7
Investment Policies..........................................................7
Investment Limitations.......................................................8
Regulatory Compliance........................................................8
Net Asset Value................................................................9
How To Purchase Shares........................................................10
Purchasing Shares Through
a Financial Institution..................................................10
Purchasing Shares By Wire...................................................11
Purchasing Shares By Check..................................................11
Systematic Investment Program...............................................11
Exchange Privilege............................................................11
Requirements for Exchange...................................................11
Tax Consequences............................................................12
Making an Exchange..........................................................12
How To Redeem Shares..........................................................13
Special Redemption Features.................................................14
Contingent Deferred Sales Charge............................................14
Elimination of Contingent
Deferred Sales Charge....................................................15
Account and Share Information.................................................16
Trust Information.............................................................17
Management of the Trust.....................................................17
Distribution of Shares......................................................18
Administration of the Trust.................................................19
Expenses of the Trust and
Class B Shares...........................................................20
Tax Information...............................................................21
Federal Income Tax..........................................................21
Pennsylvania Corporate and
Personal Property Taxes..................................................21
Performance Information.......................................................21
- --------------------------------------------------------------------------------
SUMMARY OF TRUST EXPENSES
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
<TABLE>
<S> <C> <C>
CLASS A SHARES
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)..................................................... 0.00%
Redemption Fee (as a percentage of amount redeemed, if applicable).............................................. None
Exchange Fee.................................................................................................... None
ANNUAL CLASS A SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (2)............................................................................... 0.49%
12b-1 Fee....................................................................................................... None
Total Other Expenses............................................................................................ 0.64%
Shareholder Services Fee (after waiver) (3)...................................................... 0.05%
Total Class A Shares Operating Expenses (4)............................................................ 1.13%
</TABLE>
(1) Shareholders who purchased Shares of the Trust through an exchange of shares
of another Liberty Family Fund, may be charged a contingent deferred sales
charge by the Trust's distributor of .50 of 1% based upon the terms and
conditions applicable to redemptions of the Class A Shares of the Liberty
Family Fund originally purchased. See "Contingent Deferred Sales Charge."
(2) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The advisor can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
.50% of the first $500 million in average daily net assets, .475% of the
second $500 million in average daily net assets, .45% of the third $500
million in average daily net assets, .425% of the fourth $500 million in
average daily net assets, and .40% of average daily net assets in excess of
$2 billion.
(3) The maximum shareholder services fee is 0.25%.
(4) The total Class A Shares Operating Expenses in the table above are based on
expenses expected during the fiscal year ending March 31, 1996. The total
Class A Shares Operating Expenses were 1.12% for the fiscal year ended March
31, 1995.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF CLASS A SHARES OF THE TRUST
WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "HOW TO PURCHASE SHARES", "EXCHANGE PRIVILEGE",
"HOW TO REDEEM SHARES", AND "TRUST INFORMATION." Wire-transferred redemptions of
less than $5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 year 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............................................... $17 $36 $62 $137
You would pay the following expenses on the same investment, assuming no
redemption.............................................................. $12 $36 $62 $137
</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.
- --------------------------------------------------------------------------------
SUMMARY OF TRUST EXPENSES
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
<TABLE>
<S> <C> <C>
CLASS B SHARES
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)....................................................... 5.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)................................................ None
Exchange Fee...................................................................................................... None
ANNUAL CLASS B SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (2)................................................................................. 0.49%
12b-1 Fee......................................................................................................... 0.75%
Total Other Expenses.............................................................................................. 0.70%
Shareholder Services Fee (after waiver) (3)........................................................ 0.11%
Total Class B Shares Operating Expenses (4) (5)........................................................... 1.94%
</TABLE>
(1) The contingent deferred sales charge reflected is 5.50% in the first year,
declining to 1.00% in the sixth year and 0.00% thereafter. This is the
highest such schedule applicable to Shares of the Trust. (See "Contingent
Deferred Sales Charge.")
(2) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The advisor can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
.50% of the first $500 million in average daily net assets, .475% of the
second $500 million in average daily net assets, .45% of the third $500
million in average daily net assets, .425% of the fourth $500 million in
average daily net assets, and .40% of average daily net assets in excess of
$2 billion.
(3) The maximum shareholder services fee is 0.25%.
(4) Class B Shares convert to Class A Shares (which pay lower ongoing expenses)
approximately eight years after purchase.
(5) The total Class B Shares Operating Expenses in the table above are based on
expenses expected during the fiscal year ending March 31, 1996. The total
Class B Shares Operating Expenses were 1.95% for the fiscal year ended March
31, 1995.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF CLASS B SHARES OF THE TRUST
WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE
VARIOUS COSTS AND EXPENSES, SEE "HOW TO PURCHASE SHARES", "EXCHANGE PRIVILEGE",
"HOW TO REDEEM SHARES", AND "TRUST INFORMATION." Wire-transferred redemptions of
less than $5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales load permitted under the rules of the National
Association of Securities Dealers, Inc.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <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 (a)............................. $76 $105
You would pay the following expenses on the same investment, assuming no redemption............... $20 $61
</TABLE>
(a) Assumes the highest applicable contingent deferred sales charge schedule.
See note (1) above.
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--CLASS A SHARES
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
The following table has been audited by Arthur Andersen LLP, the Trust's
independent public accountants. Their report, dated May 12, 1995, on the Trust's
financial statements for the year ended March 31, 1995, and on the following
table for each of the ten years in the periods presented is included in the
Annual Report, which is incorporated by reference. This table should be read in
conjunction with the Trust's financial statements and notes thereto, which may
be obtained free of charge from the Trust.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991 1990 1989 1988 1987
NET ASSET VALUE,
BEGINNING OF PERIOD $ 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 0.04 0.02 0.03 0.05 0.07 0.08 0.07 0.06 0.05
- ------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- -------------------------
Distributions to
shareholders from net
investment income (0.04) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.06) (0.05)
- ------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN(A) 3.93% 2.34% 2.71% 4.66% 7.11% 8.24% 7.44% 6.07% 5.48%
- -------------------------
RATIOS TO AVERAGE NET
ASSETS
- -------------------------
Expenses 1.12% 1.01% 1.04% 1.03% 1.01% 1.02% 1.01% 1.01% 1.01%
- -------------------------
Net investment income 3.83% 2.31% 2.69% 4.59% 6.89% 7.94% 7.19% 5.90% 5.39%
- -------------------------
SUPPLEMENTAL DATA
- -------------------------
Net assets, end of
period (000 omitted) $715,257 $805,907 $919,883 1,173,685 $1,393,380 $1,443,347 $1,386,704 $1,358,694 $1,467,182
- -------------------------
<CAPTION>
<S> <C>
1986
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00
- -------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -------------------------
Net investment income 0.07
- ------------------------- ---------
LESS DISTRIBUTIONS
- -------------------------
Distributions to
shareholders from net
investment income (0.07)
- ------------------------- ---------
NET ASSET VALUE, END OF
PERIOD $ 1.00
- ------------------------- ---------
TOTAL RETURN(A) 7.16%
- -------------------------
RATIOS TO AVERAGE NET
ASSETS
- -------------------------
Expenses 0.98%
- -------------------------
Net investment income 6.95%
- -------------------------
SUPPLEMENTAL DATA
- -------------------------
Net assets, end of
period (000 omitted) $2,069,333
- -------------------------
</TABLE>
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--CLASS B SHARES
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
The following table has been audited by Arthur Andersen LLP, the Trust's
independent public accountants. Their report, dated May 12, 1995, on the Trust's
financial statements for the period ended March 31, 1995, and on the following
table for the period presented, is included in the Annual Report, which is
incorporated by reference. This table should be read in conjunction with the
Trust's financial statements and notes thereto, which may be obtained free of
charge from the Trust.
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31,
1995(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------
Net investment income 0.01
- ---------------------------------------------------------------------------------------------------- -------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (0.01)
- ---------------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ---------------------------------------------------------------------------------------------------- -------
TOTAL RETURN(B) 1.14%
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------------
Expenses 1.95%(c)
- ----------------------------------------------------------------------------------------------------
Net investment income 4.15%(c)
- ----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $186
- ----------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from December 17, 1994 (date of initial
public offering) to March 31, 1995.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
- --------------------------------------------------------------------------------
SYNOPSIS
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, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. The Trust invests in U.S. government obligations
maturing in one year or less. The Trust is permitted, under its Declaration of
Trust, to offer separate series of shares representing interests in separate
portfolios of securities. The shares in any one portfolio may be offered in
separate classes. As of the date of this prospectus, the Board of Trustees
("Trustees") has established two classes of shares, known as Class A Shares and
Class B Shares (individually and collectively, as the context requires,
"Shares").
Shares of the Trust are designed primarily for individuals and institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio primarily limited to U.S. government obligations. The
Trust attempts to stabilize the value of a Share at $1.00. However, a contingent
deferred sales charge is imposed under certain circumstances. For a more
complete description, see "How to Redeem Shares."
In addition, the Trust pays a distribution fee to the distributor at an annual
rate not to exceed 0.75% of the Class B Shares' average daily net assets. These
distribution fees, while exceeding those paid by certain other money market
funds, are comparable to fees paid by money market funds issuing comparable
shares. In addition the Trust also pays a Shareholder Services Fee at an annual
rate not to exceed 0.25% of average daily net assets. For a more complete
description, see "Distribution Plan and Shareholder Services Plans."
For information on how to purchase Shares of the Trust, please refer to "How to
Purchase Shares." The minimum initial investment for Class A Shares and Class B
Shares is $500, except for retirement plans.
Additionally, information regarding the exchange privilege offered with respect
to the Trust and certain other funds for which affiliates of Federated Investors
serve as principal underwriter ("Federated Funds") can be found under "Exchange
Privilege."
Federated Advisers is the investment adviser (the "Adviser") to the Trust and
receives compensation for its services. The Adviser's address is Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779.
Investors should be aware of the following general observations. The Trust may
make certain investments and employ certain investment techniques that involve
risks, including entering into repurchase agreements and investing in
when-issued securities. These risks are described under "Investment Policies."
- --------------------------------------------------------------------------------
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 Liberty Family of Funds 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 communications 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 primarily 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 proven, professional investment advisers.
Shareholders of Class A Shares who have been designated as Liberty Life Members
are exempt from sales loads on future purchases in and exchanges between the
Class A Shares of 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
thirteen months (397 days) 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;
obligations of U.S. government agencies or instrumentalities such as: the Farm
Credit System, including the National Bank for Cooperatives, Farm Credit Banks,
and Banks for Cooperatives; Farmers Home Administration; Federal Home Loan
Banks; and Federal 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 LOANS 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.
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 securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which the Trust purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Trust to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions and the market values of the securities
purchased may vary from purchase prices. Accordingly, the Trust may pay more or
less than the market value of the securities on the settlement date.
The Trust may dispose of a commitment prior to settlement if the Adviser deems
it appropriate to do so. In addition, the Trust may enter into transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Trust may realize short-term profits or losses upon the sale of such
commitments.
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 Combined 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 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.
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.
CONVERSION OF CLASS B SHARES
Class B Shares will automatically convert into Class A Shares on or around the
fifteenth of the month eight full years after the purchase date, except as noted
below, and will no longer be subject to a distribution services fee (see
"Distribution of Shares"). Such conversion will be on the basis of the relative
net asset values per share, without the imposition of any sales load, fee or
other charge. Class B Shares acquired by exchange from Class B Shares of another
fund in the Liberty Family of Funds will convert into Class A Shares based on
the time of the initial purchase. For purposes of conversion to Class A
Shares, Shares purchased through the reinvestment of dividends and distributions
paid on Class B Shares will be considered to be held in a
separate sub-account. Each time any Class B Shares in the shareholder's account
(other than those in the sub-account) convert to Class A Shares, an equal pro
rata portion of the Class B Shares in the sub-account will also convert to Class
A Shares. The conversion of Class B Shares to Class A Shares is subject to the
continuing availability of a ruling from the Internal Revenue Service or an
opinion of counsel that such conversions will not constitute taxable events for
federal tax purposes. There can be no assurance that such ruling or opinion will
be available, and the conversion of Class B Shares to Class A Shares will not
occur if such ruling or opinion is not available. In such event, Class B Shares
would continue to be subject to higher expenses than Class A Shares for an
indefinite period.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Class A Shares and Class B Shares are sold at their net asset value next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased as described below either through a financial institution (such as
a bank or broker/dealer) or by wire or by check directly from the Trust, with a
minimum initial investment of $500 or more or additional investments of as
little as $100. The minimum initial and subsequent investment for retirement
plans is only $50 (Financial institutions may impose different minimum
investment requirements on their customers.)
Orders for $250,000 or more of Class B Shares will automatically be invested in
Class A Shares.
In connection with any sale, 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. An account must be
established at a financial institution or by completing, signing, and returning
the new account form available from the Trust before shares can be purchased.
PURCHASING SHARES THROUGH A FINANCIAL INSTITUTION
Investors may purchase shares through a financial institution which has a sales
agreement with the distributor. Orders 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. Financial institutions may charge additional fees
for their services.
PURCHASING SHARES BY WIRE
Shares may be purchased by wire by calling the Trust before 3:00 p.m. (Eastern
time). The order is considered received immediately. Payment by federal funds
must be received before 3:00 p.m. (Eastern time) in order to begin earning
dividends that same day. Federal funds should be wired as follows: State Street
Bank and Trust Company, Boston, MA; Attention; EDGEWIRE; For Credit to: ( Trust
Name); ( Trust Number) (this number can be found on the account statement or by
contacting the Trust) Group Number or Order Number; Nominee or Institution Name;
and ABA Number 011000028. Shares cannot be purchased by wire on holidays when
wire transfers are restricted.
PURCHASING SHARES BY CHECK
Shares may be purchased by sending a check made payable to the name of the Trust
to: (Trust Name) P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are
considered received when payment by check is converted into federal funds
(normally the business day after the check is received) and shares begin earning
dividends the next day.
SPECIAL PURCHASE FEATURES
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 at
an Automated Clearing House ("ACH") member and invested in the Trust at the net
asset value next determined after an order is received by the Trust, plus the
sales load, if applicable. Shareholders should contact their financial
institution or the Trust to participate in this program.
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
CLASS A SHARES
Class A shareholders may exchange all or some of their Shares for Class A Shares
of other funds in the Liberty Family of Funds at net asset value. Neither the
Trust nor any of the funds in the Liberty Family of Funds imposes any additional
fees on exchanges.
CLASS B SHARES
Class B shareholders may exchange all or some of their Shares for Class B Shares
of other funds in the Liberty Family of Funds. (Not all funds in the Liberty
Family of Funds currently offer Class B Shares. Contact your financial
institution regarding the availability of other Class B Shares in the Liberty
Family of Funds). Exchanges are made at net asset value without being assessed a
contingent deferred sales charge on the exchanged Shares. To the extent that a
shareholder exchanges Shares for Class B Shares in other funds in the Liberty
Family of Funds, the time for which the exchanged-for Shares are to be held will
be added to the time for which exchanged-from Shares were held for purposes of
satisfying the applicable holding period.
REQUIREMENTS FOR EXCHANGE
Shareholders using this privilege must exchange shares having a net asset value
equal to the minimum investment requirements of the fund into which the exchange
is being made. 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, 500 Victory Road--2nd Floor, Quincy, Massachusetts 02171.
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 8600, Boston, Massachusetts
02266-8600, 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 begin receiving dividends the
following business day. This privilege may be modified or terminated at any
time.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares are redeemed 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. Redemption requests must be received in
proper form and can be made as described below.
REDEEMING SHARES THROUGH A
FINANCIAL INSTITUTION
Shares may be redeemed by contacting the shareholder's financial institution.
Shares will be redeemed at the net asset value next determined after Federated
Services Company receives the redemption request. According to the shareholder's
instructions, redemption proceeds can be sent to the financial institution or to
the shareholder by check or by wire. The financial institution is responsible
for promptly submitting redemption requests and providing proper written
redemption instructions. Customary fees and commissions may be charged by the
financial institution for this service.
REDEEMING SHARES BY TELEPHONE
Redemptions in any amount may be made by calling the Trust provided the Trust
has a properly completed authorization form. These forms can be obtained from
Federated Securities Corp. Proceeds from redemption requests received before
12:00 noon (Eastern time) will be wired the same day to the shareholder's
account at a domestic commercial bank which is a member of the Federal Reserve
System, but will not include that day's dividend. Proceeds from redemption
requests received after that time will include that day's dividends but will be
wired the following business day. Proceeds from redeemed shares purchased by
check or through ACH will not be wired until that method of payment has cleared.
Telephone instructions may be recorded and if reasonable procedures are not
followed by the Trust, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If this occurs, "Redeeming Shares By Mail"
should be considered. If at any time the Trust shall determine it necessary to
terminate or modify the telephone redemption privilege, shareholders would be
promptly notified.
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").
REDEEMING SHARES BY MAIL
Shares may be redeemed in any amount by mailing a written request to: Federated
Services Company, Trust Name, Trust Class, P.O. Box 8600, Boston, MA 02266-8600.
The written request should state: the Trust Name and class designation; the
account name as registered with the Trust; the account number; and the number of
shares to be redeemed or the dollar amount requested. All owners of the account
must sign the request exactly as the shares are registered. Any share
certificates should be sent by registered or certified mail with the written
request. 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.
Dividends are paid up to and including the day that a redemption request is
processed.
If you are requesting a redemption of any amount to be sent to an address other
than that on record with the Trust, or a redemption payable to a third party,
then all signatures appearing on the written request must be guaranteed by a
bank which is a member of the Federal Deposit Insurance Corporation, a trust
company, a member firm of a domestic stock exchange, or any other "eligible
guarantor institution," as defined by the Securities and 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.
SPECIAL REDEMPTION FEATURES
CHECK WRITING
Upon request, a checking account will be established to allow shareholders to
redeem their Trust Shares. A fee will be charged for this service. The check
writing service allows the shareholder to receive the daily dividend declared on
the Shares to be redeemed until the check is presented to State Street Bank for
payment. However, checks should never be made payable or sent to State Street
Bank or the Trust to redeem shares, and a check may not be written to close an
account. Canceled checks are sent to the shareholder each month.
DEBIT CARD
Upon request, a debit account will be established. This account allows
shareholders to redeem Shares by using a debit card. A fee will be charged to
the account for this service.
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 ACH member. Shareholders may apply for
participation in this program through their financial institution or the Trust.
CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge of up to .50 of 1% may be imposed upon
redemption of Class A Shares that were purchased through an exchange from
another Liberty Family Fund. This only applies to exchanges of shares of a
Liberty Family Fund that were originally purchased at net asset value (and upon
which .50 of 1% was paid to the dealer), with proceeds of an unaffiliated
investment company, based upon the terms and conditions outlined in the
"Purchases With Proceeds From Redemptions of Unaffiliated Investment Companies"
and "Contingent Deferred Sales Charge" sections of the applicable fund
prospectuses.
Additionally, a contingent deferred sales charge of up to 5.50% may be imposed
upon redemption of Class B Shares within six full years of purchase.
Any applicable contingent deferred sales charge will be imposed on the lesser of
the net asset value of the redeemed Class B Shares at the time of purchase or
the net asset value of the redeemed Class B Shares at the time of redemption in
accordance with the following schedule:
<TABLE>
<CAPTION>
CONTINGENT
YEAR OF REDEMPTION DEFERRED
AFTER PURCHASE SALES CHARGE
<S> <C>
First 5.50%
Second 4.75%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%
</TABLE>
The contingent deferred sales charge on Class B Shares will be deducted from the
redemption proceeds otherwise payable to the shareholder and will be retained by
the distributor. The contingent deferred sales charge will not be imposed with
respect to: (1) Shares acquired through the reinvestment of dividends or
distributions of long-term capital gains; and (2) Shares held for more than six
full years from the date of purchase. Redemptions will be processed in a manner
intended to maximize the amount of redemption which will not be subject to a
contingent deferred sales charge. In computing the amount of the applicable
contingent deferred sales charge, redemptions are deemed to have occurred in the
following order:
(1) Shares acquired through the reinvestment of dividends and long-term capital
gains; (2) Shares held for more than six full years from the date of purchase;
(3) Shares held for fewer than six years on a first-in, first-out basis. A
contingent deferred sales charge is not assessed in connection with an exchange
of Trust Shares for shares of other Class B Shares of funds in the Liberty
Family of Funds (see "Exchange Privilege"). Any contingent deferred sales charge
imposed at the time the exchanged-for shares are redeemed is calculated as if
the shareholder had held the shares from the date on which he became a
shareholder of the exchanged-from shares. Moreover, the contingent deferred
sales charge will be eliminated with respect to certain redemptions (see
"Elimination of Contingent Deferred Sales Charge" below).
ELIMINATION OF CONTINGENT DEFERRED SALES CHARGE
The contingent deferred sales charge will be eliminated with respect to the
following redemptions: (1) redemptions following the death or disability, as
defined in Section 72(m)(7) of the Internal Revenue Code of 1986, of a
shareholder; (2) redemptions representing minimum required distributions from an
Individual Retirement Account or other retirement plan to a shareholder who has
attained the age of 70-1/2; and (3) involuntary redemptions by the Trust of
Shares in shareholder accounts that do not comply with the minimum balance
requirements. In addition, to the extent that the distributor does not make
advance payments to certain financial institutions for purchases made by their
clients, no contingent deferred sales charge will be imposed on redemptions of
Shares held by Trustees, employees and sales representatives of the Trust, the
distributor, or affiliates of the Trust or distributor; employees of any
financial institution that sells shares of the Trust pursuant to a sales
agreement with the distributor; and spouses and children under the age of 21 of
the aforementioned persons. Finally, no contingent deferred sales charge will be
imposed on the redemption of Shares originally purchased through a bank trust
department, an investment adviser registered under the Investment Advisers Act
of 1940, as amended, or retirement plans where the third party administrator has
entered into certain arrangements with Federated Securities Corp. or its
affiliates, or any other financial institution, to the extent that no payments
were advanced for purchases made through or by such entities. The Trustees
reserve the right to discontinue elimination of the contingent deferred sales
charge. Shareholders will be notified of such elimination. Any Shares purchased
prior to the termination of such waiver would have the contingent deferred sales
charge eliminated as provided in the Trust's prospectus at the time of the
purchase of
the Shares. If a shareholder making a redemption qualifies for an elimination of
the contingent deferred sales charge, the shareholder must notify Federated
Securities Corp. or the transfer agent in writing that he is entitled to such
elimination.
- -------------------------------------------------------
ACCOUNT AND SHARE
INFORMATION
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 writing to the Trust.
CAPITAL GAINS
The Trust does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Trust will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
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
by contacting the Trust or Federated Services Company in writing. Monthly
confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, if an account
balance falls below $500 due to shareholder redemptions, the Trust may redeem
all of the remaining shares in that account (except accounts maintained by
retirement plans) and pay the proceeds to the shareholder. Before shares are
redeemed to close an account, the shareholder will be notified in writing and
allowed 30 days to purchase additional shares to meet the minimum requirement.
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes in
the Trust have equal voting rights, except that in matters affecting only a
particular class, only shares of that class are entitled to 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.
- --------------------------------------------------------------------------------
TRUST INFORMATION
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The Trust is managed by a Board of 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.
INVESTMENT ADVISER
Investment decisions for the Trust are made by Federated Advisers, 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 subsidiaries also provide administrative services to a number of
investment companies. With over $72 billion invested across more than 260 funds
under management and/or administration by its subsidiaries, as of December 31,
1994, Federated Investors is one of the largest mutual fund investment managers
in the United States. With more than 1,750 employees, Federated continues to be
led by the management who founded the company in 1955. Federated funds are
presently at work in and through 4,000 financial institutions nationwide. More
than 100,000 investment professionals have selected Federated funds for their
clients.
DISTRIBUTION OF 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.
The distributor will pay dealers an amount equal to 5.5% of the net asset value
of Class B Shares directly purchased by their clients or customers. These
payments will be made directly by the distributor from its assets, and will not
be made from the assets of the Trust. Dealers may voluntarily waive receipt of
all or any portion of these payments. The distributor may pay a portion of the
distribution fee discussed below to financial institutions that waive all or any
portion of the advance payments.
DISTRIBUTION PLAN
(CLASS B SHARES ONLY)
AND SHAREHOLDER SERVICES PLANS
Under a distribution plan adopted in accordance with Investment Company Act Rule
12b-1 (the "Distribution Plan"), Class B Shares will pay a fee to the
distributor in an amount computed at an annual rate of .75% of the average daily
net assets of Class B Shares to finance any activity which is principally
intended to result in the sale of Shares subject to the Distribution Plan.
Because distribution fees to be paid by the Trust to the distributor may not
exceed an annual rate of .75% of Class B Shares' average daily net assets, it
will take the distributor a number of years to recoup the expenses it has
incurred for its distribution and distribution-related services pursuant to the
Plan.
The Distribution Plan is a compensation type plan. As such, the Trust makes no
payments to the distributor except as described above. Therefore, the Trust does
not pay for unreimbursed expenses of the distributor, including amounts expended
by the distributor in excess of amounts received by it from the Trust, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by Shares
under the Plan.
In addition, 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
Class A Shares and Class B Shares to obtain certain personal services for
shareholders and for 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.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or savings and loan association) from being an underwriter or distributor
of most securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the capacities described above or should
Congress relax current restrictions on depository institutions, the Trustees
will consider appropriate changes in the services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state laws.
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 load on
shares.
Furthermore, the distributor may offer to pay a fee from its own assets to
financial institutions as financial assistance for providing substantial
marketing and sales support. The support may include sponsoring sales,
educational and training seminars for their employees, providing sales
literature, and engineering computer software programs that emphasize the
attributes of the Trust. Such assistance will be predicated upon the amount of
Shares the financial institution sells or may sell, and/or upon the type and
nature of sales or marketing support furnished by the financial institution. Any
payments made by the distributor may be reimbursed by the Trust's investment
adviser or its affiliates.
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 Federated Trusts as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE
ADMINISTRATIVE DAILY NET ASSETS
FEE OF THE FEDERATED TRUSTS
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of
$750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN
State Street Bank and Trust Company, P.O. Box 8600, Boston, Massachusetts
02266-8600, is custodian for the securities and cash of the Trust.
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Federated Services Company, P.O. Box 8600, Boston, Massachusetts 02266-8600, is
transfer agent for the Shares of the Trust, and dividend disbursing agent for
the Trust.
INDEPENDENT AUDITORS
The independent auditors for the Trust are Arthur Andersen LLP, 2100 One PPG
Place, Pittsburgh, PA 15222.
EXPENSES OF THE TRUST AND
CLASS B SHARES
Holders of Class B Shares pay their allocable portion of Trust and portfolio
expenses.
The Trust expenses for which holders of Class B Shares pay their allocable
portion include, but are not limited to: the cost of organizing the Trust and
continuing its existence; registering the Trust with federal and state
securities authorities; Trustees' fees; auditors' fees; the cost of meetings of
Trustees; legal fees of the Trust; association membership dues; and such
non-recurring and extraordinary items as may arise from time to time.
The portfolio expenses for which holders of Class B Shares pay their allocable
portion include, but are not limited to: registering the portfolio and Class B
Shares of the portfolio; investment advisory services; taxes and commissions;
custodian fees; insurance premiums; auditors' fees; and such non-recurring and
extraordinary items as may arise from time to time.
At present, the only expenses which are allocated specifically to Class B Shares
as a class are expenses under the Trust's Shareholder Services Plan and
Distribution Plan. However, the Trustees reserve the right to allocate certain
other expenses to holders of Class B Shares as they deem appropriate ("Class
Expenses"). In any case, Class Expenses would be limited to: distribution fees;
transfer agent fees as identified by the transfer agent as attributable to
holders of Class B Shares; fees under the Trust's Shareholder Services Plan;
printing and postage expenses related to preparing and distributing materials
such as shareholder reports, prospectuses and proxies to current shareholders;
registration fees paid to the Securities and Exchange Commission and to state
securities commissions; expenses related to administrative personnel and
services as required to support holders of Class B Shares; legal fees relating
solely to Class B Shares; and Trustees' fees incurred as a result of issues
relating solely to Class B Shares.
- --------------------------------------------------------------------------------
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, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional Shares. Distributions representing long-term capital gains, if
any, will be taxable to shareholders as long-term capital gains no matter how
long the shareholders have held the Shares. No federal income tax is due on any
dividends earned in an IRA or qualified retirement plan until distributed.
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 for each
class of Shares.
The yield of Class A Shares and Class B Shares represents the annualized rate of
income earned on an investment in Shares 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 Shares 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.
Yield and effective yield will be calculated separately for Class A Shares and
Class B Shares. Because Class B Shares are subject to Rule 12b-1 fees, the yield
and effective yield for Class A Shares, for the same period, will exceed that of
Class B Shares.
From time to time, the Trust may advertise its performance for Class A Shares
and Class B Shares using certain financial publications and/ or compare the
performance of Class A Shares and Class B Shares to certain indices.
LIBERTY U.S. GOVERNMENT
MONEY MARKET TRUST
CLASS A SHARES
CLASS B SHARES
COMBINED PROSPECTUS
An Open-End, Diversified
Management Investment Company
May 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
531485100
531485209
G00701-03 (5/95)
Liberty U.S. Government Money Market Trust
Class A Shares
Class B Shares
Combined Statement of Additional Information
This Combined Statement of Additional Information should be read
with the combined prospectus of Class A Shares and Class B Shares
of Liberty U.S. Government Money Market Trust (the "Trust") dated
May 31, 1995. This Statement is not a prospectus itself. To
receive a copy of the prospectus for any class, write or call the
Trust.
Liberty Center
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated May 31, 1995
Federated Securities Corp.
Distributor
A subsidiary of
Federated Investors
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
Liberty U.S. Government Money
Market
Trust Management 2
Trust Ownership 6
Trustees Compensation 6
Investment Advisory Services 7
Adviser to the Trust 7
Advisory Fees 7
Administrative Services 8
Brokerage Transactions 8
Purchasing Shares 8
Distribution of Shares 8
Distribution Plan (Class B
Shares Only) and
Shareholder Services Plan 8
Conversion to Federal Funds 9
Use of the Amortized Cost
Method 9
Redeeming Shares 10
Redemption in Kind 10
Tax Status 10
The Trust's Tax Status 10
Shareholders' Tax Status 10
Yield 10
Effective Yield 11
Performance Comparisons 11
About Federated Investors 12
Financial Statements 13
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.
On December 13, 1994, the shareholders of the Trust voted to permit the
Trust to offer separate series and classes of shares. Shares of the
Trust are offered in two classes, known as Class A Shares and Class B
Shares (individually and collectively referred to as "Shares" as the
context may require.) This Combined Statement of Additional Information
relates to both classes of Shares.
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 made to secure what is considered to be an
advantageous price or yield for the Trust. No fees or other 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 on the Trust's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled.
With respect to the Trust's investments in when-issued and delayed
delivery transactions, the Trust's investment adviser has adopted an
operating policy, which can be changed by the Trustees, that such
investments will be limited to 20% of the Trust's total assets.
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.
Liberty U.S. Government Money Market Trust Management
Officers and Trustees. Officers and Trustees are listed with their
addresses, present positions with Liberty U.S. Government Money Market
Trust and principal occupations, including those with Federated
Advisers, its affiliates, and the "Funds."
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life
and Casualty Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Director of the Company.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp.; President, Passport Research, Ltd.; Trustee,
Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; 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 Director
of the Company.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D.
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
225 Franklin Street
Boston, MA
Birthdate: April 16, 1942
Trustee
Pr
President, State Street Bank and Trust Company and State Street Boston
Corporation and Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman, Horizon Financial, F.A.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: July 21, 1935
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Vice President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and
Secretary, Federated Research Corp. and Passport Research, Ltd.;
Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; Secretary and
Trustee, Federated Shareholder Services; Executive Vice President and
Director, Federated Securities Corp.; Vice President and Secretary of
the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
Officers and Trustees own less than 1% of the Trust's outstanding
Shares.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Cash Management Trust; Automated
Government Money Trust; California Municipal Cash Trust; Cash Trust
Series II; Cash Trust Series, Inc.; 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
Institutional 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 Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; 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 Term
Trust, Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Managed Series Trust; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income
Trust; Newpoint Funds; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free Instruments Trust; 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; The Virtus Funds; World Investment Series,
Inc.
Trust Ownership
As of May 16, 1995, there were no shareholders of record who owned 5% or
more of the outstanding Class A Shares of the Trust.
As of May 16, 1995, the following shareholders were the beneficial
owners of more than 5% of the outstanding Class B Shares of the Trust:
Marilyn V. Burton Trust owned approximately 79,507 (9.25%) Shares;
Lincoln Trust Company owned approximately 72,013 (8.38%) Shares;
Painewebber for the Benefit of Janet K. Mitchell and Alice M. Long,
Trustees owned approximately 56,120 (6.63%) Shares; and Dain Bosworth
Inc. owned approximately 53,878 (6.27%) Shares.
Trustees Compensation
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
68 other investment companies in the Fund
Complex
Thomas G. Bigley $878 $20,688 for the Trust and
49 other investment companies in the Fund
Complex
John T. Conroy $1,953 $117,202 for the Trust and
64 other investment companies in the Fund
Complex
William J. Copeland $1,953 $117,202 for the Trust and
64 other investment companies in the Fund
Complex
James E. Dowd $1,953 $117,202 for the Trust and
64 other investment companies in the Fund
Complex
Lawrence D. Ellis, M.D. $1,771 $106,460 for the Trust and
64 other investment companies in the Fund
Complex
Edward L. Flaherty, Jr. $1,953 $117,202 for the Trust and
64 other investment companies in the Fund
Complex
Peter E. Madden $1505 $90,563 for the Trust and
64 other investment companies in the Fund
Complex
Gregor F. Meyer $1.771 $106,460 for the Trust and
64 other investment companies in the Fund
Complex
John E. Murray, Jr. $0 $0 for the Trust and
64 other investment companies in the Fund
Complex
Wesley W. Posvar $1,771 $106,460 for the Trust and
64 other investment companies in the Fund
Complex
Marjorie P. Smuts $1,771 $106,460 for the Trust and
64 other investment companies in the Fund
Complex
*Information is furnished for the fiscal year ended March 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised
of 1 portfolio.
+The information is provided for the last calendar year.
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
securities of Federated Investors are owned by a trust, the trustees of
which are John F. Donahue, his wife, and his son, J. Christopher
Donahue.
The Adviser shall not be liable to the 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, 1995, 1994, and 1993, the Adviser earned $3,708,178 ,
$4,147,512, and $5,080,154, 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 the fiscal years ended March
31, 1995 and 1994, the Federated Administrative Services earned
$571,385, and $985,326, respectively. For the fiscal year ended March
31, 1993, Federated Administrative Services, Inc. earned $1,103,131.
Dr. Henry J. Gailliot, an officer of Federated Advisers, the adviser to
the Trust, holds approximately 20% of the outstanding common stock and
serves as director of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative
Services, Inc., and Federated Administrative Services.
Brokerage Transactions
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 load on days
the New York Stock Exchange is open for business. The procedure for
purchasing Class A Shares and Class B Shares is explained in the
respective prospectuses under "How To Purchase Shares."
Distribution of Shares
Federated Securities Corp. is the principal distributor for Shares of
the Trust.
Distribution Plan (Class B Shares Only) and Shareholder Services Plan
These arrangements permit the payment of fees to financial institutions,
the distributor, and Federated Shareholder Services, to stimulate
distribution activities and 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, marketing efforts; 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.
With respect to the Class B Shares of the Trust, by adopting the
Distribution Plan, the Board of Trustees expects that the Trust will be
able to achieve a more predictable flow of cash for investment purposes
and to meet redemptions. This will facilitate more efficient portfolio
management and assist the Trust in pursuing its investment objectives.
By identifying potential investors whose needs are served by the Trust
objectives, and properly servicing these accounts, it may be possible to
curb sharp fluctuations in rates of redemptions and sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail;
(3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders' requests and inquiries concerning their
accounts.
For the fiscal period ended March 31, 1995, no payment was made
pursuant to the Distribution Plan. In addition, for the fiscal year
ended March 31, 1995, payment in the amount of $403,573 was made
pursuant to the Shareholder Services Plan, all of which was paid to
financial institutions.
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 purchasing Shares 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.
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 "How To Redeem 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
for Class A Shares or Class B Shares.
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 Class A Shares for the seven-day period ended
March 31, 1995 was 5.09%.
The Trust's yield for Class B Shares for the seven-day period ended
March 31, 1995 was 4.28%.
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 Class A Shares for the seven-day period
ended March 31, 1995 was 5.22%.
The Trust's effective yield for Class B Shares for the seven-day period
ended March 31, 1995 was 4.37%.
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 of each class of Shares 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 the Trust's or either class of Shares' 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 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.
- 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 either class of Shares may
refer to "total return." Total return is the historic change in the
value of an investment in either class of Shares of 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 of either class of Shares using charts, graphs, and
descriptions, compared to federally insured bank products including
certificates of deposit and time deposits.
About Federated Investors
Federated is dedicated to meeting investor needs which is
reflected in its investment decision making structured,
straightforward, and consistent. This has resulted in a
history of competitive performance with a range of
competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is
firmly rooted in sound methodologies backed by fundamental
and technical research. Investment decisions are made and
executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in
the mutual fund industry in 1974 with the creation of the
first institutional money market fund. Simultaneously, the
company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a
principal means used by money managers today to value money
market fund shares. Other innovations include the first
institutional tax-free money market fund. As of December
31, 1994, Federated managed more than $31 billion in assets
across approximately 43 money market funds, including 17
government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion,
respectively.
J. Thomas Madden, Executive Vice President, oversees
Federated's equity and high yield corporate bond management
while William D. Dawson, Executive Vice President, oversees
Federated's domestic fixed income management. Henry A.
Frantzen, Executive Vice President, oversees the management
of Federated's international portfolios.
Mutual Fund Market
Twenty-seven percent of American households are pursuing
their financial goals through mutual funds. These investors,
as well as businesses and institutions, have entrusted over
$2 trillion to the more than 5,500 funds available.*
Federated Investors, through its subsidiaries, distributes
mutual funds for a variety of investment applications.
Specific markets include:
Institutional
Federated meets the needs of more than 4,000 institutional
clients nationwide by managing and servicing separate
accounts and mutual funds for a variety of applications,
including defined benefit and defined contribution programs,
cash management, and asset/liability management.
Institutional clients include corporations, pension funds,
tax-exempt entities, foundations/endowments, insurance
companies, and investment and financial advisors. The
marketing effort to these institutional clients is headed
by John B. Fisher, President, Institutional Sales Division.
Trust Organizations
Other institutional clients include close relationships with
more than 1,500 banks and trust organizations. Virtually
all of the trust divisions of the top 100 bank holding
companies use Federated funds in their clients' portfolios.
The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing &
Sales.
Broker/dealers and bank broker/dealer subsidiaries
Federated mutual funds are available to consumers through
major brokerage firms nationwide--including 200 New York
Stock Exchange firms--supported by more wholesalers than any
other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President,
Broker/Dealer Division.
*source: Investment Company Institute
Financial Statements
The Financial Statements for the fiscal year ended March 31, 1995 are
incorporated herein by reference to the Annual Report of the Trust dated
March 31, 1995 (File Nos. 2-65447 and 811-2956). A copy of the this
report may be obtained without charge by contacting the Trust.
531485100
531485209
8062809B (5/95)
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Incorporated by reference to Annual
Report of Registrant dated March 31, 1995 (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) (i) Conformed copy of Distributor's Contract of the
Registrant +;
(ii) Conformed copy of Administrative Services
Agreement;+
(7) Not applicable;
(8) Conformed Copy of Custodian Agreement of the
Registrant;+
+ 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).
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).
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).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed May 26, l994 (File No. 2-65447)
(9) (i) Conformed copy of Transfer Agency Agreement of
the Registrant; +
(ii) Conformed copy of Shareholder Services Plan of
the Registrant; +
(iii) Conformed copy of Shareholder Services
Agreement;+
(iiii) Copy of Shareholder Services Sub-Contract of
Registranr;+
(10) Not applicable;
(11) Conformed Copy of Consent of Independent Public
Accountants;+
(12) Not applicable;
(13) Not applicable;
(14) (i) Copy of Keogh Plan of the Registrant (6);
(ii) Copy of IRA Plan of the Registrant;+
(15) (i) Copy of Distribution Plan of the
Registrant (9);
(ii) Copy of Sales Agreement of the Registrant
(10);
(iii) Form of Rule 12b-1 Agreement of the
Registrant;(18)
(16) Schedule for Computation of Yield Calculation
(11);
(17) Financial Data Schedule;+
(18) Power of Attorney;+
+ 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).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 31 on Form N-1A filed May 26, l994 (File No. 2-65447)
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 32 filed October 18, 1994 (File No. 2-65447).
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 8, 1995
Shares of Beneficial Interest
(no par value)
Class A Shares 97,512
Class B Shares 1,887
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: Mark L.
Mallon, William D. Dawson, III, and J. Thomas Madden, Executive
Vice Presidents; Henry J. Gailliot, Senior Vice President-
Economist; Peter R. Anderson, and J. Alan Minteer, Senior Vice
Presidents; Randall A. Bauer, David A. Briggs, Jonathan C. Conley,
Deborah A. Cunningham, Michael P. Donnelly, Mark Durbiano,
Kathleen Foody-Malus, Thomas M. Franks, Edward C. Gonzales, Jeff
A. Kozemchek, Marian R. Marinack, John W.McGonigle, Susan M.
Nason, Mary Jo Ochson, Robert J. Ostrowski, Frederick L. Plautz,
Jr., Charles A. Ritter, James D. Roberge, Sandra L. Weber,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 investment adviser is Federated
Investors Tower, Pittsburgh, PA 15222-3779. These individuals are
also officers of a majority of the investment advisers to the
Funds listed in Part B of this Registration Statement.
Item 29. Principal Underwriters:
(a)Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: Alexander Hamilton
Funds; American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Cash Management Trust;
Automated Government Money Trust; BayFunds; The Biltmore
Funds; The Biltmore Municipal Funds; 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 Institutional 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 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; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; The
Monitor Funds; Municipal Securities Income Trust; Newpoint
Funds; New York Municipal Cash Trust; 111 Corcoran Funds;
Peachtree Funds; The Planters Funds; RIMCO Monument Funds;
The Shawmut Funds; Short-Term Municipal Trust; 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;
The Virtus Funds; 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 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
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
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
Kevin J. Crenny Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
Joseph L. Epstein Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
Stephen A. LaVersa 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
Richard C. Mihm Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
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
Robert D. Oehlschlager Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President,
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Assistant
Federated Investors Tower Federated 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 Federated Investors Tower
("Transfer Agent and Dividend Pittsburgh, Pennsylvania 15222-3779
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 1860
("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, has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania,
on the 26st day of May, 1995.
LIBERTY U.S. GOVERMENT MONEY MARKET TRUST
BY: /s/Charles H. Field
Charles H. Field, Assistant Secretary
Attorney in Fact for John F. Donahue
May 26, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/Charles H. Field
Charles H. Field Attorney In Fact May 26, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
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
John E. Murray, Jr.* 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.
Pittsburgh, Pennsylvania
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in
Post-Effective Amendment No.34 to Form N-1A Registration Statement of
Liberty U.S. Government Money Market Trust, of our report dated May 12,
1995, on the financial statements as of March 31, 1995, included in or
made part of this registration statement.
By: /s/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
May 23, 1995
EXHIBIT18 UNDER FORM N-1A
EXHIBIT 24 UNDER ITEM 601REG.S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints the Secretary and Assistant Secretary of Liberty U.S.
Government Money Market Trust. and the Assistant General Counsel of
Federated Investors, and each of them, their true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution
for them and in their names, place and stead, in any and all capacities,
to sign any and all documents to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940,
by means of the EDGAR; and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agents, and
each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, or their or his substitute
or substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman and Trustee April 28, 1995
John F. Donahue (Chief Executive Officer)
/s/ J. Christopher Donahue President and Trustee April 28, 1995
J. Christopher Donahue
/s/ Edward C. Gonzales Vice President and Treasurer April 28, 1995
Edward C. Gonzales (Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee April 28, 1995
Thomas G. Bigley
/s/ John T. Conroy Trustee April 28, 1995
John T. Conroy, Jr.
/s/ William J. Conroy Trustee April 28, 1995
William J. Copeland
SIGNATURES TITLE DATE
/s/ James E. Dowd Trustee April 28, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee April 28, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee April 28, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee April 28, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee April 28, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee April 28, 1995
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee April 28, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee April 28, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 28th day of April, 1995
/s/ Marie M. Hamm
Notary Public
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Sept, 16, 1996
Member, Pennsylvania Associations of Notaries
EXHIBIT 6 (I) UNDER FORM N-1A
EXHIBIT 1(I) UNDER ITEM 601/REG.S-K
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 14th day of December, 1994 by and between
Liberty U.S. Government Money Market Trust (the "Trust"), a
Massachusetts business trust, and FEDERATED SECURITIES CORP. ("FSC"),
a Pennsylvania Corporation.
In consideration of the mutual covenants hereinafter contained, it
is hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints FSC as its agent to sell and
distribute shares of the Trust which may be offered in one or more
series (the "Funds") consisting of one or more classes (the "Classes")
of shares (the "Shares"), as described and set forth on one or more
exhibits to this Agreement, at the current offering price thereof as
described and set forth in the current Prospectuses of the Trust. FSC
hereby accepts such appointment and agrees to provide such other
services for the Trust, if any, and accept such compensation from the
Trust, if any, as set forth in the applicable exhibits to this
Agreement.
2. The sale of any Shares may be suspended without prior notice
whenever in the judgment of the Trust it is in its best interest to do
so.
3. Neither FSC nor any other person is authorized by the Trust to
give any information or to make any representation relative to any
Shares other than those contained in the Registration Statement,
Prospectuses, or Statements of Additional Information ("SAIs") filed
with the Securities and Exchange Commission, as the same may be
amended from time to time, or in any supplemental information to said
Prospectuses or SAIs approved by the Trust. FSC agrees that any other
information or representations other than those specified above which
it or any dealer or other person who purchases Shares through FSC may
make in connection with the offer or sale of Shares, shall be made
entirely without liability on the part of the Trust. No person or
dealer, other than FSC, is authorized to act as agent for the Trust
for any purpose. FSC agrees that in offering or selling Shares as
agent of the Trust, it will, in all respects, duly conform to all
applicable state and federal laws and the rules and regulations of the
National Association of Securities Dealers, Inc., including its Rules
of Fair Practice. FSC will submit to the Trust copies of all sales
literature before using the same and will not use such sales
literature if disapproved by the Trust.
4. This Agreement is effective with respect to each Class as of
the date of execution of the applicable exhibit and shall continue in
effect with respect to each Class presently set forth on an exhibit
and any subsequent Classes added pursuant to an exhibit during the
initial term of this Agreement for one year from the date set forth
above, and thereafter for successive periods of one year if such
continuance is approved at least annually by the Trustees of the Trust
including a majority of the members of the Board of Trustees of the
Trust who are not interested persons of the Trust and have no direct
or indirect financial interest in the operation of any Distribution
Plan relating to the Trust or in any related documents to such Plan
("Disinterested Trustees") cast in person at a meeting called for that
purpose. If a Class is added after the first annual approval by the
Trustees as described above, this Agreement will be effective as to
that Class upon execution of the applicable exhibit and will continue
in effect until the next annual approval of this Agreement by the
Trustees and thereafter for successive periods of one year, subject to
approval as described above.
5. This Agreement may be terminated with regard to a particular
Fund or Class at any time, without the payment of any penalty, by the
vote of a majority of the Disinterested Trustees or by a majority of
the outstanding voting securities of the particular Fund or Class on
not more than sixty (60) days' written notice to any other party to
this Agreement. This Agreement may be terminated with regard to a
particular Fund or Class by FSC on sixty (60) days' written notice to
the Trust.
6. This Agreement may not be assigned by FSC and shall
automatically terminate in the event of an assignment by FSC as
defined in the Investment Company Act of 1940, as amended, provided,
however, that FSC may employ such other person, persons, corporation
or corporations as it shall determine in order to assist it in
carrying out its duties under this Agreement.
7. FSC shall not be liable to the Trust 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 by this Agreement.
8. This Agreement may be amended at any time by mutual agreement
in writing of all the parties hereto, provided that such amendment is
approved by the Trusteesof the Trust including a majority of the
Disinterested Trustees of the Trust cast in person at a meeting called
for that purpose.
9. This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
10.(a) Subject to the conditions set forth below, the Trust
agrees to indemnify and hold harmless FSC and each person, if any, who
controls FSC within the meaning of Section 15 of the Securities Act of
1933 and Section 20 of the Securities Act of 1934, as amended, against
any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
any Prospectuses or SAIs (as from time to time amended and
supplemented) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission
was made in reliance upon and in conformity with written information
furnished to the Trust about FSC by or on behalf of FSC expressly for
use in the Registration Statement, any Prospectuses and SAIs or any
amendment or supplement thereof.
If any action is brought against FSC or any controlling person
thereof with respect to which indemnity may be sought against the
Trust pursuant to the foregoing paragraph, FSC shall promptly notify
the Trust in writing of the institution of such action and the Trust
shall assume the defense of such action, including the employment of
counsel selected by the Trust and payment of expenses. FSC or any such
controlling person thereof shall have the right to employ separate
counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of FSC or such controlling person unless the
employment of such counsel shall have been authorized in writing by
the Trust in connection with the defense of such action or the Trust
shall not have employed counsel to have charge of the defense of such
action, in any of which events such fees and expenses shall be borne
by the Trust. Anything in this paragraph to the contrary
notwithstanding, the Trust shall not be liable for any settlement of
any such claim of action effected without its written consent. The
Trust agrees promptly to notify FSC of the commencement of any
litigation or proceedings against the Trust or any of its officers or
Trustees or controlling persons in connection with the issue and sale
of Shares or in connection with the Registration Statement,
Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the Trust, each
of its Trustees, each of its officers who have signed the Registration
Statement and each other person, if any, who controls the Trust within
the meaning of Section 15 of the Securities Act of 1933, but only with
respect to statements or omissions, if any, made in the Registration
Statement or any Prospectus, SAI, or any amendment or supplement
thereof in reliance upon, and in conformity with, information
furnished to the Trust about FSC by or on behalf of FSC expressly for
use in the Registration Statement or any Prospectus, SAI, or any
amendment or supplement thereof. In case any action shall be brought
against the Trust or any other person so indemnified based on the
Registration Statement or any Prospectus, SAI, or any amendment or
supplement thereof, and with respect to which indemnity may be sought
against FSC, FSC shall have the rights and duties given to the Trust,
and the Trust and each other person so indemnified shall have the
rights and duties given to FSC by the provisions of subsection (a)
above.
(c) Nothing herein contained shall be deemed to protect any
person against liability to the Trust or its shareholders to which
such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of the
duties of such person or by reason of the reckless disregard by such
person of the obligations and duties of such person under this
Agreement.
(d) Insofar as indemnification for liabilities may be
permitted pursuant to Section 17 of the Investment Company Act of
1940, as amended, for Trustees, officers, FSC and controlling persons
of the Trust by the Trust pursuant to this Agreement, the Trust is
aware of the position of the Securities and Exchange Commission as set
forth in the Investment Company Act Release No. IC-11330. Therefore,
the Trust undertakes that in addition to complying with the applicable
provisions of this Agreement, in the absence of a final decision on
the merits by a court or other body before which the proceeding was
brought, that an indemnification payment will not be made unless in
the absence of such a decision, a reasonable determination based upon
factual review has been made (i) by a majority vote of a quorum of non-
party Disinterested Trustees, or (ii) by independent legal counsel in
a written opinion that the indemnitee was not liable for an act of
willful misfeasance, bad faith, gross negligence or reckless disregard
of duties. The Trust further undertakes that advancement of expenses
incurred in the defense of a proceeding (upon undertaking for
repayment unless it is ultimately determined that indemnification is
appropriate) against an officer, Trustee, FSC or controlling person of
the Trust will not be made absent the fulfillment of at least one of
the following conditions: (i) the indemnitee provides security for his
undertaking; (ii) the Trust is insured against losses arising by
reason of any lawful advances; or (iii) a majority of a quorum of non-
party Disinterested Trustees or independent legal counsel in a written
opinion makes a factual determination that there is reason to believe
the indemnitee will be entitled to indemnification.
11.FSC is hereby expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust and agrees that the
obligations assumed by the Trust pursuant to this Agreement shall be
limited in any case to the Trust and its assets and FSC shall not seek
satisfaction of any such obligation from the shareholders of the
Trust, the Trustees, officers, employees or agents of the Trust, or
any of them.
12.If at any time the Shares of any Fund are offered in two or
more Classes, FSC agrees to adopt compliance standards as to when a
class of shares may be sold to particular investors.
13.This Agreement will become binding on the parties hereto upon
the execution of the attached exhibits to the Agreement.
Exhibit A
to the
Distributor's Contract
Liberty U.S. Government Money Market Trust
Class A Shares
In consideration of the mutual covenants set forth in the
Distributor's Contract dated December 14, 1994 between Liberty
U.S. Government Money Market Trust and Federated Securities
Corp., Liberty U.S. Government Money Market Trust executes and
delivers this Exhibit on behalf of , and with respect to the
Class B Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 14th day of December,
1994.
ATTEST: LIBERTY U.S. GOVERNMENT
MONEY MARKET TRUST
/s/ John W. McGonigle By:/s/ J. Christopher Donahue
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By:/s/ E. C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit B
to the
Distributor's Contract
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
Class B Shares
The following provisions are hereby incorporated and made part of
the Distributor's Contract dated December 14, 1994, between Liberty
U.S. Government Money Market Trust and Federated Securities Corp. with
respect to the Class of shares set forth above.
1. The Trust hereby appoints FSC to engage in activities
principally intended to result in the sale of shares of the above-
listed Class ("Shares"). Pursuant to this appointment, FSC is
authorized to select a group of financial institutions ("Financial
Institutions") to sell Shares at the current offering price thereof as
described and set forth in the respective prospectuses of the Trust.
2. During the term of this Agreement, the Trust will pay FSC for
services pursuant to this Agreement, a monthly fee computed at the
annual rate of .75 of 1% of the average aggregate net asset value of
the Shares held during the month. For the month in which this
Agreement becomes effective or terminates, there shall be an
appropriate proration of any fee payable on the basis of the number of
days that the Agreement is in effect during the month.
3. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Class' expenses
exceed such lower expense limitation as FSC may, by notice to the
Trust, voluntarily declare to be effective.
4. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Financial Institutions a
periodic fee in respect of Shares owned from time to time by their
clients or customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time to time by
FSC in its sole discretion.
5. FSC will prepare reports to the Board of Trustees of the Trust
on a quarterly basis showing amounts expended hereunder including
amounts paid to Financial Institutions and the purpose for such
expenditures.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated September 1, 1994 between Liberty U.S.
Government Money Market Trust and Federated Securities Corp., Liberty
U.S. Government Money Market Trustexecutes and delivers this Exhibit
on behalf of the , and with respect to the Class B Shares thereof,
first set forth in this Exhibit.
Witness the due execution hereof this 14th day of December, 1994.
ATTEST: LIBERTY U.S. GOVERNMENT
MONEY MARKET TRUST
/s/ John W. McGonigle By: /s/ J. Christopher Donahue
Secretary President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By:/s/ E. C. Gonzales
Secretary Executive Vice President
(SEAL)
Exhibit 6 (ii) under Form N-1A
Exhibit 1 (ii) under Item 601/Reg.S-K
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement is made as of this first
day of March, 1994, between those investment companies listed on Exhibit
1, as may be amended from time to time, having their principal office
and place of business at Federated Investors Tower, Pittsburgh PA 15222-
3779 (individually referred to herein as "Fund" and collectively
referred to as "Funds), on behalf of the portfolios of the Funds, and
Federated Administrative Services, a Delaware business trust (herein
called "FAS").
WHEREAS, the Funds desire to retain FAS as their Administrator to
provide them with Administrative Services (as herein defined), and FAS
is willing to render such services;
WHEREAS, the Funds are registered as open-end management
investment companies under the Investment Company Act of 1940, as
amended (the "1940 Act"), with authorized and issued shares of capital
stock or beneficial interest ("Shares"); and
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Funds hereby appoint FAS
as Administrator of the Funds on the terms and conditions set forth in
this Agreement; and FAS hereby accepts such appointment and agrees to
perform the services and duties set forth in Section 2 of this Agreement
in consideration of the compensation provided for in Section 4 hereof.
2. Services and Duties. As Administrator, and subject to the
supervision and control of the Funds' Boards of Trustees or Directors,
as applicable (the "Boards"), FAS will provide facilities, equipment,
and personnel to carry out the following administrative services for
operation of the business and affairs of the Funds and each of their
portfolios:
(a) prepare, file, and maintain the
Funds' governing documents and any amendments thereto,
including the Declaration of Trust or Articles of
Incorporation, as appropriate,(which has already been
prepared and filed), the By-laws and minutes of meetings of
their Boards, Committees, and shareholders;
(b) prepare and file with the
Securities and Exchange Commission and the appropriate
state securities authorities the registration statements
for the Funds and the Funds' shares and all amendments
thereto, reports to regulatory authorities and
shareholders, prospectuses, proxy statements, and such
other documents all as may be necessary to enable the Funds
to make continuous offerings of their shares, as
applicable;
(c) prepare, negotiate, and
administer contracts on behalf of the Funds with, among
others, each Fund's investment adviser, distributor,
custodian, and transfer agent, subject to any applicable
restrictions of the Boards or the 1940 Act;
(d) supervise the Funds' custodians
in the maintenance of the Funds' general ledgers and in the
preparation of the Funds' financial statements, including
oversight of expense accruals and payments, the
determination of the net asset value of the Funds and the
declaration and payment of dividends and other
distributions to shareholders;
(e) calculate performance data of the
Funds for dissemination to information services covering
the investment company industry;
(f) prepare and file the Funds' tax
returns;
(g) examine and review the operations
of the Funds' custodians and transfer agents;
(h) coordinate the layout and
printing of publicly disseminated prospectuses and reports;
(i) perform internal audit
examinations in accordance with a charter to be adopted by
FAS and the Funds;
(j) assist with the design,
development, and operation of the Funds;
(k) provide individuals reasonably
acceptable to the Funds' Boards for nomination,
appointment, or election as officers of the Funds, who will
be responsible for the management of certain of the Funds'
affairs as determined by the Funds' Boards; and
(l) consult with the Funds and their
Boards of Trustees or Directors, as appropriate, on matters
concerning the Funds and their affairs.
The foregoing, along with any additional services that FAS shall
agree in writing to perform for the Funds hereunder, shall hereafter be
referred to as "Administrative Services." Administrative Services shall
not include any duties, functions, or services to be performed for any
Fund by such Fund's investment adviser, distributor, custodian, transfer
agent, or shareholder service agent, pursuant to their respective
agreements with such Fund.
3. Expenses. FAS shall be responsible for expenses incurred
in providing office space, equipment, and personnel as may be necessary
or convenient to provide the Administrative Services to the Fund,
including the compensation of FAS employees who serve on the Funds'
Boards, or as officers of the Funds. Each Fund shall be responsible for
all other expenses incurred by FAS on behalf of such Fund, including
without limitation postage and courier expenses, printing expenses,
travel expenses, registration fees, filing fees, fees of outside counsel
and independent auditors, insurance premiums, fees payable to members of
such Fund's Board who are not FAS employees, and trade association dues.
4. Compensation. For the Administrative Services provided,
each Fund hereby agrees to pay and FAS hereby agrees to accept as full
compensation for its services rendered hereunder an administrative fee
at an annual rate, payable daily, as specified below, based upon the
total assets of all of the Funds:
Maximum Administrative Average Daily Net Assets
Fee of the Funds
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250
million
.075% on assets in excess of
$750 million
However, in no event shall the administrative fee received during
any year of this Agreement be less than, or be paid at a rate less than
would aggregate, $125,000, per individual Fund, with an additional
$30,000 for each class of shares added to any such Fund after the date
hereof.
5. Standard of Care.
(a) FAS shall not be liable for any
error of judgment or mistake of law or for any loss
suffered by any Fund in connection with the matters to
which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this
Agreement. FAS shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for such Fund)
on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
Any person, even though also an officer, trustee, partner,
employee or agent of FAS, who may be or become a member of
such Fund's Board, officer, employee or agent of any Fund,
shall be deemed, when rendering services to such Fund or
acting on any business of such Fund (other than services or
business in connection with the duties of FAS hereunder) to
be rendering such services to or acting solely for such
Fund and not as an officer, trustee, partner, employee or
agent or one under the control or direction of FAS even
though paid by FAS.
(b) This Section 5 shall survive
termination of this Agreement.
6. Duration and Termination. The initial term of this
Agreement with respect to each Fund shall commence on the date hereof,
and extend for a period of one year, renewable annually by the approval
of the Board of Directors/Trustees of each Fund.
7. Amendment. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which an enforcement of the change,
waiver, discharge or termination is sought.
8. Limitations of Liability of Trustees or Officers,
Employees, Agents and Shareholders of the Funds. FAS is expressly put
on notice of the limitation of liability as set forth in the Declaration
of Trust of each Fund that is a Massachusetts business trust and agrees
that the obligations assumed by each such Fund pursuant to this
Agreement shall be limited in any case to such Fund and its assets and
that FAS shall not seek satisfaction of any such obligations from the
shareholders of such Fund, the Trustees, Officers, Employees or Agents
of such Fund, or any of them.
9. Limitations of Liability of Trustees and Shareholders of
FAS. The execution and delivery of this Agreement have been authorized
by the Trustees of FAS and signed by an authorized officer of FAS,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon
any of the Trustees or shareholders of FAS, but bind only the trust
property of FAS as provided in the Declaration of Trust of FAS.
10. Notices. Notices of any kind to be given hereunder
shall be in writing (including facsimile communication) and shall be
duly given if delivered to any Fund at the following address: Federated
Investors Tower, Pittsburgh, PA 15222-3779, Attention: President and
if delivered to FAS at Federated Investors Tower, Pittsburgh, PA 15222-
3779, Attention: President.
11. Miscellaneous. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior agreement
with respect to the subject hereof whether oral or written. The
captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of Section 5,
hereof, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall
be governed by Pennsylvania law; provided, however, that nothing herein
shall be construed in a manner inconsistent with the Investment Company
Act of 1940 or any rule or regulation promulgated by the Securities and
Exchange Commission thereunder.
12. Counterparts. This Agreement may be executed by different
parties on separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.
13. Assignment; Successors. This Agreement shall not be assigned
by any party without the prior written consent of FAS, in the case of
assignment by any Fund, or of the Funds, in the case of assignment by
FAS, except that any party may assign to a successor all of or a
substantial portion of its business to a party controlling, controlled
by, or under common control with such party. Nothing in this Section 14
shall prevent FAS from delegating its responsibilities to another entity
to the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
Investment Companies (listed
on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Administrative Services
By: /s/ Edward C. Gonzales
Edward C. Gonzales
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
EXHIBIT 8 UNDER FORM N-1A
EXHIBIT 10 UNDER ITEM 601REG.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 It 1
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 business 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 and
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 Funds Held
by the Custodian
2.1 Holding Securities. The Custodian shall hold and physically
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.
2.2 Delivery of Securities. The Custodian shall release and
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 Securities
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 securities
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 of 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 securities,
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 portfolio
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
borrowings 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 agent
("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 Custodian
(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.
2.5 Payments for Shares. The Custodian shall make such
arrangements 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.
2.6 Availability 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 whenever
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.
2.8 Payment of Fund Moneys. Upon receipt of Proper Instructions,
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 surrender of
securities owned by a Fund as set forth in Section 2.2
hereof;
(3) For the redemption or repurchase of Shares of a Fund
issued by the Trust as set forth in Section 2.10 hereof;
(4) For the payment of any expense or liability incurred 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 Fund
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 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 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.
2.9 Liability for Payment in Advance of Receipt of Securities
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 Custodian 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 Proper
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 Custodian 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 securities
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 throughout
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 Custodian may
in its discretion, without express authority from the Trust:
(1) make payments to itself or others for minor expenses 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 securities in
definitive form;
(3) endorse for collection, in the name of a Fund, checks,
drafts and other negotiable instruments; and
(4) in general, attend to all non-discretionary details 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 protected 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 and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary
information 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
/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 COMPANY
/s/ Jeannette Fisher-Garber______ By /s/ James J. Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
12/01/95 Liberty U.S. Government Money Market Trust
</TABLE>
Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of December 1, 1994, by and between those
investment companies listed on Exhibit 1 as may be amended from
time to time, having their principal office and place of
business at Federated Investors Tower, Pittsburgh, PA 15222-3779
(the "Trust"), on behalf of the portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") of
the Trust, and FEDERATED SERVICES COMPANY, a Delaware business
trust, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(the "Company").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), with authorized and issued shares of
capital stock or beneficial interest ("Shares"); and
WHEREAS, the Trust may desire to retain the Company to
provide certain pricing, accounting and recordkeeping services
for each of the Funds, including any classes of shares issued by
any Fund ("Classes") if so indicated on Exhibit 1, and the
Company is willing to furnish such services; and
WHEREAS, the Trust may desire to appoint the Company as its
transfer agent, dividend disbursing agent if so indicated on
Exhibit 1, and agent in connection with certain other
activities, and the Company desires to accept such appointment;
and
WHEREAS, the Trust may desire to appoint the Company as its
agent to select, negotiate and subcontract for custodian
services from an approved list of qualified banks if so
indicated on Exhibit 1, and the Company desires to accept such
appointment; and
WHEREAS, from time to time the Trust may desire and may
instruct the Company to subcontract for the performance of
certain of its duties and responsibilities hereunder to State
Street Bank and Trust Company or another agent (the "Agent");
and
WHEREAS, the words Trust and Fund may be used interchangeably
for those investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
SECTION ONE: Fund Accounting.
Article 1. Appointment.
The Trust hereby appoints the Company to provide certain
pricing and accounting services to the Funds, and/or the
Classes, for the period and on the terms set forth in this
Agreement. The Company accepts such appointment and agrees to
furnish the services herein set forth in return for the
compensation as provided in Article 3 of this Section.
Article 2. The Company's Duties.
Subject to the supervision and control of the Trust's Board
of Trustees or Directors ("Board"), the Company will assist the
Trust with regard to fund accounting for the Trust, and/or the
Funds, and/or the Classes, and in connection therewith
undertakes to perform the following specific services;
A. Value the assets of the Funds using: primarily, market
quotations, including the use of matrix pricing, supplied by
the independent pricing services selected by the Company in
consultation with the adviser, or sources selected by the
adviser, and reviewed by the board; secondarily, if a
designated pricing service does not provide a price for a
security which the Company believes should be available by
market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the fund
holding the security, or if the adviser does not supply the
names of such brokers, the Company will attempt on its own to
find brokers to price those securities; thirdly, for securities
for which no market price is available, the Pricing Committee
of the Board will determine a fair value in good faith.
Consistent with Rule 2a-4 of the 40 Act, estimates may be used
where necessary or appropriate. The Company's obligations with
regard to the prices received from outside pricing services and
designated brokers or other outside sources, is to exercise
reasonable care in the supervision of the pricing agent. The
Company is not the guarantor of the securities prices received
from such agents and the Company is not liable to the Fund for
potential errors in valuing a Fund's assets or calculating the
net asset value per share of such Fund or Class when the
calculations are based upon such prices. All of the above
sources of prices used as described are deemed by the Company
to be authorized sources of security prices. The Company
provides daily to the adviser the securities prices used in
calculating the net asset value of the fund, for its use in
preparing exception reports for those prices on which the
adviser has comment. Further, upon receipt of the exception
reports generated by the adviser, the Company diligently
pursues communication regarding exception reports with the
designated pricing agents.
B. Determine the net asset value per share of each Fund and/or
Class, at the time and in the manner from time to time
determined by the Board and as set forth in the Prospectus and
Statement of Additional Information ("Prospectus") of each
Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Fund, and/or
Class, as required under Section 31(a) of the 1940 Act and the
Rules thereunder in connection with the services provided by
the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records to be maintained by Rule 31a-1 under the
1940 Act in connection with the services provided by the
Company. The Company further agrees that all such records it
maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust such records
upon the Trust's request;
G. At the request of the Trust, prepare various reports or other
financial documents required by federal, state and other
applicable laws and regulations; and
H. Such other similar services as may be reasonably requested by
the Trust.
Article 3. Compensation and Allocation of Expenses.
A. The Funds will compensate the Company for its services rendered
pursuant to Section One of this Agreement in accordance with
the fees agreed upon from time to time between the parties
hereto. Such fees do not include out-of-pocket disbursements of
the Company for which the Funds shall reimburse the Company
upon receipt of a separate invoice. Out-of-pocket disbursements
shall include, but shall not be limited to, the items agreed
upon between the parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear the
cost of: custodial expenses; membership dues in the Investment
Company Institute or any similar organization; transfer agency
expenses; investment advisory expenses; costs of printing and
mailing stock certificates, Prospectuses, reports and notices;
administrative expenses; interest on borrowed money; brokerage
commissions; taxes and fees payable to federal, state and other
governmental agencies; fees of Trustees or Directors of the
Trust; independent auditors expenses; Federated Administrative
Services and/or Federated Administrative Services, Inc. legal
and audit department expenses billed to Federated Services
Company for work performed related to the Trust, the Funds, or
the Classes; law firm expenses; or other expenses not specified
in this Article 3 which may be properly payable by the Funds
and/or classes.
C. The compensation and out-of-pocket expenses shall be accrued by
the Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about
the compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Trust and/or the Funds and a duly
authorized officer of the Company.
E. The fee for the period from the effective date of this
Agreement with respect to a Fund or a Class to the end of the
initial month shall be prorated according to the proportion
that such period bears to the full month period. Upon any
termination of this Agreement before the end of any month, the
fee for such period shall be prorated according to the
proportion which such period bears to the full month period.
For purposes of determining fees payable to the Company, the
value of the Fund's net assets shall be computed at the time
and in the manner specified in the Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or
persons as the Company may believe to be particularly suited to
assist it in performing services under this Section One. Such
person or persons may be third-party service providers, or they
may be officers and employees who are employed by both the
Company and the Funds. The compensation of such person or
persons shall be paid by the Company and no obligation shall be
incurred on behalf of the Trust, the Funds, or the Classes in
such respect.
SECTION TWO: Shareholder Recordkeeping.
Article 4. Terms of Appointment.
Subject to the terms and conditions set forth in this
Agreement, the Trust hereby appoints the Company to act as, and
the Company agrees to act as, transfer agent and dividend
disbursing agent for each Fund's Shares, and agent in connection
with any accumulation, open-account or similar plans provided to
the shareholders of any Fund ("Shareholder(s)"), including
without limitation any periodic investment plan or periodic
withdrawal program.
As used throughout this Agreement, a "Proper Instruction"
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 Company 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, or the Fund, and
the Company promptly cause such oral instructions to be
confirmed in writing. Proper Instructions may include
communications effected directly between electro-mechanical or
electronic devices provided that the Trust, or the Fund, and the
Company are satisfied that such procedures afford adequate
safeguards for the Fund's assets. Proper Instructions may only
be amended in writing.
Article 5. Duties of the Company.
The Company shall perform the following services in
accordance with Proper Instructions as may be provided from time
to time by the Trust as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the
purchase of shares and promptly deliver payment and
appropriate documentation therefore to the custodian of
the relevant Fund, (the "Custodian"). The Company shall
notify the Fund and the Custodian on a daily basis of the
total amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the
Fund's current Prospectus, the Company shall compute and
issue the appropriate number of Shares of each Fund
and/or Class and hold such Shares in the appropriate
Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder
or its agent requests a certificate, the Company, as
Transfer Agent, shall countersign and mail by first class
mail, a certificate to the Shareholder at its address as
set forth on the transfer books of the Funds, and/or
Classes, subject to any Proper Instructions regarding the
delivery of certificates.
(4) In the event that any check or other order for the
purchase of Shares of the Fund and/or Class is returned
unpaid for any reason, the Company shall debit the Share
account of the Shareholder by the number of Shares that
had been credited to its account upon receipt of the
check or other order, promptly mail a debit advice to the
Shareholder, and notify the Fund and/or Class of its
action. In the event that the amount paid for such Shares
exceeds proceeds of the redemption of such Shares plus
the amount of any dividends paid with respect to such
Shares, the Fund and/the Class or its distributor will
reimburse the Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as
Dividend Disbursing Agent for the Funds in accordance
with the provisions of its governing document and the
then-current Prospectus of the Fund. The Company shall
prepare and mail or credit income, capital gain, or any
other payments to Shareholders. As the Dividend
Disbursing Agent, the Company shall, on or before the
payment date of any such distribution, notify the
Custodian of the estimated amount required to pay any
portion of said distribution which is payable in cash and
request the Custodian to make available sufficient funds
for the cash amount to be paid out. The Company shall
reconcile the amounts so requested and the amounts
actually received with the Custodian on a daily basis. If
a Shareholder is entitled to receive additional Shares by
virtue of any such distribution or dividend, appropriate
credits shall be made to the Shareholder's account, for
certificated Funds and/or Classes, delivered where
requested; and
(2) The Company shall maintain records of account for each
Fund and Class and advise the Trust, each Fund and Class
and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and
redemption directions and, if such redemption requests
comply with the procedures as may be described in the
Fund Prospectus or set forth in Proper Instructions,
deliver the appropriate instructions therefor to the
Custodian. The Company shall notify the Funds on a daily
basis of the total amount of redemption requests
processed and monies paid to the Company by the Custodian
for redemptions.
(2) At the appropriate time upon receiving redemption
proceeds from the Custodian with respect to any
redemption, the Company shall pay or cause to be paid the
redemption proceeds in the manner instructed by the
redeeming Shareholders, pursuant to procedures described
in the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other
request for redemption does not comply with the
procedures for redemption approved by the Fund, the
Company shall promptly notify the Shareholder of such
fact, together with the reason therefor, and shall effect
such redemption at the price applicable to the date and
time of receipt of documents complying with said
procedures.
(4) The Company shall effect transfers of Shares by the
registered owners thereof.
(5) The Company shall identify and process abandoned accounts
and uncashed checks for state escheat requirements on an
annual basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each
Fund, and/or Class, and maintain pursuant to applicable
rules of the Securities and Exchange Commission ("SEC") a
record of the total number of Shares of the Fund and/or
Class which are authorized, based upon data provided to
it by the Fund, and issued and outstanding. The Company
shall also provide the Fund on a regular basis or upon
reasonable request with the total number of Shares which
are authorized and issued and outstanding, but shall have
no obligation when recording the issuance of Shares,
except as otherwise set forth herein, to monitor the
issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant
to applicable rules of the SEC relating to the services
to be performed hereunder in the form and manner as
agreed to by the Trust or the Fund to include a record
for each Shareholder's account of the following:
(a) Name, address and tax identification number (and
whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account,
including dividends paid and date and price for all
transactions;
(d) Any stop or restraining order placed against the
account;
(e) Information with respect to withholding in the case
of a foreign account or an account for which
withholding is required by the Internal Revenue
Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(h) Any information required in order for the Company
to perform the calculations contemplated or
required by this Agreement.
(3) The Company shall preserve any such records required to
be maintained pursuant to the rules of the SEC for the
periods prescribed in said rules as specifically noted
below. Such record retention shall be at the expense of
the Company, and such records may be inspected by the
Fund at reasonable times. The Company may, at its option
at any time, and shall forthwith upon the Fund's demand,
turn over to the Fund and cease to retain in the
Company's files, records and documents created and
maintained by the Company pursuant to this Agreement,
which are no longer needed by the Company in performance
of its services or for its protection. If not so turned
over to the Fund, such records and documents will be
retained by the Company for six years from the year of
creation, during the first two of which such documents
will be in readily accessible form. At the end of the six
year period, such records and documents will either be
turned over to the Fund or destroyed in accordance with
Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding
in each state for "blue sky" purposes as determined
according to Proper Instructions delivered from
time to time by the Fund to the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption
fees, or other transaction- or sales-related
payments;
(f) Such other information as may be agreed upon from
time to time.
(2) The Company shall prepare in the appropriate form, file
with the Internal Revenue Service and appropriate state
agencies, and, if required, mail to Shareholders, such
notices for reporting dividends and distributions paid as
are required to be so filed and mailed and shall withhold
such sums as are required to be withheld under applicable
federal and state income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth
above, the Company shall:
(a) Perform all of the customary services of a transfer
agent, dividend disbursing agent and, as relevant,
agent in connection with accumulation, open-account
or similar plans (including without limitation any
periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder
reports and Prospectuses to current Shareholders,
withholding taxes on accounts subject to back-up or
other withholding (including non-resident alien
accounts), preparing and filing reports on U.S.
Treasury Department Form 1099 and other appropriate
forms required with respect to dividends and
distributions by federal authorities for all
Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for
all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts,
preparing and mailing activity statements for
Shareholders, and providing Shareholder account
information; and
(b) provide a system which will enable the Fund to
monitor the total number of Shares of each Fund
and/or Class sold in each state ("blue sky
reporting"). The Fund shall by Proper Instructions
(i) identify to the Company those transactions and
assets to be treated as exempt from the blue sky
reporting for each state and (ii) verify the
classification of transactions for each state on
the system prior to activation and thereafter
monitor the daily activity for each state. The
responsibility of the Company for each Fund's
and/or Class's state blue sky registration status
is limited solely to the recording of the initial
classification of transactions or accounts with
regard to blue sky compliance and the reporting of
such transactions and accounts to the Fund as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders
relating to their Share accounts and such other
correspondence as may from time to time be addressed to
the Company;
(2) The Company shall prepare Shareholder meeting lists, mail
proxy cards and other material supplied to it by the Fund
in connection with Shareholder Meetings of each Fund;
receive, examine and tabulate returned proxies, and
certify the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account
of, such certificates, forms and devices.
Article 6. Duties of the Trust.
A. Compliance
The Trust or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or
their classes' Prospectus and for complying with all applicable
requirements of the Securities Act of 1933, as amended (the
"1933 Act"), the 1940 Act and any laws, rules and regulations
of government authorities having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of
blank Share certificates and from time to time shall renew such
supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by
facsimile, if authorized by the Trust and shall bear the seal
of the Trust or facsimile thereof; and notwithstanding the
death, resignation or removal of any officer of the Trust
authorized to sign certificates, the Company may continue to
countersign certificates which bear the manual or facsimile
signature of such officer until otherwise directed by the
Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration
of any dividend or distribution on account of any Fund's
shares.
Article 7. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company
an annual maintenance fee for each Shareholder account as
agreed upon between the parties and as may be added to or
amended from time to time. Such fees may be changed from time
to time subject to written agreement between the Trust and the
Company. Pursuant to information in the Fund Prospectus or
other information or instructions from the Fund, the Company
may sub-divide any Fund into Classes or other sub-components
for recordkeeping purposes. The Company will charge the Fund
the same fees for each such Class or sub-component the same as
if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by
the Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about
the compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Trust and/or the Funds and a duly
authorized officer of the Company.
Article 8. Assignment of Shareholder Recordkeeping.
Except as provided below, no right or obligation under this
Section Two may be assigned by either party without the written
consent of the other party.
A. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and
assigns.
B. The Company may without further consent on the part of the
Trust subcontract for the performance hereof with (A) State
Street Bank and its subsidiary, Boston Financial Data Services,
Inc., a Massachusetts Trust ("BFDS"), which is duly registered
as a transfer agent pursuant to Section 17A(c)(1) of the
Securities Exchange Act of 1934, as amended, or any succeeding
statute ("Section 17A(c)(1)"), or (B) a BFDS subsidiary duly
registered as a transfer agent pursuant to Section 17A(c)(1),
or (C) a BFDS affiliate, or (D) such other provider of services
duly registered as a transfer agent under Section 17A(c)(1) as
Company shall select; provided, however, that the Company shall
be as fully responsible to the Trust for the acts and omissions
of any subcontractor as it is for its own acts and omissions;
or
C. The Company shall upon instruction from the Trust subcontract
for the performance hereof with an Agent selected by the Trust,
other than BFDS or a provider of services selected by Company,
as described in (2) above; provided, however, that the Company
shall in no way be responsible to the Trust for the acts and
omissions of the Agent.
SECTION THREE: Custody Services Procurement.
Article 9. Appointment.
The Trust hereby appoints Company as its agent to evaluate
and obtain custody services from a financial institution that
(i) meets the criteria established in Section 17(f) of the 1940
Act and (ii) has been approved by the Board as eligible for
selection by the Company as a custodian (the "Eligible
Custodian"). The Company accepts such appointment.
Article 10. The Company and Its Duties.
Subject to the review, supervision and control of the Board,
the Company shall:
A. evaluate the nature and the quality of the custodial services
provided by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the Trust
as Custodian of the Trust's assets substantially on the terms
set forth as the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for the
benefit of the Trust, with the Trust as a party to each such
agreement. The Company shall not be a party to any agreement
with any such Custodian;
D. establish procedures to monitor the nature and the quality of
the services provided by the Custodians;
E. continuously monitor the nature and the quality of services
provided by the Custodians; and
F. periodically provide to the Trust (i) written reports on the
activities and services of the Custodians; (ii) the nature and
amount of disbursement made on account of the Trust with
respect to each custodial agreement; and (iii) such other
information as the Board shall reasonably request to enable it
to fulfill its duties and obligations under Sections 17(f) and
36(b) of the 1940 Act and other duties and obligations thereof.
Article 11. Fees and Expenses.
A. Annual Fee
For the performance by the Company pursuant to Section Three of
this Agreement, the Trust and/or the Fund agree to pay the
Company an annual fee as agreed upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust
and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items
agreed upon between the parties, as may be added to or amended
from time to time. In addition, any other expenses incurred by
the Company at the request or with the consent of the Trust
and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by
the Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about
the compensation and out-of-pocket expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Trust and/or the Funds and a duly
authorized officer of the Company.
Article 12. Representations.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the
services contemplated in Section Three of this Agreement.
SECTION FOUR: General Provisions.
Article 13. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Trust shall file with the Company the following
documents:
(1) A copy of the Charter and By-Laws of the Trust and all
amendments thereto;
(2) A copy of the resolution of the Board of the Trust
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share certificates
of the Trust or the Funds in the forms approved by the
Board of the Trust with a certificate of the Secretary of
the Trust as to such approval;
(4) All account application forms and other documents
relating to Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Trust authorizing the
original issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and
amendments thereof and orders relating thereto in effect
with respect to the sale of Shares of any Fund, and/or
Class;
(3) A certified copy of each amendment to the governing
document and the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement,
and shareholder recordkeeping or transfer agency
services;
(5) Specimens of all new Share certificates representing
Shares of any Fund, accompanied by Board resolutions
approving such forms;
(6) Such other certificates, documents or opinions which the
Company may, in its discretion, deem necessary or
appropriate in the proper performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
Article 14. Representations and Warranties.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the
State of Delaware.
(3) It is empowered under applicable laws and by its charter
and by-laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations
under this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
(6) It is in compliance with federal securities law
requirements and in good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing
and in good standing under the laws of its state of
organization;
(2) It is empowered under applicable laws and by its Charter
and By-Laws to enter into and perform its obligations
under this Agreement;
(3) All corporate proceedings required by said Charter and By-
Laws have been taken to authorize it to enter into and
perform its obligations under this Agreement;
(4) The Trust is an open-end investment company registered
under the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings
have been made and will continue to be made, with respect
to all Shares of each Fund being offered for sale.
Article 15. Standard of Care and Indemnification.
A. Standard of Care
The Company shall be held to a standard of reasonable care in
carrying out the provisions of this Contract. The Company 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.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund
shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and
affiliates, harmless against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-
adviser or other party contracted by or approved by the
Trust or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf
of the Fund, its Shareholders or investors
regarding the purchase, redemption or transfer of
Shares and Shareholder account information;
(b) are received by the Company from independent
pricing services or sources for use in valuing the
assets of the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or other
third parties contracted by or approved by the
Trust of Fund for use in the performance of
services under this Agreement;
(d) have been prepared and/or maintained by the Fund or
its affiliates or any other person or firm on
behalf of the Trust.
(3) The reliance on, or the carrying out by the Company or
its agents or subcontractors of Proper Instructions of
the Trust or the Fund.
(4) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations of any
state that such Shares be registered in such state or in
violation of any stop order or other determination or
ruling by any federal agency or any state with respect to
the offer or sale of such Shares in such state.
Provided, however, that the Company shall not be
protected by this Article 15.A. from liability for any
act or omission resulting from the Company's willful
misfeasance, bad faith, negligence or reckless disregard
of its duties of failure to meet the standard of care set
forth in 15.A. above.
C. Reliance
At any time the Company may apply to any officer of the Trust
or Fund for instructions, and may consult with legal counsel
with respect to any matter arising in connection with the
services to be performed by the Company under this Agreement,
and the Company and its agents or subcontractors shall not be
liable and shall be indemnified by the Trust or the appropriate
Fund for any action reasonably taken or omitted by it in
reliance upon such instructions or upon the opinion of such
counsel provided such action is not in violation of applicable
federal or state laws or regulations. The Company, its agents
and subcontractors shall be protected and indemnified in
recognizing stock certificates which are reasonably believed to
bear the proper manual or facsimile signatures of the officers
of the Trust or the Fund, and the proper countersignature of
any former transfer agent or registrar, or of a co-transfer
agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party
of such assertion, and shall keep the other party advised with
respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to
participate with the party seeking indemnification in the
defense of such claim. The party seeking indemnification shall
in no case confess any claim or make any compromise in any case
in which the other party may be required to indemnify it except
with the other party's prior written consent.
Article 16. Termination of Agreement.
This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other. Should
the Trust exercise its rights to terminate, all out-of-pocket
expenses associated with the movement of records and materials
will be borne by the Trust or the appropriate Fund.
Additionally, the Company reserves the right to charge for any
other reasonable expenses associated with such termination. The
provisions of Article 15 shall survive the termination of this
Agreement.
Article 17. Amendment.
This Agreement may be amended or modified by a written
agreement executed by both parties.
Article 18. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the
Company and the Trust may from time to time agree on such
provisions interpretive of or in addition to the provisions of
this Agreement as may in their joint opinion be consistent with
the general tenor of this Agreement. 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
Charter. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
Article 19. Governing Law.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts
Article 20. 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 Company at Federated Investors Tower,
Pittsburgh, Pennsylvania, 15222-3779, or to such other address
as the Trust or the Company may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the
respective address.
Article 21. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 22. Limitations of Liability of Trustees and Shareholders of
the Trust.
The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an
authorized officer of the Trust, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not
binding upon any of the Trustees or Shareholders of the Trust,
but bind only the appropriate property of the Fund, or Class, as
provided in the Declaration of Trust.
Article 23. Limitations of Liability of Trustees and Shareholders of
the Company.
The execution and delivery of this Agreement have been
authorized by the Trustees of the Company and signed by an
authorized officer of the Company, acting as such, and neither
such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not
binding upon any of the Trustees or Shareholders of the Company,
but bind only the property of the Company as provided in the
Declaration of Trust.
Article 24. Assignment.
This Agreement and the rights and duties hereunder shall not
be assignable with respect to the Trust or the Funds by either
of the parties hereto except by the specific written consent of
the other party.
Article 25. Merger of Agreement.
This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect
to the subject hereof whether oral or written.
Article 26. Successor Agent.
If a successor agent for the Trust shall be appointed by the
Trust, the Company shall upon termination of this Agreement
deliver to such successor agent at the office of the Company all
properties of the Trust held by it hereunder. If no such
successor agent shall be appointed, the Company shall at its
office upon receipt of Proper Instructions deliver such
properties in accordance with such instructions.
In the event that no written order designating a successor
agent or Proper Instructions shall have been delivered to the
Company on or before the date when such termination shall become
effective, then the Company shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the 1940
Act, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of
not less than $2,000,000, all properties held by the Company
under this Agreement. Thereafter, such bank or trust company
shall be the successor of the Company under this Agreement.
Article 27. Force Majeure.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a
result of work stoppage, power or other mechanical failure,
natural disaster, governmental action, communication disruption
or other impossibility of performance.
Article 28. Assignment; Successors.
This Agreement shall not be assigned by either party without
the prior written consent of the other party, except that either
party may assign to a successor all of or a substantial portion
of its business, or to a party controlling, controlled by, or
under common control with such party. Nothing in this Article 28
shall prevent the Company from delegating its responsibilities
to another entity to the extent provided herein.
Article 29. Severability.
In the event any provision of this Agreement is held illegal,
void or unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf
under their seals by and through their duly authorized officers,
as of the day and year first above written.
ATTEST: INVESTMENT COMPANIES
(listed on Exhibit 1)
/s/ John W. McGonigle_______ By:__/s/ John F. Donahue___
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By:_/s/ James J. Dolan_____
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
<TABLE>
<S> <C>
CONTRACT
DATE INVESTMENT COMPANY
Portfolios
Classes
12/01/94 LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
FEDERATED SERVICES COMPANY provides the following services:
Fund Accounting
Shareholder Recordkeeping
Custody Services Procurement
</TABLE>
EXHIBIT 6(iii) UNDER FORM N-1A
EXHIBIT 1(iii) UNDER ITEM 601REG.S-K
SHAREHOLDER SERVICES PLAN
This Shareholder Services Plan ("Plan") is adopted as of this 1st
day of March, 1994, by the Boards of Directors or Trustees, as
applicable (the "Boards"), of those investment companies listed on
Exhibit 1 hereto as may be amended from time to time, having their
principal office and place of business at Federated Investors Tower,
Pittsburgh, PA 15222-3779 (individually referred to herein as a "Fund"
and collectively as "Funds").
1. This Plan is adopted to allow the Funds to make payments as
contemplated herein to obtain certain personal services for shareholders
and/or the maintenance of shareholder accounts ("Services").
2. This Plan is designed to compensate Federated Shareholder
Services ("FSS") for providing personal services and/or the maintenance
of shareholder accounts to the Funds and their shareholders. In
compensation for the services provided pursuant to this Plan, FSS may be
paid a monthly fee computed at the annual rate not to exceed .25 of 1%
of the average aggregate net asset value of the shares of each Fund held
during the month.
3. Any payments made by the Funds to FSS pursuant to this Plan
will be made pursuant to a "Shareholder Services Agreement" between FSS
and each of the Funds.
4. Quarterly in each year that this Plan remains in effect, FSS
shall prepare and furnish to the Boards of the Funds, and the Boards
shall review, a written report of the amounts expended under the Plan.
5. This Plan shall become effective with regard to each Fund
(i) after approval by majority votes of: (a) such Fund's Board; and (b)
the members of the Board of such Fund who are not interested persons of
such Fund and have no direct or indirect financial interest in the
operation of such Fund's Plan or in any related documents to the Plan
("Independent Trustees or Directors"), cast in person at a meeting
called for the purpose of voting on the Plan.
6. This Plan shall remain in effect with respect to each Fund
presently set forth on an exhibit and any subsequent Fund added pursuant
to an exhibit during the initial year of this Plan for the period of one
year from the date set forth above and may be continued thereafter if
this Plan is approved with respect to each Fund at least annually by a
majority of the relevant Fund's Board and a majority of the Independent
Trustees or
Directors, of such Fund as applicable, cast in person at a meeting
called for the purpose of voting on the renewal of such Plan. If this
Plan is adopted with respect to a fund after the first annual approval
by the Trustees or Directors as described above, this Plan will be
effective as to that Fund at such time as Exhibit 1 hereto is amended to
add such Fund and will continue in effect until the next annual approval
of this Plan by the Funds' Boards and thereafter for successive periods
of one year subject to approval as described above.
7. All material amendments to this Plan must be approved by a
vote of the Board of each Fund and of the Independent Directors or
Trustees of such Fund, cast in person at a meeting called for such
purpose.
8. This Plan may be terminated as follows:
(a) at any time, without the payment of any penalty, by
the vote of a majority of the Independent Board Members of any
Fund or by a vote of a majority of the outstanding voting
securities of any Fund as defined in the Investment Company Act
of 1940 on sixty (60) days' written notice to the parties to
this Agreement; or
(b) by any party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice
of its intention to terminate.
9. While this Plan shall be in effect, the selection and
nomination of Independent Directors or Trustees of each Fund shall be
committed to the discretion of the Independent Directors or Trustees
then in office.
10. All agreements with any person relating to the
implementation of this Plan shall be in writing and any agreement
related to this Plan shall be subject to termination, without penalty,
pursuant to the provisions of Paragraph 8 herein.
11. This Plan shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
Witness the due execution hereof this as of the date set forth
above.
Investment Companies (listed
on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Shareholder Services
By: /s/ James J. Dolan
Title: President
Attest: /s/ John W. McGonigle
John W. McGonigle
EXHIBIT 9(iii) UNDER FORM N-1A
EXHIBIT 1(iii) UNDER ITEM 601/REG.S-K
SHAREHOLDER SERVICES AGREEMENT
AGREEMENT made as of the first day of March, 1994, by and between
those investment companies listed on Exhibit 1, as may be amended from
time to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 and who have
approved a Shareholder Services Plan (the "Plan") and this form of
Agreement (individually referred to herein as a "Fund" and collectively
as "Funds") and Federated Shareholder Services, a Delaware business
trust, having its principal office and place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS").
1. The Funds hereby appoint FSS to render or cause to be
rendered personal services to shareholders of the Funds and/or the
maintenance of accounts of shareholders of the Funds ("Services"). In
addition to providing Services directly to shareholders of the Funds,
FSS is hereby appointed the Funds' agent to select, negotiate and
subcontract for the performance of Services. FSS hereby accepts such
appointments. FSS agrees to provide or cause to be provided Services
which, in its best judgment (subject to supervision and control of the
Funds' Boards of Trustees or Directors, as applicable), are necessary or
desirable for shareholders of the Funds. FSS further agrees to provide
the Funds, upon request, a written description of the Services which FSS
is providing hereunder.
2. During the term of this Agreement, each Fund will pay FSS
and FSS agrees to accept as full compensation for its services rendered
hereunder a fee at an annual rate, calculated daily and payable monthly,
up to 0.25% of 1% of average net assets of each Fund.
For the payment period in which this Agreement becomes effective
or terminates with respect to any Fund, there shall be an appropriate
proration of the monthly fee on the basis of the number of days that
this Agreement is in effect with respect to such Fund during the month.
To enable the Funds to comply with an applicable exemptive order, FSS
represents that the fees received pursuant to this Agreement will be
disclosed to and authorized by any person or entity receiving Services,
and will not result in an excessive fee to FSS.
3. This Agreement shall continue in effect for one year from
the date of its execution, and thereafter for successive periods of one
year only if the form of this Agreement is approved at least annually by
the Board of each Fund, including a majority of the members of the Board
of the Fund who are not interested persons of the Fund and have no
direct or indirect financial interest in the operation of the Funds'
Plan or in any related documents to the Plan ("Independent Board
Members") cast in person at a meeting called for that purpose.
4. Notwithstanding paragraph 3, this Agreement may be
terminated as follows:
(a) at any time, without the payment of any penalty, by
the vote of a majority of the Independent Board Members of any
Fund or by a vote of a majority of the outstanding voting
securities of any Fund as defined in the Investment Company Act
of 1940 on sixty (60) days' written notice to the parties to
this Agreement;
(b) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of 1940; and
(c) by any party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice
of its intention to terminate.
5. FSS agrees to obtain any taxpayer identification number
certification from each shareholder of the Funds to which it provides
Services that is required under Section 3406 of the Internal Revenue
Code, and any applicable Treasury regulations, and to provide each Fund
or its designee with timely written notice of any failure to obtain such
taxpayer identification number certification in order to enable the
implementation of any required backup withholding.
6. FSS shall not be liable for any error of judgment or mistake
of law or for any loss suffered by any Fund in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. FSS shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for such
Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Any person, even
though also an officer, trustee, partner, employee or agent of FSS, who
may be or become a member of such Fund's Board, officer, employee or
agent of any Fund, shall be deemed, when rendering services to such Fund
or acting on any business of such Fund (other than services or business
in connection with the duties of FSS hereunder) to be rendering such
services to or acting solely for such Fund and not as an officer,
trustee, partner, employee or agent or one under the control or
direction of FSS even though paid by FSS.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.
8. FSS is expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of each Fund that is
a Massachusetts business trust and agrees that the obligations assumed
by each such Fund pursuant to this Agreement shall be limited in any
case to such Fund and its assets and that FSS shall not seek
satisfaction of any such obligations from the shareholders of such Fund,
the Trustees, Officers, Employees or Agents of such Fund, or any of
them.
9. The execution and delivery of this Agreement have been
authorized by the Trustees of FSS and signed by an authorized officer of
FSS, acting as such, and neither such authorization by such Trustees nor
such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or shareholders of FSS, but bind only the trust
property of FSS as provided in the Declaration of Trust of FSS.
10. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if
delivered to any Fund and to such Fund at the following address:
Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President and if delivered to FSS at Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President.
11. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written. If any provision of this
Agreement shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of Sections 3
and 4, hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
shall be governed by Pennsylvania law; provided, however, that nothing
herein shall be construed in a manner inconsistent with the Investment
Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.
12. This Agreement may be executed by different parties on
separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together
constitute one and the same instrument.
13. This Agreement shall not be assigned by any party without
the prior written consent of FSS in the case of assignment by any Fund,
or of the Funds in the case of assignment by FSS, except that any party
may assign to a successor all of or a substantial portion of its
business to a party controlling, controlled by, or under common control
with such party. Nothing in this Section 14 shall prevent FSS from
delegating its responsibilities to another entity to the extent provided
herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
Investment Companies (listed
on Exhibit 1)
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Shareholder Services
By: /s/ James J. Dolan
Title: President
Attest: /s/ John W. McGonigle
John W. McGonigle
EXHIBIT 9(iiii) UNDER FORM N-1A
EXHIBIT 1(iiii) UNDER ITEM 601/REG.S-K
SHAREHOLDER SERVICES SUB-CONTRACT
This Agreement is made between the Financial Institution executing
this Agreement ("Provider") and Federated Shareholder Services ("FSS")
on behalf of the investment companies listed in Exhibit A hereto (the
"Funds"), for whom FSS administers the Shareholder Services Plan
("Plan") and who have approved this form of Agreement. In consideration
of the mutual covenants hereinafter contained, it is hereby agreed by
and between the parties hereto as follows:
1. FSS hereby appoints Provider to render or cause to be
rendered personal services to shareholders of the Funds and/or the
maintenance of accounts of shareholders of the Funds ("Services").
Provider agrees to provide Services which, in its best judgment, are
necessary or desirable for its customers who are investors in the Funds.
Provider further agrees to provide FSS, upon request, a written
description of the Services which Provider is providing hereunder.
2. During the term of this Agreement, the Funds will pay the
Provider fees as set forth in a written schedule delivered to the
Provider pursuant to this Agreement. The fee schedule for Provider may
be changed by FSS sending a new fee schedule to Provider pursuant to
Paragraph 9 of this Agreement. For the payment period in which this
Agreement becomes effective or terminates, there shall be an appropriate
proration of the fee on the basis of the number of days that this
Agreement is in effect during the quarter. To enable the Funds to
comply with an applicable exemptive order, Provider represents that the
fees received pursuant to this Agreement will be disclosed to its
customers, will be authorized by its customers, and will not result in
an excessive fee to the Provider.
3. The Provider understands that the Department of Labor views
ERISA as prohibiting fiduciaries of discretionary ERISA assets from
receiving shareholder service fees or other compensation from funds in
which the fiduciary's discretionary ERISA assets are invested. To date,
the Department of Labor has not issued any exemptive order or advisory
opinion that would exempt fiduciaries from this interpretation. Without
specific authorization from the Department of Labor, fiduciaries should
carefully avoid investing discretionary assets in any fund pursuant to
an arrangement where the fiduciary is to be compensated by the fund for
such investment. Receipt of such compensation could violate ERISA
provisions against fiduciary self-dealing and conflict of interest and
could subject the fiduciary to substantial penalties.
4. The Provider agrees not to solicit or cause to be solicited
directly, or indirectly at any time in the future, any proxies from the
shareholders of a Fund in opposition to proxies solicited by management
of the Fund, unless a court of competent jurisdiction shall have
determined that the conduct of a majority of the Board of Trustees or
Directors of the Fund constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties. This paragraph 4 will
survive the term of this Agreement.
5. This Agreement shall continue in effect for one year from
the date of its execution, and thereafter for successive periods of one
year if the form of this Agreement is approved at least annually by the
Board of each Fund, including a majority of the members of the Board of
the Fund who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Fund's Plan or in
any related documents to the Plan ("Disinterested Board Members") cast
in person at a meeting called for that purpose.
6. Notwithstanding paragraph 5, this Agreement may be
terminated as follows:
(a) at any time, without the payment of any penalty, by
the vote of a majority of the Disinterested Board Members of the
Fund or by a vote of a majority of the outstanding voting
securities of the Fund as defined in the Investment Company Act
of 1940 on not more than sixty (60) days' written notice to the
parties to this Agreement;
(b) automatically in the event of the Agreement's
assignment as defined in the Investment Company Act of 1940; and
(c) by either party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice
of its intention to terminate.
7. The Provider agrees to obtain any taxpayer identification
number certification from its customers required under Section 3406 of
the Internal Revenue Code, and any applicable Treasury regulations, and
to provide the Fund or its designee with timely written notice of any
failure to obtain such taxpayer identification number certification in
order to enable the implementation of any required backup withholding.
8. The execution and delivery of this Agreement have been
authorized by the Trustees of FSS and signed by an authorized officer of
FSS, acting as such, and neither such authorization by such Trustees nor
such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding
upon any of the Trustees or shareholders of FSS, but bind only the trust
property of FSS as provided in the Declaration of Trust of FSS.
9. Notices of any kind to be given hereunder shall be in
writing (including facsimile communication) and shall be duly given if
delivered to Provider at the address set forth below and if delivered to
FSS at Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.
10. This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written. If any provision of this
Agreement shall be held or made invalid by a court or regulatory agency
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. Subject to the provisions of Sections 5
and 6, hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
shall be governed by Pennsylvania law; provided, however, that nothing
herein shall be construed in a manner inconsistent with the Investment
Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.
11. This Agreement may be executed by different parties on
separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together
constitute one and the same instrument.
12. This Agreement shall not be assigned by any party without
the prior written consent of FSS in the case of assignment by Provider,
or of Provider in the case of assignment by FSS, except that any party
may assign to a successor all of or a substantial portion of its
business to a party controlling, controlled by, or under common control
with such party.
13. This Agreement may be amended by FSS from time to time by
the following procedure. FSS will mail a copy of the amendment to the
Provider's address, as shown below. If the Provider does not object to
the amendment within thirty (30) days after its receipt, the amendment
will become part of the Agreement. The Provider's objection must be in
writing and be received by FSS within such thirty days.
14. This Agreement may be terminated with regard to a
particular Fund or Class at any time, without the payment of any
penalty, by FSS or by the vote of a majority of the Disinterested
Trustees or Directors, as applicable, or by a majority of the
outstanding voting securities of the particular Fund or Class on not
more than sixty (60) days' written notice to the Provider. This
Agreement may be terminated by Provider on sixty (60) days' written
notice to FSS.
15. The Provider acknowledges and agrees that FSS has entered
into this Agreement solely in the capacity of agent for the Funds and
administrator of the Plan. The Provider agrees not to claim that FSS is
liable for any responsibilities or amounts due by the Funds hereunder.
[Provider]
Address
City State Zip Code
Dated: By:
Authoried Signature
Title
Print Name of Authorized Signature
FEDERATED SHAREHOLDER SERVICES
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:
Vice President
EXHIBIT A to Shareholder Services Sub-Contract with
Funds covered by this Agreement:
Shareholder Service Fees
1. During the term of this Agreement, FSS will pay Provider a
quarterly fee. This fee will be computed at the annual rate of ______
of the average net asset value of shares of the Funds held during the
quarter in accounts for which the Provider provides Services under this
Agreement, so long as the average net asset value of Shares in the Funds
during the quarter equals or exceeds such minimum amount as FSS shall
from time to time determine and communicate in writing to the Provider.
2. For the quarterly period in which the Agreement becomes
effective or terminates, there shall be an appropriate proration of any
fee payable on the basis of the number of days that the Agreement is in
effect during the quarter.
EXHIBIT 15 UNDER FORM N-1A
EXHIBIT 99 UNDER ITEM 601/REG.S-K
THE LIBERTY ACCOUNT
Federated Securities Corp., Distributor, 421 Seventh Avenue, Pittsburgh,
Pennsylvania 15219
Dear Investor:
Thank you for considering The Liberty Account IRA. We hope that
after you've reviewed the enclosed information kit you requested, you'll
share our enthusiasm about this exciting, new investment opportunity.
No doubt, you already know the benefits of an IRA in general-- the
security and the tax savings. But, when you make your IRA investment in
the Liberty Account funds, you enjoy all these benefits, too: high
current yields . . professional management . . . diversification . . .
an experienced Shareholder Services staff. With the Liberty Account
IRA, you're eligible for all of these plus something extra -- A Free
Exchange Privilege.
As your investment goals change, this Exchange Privilege gives you
the opportunity to switch all or part of your investment from one fund
to another -- quickly by phone -- and at no extra cost to you. The
Exchange Privilege is only part of this exciting new IRA, however.
What else makes this package so attractive? Well, first, the
three funds available to you are well-established -- all with proven
track records. (The funds and The Liberty Account are brought to you be
Federated Securities Corp. exclusively and not by AARP.) And second,
each Liberty Account IRA fund is designed with a specific objective in
mind, to meet your many investment needs. Take a look:
*** AARP U.S. Government Money Market Trust -- for high current
yields from U.S. Government securities and instruments
backed by them;
*** Fund for U.S. Government Securities, Inc. -- for high
current income from high-quality securities with payment of
both principal and interest assured by the U.S. Government
or its instrumentalities; and
*** American Leaders Fund, Inc. -- for growth of capital and
income, from investing in high-quality stocks.
The choice is yours, because now you can invest in one or all of these
funds -- another advantage of The Liberty Account IRA.
You'll find details in the enclosed Liberty Account IRA Start-Up
Kit. I urge you to examine the kit carefully. We've also enclosed
everything you'll need -- application, prospectuses, postage--paid reply
envelope -- to invest in The Liberty Account IRA today!
If you still have questions, please don't hesitate to call us toll-
free: 1/800-245-4770. Our courteous Shareholder Services staff is
always available to help you.
Sincerely,
J. Christopher Donahue
P.S. Please not, the deadline for all 1984 contributors is April 15,
1985 -- regardless of when you file you 1984 tax return. If you
haven't made you 1984 IRA investment yet, I suggest you do it now.
______________________________
______________________________
______________________________
______________________________
Your IRA Mutual Fund
Investment Options
This booklet includes directed, we will distributions at any
important information automatically reinvest time after you reach
about the mutual fund all dividends in mutual age 59 1/2, or
investments we offer fund shares. Capital earlier of you
for your IRA. Please gains, if any, are become disabled.
read it before you distributed every 12 Premature
decide how to invest months and will also be distributions from
your IRA funds. reinvested in mutual your IRA will result
fund shares unless you in penalty taxes.
The three mutual funds authorize us otherwise. See Your Guide to
we offer are: _______________________ IRAs for details.
Contributions
- - AARP U.S. Government You must begin
Money Market Trust, a Minimum Contributions. receiving
$3 billion money market The minimum initial distributions by
fund offering current contribution in each April 1 of the
income from U.S. mutual fund is $50. calendar year
Government Securities You may make additional following the later
and instruments backed contributions in any of the calendar year
by U.S. Government amount, as long as you in which you reach
Securities. don't exceed your age 70 1/2 or
maximum contribution retire.
- - Fund for U.S. limit for each year.
Government Securities, See your Guide to IRAs ____________________
Inc., a $50 million for details. Investment Advisers
portfolio of long-term for the Funds
government bonds Choice of Investment.
offering current income You may invest in one, AARP U.S. Government
by investing two, or all three of Money Market Trust
exclusively in U.S. these Liberty Account is advised by
Government Securities. funds, as long as you Institutional
don't exceed your Research Corp., as
- -American Leaders Fund, maximum contribution affiliate of
Inc., a $50 million limit. You may also Federated Investors,
portfolio of high move your funds from Inc. Fund for U.S.
quality common stocks one fund to another as Government
selected from the often as you choose. Securities, and
"Leaders List" of 100 If we add a new mutual American Leaders
blue chip corporations fund to out program, Fund, Inc. are
offering income and you may invest in that advised by the
capital growth. fund as well. Federated Research
_______________________ Division of The
Making Contributions. Standard Five
Dividends Dividends Your contributions can Insurance Company,
for the three funds are be made by check or also an affiliate of
declared and paid as electronic fund Federated Investors,
follows: transfer. Checks Inc. have
- -AARP U.S. Government should be made payable approximately $30
Money Market Trust: to State Street Bank billion in net
declared daily and paid and Trust Company, and assets.
monthly/ mailed to: State
Street Bank and Trust
- -Fund for U.S. Company, P.O. Box 1723,
Government Securities: Boston, MA 02105.
declared and paid
monthly. To invest by wire, call
Federated Securities
- -American Leaders Fund, Corp. at 1-800-245-
Inc.: declared and 4770.
paid quarterly.
Distributions You
Unless otherwise may begin receiving
Keep this with your IRA records ___________________________
You will need it later to request ___________________________
distributions from your account. ___________________________
IRA Distribution
Instructions
IRA Distribution Instructions
Investor Name
Information Street Address
City State Zip code
Social Security no. Birth date
Distribution Type of distribution
Information __ Transfer to:
__ Removal of excess contribution for tax year 19__
__ Regular distribution. Investor is:
__ at least 59 1/2 years old.
__ deceased.
__ disabled or declared mentally incompetent by a
court.
__ Other. Describe:
Amount and frequency of payments
__ Distribute the entire balance in one payment.
__ Distribute $__________ in one payment, to be followed
by
installment payments.
__ Distribute the balance in equal payments to be made:
__ monthly.
__ quarterly.
__ annually.
Duration of installment payments
__ Over the life of the investor.
__ Over a period of _____ years not to exceed the
investor's life
expectancy.
__ Over the joint life and last survivor lives of the
investor and spouse. (As of January 1, 1985, payments
may be made over a period equal to the joint and last
survivor lives of the investor and any beneficiary.)
__ A period of _____ years not to exceed the joint life
and last survivor expectancy of the depositor and
spouse. (Beginning January 1, 1985, payments may be
made over a period not more than the joint life survivor
expectancy of the investor and any beneficiary.)
Withholding Unless you instruct us not to, we will withhold
federal taxes
Tax Instructions equal to 10% of each distribution. If you do instruct
us not to withhold taxes, you may be required to make
estimated income tax payments throughout the year.
__ Do not deduct withholding tax from distributions.
Signature By signing, below, you certify, under penalties of
perjury, that the social security number you have
given us is correct.
Signature Date
Signature guarantee
(if required by custodian)
Use this form to open your IRA
For Spousal IRAs, two applica-
tions are needed.
IRA Application
Request for Transfer of IRA
Investor Name
Information Street Address
City State Zip code
Social Security no. Birth date
Previous Name
Trustee/ Street Address
Custodian City State Zip code
Information Name on account Account no.
Type of IRA: __ Individual __ Spousal __ Rollover
Transfer IRA Check one:
Instructions __ This will be a new account. A completed
application is attached.
__ The proceeds of this transfer are to be deposited
in my existing Liberty Account IRA.
Allocation for transfer:
Mutual Fund Account No. %
Investor's To Resigning Trustee/Custodian:
Signature I have appointed
State Street Bank and Trust Company
P.O. Box 1723
Boston, MA 02105
as the custodian of my IRA and authorize you to
transfer my IRA to the new custodian. Please sent the
new custodian any documents or records needed to
complete the transfer.
Signature Date
Signature guarantee
(if required by resigning trustee/custodian)
_______________________________________
_______________________________________
_______________________________________
Your Guide to IRAs
_____________________________________
In this booklet, you and your refer to
the investor opening an Individual
Retirement Account (IRA). We, us
and our refer to State Street Bank and
Trust Company, the custodian of your
Individual Retirement Account.
This IRA Guide includes:
- - a summary of your Individual Retire-
ment Custodial Account Agreement
with us as custodian of your IRA; and
- - a summary of the Disclosure State-
ment describing your IRA.
A copy of the Custodial Agreement is
provided separately in this package. A
copy of the Disclosure Statement is
also provided as required by federal
law. Refer to the Custodial Agreement
and Disclosure Statement for details
of rules governing your IRA. In case
of ambiguity, the Disclosure State-
ment and Custodial Agreement
govern.
Read this IRA Guide carefully. It
summarizes your rights and resposi-
bilities as an IRA depositor and ours
as custodian of your IRA. If you es-
tablish IRAs for yourself and your
spouse, these terms apply to both of
you.
Right to Cancel includes:
You may revoke this IRA on or - wages and salaries'
before seven days after it's - professional fees;
opened. You may revoke it in - commissions;
writing by delivering your notice - bonuses;
of revocation to us or mailing it - tips; and
to us (first class, certified or - other amounts received for
registered mail) at the address personal services
shown below.
It doesn't include:
If you write, be sure:
- interest and dividends
- - your letter is in an envelope - rent; or
and is properly addressed and - retirement benefits.
stamped with first class postage;
and Your IRA contribution can be
deducted on your federal income
- - the postmark and certification tax return for the year in which
or registration date are not you make the contribution, even
later than seven days after the if you don't itemize deductions.
date you opened the account. Your contributions and earned
interest won't be subject to
If you revoke your IRA, we'll federal income taxes until you
refund your full deposit, without begin to receive distributions.
adjustment for any expenses or
charges State income tax treatment of
your IRA may differ. Details are
_________________________________ available from your state tax
Custodian's Address authority or your own tax
adviser.
State Street Bank and Trust
Company You can choose to invest your IRA
P.O. Box 1723 contributions in any mutual fund
Boston, MA 02105 we offer for IRAs. See Your IRA
Mutual Fund Investment Options
_________________________________ for details on the mutual fund
How an IRA Works investments offered with this
program.
Your IRA has been designed to:
The money you deposit in your IRA
- - reduce your tax burden during can't be forfeited for any
your earning years; reason. Your IRA funds will not
be commingled with any other
- - provide for your retirement; depositor's property nor will
and they be invested in life
insurance or collectibles.
- - provide for your beneficiaries _________________________________
in the event of your death. Making Contributions
Because an IRA is a retirement Except for rollover
plan, there are certain contributions, all contributions
restrictions on the types of to an IRA must be made by check
investments you can make and on or electronic funds transfer.
your rights to withdraw your You may not deposit securities or
money before retirement. property. Assets invested in an
existing IRA may be transferred.
Until the tax year in which you See page 11 of this Guide for
reach age 70 1/2, you may make details.
contributions to your IRA for any
tax year in which you earn We must receive your contribution
compensation. Compensation for any given tax year by the
time you are required to file Amount of contributions. You may
your federal income tax return make annual contributions to your
for that year. For contributions spousal IRAs of up to $2,250 or
made after December 31, 1984, 100% of your earned compensation,
extensions you are granted for whichever is less. You may
filing your federal income tax divide the contributions between
return will not apply to your IRA the accounts however you choose
contributions. as long as no more than $2,000 is
deposited in either account.
For contributions made after
December 31, 1984, you must tell In the event of divorce. If a
us the tax year to which your spousal IRA was set up for you as
contribution applies. We're not a nonworking spouse and you are
required to decide if a divorced or receive a separate
contributions you make is maintenance decree, you may
deductible if it brings your contribute to the account as you
contributions for that year over would to an individual IRA if you
your deductible limit. Our have earned compensation after
accepting a contribution doesn't the divorce. For tax years
mean it's tax-deductible; you beginning after December 31,
must keep track of your 1984, alimony will be considered
contributions. earned compensation.
_________________________________ There are special rules governing
Personal IRAs contributions from alimony
received before December 31,
If you set up an IRA for 1984. Refer to your Disclosure
yourself, you may deposit up to Statement and consult your tax
$2,000 or 100% of your earned adviser.
compensation annual, whichever is
less. _________________________________
Excess Contributions
If you have more than one IRA,
this limit applies to the total Contributions above your
of all your IRAs. If you make deductible limit are excess
any voluntary tax-deductible contributions. If you contribute
contributions to your employer's less than you're allowed in any
tax-qualified retirement plan, one year, you're not allowed to
you must deduct those make excess contributions the
contributions from your allowed next year to make up for it.
IRA contribution. Excess contributions aren't tax-
deductible and you'll be taxed on
_________________________________ interest they earn.
Working Family IRAs
_________________________________
If your spouse has earned Excise Tax on Excess
compensation, you may each set up Contributions
an IRA and take the full amount
of the deduction allowed for There is also a nondeductible
individual IRAs. It doesn't excise tax of 6% of the excess
matter whether you file your contribution each year until it
income tax return jointly or not. is applied as a contribution in a
subsequent year or is returned to
_________________________________ you. The excise tax is payable
Spousal IRAs with your federal income tax
return.
If your spouse doesn't have any _________________________________
earned compensation and you filed Distributions
a joint federal income tax
return, you may set up spousal You may begin receiving
IRAs for the two of you. distributions from your IRA
without penalty:
and any beneficiary.
- - after you reach age 59 1/2; or
- payments over a specific
- - sooner if you become disabled. number of years not to exceed the
joint life and last survivor
Your IRA may also be distributed expectancy of you and your
to your beneficiary if you die spouse. Beginning January 1,
before you begin to receive 1985, payments may be made over a
distributions. You may designate period not more than the joint
primary and secondary life and last survivor expectancy
beneficiaries to receive the of you and any beneficiary.
proceeds of your IRA and you may
change the beneficiary as often If you choose installment
as you wish. payments over a specified period,
you may still receive the balance
If you are requesting of your IRA in a single payment
distributions and have not at any time. You have to give us
reached age 59 1/2 and are not written notice requesting the
disabled, your distributions may payment. You may also choose to
be subject to a 10% penalty tax. have a portion of your balance
You must tell us how you plan to paid to you in a single large
dispose of the distribution. See payment followed by installment
"Premature Distributions" for payments.
details.
If you don't choose a
You must begin receiving distribution plan by the time
distributions by the end of the you're 70 1/2, we'll distribute
year in which you reach age 70 your IRA to you in a single
1/2. For years beginning after payment by the end of that tax
December 31, 1984, you must begin year. For years beginning after
receiving distributions by April December 31, 1984, you must begin
1 of the calendar year following receiving distributions by April
the later of the calendar year in 1 of the calendar year following
which you turn 70 1/2 or retire. the later of the calendar year in
which you turn 70 1/2 or retire.
_________________________________
Methods of Distribution _________________________________
Minimum Distribution
Single or periodic payments.
Once you reach age 59 1/2, you Once you begin receiving
may choose to have your entire distributions, you're required to
balance distributed to you in a receive a certain minimum
single payment or in distribution from your IRA each
substantially equal monthly, year. Methods for calculating
quarterly, or annual minimum distributions are
installments. described in your Disclosure
Statement.
If you select installment
payments, you can choose. Penalties for distribution less
than the minimum. If you don't
- - payments over your lifetime. receive your minimum
distribution, you will be subject
- - payments over a specific to a penalty tax equal to 50% of
number of years not to exceed the difference between the
your life expectancy. minimum distribution and the
amount you actually received.
- - payments over the joint and You may not deduct this penalty
last survivor lives of you and on your federal income tax
your spouse. Beginning January return.
1, 1985, payments may be made
over a period equal to the joint _________________________________
and last survivor lives of you How Distributions Are Taxed
Amounts distributed are taxable
as ordinary income for the tax
year in which you receive them.
You may use three-year income
averaging when figuring your
income taxes, but you can't use
capital gains or 10-year income
averaging provisions for IRA
distributions.
Withholding taxes. Distributions
from your IRA are subject to a
10% federal withholding tax. You
may:
- - instruct us to withhold the
tax before making the
distribution to you; or
- - pay the withholding tax
yourself.
file your tax return for the year
Gift taxes. Designating a you made the excess
beneficiary to receive contributions;
distributions is not a transfer
for federal gift tax purposes. - payments to your beneficiaries
after your death; and
_________________________________
In the Event of Your Death - payments rolled over to
another IRA (see "IRA
If you die before receiving all Rollovers").
the money in your IRA, the
balance of your account must _________________________________
normally be distributed to your IRA Rollovers
beneficiary within five years of
your death. If distributions are You may defer taxes on a
being made to your surviving distribution from a qualified
spouse and your spouse dies, then plan by rolling it over into an
the balance must normally be IRA. Rollovers aren't subject to
distributed to your spouse's the annual contribution limits
beneficiary within five years. that apply to personal IRAs and
are permitted only once a year.
However, if distributions are
being made in substantially equal You must roll the funds over
payments over a specific period within 60 days after receiving a
based on your life expectancy or distribution from a qualified
your and your spouse's joint life retirement plan. Any part of you
and last survivor expectancy, distribution that you don't roll
these payments may be continued over into an IRA within 60 days
and the requirement that the will be treated as a premature
account be distributed within distribution.
five years will not apply.
Always check with you attorney or
After your death, your tax adviser about the tax
beneficiary may receive payments consequences of making a rollover
but may not contribute to your contributions.
IRA unless your beneficiary is
your spouse. Your surviving
spouse may treat your IRA as his
or her own.
_________________________________
Premature Distributions
Payments you receive from your
IRA before you reach age 59 1/2
may be considered premature
distributions. Premature
distributions are subject to a
10% penalty tax and to ordinary
income tax.
These transactions are not
considered premature
distributions:
- - payments made because you are
disabled.
- - withdrawals to correct excess
contributions, if made before you
IRA Transfers _________________________________
Tax Information
You may transfer you IRA from one
custodian to another with no Filing Requirements
adverse tax consequences as long Your IRA contributions and
as you don't actually take distributions must be reported on
possession of your IRA assets. your federal income tax return
You'll have to check with both (Form 1040 or 1040A). You (or
the old and the new custodian for your beneficiary after your
specific IRA transfer procedures. death) must also filed Form 5329
if any excise or penalty tax for
If you transfer your IRA to premature distributions or excess
another custodian, our contributions is imposed.
responsibility ends. We will do
an accounting and give the new _________________________________
custodian all your IRA property IRS Approval
held by us. We will also provide
any account records, within The form of this plan has been
reason. Any expenses will be approved by the Internal Revenue
charged to your account. Service. IRS approval does not
mean that the IRS has endorsed
_________________________________ the merits of the investments
Prohibited Transactions allowed under this plan.
As long as you simply make _________________________________
contributions to and withdrawals Reports and Statements
from your IRA, you probably won't
enter into prohibited We'll provide you and the IRS
transactions that would with any reports or statements
jeopardize your account's that IRA custodians are required
favorable tax status. Prohibited to provide.
transactions include:
You must provide us with any
- - using all or part of your IRA information we need to prepare
as collateral for a loan; reports required to file any
income tax form for you.
- - borrowing from the account;
_________________________________
- - assigning, pledging, or Our Responsibilities
transferring this account in any
way; and As custodian of your IRA, we can
invest your money only as you
- - selling property to or buying direct in writing. We give no
property from the account. investment advice. We'll place
your money in any mutual funds
If any portion of your IRA is offered under this plan.
used in a prohibited transaction,
your account loses its tax We will act on any instructions
exemption and will be considered that we believe are genuine and
distributed to you. The value of signed or presented by the proper
your entire account will be people. We are not required to
includable in your gross income investigate any statements made
and will be subject to ordinary in instructions to us.
income tax. If you are under age
59 1/2, you would also be subject We cannot guarantee your balance
to the 10% penalty tax on early against loss or depreciation. In
distributions. We're not particular, growth in the value
required to decide whether or not of your IRA cannot be guaranteed
you have engaged in prohibited or projected, due to the nature
transaction. of this IRA program.
We may resign as custodian of
your IRA by giving you 30 days'
written notice. You may also
close your IRA with us by giving
us 30 days' written notice. Your
IRA balance will be distributed
to the new custodian or trustee
of your choice.
_________________________________
Fees and Charges
Certain fees and charges apply to
this IRA. These fees include a
$5.00 charge for opening the
account and an annual maintenance
fee of $10.00. These fees are
described in more detail on page
7 of the Disclosure Statement.
_________________________________
Change of Address
We'll send any statements or
notice of change in these terms
to the address you have given us.
You should notify us in writing
if you change your address.
__________________________________
__________________________________
__________________________________
__________________________________
Individual Retirement Account
Disclosure Statement
The following information is being pro-
vided to you in accordance with the
requirements of the Internal Revenue Ser-
vice and should be read together with the
Individual Retirement Custodial Account
Agreement (hereinafter referred to as
"IRA") and any prospectuses for the
securities selected by you for the invest-
ment of your contributions to your IRA.
The Employee Retirement Income Secu-
rity Act of 1974 (and the Economic
Recovery Tax Act of 1981 and the Tax
Equity and Fiscal Responsibility Act of
1982) provided an entirely new program
that may enable you to plan for your
retirement with federally tax-deductible
dollars. Individuals eligible to make tax
deductible contributions are those who
have compensation income and are under
age 70 1/2 and certain divorced individuals.
This federal income tax deduction is avail-
able even if you do not other wise itemize
your deductions. In addition, any earnings
on the assets held in your IRA will not be
subject to federal income tax until you
actually begin to receive distributions
from your IRA. The state income tax
treatment of your IRA may differ and
details should be available from your
state taxing authority or your own tax
adviser.
You have the right to revoke your IRA
and receive the entire amount of your
contribution by notifying State Street
Bank and Trust Company, the Custodian
of your IRA, in writing within seven (7)
days of the earlier of the date of purchase
or establishment of your IRA. If you
should decide to revoke your IRA, the
notice should be delivered or mailed to:
State Street Bank and Trust Company
P.O. Box 1723
Boston, MA 02105.
Exhibit 16 under Item N-1A
Exhibit 99 under Item 601/Reg.S-K
SCHEDULE FOR COMPUTATION OF YIELD QUOTATION
This example illustrates the yield quotation for
the seven-day period ended June 30, 1988:
Value of a hypothetical pre-existing account
with exactly one share at the beginning of
the base period ..................$1.000000000
Value of same account (excluding capital
changes) at end of the seven-day base
period* .................................. 1.001234191
Net change in account value................. $0.001234191
Base Period Return:
Net change in account value divided by the
beginning account
value ($0.001234191 / $1.000000000)=....... .001234191
Annualized Current Net Yield
[0.001234191 x (365/7)]............. 6.44%
Compound Effective Yield**
[(0.001234191 - 1 365/7 + 1]........... 6.64%
*This value includes the value of additional shares purchased with
dividends from the original share, and dividends declared on both the
original share and any such additional shares.
**This value may change to include shares purchased with dividends
reinvested on a less frequent basis.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Liberty U.S. Government Money Market Trust
Class A Shares
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Mar-31-1995
<PERIOD-END> Mar-31-1995
<INVESTMENTS-AT-COST> 713,843,859
<INVESTMENTS-AT-VALUE> 713,843,859
<RECEIVABLES> 2,661,714
<ASSETS-OTHER> 722,657
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<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 28,923,432
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 28,922,728
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 353,555,803
<NUMBER-OF-SHARES-REDEEMED> 470,124,864
<SHARES-REINVESTED> 25,918,684
<NET-CHANGE-IN-ASSETS> (90,463,973)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,708,178
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,436,043
<AVERAGE-NET-ASSETS> 754,352,682
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.040
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.040
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<EXPENSE-RATIO> 112
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<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Liberty U.S. Government Money Market Trust
Class B Shares
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Mar-31-1995
<PERIOD-END> Mar-31-1995
<INVESTMENTS-AT-COST> 713,843,859
<INVESTMENTS-AT-VALUE> 713,843,859
<RECEIVABLES> 2,661,714
<ASSETS-OTHER> 722,657
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 717,228,230
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,785,190
<TOTAL-LIABILITIES> 1,785,190
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 715,443,040
<SHARES-COMMON-STOCK> 186,404
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<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 186,404
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 37,359,475
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<EXPENSES-NET> 8,436,043
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<NET-CHANGE-FROM-OPS> 28,923,432
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 704
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 243,763
<NUMBER-OF-SHARES-REDEEMED> 58,119
<SHARES-REINVESTED> 760
<NET-CHANGE-IN-ASSETS> (90,463,973)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
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<GROSS-ADVISORY-FEES> 3,708,178
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<AVERAGE-NET-ASSETS> 754,352,682
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.010
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<PER-SHARE-DIVIDEND> 0.010
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<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 195
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<AVG-DEBT-PER-SHARE> 0.000
</TABLE>