1933 Act File No. 2-72277
1940 Act File No. 811-3181
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. 26 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 X
Amendment No. 20 X
SHORT-TERM MUNICIPAL TRUST
(formerly, Federated Short-Intermediate Municipal 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 August 29, 1994 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange
Commission a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940, and:
X filed the Notice required by that Rule on August 15, 1994;
or
intends to file the Notice required by that Rule on or
about___________________; or
during the most recent fiscal year did not sell any
securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940, and, pursuant to Rule 24f-2(b)(2), need
not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin,
L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS REFERENCE SHEET
This Amendment to the Registration Statement of SHORT-
TERM MUNICIPAL TRUST (formerly, Federated Short-Intermediate
Municipal Trust), which consists of one portfolio: Short-
Term Municipal Trust, which is offered in two separate
classes of shares, Institutional Shares and Institutional
Service Shares, is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross
Reference)
Item 1. Cover Page Cover Page.
Item 2. Synopsis Summary of Fund Expenses.
Item 3. Condensed Financial
Information Financial Highlights;
Performance Information.
Item 4. General Description of
Registrant General Information;
Investment Information;
Investment Objective;
Investment Policies;
Average Maturity;
Municipal Securities;
Investment Risks;
Investment Limitations.
Item 5. Management of the Fund Trust Information;
Management of the Trust;
Distribution of
(Institutional or
Institutional Service)
Shares; Distribution
(Institutional Service
Shares only) and
Shareholder Services
Plans; Administration of
the Fund; Expenses of the
Fund and Institutional
Service Shares.
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;
Other State and Local
Taxes; Other Classes of
Shares.
Item 7. Purchase of Securities Being
Offered Net Asset Value; Investing
in (Institutional or
Institutional Service)
Shares; Share Purchases;
Minimum Investment
Required; What Shares
Cost; Subaccounting
Services; Certificates and
Confirmations.
Item 8. Redemption or Repurchase Redeeming (Institutional
or Institutional Service)
Shares; Telephone
Redemption; Written
Requests; Accounts With
Low Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION.
Item 10. Cover Page Cover Page.
Item 11. Table of Contents Table of Contents.
Item 12. General Information and
History General Information About
the Trust.
Item 13. Investment Objectives and
Policies Investment Objective and
Policies.
Item 14. Management of the Fund Trust Management.
Item 15. Control Persons and Principal
Holders of Securities Not Applicable.
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;
Distribution Plan
(Institutional Service
Shares only) and
Shareholder Services Plan;
Determining Net Asset
Value; Redeeming Shares.
Item 20. Tax Status Tax Status.
Item 21. Underwriters Not applicable.
Item 22. Calculation of Performance
Data Total Return; Yield; Tax-
Equivalent Yield;
Performance Comparisons.
Item 23. Financial Statements Filed in Part A.
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares offered by this prospectus represent
interests in a diversified portfolio of securities of Short-Term
Municipal Trust (the "Trust"). The Trust is an open-end management
investment company (a mutual fund).
The investment objective of the Trust is to provide dividend income
which is exempt from federal regular income tax. The Trust pursues
this investment objective by investing in a portfolio of municipal
securities with a dollar-weighted average maturity of less than three
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 BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
This prospectus contains the information you should read and know
before you invest in Institutional Shares of the Trust. Keep this
prospectus for future reference.
The Trust has also filed a Combined Statement of Additional
Information for Institutional Shares and Institutional Service Shares
dated August 31, 1994, 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 the Trust
at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated August 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SHARES 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Average Maturity 4
Characteristics 4
Participation Interests 4
Variable Rate Municipal Securities 4
When-Issued and Delayed Delivery
Transactions 5
Temporary Investments 5
Municipal Securities 5
Investment Risks 6
Investment Limitations 6
TRUST INFORMATION 6
- --------------------------------------------------
Management of the Trust 6
Board of Trustees 6
Investment Adviser 6
Advisory Fees 7
Adviser's Background 7
Other Payments to Financial
Institutions 7
Distribution of Institutional Shares 8
Administration of the Trust 8
Administrative Services 8
Shareholder Services Plan 8
Custodian 8
Transfer Agent and Dividend
Disbursing Agent 8
Legal Counsel 8
Independent Public Accountants 8
NET ASSET VALUE 9
- --------------------------------------------------
INVESTING IN INSTITUTIONAL SHARES 9
- --------------------------------------------------
Share Purchases 9
By Wire 9
By Mail 9
Minimum Investment Required 9
What Shares Cost 10
Subaccounting Services 10
Certificates and Confirmations 10
Dividends 10
Capital Gains 10
REDEEMING INSTITUTIONAL SHARES 11
- --------------------------------------------------
Telephone Redemption 11
Written Requests 11
Signatures 11
Receiving Payment 12
Accounts with Low Balances 12
SHAREHOLDER INFORMATION 12
- --------------------------------------------------
Voting Rights 12
Massachusetts Partnership Law 12
TAX INFORMATION 13
- --------------------------------------------------
Federal Income Tax 13
Pennsylvania Corporate and Personal
Property Taxes 14
OTHER STATE AND LOCAL TAXES 14
- --------------------------------------------------
PERFORMANCE INFORMATION 14
- --------------------------------------------------
OTHER CLASSES OF SHARES 15
- --------------------------------------------------
Financial Highlights --
Institutional Service Shares 16
FINANCIAL STATEMENTS 17
- --------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 36
- --------------------------------------------------
ADDRESSES Inside Back Cover
- --------------------------------------------------
</TABLE>
I
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
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)........................................................................ None
Redemption Fee (as a percentage of amount redeemed, if applicable)................................ None
Exchange Fee...................................................................................... None
<CAPTION>
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)................................................................. 0.27%
12b-1 Fee......................................................................................... None
Total Other Expenses.............................................................................. 0.20%
Shareholder Services Fee (2)......................................................... 0.00%
Total Institutional Shares Operating Expenses (3)......................................... 0.47%
<FN>
(1) The management fee has been reduced to reflect the waiver of a portion of
the management fee. The adviser can terminate this waiver at any time at
its sole discretion. The maximum management fee is 0.40%.
(2) The maximum Shareholder Services Fee is 0.25%.
(3) The Total Institutional Shares Operating Expenses would have been 0.60%
absent the waiver of a portion of the management fee.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SHARES OF THE
TRUST WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS
OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN INSTITUTIONAL 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 YEARS 10 YEARS
- --------------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of
each time period............................................... $5 $15 $26 $59
</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.
The information set forth in the foregoing table and example relates only to
Institutional Shares of the Trust. The Trust also offers another class of shares
called Institutional Service Shares. Institutional Shares and Institutional
Service Shares are subject to certain of the same expenses; however,
Institutional Service Shares are subject to a 12b-1 fee of up to 0.25%. See
"Other Classes of Shares."
1
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 36.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------------------------------
1994 1993 1992 1991 1990
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.37 $ 10.29 $ 10.18 $ 10.14 $ 10.10
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.40 0.44 0.53 0.60 0.60
- ------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.22) 0.08 0.11 0.04 0.04
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
Total from investment operations 0.18 0.52 0.64 0.64 0.64
- ------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Dividends to shareholders from net investment income (0.40) (0.44) (0.53) (0.60) (0.60)
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 10.15 $ 10.37 $ 10.29 $ 10.18 $ 10.14
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
TOTAL RETURN* 1.76% 5.11% 6.40% 6.47% 6.54%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 0.47% 0.46% 0.46% 0.46% 0.47%
- ------------------------------------------------------------
Net investment income 3.89% 4.21% 5.12% 5.89% 5.94%
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $316,810 $318,932 $205,101 $142,493 $139,113
- ------------------------------------------------------------
Portfolio turnover rate 36% 15% 42% 40% 69%
- ------------------------------------------------------------
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------------------------------
1989 1988 1987 1986 1985
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 10.24 $ 10.31 $ 10.22 $ 10.05
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.57 0.54 0.51 0.60 0.64
- ------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.09) (0.05) (0.07) 0.09 0.17
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
Total from investment operations 0.48 0.49 0.44 0.69 0.81
- ------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Dividends to shareholders from net investment income (0.57) (0.54) (0.51) (0.60) (0.64)
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 10.10 $ 10.19 $ 10.24 $ 10.31 $ 10.22
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
TOTAL RETURN* 4.84% 4.89% 4.37% 7.55% 7.68%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 0.46% 0.47% 0.47% 0.48% 0.47%
- ------------------------------------------------------------
Net investment income 5.59% 5.25% 4.95% 5.80% 6.33%
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $178,978 $315,154 $483,279 $341,294 $192,573
- ------------------------------------------------------------
Portfolio turnover rate 55% 63% 57% 16% 32%
- ------------------------------------------------------------
<FN>
* Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Further information about the Trust's performance is contained in the Trust's
Annual Report for the fiscal year ended June 30, 1994, which can be obtained
free of charge.
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated May 8, 1981. The Declaration of Trust permits the Trust to offer
separate series of shares of beneficial interest 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 (the "Trustees") have established two classes of shares of the Trust,
known as Institutional Shares and Institutional Service Shares. This prospectus
relates only to Institutional Shares ("Shares") of the Trust.
Shares of the Trust are sold primarily to accounts for which financial
institutions act in a fiduciary or agency capacity, or other accounts where the
financial institution maintains master accounts with an aggregate investment of
at least $400 million in certain funds which are advised or distributed by
affiliates of Federated Investors. An investment in the Trust serves as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio of municipal securities. A minimum initial investment of
$25,000 over a 90-day period is required. The Trust may not be a suitable
investment for retirement plans since it invests in municipal securities.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Trust.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Trust is to provide dividend income which is
exempt from federal regular income tax. Interest income of the Trust that is
exempt from federal regular income tax retains its tax-free status when
distributed to the Trust's shareholders. The Trust attempts to achieve its
investment objective by investing at least 80% of its net assets in a
diversified portfolio of municipal securities or by investing its assets so that
at least 80% of its income will be tax-exempt. 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 above investment policy, cannot be changed without approval
of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The municipal securities in which the Trust invests
are:
- debt obligations issued by or on behalf of any state, territory, or
possession of the United States, including the District of Columbia, or
any political subdivision of any of these; and
- participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Trust and/or the investment adviser to the Trust,
exempt from federal regular income tax.
3
AVERAGE MATURITY. The dollar-weighted average maturity of the Trust's portfolio
of municipal securities will be less than three years. For purposes of
determining the dollar-weighted average maturity of the Trust's portfolio, the
maturity of a municipal security will be its ultimate maturity, unless it is
probable that the issuer of the security will take advantage of
maturity-shortening devices such as a call, refunding, or redemption provision,
in which case the maturity date will be the date on which it is probable that
the security will be called, refunded, or redeemed. If the municipal security
includes the right to demand payment, the maturity of the security for purposes
of determining the Trust's dollar-weighted average maturity will be the period
remaining until the principal amount of the security can be recovered by
exercising the right to demand payment.
CHARACTERISTICS. The municipal securities in which the Trust invests are:
- rated within the three highest ratings for municipal securities by Moody's
Investors Service, Inc. ("Moody's") (Aaa, Aa or A) or by Standard & Poor's
Corporation ("Standard & Poor's") (AAA, AA, or A);
- guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
- fully collateralized by an escrow of U.S. government or other securities
acceptable to the Trust's adviser;
- rated at the time of purchase within Moody's highest short-term municipal
obligation rating (MIG1/VMIG1) or Moody's highest municipal commercial
paper rating (P-1) or Standard & Poor's highest municipal commercial paper
rating (SP-1);
- unrated if, at the time of purchase, longer term municipal securities of
the issuer are rated A or better by Moody's or Standard & Poor's; or
- determined by the Trust's investment adviser to be equivalent to municipal
securities which are rated A or better by Moody's or by Standard & Poor's.
Downgraded securities will be evaluated on a case by case basis by the adviser.
The adviser will determine whether or not the security continues to be an
acceptable investment. If not, the security will be sold. The prices of fixed
income securities fluctuate inveresely to the direction of interest rates. A
description of the ratings categories is contained in the Appendix to the
Combined Statement of Additional Information.
PARTICIPATION INTERESTS. The Trust may purchase participation interests from
financial institutions such as commercial banks, savings and loan associations,
and insurance companies. These participation interests give the Trust an
undivided interest in municipal securities. The financial institutions from
which the Trust purchases participation interests frequently provide or secure
irrevocable letters of credit or guarantees to assure that the participation
interests are of high quality. The Trustees will determine that participation
interests meet the prescribed quality standards for the Trust.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the municipal securities which the
Trust purchases may have variable interest rates. Variable interest rates are
ordinarily based on a published interest
4
rate or interest rate index or some similar standard, such as the 91-day U.S.
Treasury bill rate. Variable rate municipal securities will be treated as
maturing on the date of the next scheduled adjustment to the interest rate for
purposes of determining the dollar-weighted average maturity of the portfolio.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase municipal
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 Trust engages in when-issued and delayed
delivery transactions only for the purpose of acquiring portfolio securities
consistent with the Trust's investment objective and policies, not for
investment leverage. In when-issued and delayed delivery transactions, the Trust
relies on the seller to complete the transaction. The seller's failure to
complete the transaction may cause the Trust to miss a price or yield considered
to be advantageous.
TEMPORARY INVESTMENTS. From time to time on a temporary basis, when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Trust may invest in short-term temporary investments
which may or may not be exempt from federal income tax. Temporary investments
include: tax-exempt variable and floating rate demand notes; tax-free commercial
paper; other temporary municipal securities; obligations issued or guaranteed by
the U.S. government, its agencies or instrumentalities; other debt securities;
commercial paper; certificates of deposit of domestic branches of U.S. banks;
and repurchase agreements (arrangements in which the organization selling the
Trust a security agrees at the time of sale to repurchase it at a mutually
agreed upon time and price).
There are no rating requirements applicable to temporary investments with the
exception of temporary municipal securities which are subject to the same rating
requirements as all other municipal securities in which the Trust invests.
However, the investment adviser will limit temporary investments to those it
considers to be of comparable quality to the acceptable investments of the
Trust.
Although the Trust is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax.
MUNICIPAL SECURITIES
Municipal securities are generally issued to finance public works such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities. Municipal securities
include industrial development bonds issued by or on behalf of public
authorities to provide financing aid to acquire sites or construct and equip
facilities for privately or publicly owned corporations. The availability of
this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment. The two principal
classifications of municipal securities are "general obligation" and "revenue"
bonds. General obligation bonds are secured by the issuer's pledge of its full
faith and credit and taxing power for the payment of principal and interest.
Interest on and principal of revenue bonds, however, are payable only from the
revenue generated by the facility financed by the bond or other specified
sources of revenue. Revenue bonds do not represent a pledge
5
of credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on municipal securities depend on a variety of factors, including: the
general conditions of the money market and the taxable and municipal bond
markets; the size of the particular offering; the maturity of the obligations;
and the rating of the issue. The ability of the Trust to achieve its investment
objective also depends on the continuing ability of the issuers of municipal
securities and participation interests, or the guarantors of either, to meet
their obligations for the payment of interest and principal when due.
INVESTMENT LIMITATIONS
The Trust will not:
- invest more than 5% of its total assets in securities of one issuer
(except cash and cash items and U.S. government obligations); or
- 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.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, can be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
The Trust will not:
- commit more than 15% of its net assets to illiquid obligations;
- invest more than 10% of its total assets in municipal securities subject
to restrictions on resale; or
- invest more than 5% of its total assets in industrial development bonds of
issuers that have a record of less than three years of continuous
operations.
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. The 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
Management, the Trust's investment adviser (the "Adviser"), subject to direction
by the Trustees. The Adviser
6
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 Trust's Adviser receives an annual investment advisory
fee equal to .40 of 1% of the Trust's average daily net assets. Under the
investment advisory contract, the Adviser will reimburse the Trust the
amount, limited to the amount of the advisory fee, by which the Trust's
aggregate annual operating expenses, including its investment advisory fee,
but excluding interest, taxes, brokerage commissions, expenses of
registering and qualifying the Trust and its shares under federal and state
laws and regulations, expenses of withholding taxes, and extraordinary
expenses, exceed .45 of 1% of its average daily net assets. This does not
include reimbursement to the Trust of any expenses incurred by shareholders
who use the transfer agent's subaccounting facilities. The Adviser has also
undertaken to reimburse the Trust for operating expenses in excess of
limitations established by certain states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956 as
Federated Investors, Inc., develops and manages mutual funds primarily for
the financial industry. Federated Investors' track record of competitive
performance and its disciplined, risk-averse investment philosophy serve
approximately 3,500 client institutions nationwide. Through these same
client institutions, individual shareholders also have access to this same
level of investment expertise.
Jonathan C. Conley has been the Trust's portfolio manager since January
1984. Mr. Conley joined Federated Investors in 1979 and has been a Vice
President of the Trust's investment adviser since 1982. Mr. Conley is a
Chartered Financial Analyst and received his M.B.A. in Finance from the
University of Virginia.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS.__In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the adviser or its affiliates for the
continuing investment of customers' assets in certain funds, including the
Trust, advised by those entities. These payments will be made directly by the
distributor or adviser from their assets, and will not be made from the assets
of the Trust or by the assessment of a sales charge on Shares.
7
DISTRIBUTION OF INSTITUTIONAL SHARES
Federated Securities Corp. is the principal distributor for Institutional
Shares. It is a Pennsylvania corporation organized on November 14, 1969, and is
the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
ADMINISTRATION OF THE TRUST
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Trust.
Federated Administrative Services provides these at an annual rate which relates
to the average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors ("Federated Funds") as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
-------------------- ------------------------------------
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
SHAREHOLDER SERVICES PLAN. The Trust has adopted a Shareholder Services Plan
(the "Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of Shares to obtain certain personal services for
shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Trust has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
Federated Shareholder Services will either perform shareholder services directly
or will select financial institutions to perform shareholder services. Financial
institutions will receive fees based upon shares owned by their clients or
customers. The schedules of such fees and the basis upon which such fees will be
paid will be determined from time to time by the Trust and Federated Shareholder
Services.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.__Federated Services Company, P.O.
Box 8602, Boston, Massachusetts 02266-8602, is transfer agent for the Shares of
the Trust and dividend disbursing agent for the Trust.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the
Trust are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
8
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust's net asset value per Share fluctuates. The net asset value for Shares
is determined by adding the interest of the Shares in the market value of all
securities and other assets of the Trust, subtracting the interest of the Shares
in the liabilities of the Trust and those attributable to Shares, and dividing
the remainder by the total number of Shares outstanding. The net asset value for
Shares may differ from that of Institutional Service Shares due to the variance
in daily net income realized by each class. Such variance will reflect only
accrued net income to which the shareholders of a particular class are entitled.
INVESTING IN INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve wire system are open for business. Shares may be purchased either by
wire or by mail.
To purchase Shares, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken over the telephone.
The Trust reserves the right to reject any purchase request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Trust before 4:00
p.m. (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m. (Eastern
time) on the next business day following the order. Federal funds should be
wired as follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Short-Term Municipal Trust--Institutional
Shares; Trust Number (this number can be found on the account statement or by
contacting the Trust); Group Number or Wire Order Number; Nominee or Institution
Name; and ABA Number 011000028. Shares cannot be purchased on days on which the
New York Stock Exchange is closed and on federal holidays restricting wire
transfers.
BY MAIL. To purchase Shares by mail, send a check made payable to Short-Term
Municipal Trust-- Institutional Shares to the Trust's transfer agent, Federated
Services Company, c/o State Street Bank and Trust Company, P.O. Box 8602,
Boston, Massachusetts 02266-8602. Orders by mail are considered received after
payment by check is converted by the transfer agent's bank, State Street Bank,
into federal funds. This is normally the next business day after State Street
Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000 plus any non-affiliated bank
or broker's fee, if applicable. However, an account may be opened with a smaller
amount as long as the $25,000 minimum is reached within 90 days. The minimum
investment for an institutional investor will be calculated by combining all
accounts it maintains with the Trust. Accounts established through a non-
affiliated bank or broker may be subject to a smaller minimum investment.
9
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Trust. Investors who purchase
Shares through a non-affiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined at 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; or (iii) the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent may
charge a fee based on the level of subaccounting services rendered. Institutions
holding Shares in a fiduciary, agency, custodial, or similar capacity may charge
or pass through subaccounting fees as part of or in addition to normal trust or
agency account fees. They may also charge fees for other services provided which
may be related to the ownership of Shares. This prospectus should, therefore, be
read together with any agreement between the customer and the institution with
regard to the services provided, the fees charged for those services, and any
restrictions and limitations imposed.
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.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are declared just prior
to determining net asset value. If an order for Shares is placed on the
preceding business day, Shares purchased by wire begin earning dividends on the
business day wire payment is received by State Street Bank. If the order for
Shares and payment by wire are received on the same day, Shares begin earning
dividends on the next business day. Shares purchased by check begin earning
dividends on the business day after the check is converted, upon instruction of
the transfer agent, into federal funds. Dividends are automatically reinvested
in additional Shares unless cash payments are requested by contacting the Trust.
CAPITAL GAINS
Distributions of net realized long-term capital gains realized by the Trust, if
any, will be made at least annually.
10
REDEEMING INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
The Trust redeems Shares at their net asset value next determined after the
Trust receives the redemption request. Redemptions may 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 by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Trust before 4:00 p.m.
(Eastern time). The proceeds will normally be wired the following business day,
but in no event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time
the Trust shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
An authorization form permitting the Trust to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions may
be recorded. If reasonable procedures are not followed by the 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 such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Trust. Call the
Trust for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Trust name and class of shares,
his account number, and the Share or dollar amount requested. If Share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Trust, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution" as defined in the Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
11
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.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem Shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Trust's net asset value.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
Shares are redeemed to close an account, the shareholder is notified in writing
and allowed 30 days to purchase additional Shares to meet the minimum
requirements.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each Share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. 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. As of August 1, 1994, Marion Merrell Dow,
Inc., Kansas City, Missouri, owned 63.64% of the Institutional Service Shares of
the Trust, and therefore, may for certain purposes, be deemed to control the
Class and be able to affect the outcome of certain matters presented for a vote
of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders shall be called for this purpose by the
Trustees upon written request of shareholders owning at least 10% of the
outstanding shares of the Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for such acts or
obligations of the Trust. These documents require notice of this disclaimer to
be given in each agreement, obligation, or instrument that the Trust or its
Trustees enter into or sign on behalf of the Trust.
12
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 from its assets.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to receive the special tax treatment afforded to such
companies.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Trust that represent net interest on tax-exempt
municipal bonds. However, dividends representing net interest earned on some
municipal bonds may be included in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.
The alternative minimum tax, equal to up to 28% of alternative minimum taxable
income for individuals and 20% for corporations, applies when it exceeds the
regular tax for the taxable year. Alternative minimum taxable income is equal to
the regular taxable income of the taxpayer increased by certain "tax preference"
items not included in regular taxable income and reduced by only a portion of
the deductions allowed in the calculation of the regular tax.
Interest on certain "private activity" bonds issued after August 7, 1986, is
treated as a tax preference item for both individuals and corporations. Unlike
traditional governmental purpose municipal bonds, which finance roads, schools,
libraries, prisons and other public facilities, private activity bonds provide
benefits to private parties. The Trust may purchase all types of municipal
bonds, including private activity bonds. Thus, while the Trust has no present
intention of purchasing any private activity bonds, should it purchase any such
bonds, a portion of the Trust's dividends may be treated as a tax preference
item.
In addition, in the case of a corporate shareholder, dividends of the Trust
which represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax treats 75% of
the excess of a taxpayer's pre-tax "adjusted current earnings" over the
taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Trust dividend, and alternative minimum taxable income does not
include the portion of the Trust's dividend attributable to municipal bonds
which are not private activity bonds, the difference will be included in the
calculation of the corporation's alternative minimum tax.
Dividends of the Trust representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
13
These tax consequences apply whether dividends are received in cash or as
additional Shares. Information on the tax status of dividends and distributions
is provided annually.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
- the Trust is not subject to 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.
OTHER STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from income taxes of any state or local
taxing authority. State laws differ on this issue and shareholders are urged to
consult their own tax advisers.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Trust advertises its total return, yield, and
tax-equivalent yield for Institutional Shares.
Total return represents the change, over a specified period of time, in the
value of an investment in Shares of the Trust after reinvesting all income and
capital gain distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.
The yield of Shares of the Trust is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by Shares over a thirty-day period by the net asset value per share of Shares on
the last day of the period. This number is then annualized using semi-annual
compounding. The tax-equivalent yield of Shares is calculated similarly to the
yield, but is adjusted to reflect the taxable yield that Shares would have had
to earn to equal its actual yield, assuming a specific tax rate. The yield and
the tax-equivalent yield do not necessarily reflect income actually earned by
Shares and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
The Trust is sold without any sales load or other similar non-recurring charges.
Total return, yield, and tax-equivalent yield will be calculated separately for
Shares and Institutional Service Shares. Because Institutional Service Shares
are subject to a 12b-1 fee, the total return, yield, and tax-equivalent yield
for Shares, for the same period, may exceed that of Institutional Service
Shares.
From time to time, the Trust may advertise the performance of Shares using
certain financial publications and/or compare the performance of Shares to
certain indices.
14
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Service Shares are sold primarily to retail and private banking
customers of financial institutions. Institutional Service Shares are sold at
net asset value and are subject to a minimum initial investment of $25,000.
Institutional Service Shares are distributed pursuant to a 12b-1 Plan adopted by
the Trust whereby the distributor is paid a fee of up to 0.25 of 1% of the
Institutional Service Shares' average daily net assets.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Trust is sold.
The amount of dividends payable to Shares may exceed that of Institutional
Service Shares by the difference between class expenses and distribution and
shareholder service expenses borne by shares of each respective class.
The stated advisory fee is the same for both classes of shares.
15
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 36.
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30, 1994*
- ---------------------------------------------------------------------- ---------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.35
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.31
- ----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.20)
- ---------------------------------------------------------------------- ---------------
Total from investment operations 0.11
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Dividends to shareholders from net investment income (0.31)
- ---------------------------------------------------------------------- ---------------
NET ASSET VALUE, END OF PERIOD $ 10.15
- ---------------------------------------------------------------------- ---------------
TOTAL RETURN** 1.08%
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 0.72%(a)
- ----------------------------------------------------------------------
Net investment income 3.65%(a)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $31,459
- ----------------------------------------------------------------------
Portfolio turnover rate 36%
- ----------------------------------------------------------------------
<FN>
* Reflects operations for the period from August 31, 1993 (date of initial
public offering) to June 30, 1994.
** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Further information about the Trust's performance is contained in the Trust's
Annual Report for the fiscal year ended June 30, 1994, which can be obtained
free of charge.
16
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
PORTFOLIO OF INVESTMENTS
JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--100.1%
- -------------------------------------------------------------------
ALABAMA--0.3%
-------------------------------------------------------
$1,000,000 Alabama Water Pollution Control Authority, 5.40%
Revenue Bonds (Series 1991)/(Revolving Trust Loan
Program)/ (AMBAC Insured), 8/15/94 AAA $ 1,002,410
------------------------------------------------------- -----------
ARIZONA--1.6%
-------------------------------------------------------
2,000,000 Pima County, AZ, Unified School District #1, 8.00%
School Improvement Bonds (FGIC Insured), 7/1/96 AAA 2,133,020
-------------------------------------------------------
1,000,000 Salt River, AZ, 3.70% Electric System Revenue Bonds
(Agricultural Improvement & Power District), 1/1/96 AA 988,920
-------------------------------------------------------
2,500,000 Salt River, AZ, 4.00% Power Supply Revenue Bonds
(Agricultural Improvement & Power District)/(Original
Issue Yield: 4.05%), 1/1/96 Aa 2,485,950
------------------------------------------------------- -----------
Total 5,607,890
------------------------------------------------------- -----------
CALIFORNIA--11.6%
-------------------------------------------------------
4,000,000 California State, 10.00% UT GO Bonds, 4/1/98 A+ 4,657,440
-------------------------------------------------------
1,250,000 Los Angeles County, CA, Transportation Commission,
4.30% Sales Tax Revenue Bonds (Series 1992A)/(MBIA
Insured), 7/1/95 Aaa 1,256,212
-------------------------------------------------------
16,000,000 Los Angeles, CA, Waste Water System, 6.70% Revenue
Bonds (Series D)/(MBIA Insured)/(Original Issue Yield:
6.769%)/(Prerefunded), 12/1/2000 (@102) AAA 17,682,080
-------------------------------------------------------
1,250,000 Orange County, CA, Local Transportation Authority,
4.15% Sales Tax Revenue Bonds, 2/15/95 Aa 1,255,700
-------------------------------------------------------
8,000,000 Southern California Public Power Authority, 11.25%
Transmission Project Revenue Bonds (Prerefunded),
1/1/95 (@103) Aaa 8,548,080
-------------------------------------------------------
</TABLE>
17
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
CALIFORNIA--CONTINUED
-------------------------------------------------------
$3,045,000 University of California, 8.00% Refunding Revenue Bonds
(UCLA Medical Center)/(MBIA Insured), 12/1/97 AAA $ 3,343,714
-------------------------------------------------------
3,310,000 University of California, 8.00% Refunding Revenue Bonds
(UCLA Medical Center)/(MBIA Insured), 12/1/98 AAA 3,700,580
------------------------------------------------------- -----------
Total 40,443,806
------------------------------------------------------- -----------
COLORADO--1.9%
-------------------------------------------------------
1,535,000 City & County of Denver Airport, 10.50% Revenue Bonds
(Stapleton International Airport)/(Prerefunded),
12/1/94 (@100) Aaa 1,581,127
-------------------------------------------------------
2,995,000 Denver (City & County), CO, 7.625% GO Bonds (Series
1992C), 8/1/95 Aa 3,112,344
-------------------------------------------------------
1,900,000 Mesa County, CO, School District #51, 4.90% GO
Refunding Bonds (Series 1991B)/(AMBAC Insured), 12/1/94 Aaa 1,914,820
------------------------------------------------------- -----------
Total 6,608,291
------------------------------------------------------- -----------
DELAWARE--0.6%
-------------------------------------------------------
2,000,000 Delaware, 6.80% UT GO Bonds, 5/1/95 Aa 2,053,120
------------------------------------------------------- -----------
DISTRICT OF COLUMBIA--0.6%
-------------------------------------------------------
1,000,000 District Columbia, 8.00% UT GO Bonds (Prerefunded),
6/1/96 (@102) AAA 1,084,680
-------------------------------------------------------
1,000,000 District of Columbia, 5.50% GO Bonds (FGIC Insured),
6/1/95 Aaa 1,011,110
------------------------------------------------------- -----------
Total 2,095,790
------------------------------------------------------- -----------
FLORIDA--1.2%
-------------------------------------------------------
1,500,000 Florida State Board of Education, 7.80% UT GO Capital
Outlay Bonds (Prerefunded), 6/1/96 (@102) AAA 1,621,560
-------------------------------------------------------
1,390,000 Miami Beach, FL, Health Facilities Authority, 4.45%
Hospital Revenue Reference Bonds (Mount Sinai Medical
Center)/(Capital Guaranty Insured), 11/15/95 AAA 1,403,789
-------------------------------------------------------
</TABLE>
18
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
FLORIDA--CONTINUED
-------------------------------------------------------
$1,000,000 Orlando, FL, Utilities Commission, 7.75% Water &
Electric Revenue Bonds, 10/1/94 Aa $ 1,011,480
------------------------------------------------------- -----------
Total 4,036,829
------------------------------------------------------- -----------
GEORGIA--0.5%
-------------------------------------------------------
1,820,000 Gwinnett County, GA, School District, 4.90% GO School
Bonds (Series A), 2/1/95 Aa 1,834,487
------------------------------------------------------- -----------
HAWAII--3.3%
-------------------------------------------------------
5,000,000 Hawaii State, 7.10% GO Bonds (Prerefunded), 6/1/98
(@101-1/2) Aaa 5,434,750
-------------------------------------------------------
6,000,000 Honolulu, City & County, HI, 4.20% OID UT GO Bonds
(Original Issue Yield: 4.30%), 10/1/97 AA 5,918,940
------------------------------------------------------- -----------
Total 11,353,690
------------------------------------------------------- -----------
ILLINOIS--4.7%
-------------------------------------------------------
1,750,000 Du Page, IL, Water Commission, 5.90% Refunding Revenue
Bonds, 5/1/96 AA- 1,791,965
-------------------------------------------------------
2,000,000 Illinois State Toll Highway Authority, 7.375% Revenue
Bonds (Prerefunded), 1/1/96 (@102) AAA 2,127,900
-------------------------------------------------------
5,500,000 Illinois State Toll Highway Road Authority, 7.10%
Revenue Bonds (Prerefunded), 1/1/96 (@102) A- 5,830,770
-------------------------------------------------------
6,500,000 Illinois State, 4.50% GO Bonds (Series 1993), 8/1/96 AA 6,498,440
------------------------------------------------------- -----------
Total 16,249,075
------------------------------------------------------- -----------
IOWA--0.6%
-------------------------------------------------------
1,095,000 Sioux City, IA, 4.15% Hospital Revenue Refunding Bonds
(Series 1993O)/(Sisters of Mercy Health Corp.), 8/15/96 A- 1,080,294
-------------------------------------------------------
1,140,000 Sioux City, IA, 4.15% Hospital Revenue Refunding Bonds
(Sisters of Mercy Health Corp.), 8/15/97 A 1,119,651
------------------------------------------------------- -----------
Total 2,199,945
------------------------------------------------------- -----------
</TABLE>
19
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
KENTUCKY--0.3%
-------------------------------------------------------
$1,000,000 Kentucky State Turnpike Authority, 7.875%
(Prerefunded), 7/1/96 (@102) AAA $ 1,084,650
------------------------------------------------------- -----------
MAINE--0.5%
-------------------------------------------------------
1,805,000 Maine, 7.875% Full Faith and Credit Bonds (Highway
Purpose), 7/1/94 Aa1 1,805,000
------------------------------------------------------- -----------
MARYLAND--1.8%
-------------------------------------------------------
1,500,000 Charles County, MD, 7.00% UT GO Refunding and Public
Improvement Bonds (AMBAC Insured), 1/15/95 Aaa 1,528,695
-------------------------------------------------------
2,055,000 University of Maryland System Auxiliary, 4.75% Facility
& Tuition Revenue Bonds (Series A), 2/1/95 Aa 2,069,714
-------------------------------------------------------
2,650,000 Washington, MD, Suburban Sanitary District, 7.20% UT GO
Bonds, 6/1/95 Aa1 2,728,705
------------------------------------------------------- -----------
Total 6,327,114
------------------------------------------------------- -----------
MASSACHUSETTS--1.4%
-------------------------------------------------------
4,500,000 Massachusetts State, 7.25% UT GO Bonds, 6/1/96 A 4,746,060
------------------------------------------------------- -----------
MICHIGAN--3.3%
-------------------------------------------------------
5,000,000 Detroit, MI, City School District, 5.30% Refunding
Bonds (Q-SBLF Guaranty), 5/1/99 AA- 5,025,000
-------------------------------------------------------
2,120,000 Michigan State Hospital Finance Authority, 4.00%
Hospital Revenue Refunding Bonds (Series
1993P)/(Sisters of Mercy Health Corp.), 8/15/96 A- 2,084,342
-------------------------------------------------------
4,345,000 Michigan State Hospital Finance Authority, 4.00%
Revenue Refunding Bonds (Series 1993P)/(Sisters of
Mercy Health Corp.) (MBIA Insured), 8/15/97 Aaa 4,235,810
------------------------------------------------------- -----------
Total 11,345,152
------------------------------------------------------- -----------
MINNESOTA--3.1%
-------------------------------------------------------
2,000,000 Southern Minnesota Municipal Power Agency, 9.125% Power
Supply Revenue Bonds (Prerefunded), 1/1/96 (@102) Aaa 2,178,340
-------------------------------------------------------
</TABLE>
20
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$1,915,000 Washington County, MN, Housing Redevelopment Authority,
3.85% Refunding Revenue Bonds, 2/1/96 AA- $ 1,892,920
-------------------------------------------------------
3,410,000 Western Minnesota Municipal Power Agency, 7.00% Revenue
Bonds (Series A)/(Original Issue Yield: 7.062%),
1/1/2013, Callable 1/1/97 (@102) A- 3,597,448
-------------------------------------------------------
3,000,000 Western Minnesota Municipal Power Agency, 9.50% Power
Supply Revenue Bonds (Prerefunded), 1/1/96 (@102) Aaa 3,283,740
------------------------------------------------------- -----------
Total 10,952,448
------------------------------------------------------- -----------
MISSOURI--1.7%
-------------------------------------------------------
2,310,000 Kansas City, MO, 5.65% Sewer Revenue Bonds, 3/1/95 Aa 2,341,069
-------------------------------------------------------
1,580,000 Kansas City, MO, School District, 5.70% Missouri
Building Corp. Refunding Leasehold Revenue Bonds
(Series 1991A)/ (FGIC Insured), 2/1/95 Aaa 1,598,454
-------------------------------------------------------
2,000,000 Missouri State HEFA, 4.10% Revenue Bonds (Series
1992B)/ (Health Midwest)/(MBIA Insured), 2/15/95 Aaa 2,002,980
------------------------------------------------------- -----------
Total 5,942,503
------------------------------------------------------- -----------
NEBRASKA--1.0%
-------------------------------------------------------
1,250,000 Omaha, NE, 3.80% Electric System Revenue Bonds (Series
B)/(Public Power District), 2/1/96 Aa 1,238,025
-------------------------------------------------------
1,400,000 Omaha, NE, 3.90% Electric System Revenue Bonds (Series
A)/(Public Power District), 2/1/96 Aa 1,389,332
-------------------------------------------------------
1,000,000 Omaha, NE, 4.70% Electric System Revenue Bonds (Series
A)/(Public Power District), 2/1/95 Aa 1,009,870
------------------------------------------------------- -----------
Total 3,637,227
------------------------------------------------------- -----------
NEVADA--0.6%
-------------------------------------------------------
2,000,000 Clark County, NV, School District, 7.10% LT GO Bonds
(Series A), 3/1/97 A+ 2,111,720
------------------------------------------------------- -----------
</TABLE>
21
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
NEW HAMPSHIRE--1.0%
-------------------------------------------------------
$3,310,000 New Hampshire, 4.20% Capital Improvement Refunding GO
Bonds (Series 1992), 9/1/95 Aa $ 3,330,886
------------------------------------------------------- -----------
NEW JERSEY--2.4%
-------------------------------------------------------
8,000,000 New Jersey State, 6.50% Refunding GO Bonds (Series C),
1/15/2002 AA+ 8,443,280
------------------------------------------------------- -----------
NEW MEXICO--7.7%
-------------------------------------------------------
2,250,000 Albuquerque, NM, 4.00% Joint Water and Sewer System
Refunding and Improvement Revenue Bonds (Series
1994A)/(Original Issue Yield: 4.10%), 7/1/99 AA 2,121,030
-------------------------------------------------------
5,375,000 Albuquerque, NM, 4.10% Joint Water and Sewer System
Refunding and Improvement Revenue Bonds (Series
1994A)/(Original Issue Yield: 4.25%), 7/1/2000 AA 4,999,879
-------------------------------------------------------
8,650,000 Albuquerque, NM, 4.60% UT GO Bonds (Series A), 7/1/98 AA 8,569,036
-------------------------------------------------------
4,000,000 Albuquerque, NM, 5.20% General Purpose GO Bonds (Series
1992A), 7/1/94 AA 4,000,000
-------------------------------------------------------
2,865,000 Bernalillo County, NM, 6.25% GO Special Tax Bonds,
8/1/95 Aa 2,938,545
-------------------------------------------------------
4,250,000 New Mexico, 5.00% Severance Tax Refunding Bonds (Series
1991A), 7/1/94 AA 4,250,000
------------------------------------------------------- -----------
Total 26,878,490
------------------------------------------------------- -----------
NEW YORK--8.4%
-------------------------------------------------------
4,600,000 New York City, NY, 10.25% GO Bonds (Series C)/
(Prerefunded), 3/15/96 (@103) Aaa 4,954,292
-------------------------------------------------------
4,735,000 New York City, NY, Municipal Water Finance Authority,
6.50% Water & Sewer System Revenue Bonds (Series C),
6/15/97 A- 4,781,261
-------------------------------------------------------
680,000 New York City, NY, Municipal Water Finance Authority,
6.50% Water & Sewer System Revenue Bonds (Series C)/
(Prerefunded), 6/15/97 A 722,310
-------------------------------------------------------
</TABLE>
22
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
NEW YORK--CONTINUED
-------------------------------------------------------
$5,000,000 New York City, NY, Municipal Water Finance Authority,
7.20% Water and Sewer System Revenue Bonds (Series A),
6/15/99 A- $ 5,484,500
-------------------------------------------------------
3,500,000 New York State Thruway Authority, 3.80% Emergency
Highway Construction & Reconstruction Bonds (FGIC
Insured), 3/1/96 AAA 3,469,690
-------------------------------------------------------
9,540,000 New York State, 5.75% UT GO Bonds, 9/15/99 A- 9,850,432
------------------------------------------------------- -----------
Total 29,262,485
------------------------------------------------------- -----------
NORTH CAROLINA--3.1%
-------------------------------------------------------
1,500,000 Charlotte-Mecklenberg, NC, Hospital Authority, 4.65%
Health Care System Revenue Bonds, 1/1/95 Aa 1,502,865
-------------------------------------------------------
6,000,000 Mecklenberg County, NC, 5.00% UT GO Refunding Bonds
(Series 1992), 3/1/95 Aaa 6,061,080
-------------------------------------------------------
3,000,000 North Carolina Eastern Municipal Power Authority,
10.00% Revenue Bonds (Prerefunded), 1/1/95 (@103) Aaa 3,186,180
------------------------------------------------------- -----------
Total 10,750,125
------------------------------------------------------- -----------
OHIO--3.0%
-------------------------------------------------------
3,300,000 Columbus, OH, 7.70% UT GO Bonds (Prerefunded), 5/1/96
(@102) AAA 3,556,872
-------------------------------------------------------
4,000,000 Ohio State Public Facilities Authority, 4.25% Higher
Education Capital Facilities Revenue Bonds (Series
11-A)/ (AMBAC Insured), 12/1/97 AAA 3,931,240
-------------------------------------------------------
2,815,000 Ohio State, Water Development Authority, PCA, 7.25%
Revenue Bonds (Phillip Morris), Callable 12/1/97 (@103) A 3,026,181
------------------------------------------------------- -----------
Total 10,514,293
------------------------------------------------------- -----------
OREGON--1.2%
-------------------------------------------------------
2,000,000 Oregon State Department of Transportation, 5.375%
Regional Light Rail Extension Revenue Bonds (Series
1994)/(MBIA Insured), 6/1/99 AAA 2,029,640
-------------------------------------------------------
</TABLE>
23
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
OREGON--CONTINUED
-------------------------------------------------------
$2,000,000 Oregon State Department of Transportation, 5.50%
Regional Light Rail Extension Revenue Bonds (MBIA
Insured), 6/1/2000 AAA $ 2,037,780
------------------------------------------------------- -----------
Total 4,067,420
------------------------------------------------------- -----------
PENNSYLVANIA--7.8%
-------------------------------------------------------
5,840,000 Commonwealth of Pennsylvania, 3.80% GO Bonds, 4/15/96 AA- 5,776,986
-------------------------------------------------------
8,000,000 Commonwealth of Pennsylvania, 4.75% GO Bonds, 6/15/98 AA- 7,974,160
-------------------------------------------------------
1,155,000 Dauphin County, PA, General Authority, 4.35% Revenue
Bonds (Series A)/(West Penn Hospital)/(MBIA Insured),
7/1/95 Aaa 1,160,059
-------------------------------------------------------
1,175,000 Dauphin County, PA, General Authority, 4.35% Revenue
Bonds (Series B)/(West Penn Hospital)/(MBIA Insured),
7/1/95 Aaa 1,180,146
-------------------------------------------------------
7,000,000 Pennsylvania Intergovernmental Cooperation Authority,
5.75% Special Tax Revenue Bonds (City of Philadelphia)/
(FGIC Insured)/(Original Issue Yield: 5.85%), 6/15/99 AAA 7,224,700
-------------------------------------------------------
3,690,000 Pittsburgh, PA, 4.10% GO Bonds (AMBAC Insured), 9/1/95 Aaa 3,700,258
------------------------------------------------------- -----------
Total 27,016,309
------------------------------------------------------- -----------
SOUTH CAROLINA--3.4%
-------------------------------------------------------
5,500,000 Piedmont Municipal Electric Agency, SC, 10.25% Power
Supply Revenue Bonds (Prerefunded), 1/1/95 (@102) Aaa 5,848,150
-------------------------------------------------------
2,000,000 Piedmont Municipal Power Agency, SC, 7.00% Refunding
Revenue Bonds (Series A)/(AMBAC Insured), 1/1/2019,
Callable 1/1/98 AAA 2,110,000
-------------------------------------------------------
2,300,000 South Carolina, 7.00% UT GO Capital Improvement Bonds,
3/1/95 Aaa 2,353,268
-------------------------------------------------------
</TABLE>
24
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
SOUTH CAROLINA--CONTINUED
-------------------------------------------------------
$1,500,000 South Carolina, 7.60% GO Bonds (Series U), 2/1/95 Aaa $ 1,535,565
------------------------------------------------------- -----------
Total 11,846,983
------------------------------------------------------- -----------
TENNESSEE--1.2%
-------------------------------------------------------
1,000,000 Nashville & Davidson, TN, Metropolitan Government,
9.375% Revenue Bonds (Prerefunded), 1/1/95 (@102) Aaa 1,049,190
-------------------------------------------------------
3,000,000 Tennessee, 6.75% GO Bonds (Series 1992A), 7/1/95 AA+ 3,087,750
------------------------------------------------------- -----------
Total 4,136,940
------------------------------------------------------- -----------
TEXAS--5.5%
-------------------------------------------------------
1,000,000 Arlington, TX, 6.70% Waterworks & Sewer Refunding
Revenue Bonds (Series A)/(AMBAC Insured), 6/1/96 AAA 1,038,480
-------------------------------------------------------
1,290,000 Houston, TX, ISD, 4.00% LT GO School House Bonds,
8/15/95 Aaa 1,292,477
-------------------------------------------------------
7,000,000 Northside, TX, ISD, 4.10% UT GO Bonds, 2/1/96 Aaa 6,970,530
-------------------------------------------------------
5,000,000 San Antonio, TX, Electric & Gas System, 4.00% Revenue
Bonds, 2/1/95 Aa 5,014,250
-------------------------------------------------------
2,425,000 Texas State Public Property Finance Corp., 4.30%
Refunding Revenue Bonds (Series 1993)/(Mental Health
and Mental Retardation Center), 9/1/97 AAA 2,395,197
-------------------------------------------------------
2,500,000 Texas Water Development Board, 4.35% Senior Lien
Revenue Bonds (Series 1992), 7/15/95 AA 2,508,025
------------------------------------------------------- -----------
Total 19,218,959
------------------------------------------------------- -----------
UTAH--3.4%
-------------------------------------------------------
8,000,000 Granite City School District, UT, Board of Education,
4.00% GO Refunding Bonds (Series 1992), 6/1/95 Aa 8,011,200
-------------------------------------------------------
1,800,000 Intermountain Power Agency, UT, 3.70% Power Supply
Revenue Bonds (Series 1993C), 7/1/96 AA 1,771,686
-------------------------------------------------------
</TABLE>
25
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
UTAH--CONTINUED
-------------------------------------------------------
$2,000,000 Intermountain Power Agency, UT, 8.75% Power Supply
Revenue Bonds (Prerefunded), 7/1/95 (@102) Aaa $ 2,135,020
------------------------------------------------------- -----------
Total 11,917,906
------------------------------------------------------- -----------
VERMONT--0.7%
-------------------------------------------------------
2,500,000 Vermont, 7.50% GO Bonds (Series A), 2/1/95 Aa 2,557,400
------------------------------------------------------- -----------
VIRGINIA--2.2%
-------------------------------------------------------
7,500,000 Fairfax County, VA, 8.25% Public Improvement Bonds
(Series 1992A), 4/1/95 Aaa 7,764,000
------------------------------------------------------- -----------
WASHINGTON--6.0%
-------------------------------------------------------
1,445,000 Seattle, WA, 4.75% Various Purpose LT GO Bonds, 3/1/95 Aa1 1,456,011
-------------------------------------------------------
4,865,000 Seattle, WA, 9.70% Municipal Light and Power Revenue
Bonds (Prerefunded), 9/1/95 (@102) Aaa 5,268,163
-------------------------------------------------------
3,000,000 Washington State, 5.00% Various Purpose GO Bonds
(Series 1994B), 5/1/98 AA 3,017,460
-------------------------------------------------------
7,425,000 Washington State, 5.00% Various Purpose GO Bonds
(Series 1994B), 5/1/99 AA 7,414,976
-------------------------------------------------------
1,000,000 Washington, 6.90% UT GO Bonds, 6/1/95 Aa 1,027,250
-------------------------------------------------------
1,500,000 Washington, 4.50% Various Purpose GO Refunding Bonds
(Series 1992A), 2/1/95 (@106) Aa 1,508,580
-------------------------------------------------------
1,000,000 Washington, 6.80% Various Purpose GO Bonds, 4/1/95 Aa 1,023,290
------------------------------------------------------- -----------
Total 20,715,730
------------------------------------------------------- -----------
WISCONSIN--2.5%
-------------------------------------------------------
2,535,000 Milwaukee, WI, 8.80% UT GO Metropolitan Sewer District
Bonds, 5/1/95 Aa 2,639,594
-------------------------------------------------------
1,970,000 Milwaukee, WI, 6.00% UT GO Public Improvement Bonds
(Series CA), 6/15/95 Aa 2,007,371
-------------------------------------------------------
3,000,000 Wisconsin State, 6.40% GO Bonds (Series A), 5/1/99 AA 3,170,580
-------------------------------------------------------
</TABLE>
26
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
WISCONSIN--CONTINUED
-------------------------------------------------------
$1,000,000 Wisconsin, 6.40% UT GO Bonds (Series A), 5/1/95 Aa $ 1,022,790
------------------------------------------------------- -----------
Total 8,840,335
------------------------------------------------------- -----------
TOTAL SHORT-INTERMEDIATE MUNICIPAL SECURITIES
(IDENTIFIED COST $351,869,499) 348,698,748
------------------------------------------------------- -----------
SHORT-TERM MUNICIPAL SECURITIES--0.9%
- -------------------------------------------------------------------
PUERTO RICO--0.3%
-------------------------------------------------------
1,050,000 Government Development Bank of Puerto Rico Weekly VRDNs
(Credit Suisse and Sumitomo Bank Ltd. LOCS) A-1+ 1,050,000
------------------------------------------------------- -----------
TENNESSEE--0.6%
-------------------------------------------------------
2,000,000 Chattanooga-Hamilton County, TN, Hospital Authority
Daily VRDNs (Erlanger Medical Center Guaranty) A-1+ 2,000,000
------------------------------------------------------- -----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES (AT AMORTIZED
COST) 3,050,000
------------------------------------------------------- -----------
TOTAL MUNICIPAL SECURITIES (IDENTIFIED COST
$354,919,499) (NOTE 2A) $351,748,748+
------------------------------------------------------- -----------
<FN>
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
+ The cost of investments for federal tax purposes amounts to $354,919,499.
The net unrealized depreciation of investments on a federal tax cost basis
amounts to $3,170,751, which is comprised of $841,220 appreciation and
$4,011,971 depreciation at June 30, 1994.
Note: The categories of investments is shown as a percentage of net assets
($348,269,731) at June 30, 1994.
</TABLE>
27
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<S> <C>
The following abbreviations are used in this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
FGIC --Financial Guaranty Insurance Company
GO --General Obligation
HEFA --Health and Education Facilities Authority
ISD --Independent School District
LOCS --Letters of Credit
LT --Limited Tax
MBIA --Municipal Bond Investors Assurance
OID --Original Issue Discount
PCA --Pollution Control Authority
Q-SBLF --Qualified State Bond Loan Trust
UT --Utah/Unlimited Tax
VA --Virginia/Veterans Administration
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
28
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A) (identified and tax cost
$354,919,499) $351,748,748
- --------------------------------------------------------------------------------
Cash 254,481
- --------------------------------------------------------------------------------
Interest receivable 6,191,253
- --------------------------------------------------------------------------------
Receivable for Trust shares sold 154,981
- -------------------------------------------------------------------------------- ------------
Total assets 358,349,463
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
Payable for investments purchased $8,025,289
- ----------------------------------------------------------------------
Payable for Trust shares redeemed 1,165,592
- ----------------------------------------------------------------------
Dividends payable (Note 2B) 833,068
- ----------------------------------------------------------------------
Accrued expenses 55,783
- ---------------------------------------------------------------------- ----------
</TABLE>
<TABLE>
<S> <C>
Total liabilities 10,079,732
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 34,316,807 shares of beneficial interest outstanding $348,269,731
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF: (NOTE 2E)
- --------------------------------------------------------------------------------
Paid-in-Capital $358,299,966
- --------------------------------------------------------------------------------
Unrealized depreciation of investments (3,170,751)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (6,859,484)
- -------------------------------------------------------------------------------- ------------
Total Net Assets $348,269,731
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
- --------------------------------------------------------------------------------
Institutional Shares (net assets of $316,810,333 DIVIDED BY 31,216,957 shares of
beneficial interest outstanding) $ 10.15
- -------------------------------------------------------------------------------- ------------
Institutional Service Shares (net assets of $31,459,398 DIVIDED BY 3,099,850
shares of beneficial interest outstanding) $ 10.15
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
29
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest income (Note 2B) $15,437,877
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $1,414,365
- -----------------------------------------------------------------------
Trustees' Fees 12,409
- -----------------------------------------------------------------------
Administrative personnel and services fees (Note 4) 346,714
- -----------------------------------------------------------------------
Custodian and portfolio accounting fees 164,292
- -----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 26,023
- -----------------------------------------------------------------------
Shareholder services fee (Note 4) 27,051
- -----------------------------------------------------------------------
Trust share registration fees 78,919
- -----------------------------------------------------------------------
Distribution services fee (Note 4) 38,361
- -----------------------------------------------------------------------
Auditing fees 17,863
- -----------------------------------------------------------------------
Legal fees 15,239
- -----------------------------------------------------------------------
Printing and postage 31,383
- -----------------------------------------------------------------------
Insurance premiums 9,889
- -----------------------------------------------------------------------
Taxes 2,473
- -----------------------------------------------------------------------
Miscellaneous 5,059
- ----------------------------------------------------------------------- ----------
Total expenses 2,190,040
- -----------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $452,665
- ------------------------------------------------------------
Waiver of distribution services fee (Note 4) 27,051 479,716
- ------------------------------------------------------------ -------- ----------
Net expenses 1,710,324
- ------------------------------------------------------------------------------------- -----------
Net investment income 13,727,553
- ------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions (identified cost basis) (253,551)
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (7,720,690)
- ------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (7,974,241)
- ------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 5,753,312
- ------------------------------------------------------------------------------------- -----------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
30
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------
1994 1993
- --------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
<CAPTION>
OPERATIONS--
- ---------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 13,727,553 $ 10,622,845
- ---------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($0 and $62,121 net
loss, respectively, as computed for federal income tax purposes) (Note 2C) (253,551) 19,108
- ---------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments (7,720,690) 1,638,701
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets resulting from operations 5,753,312 12,280,654
- ---------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- ---------------------------------------------------------------------------
Dividends to shareholders from net investment income
- ---------------------------------------------------------------------------
Institutional Shares (13,167,119) (10,622,845)
- ---------------------------------------------------------------------------
Institutional Service Shares (560,434) --
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets from distributions to shareholders (13,727,553) (10,622,845)
- --------------------------------------------------------------------------- ------------- -------------
TRUST SHARE (PRINCIPAL) TRANSACTION (NOTE 3)--
- ---------------------------------------------------------------------------
Proceeds from sale of shares 259,790,293 238,425,313
- ---------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends
declared 3,549,886 1,899,201
- ---------------------------------------------------------------------------
Cost of shares redeemed (226,027,733) (128,151,579)
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets resulting from Trust share transactions 37,312,446 112,172,935
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets 29,338,205 113,830,744
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period 318,931,526 205,100,782
- --------------------------------------------------------------------------- ------------- -------------
End of period $ 348,269,731 $ 318,931,526
- --------------------------------------------------------------------------- ------------- -------------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
31
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Short-Term Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, no load, open-end
management investment company.
The Trust provides two classes of shares, Institutional Shares and Institutional
Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its tax-exempt income.
Accordingly, no provisions for federal tax are necessary. At June 30, 1994,
the Trust, for federal tax purposes, had a capital loss carryforward of
$6,605,611, which will reduce the Trust's taxable income arising from future
net realized gain on investments, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distributions to shareholders
which would otherwise be necessary to relieve the Trust of any liability for
federal tax. Pursuant to the Code, such capital loss carryforward will
expire in 1995 ($1,449,467), 1996 ($2,255,334), 1997 ($1,097,445), 1998
($1,729,378), 1999 ($11,866) and 2001 ($62,121). Additionally, net capital
losses of $253,551 attributable to security transactions incurred after
October 31, 1993 are treated as arising on July 1, 1994, the first day of
the Trust's next taxable year.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment
32
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest
on the settlement date.
E. RECLASSIFICATION--During the year ended June 30, 1994, the Trust adopted
Statement of Position 93-2, DETERMINATION, DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES. Accordingly, permanent book and tax
differences have been reclassified to paid-in-capital. The Trust
reclassified $417,890 from accumulated net realized loss to paid-in-capital
in accordance with SOP 93-2. Net investment income, net realized gains, and
net assets were not affected by this change.
F. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------------------------------------
1994 1993
----------------------------- -----------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold 20,791,128 $ 215,505,746 23,007,231 $ 238,425,313
- --------------------------------------------------
Shares issued to shareholders in payment of
dividends declared 292,960 3,013,260 183,329 1,899,201
- --------------------------------------------------
Shares redeemed (20,620,412) (213,148,873) (12,367,267) (128,151,579)
- -------------------------------------------------- ------------ -------------- ------------ --------------
Net change resulting from Institutional Share
transactions 463,676 $ 5,370,133 10,823,293 $ 112,172,935
- -------------------------------------------------- ------------ -------------- ------------ --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1994*
--------------------------
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS
- -------------------------------------------------- ----------- ------------
<S> <C> <C>
Shares sold 4,299,696 $ 44,284,547
- --------------------------------------------------
Shares issued to shareholders in payment of
dividends declared 52,512 536,626
- --------------------------------------------------
Shares redeemed (1,252,358) (12,878,860)
- -------------------------------------------------- ----------- ------------
Net change resulting from Institutional Service
Share transactions 3,099,850 31,942,313
- -------------------------------------------------- ----------- ------------
Total net change resulting from Trust Share
transactions 3,563,526 $ 37,312,446
- -------------------------------------------------- ----------- ------------
<FN>
* For the period from August 31, 1993 (date of initial public offering) to June
30, 1994.
</TABLE>
33
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Management, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40 of 1% of the Trust's average daily net assets. The Adviser will waive, to
the extent of its advisory fee, the amount, if any, by which the Trust's
aggregate annual operating expenses (excluding interest, taxes, brokerage
commissions, expenses of registering and qualifying the Trust and its shares
under federal and state laws and regulations, expenses of withholding taxes, and
extraordinary expenses) exceeded .45 of 1% of average daily net assets of the
Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the FAS fee is based
on the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
DISTRIBUTION AND SHAREHOLDER SERVICES FEE--The Trust has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the
Plan, the Trust will compensate Federated Securities Corp. ("FSC"), the
principal distributor, from the net assets of the Trust to finance activities
intended to result in the sale of the Trust's Institutional Service Shares. The
Plan provides that the Trust may incur distribution expenses up to .25 of 1% of
the average daily net assets of the Institutional Shares, annually, to
compensate FSC.
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services ("FSS"), the Trust will pay FSS up to .25 of 1% of average net assets
for the Trust for the period. This fee is to obtain certain personal services
for shareholders and the maintenance of shareholder accounts. For the period
ended June 30, 1994, Institutional Service Shares did not incur a shareholder
services fee.
INTERFUND TRANSACTIONS--During the year ended June 30, 1994, the Trust engaged
in purchase and sale transactions with other affiliated funds pursuant to Rule
17a-7 amounting to $119,950,000 and $114,596,919, respectively. These purchases
and sales were conducted on an arms length basis and transacted for cash
consideration only, at independent current market prices and without brokerage
commissions, fees or other remuneration.
Certain Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
34
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended June 30, 1994, were as follows:
<TABLE>
<S> <C>
PURCHASES $181,622,840
- -------------------------------------------------- ------------
SALES $125,798,481
- -------------------------------------------------- ------------
</TABLE>
35
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------
To the Shareholders and Board of Trustees of
SHORT-TERM MUNICIPAL TRUST:
We have audited the accompanying statement of assets and liabilities of
Short-Term Municipal Trust (a Massachusetts business trust), including the
schedule of portfolio of investments as of June 30, 1994 and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights (see pages 2 and 16 of the prospectus) for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1994, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Short-Term Municipal Trust as of June 30, 1994, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the periods
presented in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania
August 1, 1994
36
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Short-Term Municipal Trust Federated Investors Tower
Institutional Shares Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- -------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM
MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-
INTERMEDIATE MUNICIPAL TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
A NO-LOAD, OPEN-END, DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY
AUGUST 31, 1994
[LOGO]
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
[LOGO]
RECYCLED
PAPER
825253107
8072507A-IS (8/94)
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares offered by this prospectus represent
interests in a diversified portfolio of securities of Short-Term
Municipal Trust (the "Trust"). The Trust is an open-end management
investment company (a mutual fund).
The investment objective of the Trust is to provide dividend income
which is exempt from federal regular income tax. The Trust pursues
this investment objective by investing in a portfolio of municipal
securities with a dollar-weighted average maturity of less than three
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 BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
This prospectus contains the information you should read and know
before you invest in Institutional Service Shares of the Trust. Keep
this prospectus for future reference.
The Trust has also filed a Combined Statement of Additional
Information for Institutional Shares and Institutional Service Shares
dated August 31, 1994, 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 the Trust
at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated August 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SERVICE SHARES 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Acceptable Investments 3
Average Maturity 3
Characteristics 4
Participation Interests 4
Variable Rate Municipal Securities 4
When-Issued and Delayed Delivery
Transactions 5
Temporary Investments 5
Municipal Securities 5
Investment Risks 6
Investment Limitations 6
TRUST INFORMATION 6
- --------------------------------------------------
Management of the Trust 6
Board of Trustees 6
Investment Adviser 6
Advisory Fees 7
Adviser's Background 7
Other Payments to Financial
Institutions 7
Distribution of Institutional Service
Shares 7
Distribution and Shareholder
Services Plans 8
Administration of the Trust 8
Administrative Services 8
Custodian 9
Transfer Agent and Dividend
Disbursing Agent 9
Legal Counsel 9
Independent Public Accountants 9
Expenses of the Trust and
Institutional Service Shares 9
NET ASSET VALUE 10
- --------------------------------------------------
INVESTING IN INSTITUTIONAL SERVICE
SHARES 10
- --------------------------------------------------
Share Purchases 10
By Wire 10
By Mail 10
Minimum Investment Required 10
What Shares Cost 11
Subaccounting Services 11
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING INSTITUTIONAL SERVICE SHARES 12
- --------------------------------------------------
Telephone Redemption 12
Written Requests 12
Signatures 12
Receiving Payment 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- --------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 14
- --------------------------------------------------
Federal Income Tax 14
Pennsylvania Corporate and Personal
Property Taxes 15
Other State and Local Taxes 15
PERFORMANCE INFORMATION 15
- --------------------------------------------------
OTHER CLASSES OF SHARES 16
- --------------------------------------------------
Financial Highlights--Institutional
Shares 17
FINANCIAL STATEMENTS 18
- --------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 37
- --------------------------------------------------
ADDRESSES Inside Back Cover
- --------------------------------------------------
</TABLE>
I
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
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)........................................................................ None
Redemption Fee (as a percentage of amount redeemed, if applicable)................................ None
Exchange Fee...................................................................................... None
<CAPTION>
ANNUAL INSTITUTIONAL SERVICE SHARES OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)................................................................. 0.27%
12b-1 Fee (after waiver)(2)....................................................................... 0.00%
Total Other Expenses.............................................................................. 0.45%
Shareholder Services Fee............................................................. 0.25%
Total Institutional Service Shares Operating Expenses (3)................................. 0.72%
<FN>
(1) The management fee has been reduced to reflect the waiver of a portion of
the management fee. The adviser can terminate this waiver at any time at
its sole discretion. The maximum management fee is 0.40%.
(2) The maximum 12b-1 Fee is 0.25%.
(3) The Total Institutional Service Shares Operating Expenses in the table
above are based on expenses expected during the fiscal year ending June 30,
1995. The Total Institutional Service Shares Operating Expenses were 0.72%
for the fiscal year ended June 30, 1994, and were 1.03% absent the waiver
of a portion of the management fee and a portion of the 12b-1 fee.
</TABLE>
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charge permitted under the rules of the National
Association of Securities Dealers, Inc.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE TRUST WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN INSTITUTIONAL
SERVICE 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 YEARS 10 YEARS
- --------------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of
each time period............................................... $7 $23 $40 $89
</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.
The information set forth in the foregoing table and example relates only to
Institutional Service Shares of the Trust. The Trust also offers another class
of shares called Institutional Shares. Institutional Service Shares and
Institutional Shares are subject to certain of the same expenses; however,
Institutional Shares are not subject to a 12b-1 fee. See "Other Classes of
Shares."
1
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 37.
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30, 1994*
- ---------------------------------------------------------------------- --------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.35
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.31
- ----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.20)
- ---------------------------------------------------------------------- --------------
Total from investment operations 0.11
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Dividends to shareholders from net investment income (0.31)
- ---------------------------------------------------------------------- --------------
NET ASSET VALUE, END OF PERIOD $10.15
- ---------------------------------------------------------------------- --------------
TOTAL RETURN** 1.08%
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 0.72%(a)
- ----------------------------------------------------------------------
Net investment income 3.65%(a)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $31,459
- ----------------------------------------------------------------------
Portfolio turnover rate 36%
- ----------------------------------------------------------------------
<FN>
* Reflects operations for the period from August 31, 1993 (date of initial
public offering) to June 30, 1994.
** Based on net asset value which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) Computed on an annualized basis.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Further information about the Trust's performance is contained in the Trust's
Annual Report for the fiscal year ended June 30, 1994, which can be obtained
free of charge.
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated May 8, 1981. The Declaration of Trust permits the Trust to offer
separate series of shares of beneficial interest 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 (the "Trustees") have established two classes of shares of the Trust,
known as Institutional Service Shares and Institutional Shares. This prospectus
relates only to Institutional Service Shares ("Shares") of the Trust.
Shares of the Trust are sold primarily to retail and private banking customers
of financial institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio of municipal securities. A minimum
initial investment of $25,000 over a 90-day period is required. The Trust may
not be a suitable investment for retirement plans since it invests in municipal
securities.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Trust.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Trust is to provide dividend income which is
exempt from federal regular income tax. Interest income of the Trust that is
exempt from federal regular income tax retains its tax-free status when
distributed to the Trust's shareholders. The Trust attempts to achieve its
investment objective by investing at least 80% of its net assets in a
diversified portfolio of municipal securities or by investing its assets so that
at least 80% of its income will be tax-exempt. 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 above investment policy, cannot be changed without approval
of shareholders.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The municipal securities in which the Trust invests
are:
- debt obligations issued by or on behalf of any state, territory, or
possession of the United States, including the District of Columbia, or
any political subdivision of any of these; and
- participation interests, as described below, in any of the above
obligations,
the interest from which is, in the opinion of bond counsel for the issuers or in
the opinion of officers of the Trust and/or the investment adviser to the Trust,
exempt from federal regular income tax.
AVERAGE MATURITY. The dollar-weighted average maturity of the Trust's portfolio
of municipal securities will be less than three years. For purposes of
determining the dollar-weighted average maturity of the Trust's portfolio, the
maturity of a municipal security will be its ultimate maturity,
3
unless it is probable that the issuer of the security will take advantage of
maturity-shortening devices such as a call, refunding, or redemption provision,
in which case the maturity date will be the date on which it is probable that
the security will be called, refunded, or redeemed. If the municipal security
includes the right to demand payment, the maturity of the security for purposes
of determining the Trust's dollar-weighted average maturity will be the period
remaining until the principal amount of the security can be recovered by
exercising the right to demand payment.
CHARACTERISTICS. The municipal securities in which the Trust invests are:
- rated within the three highest ratings for municipal securities by Moody's
Investors Service, Inc. ("Moody's") (Aaa, Aa or A) or by Standard & Poor's
Corporation ("Standard & Poor's") (AAA, AA, or A);
- guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
- fully collateralized by an escrow of U.S. government or other securities
acceptable to the Trust's adviser;
- rated at the time of purchase within Moody's highest short-term municipal
obligation rating (MIG1/VMIG1) or Moody's highest municipal commercial
paper rating (P-1) or Standard & Poor's highest municipal commercial paper
rating (SP-1);
- unrated if, at the time of purchase, longer term municipal securities of
the issuer are rated A or better by Moody's or Standard & Poor's; or
- determined by the Trust's investment adviser to be equivalent to municipal
securities which are rated A or better by Moody's or by Standard & Poor's.
Downgraded securities will be evaluated on a case by case basis by the adviser.
The adviser will determine whether or not the security continues to be an
acceptable investment. If not, the security will be sold. The prices of fixed
income securities fluctuate inversely to the direction of interest rates. A
description of the ratings categories is contained in the Appendix to the
Combined Statement of Additional Information.
PARTICIPATION INTERESTS. The Trust may purchase participation interests from
financial institutions such as commercial banks, savings and loan associations,
and insurance companies. These participation interests give the Trust an
undivided interest in municipal securities. The financial institutions from
which the Trust purchases participation interests frequently provide or secure
irrevocable letters of credit or guarantees to assure that the participation
interests are of high quality. The Trustees will determine that participation
interests meet the prescribed quality standards for the Trust.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the municipal securities which the
Trust purchases may have variable interest rates. Variable interest rates are
ordinarily based on a published interest rate or interest rate index or some
similar standard, such as the 91-day U.S. Treasury bill rate. Variable rate
municipal securities will be treated as maturing on the date of the next
scheduled adjustment to the interest rate for purposes of determining the
dollar-weighted average maturity of the portfolio.
4
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase municipal
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 Trust engages in when-issued and delayed
delivery transactions only for the purpose of acquiring portfolio securities
consistent with the Trust's investment objective and policies, not for
investment leverage. In when-issued and delayed delivery transactions, the Trust
relies on the seller to complete the transaction. The seller's failure to
complete the transaction may cause the Trust to miss a price or yield considered
to be advantageous.
TEMPORARY INVESTMENTS. From time to time on a temporary basis, when the
investment adviser determines that market conditions call for a temporary
defensive posture, the Trust may invest in short-term temporary investments
which may or may not be exempt from federal income tax. Temporary investments
include: tax-exempt variable and floating rate demand notes; tax-free commercial
paper; other temporary municipal securities; obligations issued or guaranteed by
the U.S. government, its agencies or instrumentalities; other debt securities;
commercial paper; certificates of deposit of domestic branches of U.S. banks;
and repurchase agreements (arrangements in which the organization selling the
Trust a security agrees at the time of sale to repurchase it at a mutually
agreed upon time and price).
There are no rating requirements applicable to temporary investments with the
exception of temporary municipal securities which are subject to the same rating
requirements as all other municipal securities in which the Trust invests.
However, the investment adviser will limit temporary investments to those it
considers to be of comparable quality to the acceptable investments of the
Trust.
Although the Trust is permitted to make taxable, temporary investments, there is
no current intention of generating income subject to federal regular income tax.
MUNICIPAL SECURITIES
Municipal securities are generally issued to finance public works such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities. Municipal securities
include industrial development bonds issued by or on behalf of public
authorities to provide financing aid to acquire sites or construct and equip
facilities for privately or publicly owned corporations. The availability of
this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment. The two principal
classifications of municipal securities are "general obligation" and "revenue"
bonds. General obligation bonds are secured by the issuer's pledge of its full
faith and credit and taxing power for the payment of principal and interest.
Interest on and principal of revenue bonds, however, are payable only from the
revenue generated by the facility financed by the bond or other specified
sources of revenue. Revenue bonds do not represent a pledge of credit or create
any debt of or charge against the general revenues of a municipality or public
authority. Industrial development bonds are typically classified as revenue
bonds.
5
INVESTMENT RISKS
Yields on municipal securities depend on a variety of factors, including: the
general conditions of the money market and the taxable and municipal bond
markets; the size of the particular offering; the maturity of the obligations;
and the rating of the issue. The ability of the Trust to achieve its investment
objective also depends on the continuing ability of the issuers of municipal
securities and participation interests, or the guarantors of either, to meet
their obligations for the payment of interest and principal when due.
INVESTMENT LIMITATIONS
The Trust will not:
- invest more than 5% of its total assets in securities of one issuer
(except cash and cash items and U.S. government obligations); or
- 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.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, can be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
The Trust will not:
- commit more than 15% of its net assets to illiquid obligations;
- invest more than 10% of its total assets in municipal securities subject
to restrictions on resale; or
- invest more than 5% of its total assets in industrial development bonds of
issuers that have a record of less than three years of continuous
operations.
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. The 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
Management, the Trust's investment adviser (the "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.
6
ADVISORY FEES. The Trust's Adviser receives an annual investment advisory fee
equal to .40 of 1% of the Trust's average daily net assets. Under the investment
advisory contract, the Adviser will reimburse the Trust the amount, limited to
the amount of the advisory fee, by which the Trust's aggregate annual operating
expenses, including its investment advisory fee, but excluding interest, taxes,
brokerage commissions, expenses of registering and qualifying the Trust and its
shares under federal and state laws and regulations, expenses of withholding
taxes, and extraordinary expenses, exceed .45 of 1% of its average daily net
assets. This does not include reimbursement to the Trust of any expenses
incurred by shareholders who use the transfer agent's subaccounting facilities.
The Adviser has also undertaken to reimburse the Trust for operating expenses in
excess of limitations established by certain states.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust organized
on April 11, 1989, is a registered investment adviser under the Investment
Advisers Act of 1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by a trust, the
trustees of which are John F. Donahue, Chairman and Trustee of Federated
Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher Donahue,
who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private accounts.
Certain other subsidiaries also provide administrative services to a number of
investment companies. Total assets under management or administration by these
and other subsidiaries of Federated Investors are approximately $70 billion.
Federated Investors, which was founded in 1956 as Federated Investors, Inc.,
develops and manages mutual funds primarily for the financial industry.
Federated Investors' track record of competitive performance and its
disciplined, risk-averse investment philosophy serve approximately 3,500 client
institutions nationwide. Through these same client institutions, individual
shareholders also have access to this same level of investment expertise.
Jonathan C. Conley has been the Trust's portfolio manager since January 1984.
Mr. Conley joined Federated Investors in 1979 and has been a Vice President of
the Trust's investment adviser since 1982. Mr. Conley is a Chartered Financial
Analyst and received his M.B.A. in Finance from the University of Virginia.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS.__In addition to periodic payments to
financial institutions under the Distribution and Shareholder Services Plans,
certain financial institutions may be compensated by the adviser or its
affiliates for the continuing investment of customers' assets in certain funds,
including the Trust, advised by those entities. These payments will be made
directly by the distributor or adviser from their assets, and will not be made
from the assets of the Trust or by the assessment of a sales charge on Shares.
DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares. 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.
7
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS. Under a distribution plan adopted
in accordance with Investment Company Act Rule 12b-1 (the "Distribution Plan"),
the Trust may pay to the distributor an amount, computed at an annual rate of
0.25 of 1% of the average daily net asset value of Shares, to finance any
activity which is principally intended to result in the sale of Shares subject
to the Distribution Plan. The distributor may select financial institutions such
as banks, fiduciaries, custodians for public funds, investment advisers, and
broker/dealers to provide sales support services as agents for their clients or
customers.
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 the Trust
under the Distribution 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 the Shares to obtain certain personal services for
shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Trust has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
Federated Shareholder Services will either perform shareholder services directly
or will select financial institutions to perform shareholder services. Financial
institutions will receive fees based upon Shares owned by their clients or
customers. The schedules of such fees and the basis upon which 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, 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.
The distributor may, from time to time and for such periods as it deems
appropriate, voluntarily reduce its compensation under the Plans.
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
8
rate which relates to the average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors ("Federated Funds") as specified
below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
-------------------- ------------------------------------
<C> <S>
0.15 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.10 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Trust.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.__Federated Services Company, P.O.
Box 8602, Boston, Massachusetts 02266-8602, is transfer agent for the Shares of
the Trust and dividend disbursing agent for the Trust.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the
Trust are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
EXPENSES OF THE TRUST AND INSTITUTIONAL SERVICE SHARES
Holders of Shares pay their allocable portion of Trust expenses.
The Trust expenses for which holders of 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.
At present, the only expenses allocated to the Shares as a class are expenses
under the Trust's Distribution Plan. However, the Trustees reserve the right to
allocate certain other expenses to holders of 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 Shares; 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 registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares; and
Trustees' fees incurred as a result of issues relating solely to Shares.
9
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust's net asset value per Share fluctuates. The net asset value for Shares
is determined by adding the interest of the Shares in the market value of all
securities and other assets of the Trust, subtracting the interest of the Shares
in the liabilities of the Trust and those attributable to Shares, and dividing
the remainder by the total number of Shares outstanding. The net asset value for
Shares may differ from that of Institutional Shares due to the variance in daily
net income realized by each class. Such variance will reflect only accrued net
income to which the shareholders of a particular class are entitled.
INVESTING IN INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange and the Federal
Reserve wire system are open for business. Shares may be purchased either by
wire or by mail.
To purchase Shares, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken over the telephone.
The Trust reserves the right to reject any purchase request.
BY WIRE. To purchase Shares by Federal Reserve wire, call the Trust before 4:00
p.m. (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m. (Eastern
time) on the next business day following the order. Federal funds should be
wired as follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Short-Term Municipal Trust--Institutional
Service Shares; Trust Number (this number can be found on the account statement
or by contacting the Trust); Group Number or Wire Order Number; Nominee or
Institution Name; and ABA Number 011000028. Shares cannot be purchased on days
on which the New York Stock Exchange is closed and on federal holidays
restricting wire transfers.
BY MAIL. To purchase Shares by mail, send a check made payable to Short-Term
Municipal Trust-- Institutional Service Shares to the Trust's transfer agent,
Federated Services Company, c/o State Street Bank and Trust Company, P.O. Box
8602, Boston, Massachusetts 02266-8602. Orders by mail are considered received
after payment by check is converted by the transfer agent's bank, State Street
Bank, into federal funds. This is normally the next business day after State
Street Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000 plus any non-affiliated bank
or broker's fee, if applicable. However, an account may be opened with a smaller
amount as long as the $25,000 minimum is reached within 90 days. The minimum
investment for an institutional investor will be calculated by combining all
accounts it maintains with the Trust. Accounts established through a non-
affiliated bank or broker may be subject to a smaller minimum investment.
10
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Trust. Investors who purchase
Shares through a non-affiliated bank or broker may be charged an additional
service fee by that bank or broker.
The net asset value is determined at 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; or (iii) the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent may
charge a fee based on the level of subaccounting services rendered. Institutions
holding Shares in a fiduciary, agency, custodial, or similar capacity may charge
or pass through subaccounting fees as part of or in addition to normal trust or
agency account fees. They may also charge fees for other services provided which
may be related to the ownership of Shares. This prospectus should, therefore, be
read together with any agreement between the customer and the institution with
regard to the services provided, the fees charged for those services, and any
restrictions and limitations imposed.
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.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Monthly confirmations are sent to report dividends paid during that
month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are declared just prior
to determining net asset value. If an order for Shares is placed on the
preceding business day, Shares purchased by wire begin earning dividends on the
business day wire payment is received by State Street Bank. If the order for
Shares and payment by wire are received on the same day, Shares begin earning
dividends on the next business day. Shares purchased by check begin earning
dividends on the business day after the check is converted, upon instruction of
the transfer agent, into federal funds. Dividends are automatically reinvested
in additional Shares unless cash payments are requested by contacting the Trust.
CAPITAL GAINS
Distributions of net realized long-term capital gains realized by the Trust, if
any, will be made at least annually.
11
REDEEMING INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
The Trust redeems Shares at their net asset value next determined after the
Trust receives the redemption request. Redemptions may 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 by telephone request or by written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Trust before 4:00 p.m.
(Eastern time). The proceeds will normally be wired the following business day,
but in no event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time
the Trust shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
An authorization form permitting the Trust to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions may
be recorded. If reasonable procedures are not followed by the 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 such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Trust. Call the
Trust for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Trust name and class of shares,
his account number, and the share or dollar amount requested. If Share
certificates have been issued, they must be properly endorsed and should be sent
by registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Trust, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution" as defined in the Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
12
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.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Trust may
redeem Shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 due to
shareholder redemptions. This requirement does not apply, however, if the
balance falls below $25,000 because of changes in the Trust's net asset value.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each Share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights except that in matters
affecting only a particular portfolio or class only shares of that portfolio or
class are entitled to vote. 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. As of August 1, 1994, Marion Merrell Dow,
Inc., Kansas City, Missouri, owned 63.64% of the Institutional Service Shares of
the Trust, and therefore, may for certain purposes, be deemed to control the
Class and be able to affect the outcome of certain matters presented for a vote
of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of shareholders shall be called for this purpose by the
Trustees upon written request of shareholders owning at least 10% of the
outstanding shares of the Trust entitled to vote.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for such acts or
obligations of the Trust. These documents require notice of this disclaimer to
be given in each agreement, obligation, or instrument that the Trust or its
Trustees enter into or sign on behalf of the Trust.
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
13
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 from its assets.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to receive the special tax treatment afforded to such
companies.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Trust that represent net interest on tax-exempt
municipal bonds. However, dividends representing net interest earned on some
municipal bonds may be included in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for corporations.
The alternative minimum tax, equal to up to 28% of alternative minimum taxable
income for individuals and 20% for corporations, applies when it exceeds the
regular tax for the taxable year. Alternative minimum taxable income is equal to
the regular taxable income of the taxpayer increased by certain "tax preference"
items not included in regular taxable income and reduced by only a portion of
the deductions allowed in the calculation of the regular tax.
Interest on certain "private activity" bonds issued after August 7, 1986, is
treated as a tax preference item for both individuals and corporations. Unlike
traditional governmental purpose municipal bonds, which finance roads, schools,
libraries, prisons and other public facilities, private activity bonds provide
benefits to private parties. The Trust may purchase all types of municipal
bonds, including private activity bonds. Thus, while the Trust has no present
intention of purchasing any private activity bonds, should it purchase any such
bonds, a portion of the Trust's dividends may be treated as a tax preference
item.
In addition, in the case of a corporate shareholder, dividends of the Trust
which represent interest on municipal bonds may be subject to the 20% corporate
alternative minimum tax because the dividends are included in a corporation's
"adjusted current earnings." The corporate alternative minimum tax treats 75% of
the excess of a taxpayer's pre-tax "adjusted current earnings" over the
taxpayer's alternative minimum taxable income as a tax preference item.
"Adjusted current earnings" is based upon the concept of a corporation's
"earnings and profits." Since "earnings and profits" generally includes the full
amount of any Trust dividend, and alternative minimum taxable income does not
include the portion of the Trust's dividend attributable to municipal bonds
which are not private activity bonds, the difference will be included in the
calculation of the corporation's alternative minimum tax.
Dividends of the Trust representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
14
These tax consequences apply whether dividends are received in cash or as
additional Shares. Information on the tax status of dividends and distributions
is provided annually.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
- the Trust is not subject to 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.
OTHER STATE AND LOCAL TAXES
Distributions representing net interest received on tax-exempt municipal
securities are not necessarily free from income taxes of any state or local
taxing authority. State laws differ on this issue and shareholders are urged to
consult their own tax advisers.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Trust advertises its total return, yield, and
tax-equivalent yield for Institutional Service Shares.
Total return represents the change, over a specified period of time, in the
value of an investment in Shares of the Trust after reinvesting all income and
capital gain distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.
The yield of Shares of the Trust is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by Shares over a thirty-day period by the net asset value per share of Shares on
the last day of the period. This number is then annualized using semi-annual
compounding. The tax-equivalent yield of Shares is calculated similarly to the
yield, but is adjusted to reflect the taxable yield that Shares would have had
to earn to equal its actual yield, assuming a specific tax rate. The yield and
the tax-equivalent yield do not necessarily reflect income actually earned by
Shares and, therefore, may not correlate to the dividends or other distributions
paid to shareholders.
The Trust is sold without any sales load or other similar non-recurring charges.
Total return, yield, and tax-equivalent yield will be calculated separately for
Institutional Service Shares and Institutional Shares. Because Institutional
Service Shares are subject to a 12b-1 fee, the total return, yield, and
tax-equivalent yield for Institutional Shares, for the same period, may exceed
that of Institutional Service Shares.
From time to time, the Trust may advertise the performance of Shares using
certain financial publications and/or compare the performance of Shares to
certain indices.
15
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Shares are sold to accounts for which financial institutions act
in a fiduciary, advisory, agency, custodial or similar capacity. Institutional
Shares are also designed for funds held by savings and other institutions,
corporations, trusts, brokers, investment counselors, and insurance companies.
Institutional Shares are sold at net asset value, distributed without a 12b-1
Plan, and are subject to a minimum initial investment of $25,000.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Trust is sold.
The amount of dividends payable to Institutional Shares may exceed that of
Shares by the difference between Class Expenses and distribution and shareholder
service expenses borne by shares of each respective class.
The stated advisory fee is the same for both classes of shares.
16
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 37.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------------------------------
1994 1993 1992 1991 1990
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.37 $ 10.29 $ 10.18 $ 10.14 $ 10.10
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.40 0.44 0.53 0.60 0.60
- ------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.22) 0.08 0.11 0.04 0.04
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
Total from investment operations 0.18 0.52 0.64 0.64 0.64
- ------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Dividends to shareholders from net investment income (0.40) (0.44) (0.53) (0.60) (0.60)
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 10.15 $ 10.37 $ 10.29 $ 10.18 $ 10.14
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
TOTAL RETURN* 1.76% 5.11% 6.40% 6.47% 6.54%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 0.47% 0.46% 0.46% 0.46% 0.47%
- ------------------------------------------------------------
Net investment income 3.89% 4.21% 5.12% 5.89% 5.94%
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $316,810 $318,932 $205,101 $142,493 $139,113
- ------------------------------------------------------------
Portfolio turnover rate 36% 15% 42% 40% 69%
- ------------------------------------------------------------
<CAPTION>
YEAR ENDED JUNE 30,
-----------------------------------------------------
1989 1988 1987 1986 1985
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 10.24 $ 10.31 $ 10.22 $ 10.05
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.57 0.54 0.51 0.60 0.64
- ------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.09) (0.05) (0.07) 0.09 0.17
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
Total from investment operations 0.48 0.49 0.44 0.69 0.81
- ------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Dividends to shareholders from net investment income (0.57) (0.54) (0.51) (0.60) (0.64)
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 10.10 $ 10.19 $ 10.24 $ 10.31 $ 10.22
- ------------------------------------------------------------ --------- --------- --------- --------- ---------
TOTAL RETURN* 4.84% 4.89% 4.37% 7.55% 7.68%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 0.46% 0.47% 0.47% 0.48% 0.47%
- ------------------------------------------------------------
Net investment income 5.59% 5.25% 4.95% 5.80% 6.33%
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $178,978 $315,154 $483,279 $341,294 $192,573
- ------------------------------------------------------------
Portfolio turnover rate 55% 63% 57% 16% 32%
- ------------------------------------------------------------
<FN>
* Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
Further information about the Trust's performance is contained in the Trust's
Annual Report for the fiscal year ended June 30, 1994, which can be obtained
free of charge.
17
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
PORTFOLIO OF INVESTMENTS
JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--100.1%
- -------------------------------------------------------------------
ALABAMA--0.3%
-------------------------------------------------------
$1,000,000 Alabama Water Pollution Control Authority, 5.40%
Revenue Bonds (Series 1991)/(Revolving Trust Loan
Program)/ (AMBAC Insured), 8/15/94 AAA $ 1,002,410
------------------------------------------------------- -----------
ARIZONA--1.6%
-------------------------------------------------------
2,000,000 Pima County, AZ, Unified School District #1, 8.00%
School Improvement Bonds (FGIC Insured), 7/1/96 AAA 2,133,020
-------------------------------------------------------
1,000,000 Salt River, AZ, 3.70% Electric System Revenue Bonds
(Agricultural Improvement & Power District), 1/1/96 AA 988,920
-------------------------------------------------------
2,500,000 Salt River, AZ, 4.00% Power Supply Revenue Bonds
(Agricultural Improvement & Power District)/(Original
Issue Yield: 4.05%), 1/1/96 Aa 2,485,950
------------------------------------------------------- -----------
Total 5,607,890
------------------------------------------------------- -----------
CALIFORNIA--11.6%
-------------------------------------------------------
4,000,000 California State, 10.00% UT GO Bonds, 4/1/98 A+ 4,657,440
-------------------------------------------------------
1,250,000 Los Angeles County, CA, Transportation Commission,
4.30% Sales Tax Revenue Bonds (Series 1992A)/(MBIA
Insured), 7/1/95 Aaa 1,256,212
-------------------------------------------------------
16,000,000 Los Angeles, CA, Waste Water System, 6.70% Revenue
Bonds (Series D)/(MBIA Insured)/(Original Issue Yield:
6.769%)/(Prerefunded), 12/1/2000 (@102) AAA 17,682,080
-------------------------------------------------------
1,250,000 Orange County, CA, Local Transportation Authority,
4.15% Sales Tax Revenue Bonds, 2/15/95 Aa 1,255,700
-------------------------------------------------------
8,000,000 Southern California Public Power Authority, 11.25%
Transmission Project Revenue Bonds (Prerefunded),
1/1/95 (@103) Aaa 8,548,080
-------------------------------------------------------
</TABLE>
18
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
CALIFORNIA--CONTINUED
-------------------------------------------------------
$3,045,000 University of California, 8.00% Refunding Revenue Bonds
(UCLA Medical Center)/(MBIA Insured), 12/1/97 AAA $ 3,343,714
-------------------------------------------------------
3,310,000 University of California, 8.00% Refunding Revenue Bonds
(UCLA Medical Center)/(MBIA Insured), 12/1/98 AAA 3,700,580
------------------------------------------------------- -----------
Total 40,443,806
------------------------------------------------------- -----------
COLORADO--1.9%
-------------------------------------------------------
1,535,000 City & County of Denver Airport, 10.50% Revenue Bonds
(Stapleton International Airport)/(Prerefunded),
12/1/94 (@100) Aaa 1,581,127
-------------------------------------------------------
2,995,000 Denver (City & County), CO, 7.625% GO Bonds (Series
1992C), 8/1/95 Aa 3,112,344
-------------------------------------------------------
1,900,000 Mesa County, CO, School District #51, 4.90% GO
Refunding Bonds (Series 1991B)/(AMBAC Insured), 12/1/94 Aaa 1,914,820
------------------------------------------------------- -----------
Total 6,608,291
------------------------------------------------------- -----------
DELAWARE--0.6%
-------------------------------------------------------
2,000,000 Delaware, 6.80% UT GO Bonds, 5/1/95 Aa 2,053,120
------------------------------------------------------- -----------
DISTRICT OF COLUMBIA--0.6%
-------------------------------------------------------
1,000,000 District Columbia, 8.00% UT GO Bonds (Prerefunded),
6/1/96 (@102) AAA 1,084,680
-------------------------------------------------------
1,000,000 District of Columbia, 5.50% GO Bonds (FGIC Insured),
6/1/95 Aaa 1,011,110
------------------------------------------------------- -----------
Total 2,095,790
------------------------------------------------------- -----------
FLORIDA--1.2%
-------------------------------------------------------
1,500,000 Florida State Board of Education, 7.80% UT GO Capital
Outlay Bonds (Prerefunded), 6/1/96 (@102) AAA 1,621,560
-------------------------------------------------------
1,390,000 Miami Beach, FL, Health Facilities Authority, 4.45%
Hospital Revenue Reference Bonds (Mount Sinai Medical
Center)/(Capital Guaranty Insured), 11/15/95 AAA 1,403,789
-------------------------------------------------------
</TABLE>
19
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
FLORIDA--CONTINUED
-------------------------------------------------------
$1,000,000 Orlando, FL, Utilities Commission, 7.75% Water &
Electric Revenue Bonds, 10/1/94 Aa $ 1,011,480
------------------------------------------------------- -----------
Total 4,036,829
------------------------------------------------------- -----------
GEORGIA--0.5%
-------------------------------------------------------
1,820,000 Gwinnett County, GA, School District, 4.90% GO School
Bonds (Series A), 2/1/95 Aa 1,834,487
------------------------------------------------------- -----------
HAWAII--3.3%
-------------------------------------------------------
5,000,000 Hawaii State, 7.10% GO Bonds (Prerefunded), 6/1/98
(@101-1/2) Aaa 5,434,750
-------------------------------------------------------
6,000,000 Honolulu, City & County, HI, 4.20% OID UT GO Bonds
(Original Issue Yield: 4.30%), 10/1/97 AA 5,918,940
------------------------------------------------------- -----------
Total 11,353,690
------------------------------------------------------- -----------
ILLINOIS--4.7%
-------------------------------------------------------
1,750,000 Du Page, IL, Water Commission, 5.90% Refunding Revenue
Bonds, 5/1/96 AA- 1,791,965
-------------------------------------------------------
2,000,000 Illinois State Toll Highway Authority, 7.375% Revenue
Bonds (Prerefunded), 1/1/96 (@102) AAA 2,127,900
-------------------------------------------------------
5,500,000 Illinois State Toll Highway Road Authority, 7.10%
Revenue Bonds (Prerefunded), 1/1/96 (@102) A- 5,830,770
-------------------------------------------------------
6,500,000 Illinois State, 4.50% GO Bonds (Series 1993), 8/1/96 AA 6,498,440
------------------------------------------------------- -----------
Total 16,249,075
------------------------------------------------------- -----------
IOWA--0.6%
-------------------------------------------------------
1,095,000 Sioux City, IA, 4.15% Hospital Revenue Refunding Bonds
(Series 1993O)/(Sisters of Mercy Health Corp.), 8/15/96 A- 1,080,294
-------------------------------------------------------
1,140,000 Sioux City, IA, 4.15% Hospital Revenue Refunding Bonds
(Sisters of Mercy Health Corp.), 8/15/97 A 1,119,651
------------------------------------------------------- -----------
Total 2,199,945
------------------------------------------------------- -----------
</TABLE>
20
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
KENTUCKY--0.3%
-------------------------------------------------------
$1,000,000 Kentucky State Turnpike Authority, 7.875%
(Prerefunded), 7/1/96 (@102) AAA $ 1,084,650
------------------------------------------------------- -----------
MAINE--0.5%
-------------------------------------------------------
1,805,000 Maine, 7.875% Full Faith and Credit Bonds (Highway
Purpose), 7/1/94 Aa1 1,805,000
------------------------------------------------------- -----------
MARYLAND--1.8%
-------------------------------------------------------
1,500,000 Charles County, MD, 7.00% UT GO Refunding and Public
Improvement Bonds (AMBAC Insured), 1/15/95 Aaa 1,528,695
-------------------------------------------------------
2,055,000 University of Maryland System Auxiliary, 4.75% Facility
& Tuition Revenue Bonds (Series A), 2/1/95 Aa 2,069,714
-------------------------------------------------------
2,650,000 Washington, MD, Suburban Sanitary District, 7.20% UT GO
Bonds, 6/1/95 Aa1 2,728,705
------------------------------------------------------- -----------
Total 6,327,114
------------------------------------------------------- -----------
MASSACHUSETTS--1.4%
-------------------------------------------------------
4,500,000 Massachusetts State, 7.25% UT GO Bonds, 6/1/96 A 4,746,060
------------------------------------------------------- -----------
MICHIGAN--3.3%
-------------------------------------------------------
5,000,000 Detroit, MI, City School District, 5.30% Refunding
Bonds (Q-SBLF Guaranty), 5/1/99 AA- 5,025,000
-------------------------------------------------------
2,120,000 Michigan State Hospital Finance Authority, 4.00%
Hospital Revenue Refunding Bonds (Series
1993P)/(Sisters of Mercy Health Corp.), 8/15/96 A- 2,084,342
-------------------------------------------------------
4,345,000 Michigan State Hospital Finance Authority, 4.00%
Revenue Refunding Bonds (Series 1993P)/(Sisters of
Mercy Health Corp.) (MBIA Insured), 8/15/97 Aaa 4,235,810
------------------------------------------------------- -----------
Total 11,345,152
------------------------------------------------------- -----------
MINNESOTA--3.1%
-------------------------------------------------------
2,000,000 Southern Minnesota Municipal Power Agency, 9.125% Power
Supply Revenue Bonds (Prerefunded), 1/1/96 (@102) Aaa 2,178,340
-------------------------------------------------------
</TABLE>
21
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------
$1,915,000 Washington County, MN, Housing Redevelopment Authority,
3.85% Refunding Revenue Bonds, 2/1/96 AA- $ 1,892,920
-------------------------------------------------------
3,410,000 Western Minnesota Municipal Power Agency, 7.00% Revenue
Bonds (Series A)/(Original Issue Yield: 7.062%),
1/1/2013, Callable 1/1/97 (@102) A- 3,597,448
-------------------------------------------------------
3,000,000 Western Minnesota Municipal Power Agency, 9.50% Power
Supply Revenue Bonds (Prerefunded), 1/1/96 (@102) Aaa 3,283,740
------------------------------------------------------- -----------
Total 10,952,448
------------------------------------------------------- -----------
MISSOURI--1.7%
-------------------------------------------------------
2,310,000 Kansas City, MO, 5.65% Sewer Revenue Bonds, 3/1/95 Aa 2,341,069
-------------------------------------------------------
1,580,000 Kansas City, MO, School District, 5.70% Missouri
Building Corp. Refunding Leasehold Revenue Bonds
(Series 1991A)/ (FGIC Insured), 2/1/95 Aaa 1,598,454
-------------------------------------------------------
2,000,000 Missouri State HEFA, 4.10% Revenue Bonds (Series
1992B)/ (Health Midwest)/(MBIA Insured), 2/15/95 Aaa 2,002,980
------------------------------------------------------- -----------
Total 5,942,503
------------------------------------------------------- -----------
NEBRASKA--1.0%
-------------------------------------------------------
1,250,000 Omaha, NE, 3.80% Electric System Revenue Bonds (Series
B)/(Public Power District), 2/1/96 Aa 1,238,025
-------------------------------------------------------
1,400,000 Omaha, NE, 3.90% Electric System Revenue Bonds (Series
A)/(Public Power District), 2/1/96 Aa 1,389,332
-------------------------------------------------------
1,000,000 Omaha, NE, 4.70% Electric System Revenue Bonds (Series
A)/(Public Power District), 2/1/95 Aa 1,009,870
------------------------------------------------------- -----------
Total 3,637,227
------------------------------------------------------- -----------
NEVADA--0.6%
-------------------------------------------------------
2,000,000 Clark County, NV, School District, 7.10% LT GO Bonds
(Series A), 3/1/97 A+ 2,111,720
------------------------------------------------------- -----------
</TABLE>
22
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
NEW HAMPSHIRE--1.0%
-------------------------------------------------------
$3,310,000 New Hampshire, 4.20% Capital Improvement Refunding GO
Bonds (Series 1992), 9/1/95 Aa $ 3,330,886
------------------------------------------------------- -----------
NEW JERSEY--2.4%
-------------------------------------------------------
8,000,000 New Jersey State, 6.50% Refunding GO Bonds (Series C),
1/15/2002 AA+ 8,443,280
------------------------------------------------------- -----------
NEW MEXICO--7.7%
-------------------------------------------------------
2,250,000 Albuquerque, NM, 4.00% Joint Water and Sewer System
Refunding and Improvement Revenue Bonds (Series
1994A)/(Original Issue Yield: 4.10%), 7/1/99 AA 2,121,030
-------------------------------------------------------
5,375,000 Albuquerque, NM, 4.10% Joint Water and Sewer System
Refunding and Improvement Revenue Bonds (Series
1994A)/(Original Issue Yield: 4.25%), 7/1/2000 AA 4,999,879
-------------------------------------------------------
8,650,000 Albuquerque, NM, 4.60% UT GO Bonds (Series A), 7/1/98 AA 8,569,036
-------------------------------------------------------
4,000,000 Albuquerque, NM, 5.20% General Purpose GO Bonds (Series
1992A), 7/1/94 AA 4,000,000
-------------------------------------------------------
2,865,000 Bernalillo County, NM, 6.25% GO Special Tax Bonds,
8/1/95 Aa 2,938,545
-------------------------------------------------------
4,250,000 New Mexico, 5.00% Severance Tax Refunding Bonds (Series
1991A), 7/1/94 AA 4,250,000
------------------------------------------------------- -----------
Total 26,878,490
------------------------------------------------------- -----------
NEW YORK--8.4%
-------------------------------------------------------
4,600,000 New York City, NY, 10.25% GO Bonds (Series C)/
(Prerefunded), 3/15/96 (@103) Aaa 4,954,292
-------------------------------------------------------
4,735,000 New York City, NY, Municipal Water Finance Authority,
6.50% Water & Sewer System Revenue Bonds (Series C),
6/15/97 A- 4,781,261
-------------------------------------------------------
680,000 New York City, NY, Municipal Water Finance Authority,
6.50% Water & Sewer System Revenue Bonds (Series C)/
(Prerefunded), 6/15/97 A 722,310
-------------------------------------------------------
</TABLE>
23
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
NEW YORK--CONTINUED
-------------------------------------------------------
$5,000,000 New York City, NY, Municipal Water Finance Authority,
7.20% Water and Sewer System Revenue Bonds (Series A),
6/15/99 A- $ 5,484,500
-------------------------------------------------------
3,500,000 New York State Thruway Authority, 3.80% Emergency
Highway Construction & Reconstruction Bonds (FGIC
Insured), 3/1/96 AAA 3,469,690
-------------------------------------------------------
9,540,000 New York State, 5.75% UT GO Bonds, 9/15/99 A- 9,850,432
------------------------------------------------------- -----------
Total 29,262,485
------------------------------------------------------- -----------
NORTH CAROLINA--3.1%
-------------------------------------------------------
1,500,000 Charlotte-Mecklenberg, NC, Hospital Authority, 4.65%
Health Care System Revenue Bonds, 1/1/95 Aa 1,502,865
-------------------------------------------------------
6,000,000 Mecklenberg County, NC, 5.00% UT GO Refunding Bonds
(Series 1992), 3/1/95 Aaa 6,061,080
-------------------------------------------------------
3,000,000 North Carolina Eastern Municipal Power Authority,
10.00% Revenue Bonds (Prerefunded), 1/1/95 (@103) Aaa 3,186,180
------------------------------------------------------- -----------
Total 10,750,125
------------------------------------------------------- -----------
OHIO--3.0%
-------------------------------------------------------
3,300,000 Columbus, OH, 7.70% UT GO Bonds (Prerefunded), 5/1/96
(@102) AAA 3,556,872
-------------------------------------------------------
4,000,000 Ohio State Public Facilities Authority, 4.25% Higher
Education Capital Facilities Revenue Bonds (Series
11-A)/ (AMBAC Insured), 12/1/97 AAA 3,931,240
-------------------------------------------------------
2,815,000 Ohio State, Water Development Authority, PCA, 7.25%
Revenue Bonds (Phillip Morris), Callable 12/1/97 (@103) A 3,026,181
------------------------------------------------------- -----------
Total 10,514,293
------------------------------------------------------- -----------
OREGON--1.2%
-------------------------------------------------------
2,000,000 Oregon State Department of Transportation, 5.375%
Regional Light Rail Extension Revenue Bonds (Series
1994)/(MBIA Insured), 6/1/99 AAA 2,029,640
-------------------------------------------------------
</TABLE>
24
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
OREGON--CONTINUED
-------------------------------------------------------
$2,000,000 Oregon State Department of Transportation, 5.50%
Regional Light Rail Extension Revenue Bonds (MBIA
Insured), 6/1/2000 AAA $ 2,037,780
------------------------------------------------------- -----------
Total 4,067,420
------------------------------------------------------- -----------
PENNSYLVANIA--7.8%
-------------------------------------------------------
5,840,000 Commonwealth of Pennsylvania, 3.80% GO Bonds, 4/15/96 AA- 5,776,986
-------------------------------------------------------
8,000,000 Commonwealth of Pennsylvania, 4.75% GO Bonds, 6/15/98 AA- 7,974,160
-------------------------------------------------------
1,155,000 Dauphin County, PA, General Authority, 4.35% Revenue
Bonds (Series A)/(West Penn Hospital)/(MBIA Insured),
7/1/95 Aaa 1,160,059
-------------------------------------------------------
1,175,000 Dauphin County, PA, General Authority, 4.35% Revenue
Bonds (Series B)/(West Penn Hospital)/(MBIA Insured),
7/1/95 Aaa 1,180,146
-------------------------------------------------------
7,000,000 Pennsylvania Intergovernmental Cooperation Authority,
5.75% Special Tax Revenue Bonds (City of Philadelphia)/
(FGIC Insured)/(Original Issue Yield: 5.85%), 6/15/99 AAA 7,224,700
-------------------------------------------------------
3,690,000 Pittsburgh, PA, 4.10% GO Bonds (AMBAC Insured), 9/1/95 Aaa 3,700,258
------------------------------------------------------- -----------
Total 27,016,309
------------------------------------------------------- -----------
SOUTH CAROLINA--3.4%
-------------------------------------------------------
5,500,000 Piedmont Municipal Electric Agency, SC, 10.25% Power
Supply Revenue Bonds (Prerefunded), 1/1/95 (@102) Aaa 5,848,150
-------------------------------------------------------
2,000,000 Piedmont Municipal Power Agency, SC, 7.00% Refunding
Revenue Bonds (Series A)/(AMBAC Insured), 1/1/2019,
Callable 1/1/98 AAA 2,110,000
-------------------------------------------------------
2,300,000 South Carolina, 7.00% UT GO Capital Improvement Bonds,
3/1/95 Aaa 2,353,268
-------------------------------------------------------
</TABLE>
25
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
SOUTH CAROLINA--CONTINUED
-------------------------------------------------------
$1,500,000 South Carolina, 7.60% GO Bonds (Series U), 2/1/95 Aaa $ 1,535,565
------------------------------------------------------- -----------
Total 11,846,983
------------------------------------------------------- -----------
TENNESSEE--1.2%
-------------------------------------------------------
1,000,000 Nashville & Davidson, TN, Metropolitan Government,
9.375% Revenue Bonds (Prerefunded), 1/1/95 (@102) Aaa 1,049,190
-------------------------------------------------------
3,000,000 Tennessee, 6.75% GO Bonds (Series 1992A), 7/1/95 AA+ 3,087,750
------------------------------------------------------- -----------
Total 4,136,940
------------------------------------------------------- -----------
TEXAS--5.5%
-------------------------------------------------------
1,000,000 Arlington, TX, 6.70% Waterworks & Sewer Refunding
Revenue Bonds (Series A)/(AMBAC Insured), 6/1/96 AAA 1,038,480
-------------------------------------------------------
1,290,000 Houston, TX, ISD, 4.00% LT GO School House Bonds,
8/15/95 Aaa 1,292,477
-------------------------------------------------------
7,000,000 Northside, TX, ISD, 4.10% UT GO Bonds, 2/1/96 Aaa 6,970,530
-------------------------------------------------------
5,000,000 San Antonio, TX, Electric & Gas System, 4.00% Revenue
Bonds, 2/1/95 Aa 5,014,250
-------------------------------------------------------
2,425,000 Texas State Public Property Finance Corp., 4.30%
Refunding Revenue Bonds (Series 1993)/(Mental Health
and Mental Retardation Center), 9/1/97 AAA 2,395,197
-------------------------------------------------------
2,500,000 Texas Water Development Board, 4.35% Senior Lien
Revenue Bonds (Series 1992), 7/15/95 AA 2,508,025
------------------------------------------------------- -----------
Total 19,218,959
------------------------------------------------------- -----------
UTAH--3.4%
-------------------------------------------------------
8,000,000 Granite City School District, UT, Board of Education,
4.00% GO Refunding Bonds (Series 1992), 6/1/95 Aa 8,011,200
-------------------------------------------------------
1,800,000 Intermountain Power Agency, UT, 3.70% Power Supply
Revenue Bonds (Series 1993C), 7/1/96 AA 1,771,686
-------------------------------------------------------
</TABLE>
26
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
UTAH--CONTINUED
-------------------------------------------------------
$2,000,000 Intermountain Power Agency, UT, 8.75% Power Supply
Revenue Bonds (Prerefunded), 7/1/95 (@102) Aaa $ 2,135,020
------------------------------------------------------- -----------
Total 11,917,906
------------------------------------------------------- -----------
VERMONT--0.7%
-------------------------------------------------------
2,500,000 Vermont, 7.50% GO Bonds (Series A), 2/1/95 Aa 2,557,400
------------------------------------------------------- -----------
VIRGINIA--2.2%
-------------------------------------------------------
7,500,000 Fairfax County, VA, 8.25% Public Improvement Bonds
(Series 1992A), 4/1/95 Aaa 7,764,000
------------------------------------------------------- -----------
WASHINGTON--6.0%
-------------------------------------------------------
1,445,000 Seattle, WA, 4.75% Various Purpose LT GO Bonds, 3/1/95 Aa1 1,456,011
-------------------------------------------------------
4,865,000 Seattle, WA, 9.70% Municipal Light and Power Revenue
Bonds (Prerefunded), 9/1/95 (@102) Aaa 5,268,163
-------------------------------------------------------
3,000,000 Washington State, 5.00% Various Purpose GO Bonds
(Series 1994B), 5/1/98 AA 3,017,460
-------------------------------------------------------
7,425,000 Washington State, 5.00% Various Purpose GO Bonds
(Series 1994B), 5/1/99 AA 7,414,976
-------------------------------------------------------
1,000,000 Washington, 6.90% UT GO Bonds, 6/1/95 Aa 1,027,250
-------------------------------------------------------
1,500,000 Washington, 4.50% Various Purpose GO Refunding Bonds
(Series 1992A), 2/1/95 (@106) Aa 1,508,580
-------------------------------------------------------
1,000,000 Washington, 6.80% Various Purpose GO Bonds, 4/1/95 Aa 1,023,290
------------------------------------------------------- -----------
Total 20,715,730
------------------------------------------------------- -----------
WISCONSIN--2.5%
-------------------------------------------------------
2,535,000 Milwaukee, WI, 8.80% UT GO Metropolitan Sewer District
Bonds, 5/1/95 Aa 2,639,594
-------------------------------------------------------
1,970,000 Milwaukee, WI, 6.00% UT GO Public Improvement Bonds
(Series CA), 6/15/95 Aa 2,007,371
-------------------------------------------------------
3,000,000 Wisconsin State, 6.40% GO Bonds (Series A), 5/1/99 AA 3,170,580
-------------------------------------------------------
</TABLE>
27
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S OR
AMOUNT S&P* VALUE
- ---------- ------------------------------------------------------- ---------- -----------
<C> <S> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------
WISCONSIN--CONTINUED
-------------------------------------------------------
$1,000,000 Wisconsin, 6.40% UT GO Bonds (Series A), 5/1/95 Aa $ 1,022,790
------------------------------------------------------- -----------
Total 8,840,335
------------------------------------------------------- -----------
TOTAL SHORT-INTERMEDIATE MUNICIPAL SECURITIES
(IDENTIFIED COST $351,869,499) 348,698,748
------------------------------------------------------- -----------
SHORT-TERM MUNICIPAL SECURITIES--0.9%
- -------------------------------------------------------------------
PUERTO RICO--0.3%
-------------------------------------------------------
1,050,000 Government Development Bank of Puerto Rico Weekly VRDNs
(Credit Suisse and Sumitomo Bank Ltd. LOCS) A-1+ 1,050,000
------------------------------------------------------- -----------
TENNESSEE--0.6%
-------------------------------------------------------
2,000,000 Chattanooga-Hamilton County, TN, Hospital Authority
Daily VRDNs (Erlanger Medical Center Guaranty) A-1+ 2,000,000
------------------------------------------------------- -----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES (AT AMORTIZED
COST) 3,050,000
------------------------------------------------------- -----------
TOTAL MUNICIPAL SECURITIES (IDENTIFIED COST
$354,919,499) (NOTE 2A) $351,748,748+
------------------------------------------------------- -----------
<FN>
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
+ The cost of investments for federal tax purposes amounts to $354,919,499.
The net unrealized depreciation of investments on a federal tax cost
basis amounts to $3,170,751, which is comprised of $841,220 appreciation
and $4,011,971 depreciation at June 30, 1994.
Note: The categories of investments is shown as a percentage of net assets
($348,269,731) at June 30, 1994.
</TABLE>
28
SHORT-TERM MUNICIPAL TRUST
- ---------------------------------------------------------
<TABLE>
<S> <C>
The following abbreviations are used in this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
FGIC --Financial Guaranty Insurance Company
GO --General Obligation
HEFA --Health and Education Facilities Authority
ISD --Independent School District
LOCS --Letters of Credit
LT --Limited Tax
MBIA --Municipal Bond Investors Assurance
OID --Original Issue Discount
PCA --Pollution Control Authority
Q-SBLF --Qualified State Bond Loan Trust
UT --Utah/Unlimited Tax
VA --Virginia/Veterans Administration
VRDNs --Variable Rate Demand Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
29
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A) (identified and tax cost
$354,919,499) $351,748,748
- --------------------------------------------------------------------------------
Cash 254,481
- --------------------------------------------------------------------------------
Interest receivable 6,191,253
- --------------------------------------------------------------------------------
Receivable for Trust shares sold 154,981
- -------------------------------------------------------------------------------- ------------
Total assets 358,349,463
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
Payable for investments purchased $8,025,289
- ----------------------------------------------------------------------
Payable for Trust shares redeemed 1,165,592
- ----------------------------------------------------------------------
Dividends payable (Note 2B) 833,068
- ----------------------------------------------------------------------
Accrued expenses 55,783
- ---------------------------------------------------------------------- ----------
</TABLE>
<TABLE>
<S> <C>
Total liabilities 10,079,732
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 34,316,807 shares of beneficial interest outstanding $348,269,731
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF: (NOTE 2E)
- --------------------------------------------------------------------------------
Paid-in-Capital $358,299,966
- --------------------------------------------------------------------------------
Unrealized depreciation of investments (3,170,751)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (6,859,484)
- -------------------------------------------------------------------------------- ------------
Total Net Assets $348,269,731
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Price Per Share
- --------------------------------------------------------------------------------
Institutional Shares (net assets of $316,810,333 DIVIDED BY 31,216,957 shares of
beneficial interest outstanding) $ 10.15
- -------------------------------------------------------------------------------- ------------
Institutional Service Shares (net assets of $31,459,398 DIVIDED BY 3,099,850
shares of beneficial interest outstanding) $ 10.15
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
30
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest income (Note 2B) $15,437,877
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee (Note 4) $1,414,365
- -----------------------------------------------------------------------
Trustees' Fees 12,409
- -----------------------------------------------------------------------
Administrative personnel and services fees (Note 4) 346,714
- -----------------------------------------------------------------------
Custodian and portfolio accounting fees 164,292
- -----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses (Note 4) 26,023
- -----------------------------------------------------------------------
Shareholder services fee (Note 4) 27,051
- -----------------------------------------------------------------------
Trust share registration fees 78,919
- -----------------------------------------------------------------------
Distribution services fee (Note 4) 38,361
- -----------------------------------------------------------------------
Auditing fees 17,863
- -----------------------------------------------------------------------
Legal fees 15,239
- -----------------------------------------------------------------------
Printing and postage 31,383
- -----------------------------------------------------------------------
Insurance premiums 9,889
- -----------------------------------------------------------------------
Taxes 2,473
- -----------------------------------------------------------------------
Miscellaneous 5,059
- ----------------------------------------------------------------------- ----------
Total expenses 2,190,040
- -----------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------
Waiver of investment advisory fee (Note 4) $452,665
- ------------------------------------------------------------
Waiver of distribution services fee (Note 4) 27,051 479,716
- ------------------------------------------------------------ -------- ----------
Net expenses 1,710,324
- ------------------------------------------------------------------------------------- -----------
Net investment income 13,727,553
- ------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions (identified cost basis) (253,551)
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (7,720,690)
- ------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (7,974,241)
- ------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 5,753,312
- ------------------------------------------------------------------------------------- -----------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
31
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------
1994 1993
- --------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------
Net investment income $ 13,727,553 $ 10,622,845
- ---------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($0 and $62,121 net
loss, respectively, as computed for federal income tax purposes) (Note 2C) (253,551) 19,108
- ---------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments (7,720,690) 1,638,701
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets resulting from operations 5,753,312 12,280,654
- ---------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- ---------------------------------------------------------------------------
Dividends to shareholders from net investment income
- ---------------------------------------------------------------------------
Institutional Shares (13,167,119) (10,622,845)
- ---------------------------------------------------------------------------
Institutional Service Shares (560,434) --
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets from distributions to shareholders (13,727,553) (10,622,845)
- --------------------------------------------------------------------------- ------------- -------------
TRUST SHARE (PRINCIPAL) TRANSACTION (NOTE 3)--
- ---------------------------------------------------------------------------
Proceeds from sale of shares 259,790,293 238,425,313
- ---------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends
declared 3,549,886 1,899,201
- ---------------------------------------------------------------------------
Cost of shares redeemed (226,027,733) (128,151,579)
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets resulting from Trust share transactions 37,312,446 112,172,935
- --------------------------------------------------------------------------- ------------- -------------
Change in net assets 29,338,205 113,830,744
- ---------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------
Beginning of period 318,931,526 205,100,782
- --------------------------------------------------------------------------- ------------- -------------
End of period $ 348,269,731 $ 318,931,526
- --------------------------------------------------------------------------- ------------- -------------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
32
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Short-Term Municipal Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified, no load, open-end
management investment company.
The Trust provides two classes of shares, Institutional Shares and Institutional
Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Trust's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its tax-exempt income.
Accordingly, no provisions for federal tax are necessary. At June 30, 1994,
the Trust, for federal tax purposes, had a capital loss carryforward of
$6,605,611, which will reduce the Trust's taxable income arising from future
net realized gain on investments, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distributions to shareholders
which would otherwise be necessary to relieve the Trust of any liability for
federal tax. Pursuant to the Code, such capital loss carryforward will
expire in 1995 ($1,449,467), 1996 ($2,255,334), 1997 ($1,097,445), 1998
($1,729,378), 1999 ($11,866) and 2001 ($62,121). Additionally, net capital
losses of $253,551 attributable to security transactions incurred after
October 31, 1993 are treated as arising on July 1, 1994, the first day of
the Trust's next taxable year.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Trust may engage in
when-issued or delayed delivery transactions. The Trust records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment
33
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest
on the settlement date.
E. RECLASSIFICATION--During the year ended June 30, 1994, the Trust adopted
Statement of Position 93-2, DETERMINATION, DISCLOSURE, AND FINANCIAL
STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES. Accordingly, permanent book and tax
differences have been reclassified to paid-in-capital. The Trust
reclassified $417,890 from accumulated net realized loss to paid-in-capital
in accordance with SOP 93-2. Net investment income, net realized gains, and
net assets were not affected by this change.
F. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Trust shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
-------------------------------------------------------------
1994 1993
----------------------------- -----------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold 20,791,128 $ 215,505,746 23,007,231 $ 238,425,313
- --------------------------------------------------
Shares issued to shareholders in payment of
dividends declared 292,960 3,013,260 183,329 1,899,201
- --------------------------------------------------
Shares redeemed (20,620,412) (213,148,873) (12,367,267) (128,151,579)
- -------------------------------------------------- ------------ -------------- ------------ --------------
Net change resulting from Institutional Share
transactions 463,676 $ 5,370,133 10,823,293 $ 112,172,935
- -------------------------------------------------- ------------ -------------- ------------ --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1994*
--------------------------
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS
- -------------------------------------------------- ----------- ------------
<S> <C> <C>
Shares sold 4,299,696 $ 44,284,547
- --------------------------------------------------
Shares issued to shareholders in payment of
dividends declared 52,512 536,626
- --------------------------------------------------
Shares redeemed (1,252,358) (12,878,860)
- -------------------------------------------------- ----------- ------------
Net change resulting from Institutional Service
Share transactions 3,099,850 31,942,313
- -------------------------------------------------- ----------- ------------
Total net change resulting from Trust Share
transactions 3,563,526 $ 37,312,446
- -------------------------------------------------- ----------- ------------
<FN>
* For the period from August 31, 1993 (date of initial public offering) to June
30, 1994.
</TABLE>
34
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
ADVISORY FEE--Federated Management, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.40 of 1% of the Trust's average daily net assets. The Adviser will waive, to
the extent of its advisory fee, the amount, if any, by which the Trust's
aggregate annual operating expenses (excluding interest, taxes, brokerage
commissions, expenses of registering and qualifying the Trust and its shares
under federal and state laws and regulations, expenses of withholding taxes, and
extraordinary expenses) exceeded .45 of 1% of average daily net assets of the
Trust.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
administrative personnel and services. Prior to March 1, 1994, these services
were provided at approximate cost. Effective March 1, 1994, the FAS fee is based
on the level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
DISTRIBUTION AND SHAREHOLDER SERVICES FEE--The Trust has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the
Plan, the Trust will compensate Federated Securities Corp. ("FSC"), the
principal distributor, from the net assets of the Trust to finance activities
intended to result in the sale of the Trust's Institutional Service Shares. The
Plan provides that the Trust may incur distribution expenses up to .25 of 1% of
the average daily net assets of the Institutional Shares, annually, to
compensate FSC.
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services ("FSS"), the Trust will pay FSS up to .25 of 1% of average net assets
for the Trust for the period. This fee is to obtain certain personal services
for shareholders and the maintenance of shareholder accounts. For the period
ended June 30, 1994, Institutional Service Shares did not incur a shareholder
services fee.
INTERFUND TRANSACTIONS--During the year ended June 30, 1994, the Trust engaged
in purchase and sale transactions with other affiliated funds pursuant to Rule
17a-7 amounting to $119,950,000 and $114,596,919, respectively. These purchases
and sales were conducted on an arms length basis and transacted for cash
consideration only, at independent current market prices and without brokerage
commissions, fees or other remuneration.
Certain Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
35
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended June 30, 1994, were as follows:
<TABLE>
<S> <C>
PURCHASES $181,622,840
- -------------------------------------------------- ------------
SALES $125,798,481
- -------------------------------------------------- ------------
</TABLE>
36
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------
To the Shareholders and Board of Trustees of
SHORT-TERM MUNICIPAL TRUST:
We have audited the accompanying statement of assets and liabilities of
Short-Term Municipal Trust (a Massachusetts business trust), including the
schedule of portfolio of investments as of June 30, 1994 and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights (see pages 2 and 17 of the prospectus) for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1994, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Short-Term Municipal Trust as of June 30, 1994, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the periods
presented in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania
August 1, 1994
37
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Short-Term Municipal Trust
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and and Trust Company P.O. Box 8602
Boston, Massachusetts 02266-8604
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- -------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- -------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
</TABLE>
- --------------------------------------------------------------------------------
SHORT-TERM
MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-
INTERMEDIATE MUNICIPAL TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A NO-LOAD, OPEN-END, DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY
AUGUST 31, 1994
[LOGO]
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
[LOGO]
RECYCLED
PAPER
825253206
8072507A-SS (8/94)
SHORT-TERM MUNICIPAL TRUST
(FORMERLY, FEDERATED SHORT-INTERMEDIATE MUNICIPAL TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
COMBINED STATEMENT OF ADDITIONAL INFORMATION
The Institutional Shares and Institutional Service Shares represent
interests in a diversified portfolio of securities of Short-Term
Municipal Trust (the "Trust"). This Combined Statement of Additional
Information should be read with the respective prospectuses for
Institutional Shares and Institutional Service Shares dated August
31, 1994. This Statement is not a prospectus itself. To receive a
copy of either prospectus, write or call Short-Term Municipal Trust.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated August 31, 1994
[LOGO]
Distributor
A subsidiary of FEDERATED INVESTORS
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
GENERAL INFORMATION ABOUT THE TRUST 1
- ---------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES 1
- ---------------------------------------------------------
Acceptable Investments 1
When-Issued and Delayed Delivery
Transactions 1
Portfolio Turnover 2
Investment Limitations 2
TRUST MANAGEMENT 4
- ---------------------------------------------------------
Officers and Trustees 4
The Funds 6
Trust Ownership 6
Trustee Liability 6
INVESTMENT ADVISORY SERVICES 6
- ---------------------------------------------------------
Adviser to the Trust 6
Advisory Fees 7
State Expense Limitations 7
Other Related Services 7
ADMINISTRATIVE SERVICES 7
- ---------------------------------------------------------
BROKERAGE TRANSACTIONS 7
- ---------------------------------------------------------
PURCHASING SHARES 8
- ---------------------------------------------------------
Distribution Plan (Institutional Service
Shares only) and Shareholder Services Plan 8
DETERMINING NET ASSET VALUE 8
- ---------------------------------------------------------
Valuing Municipal Securities 8
Use of Amortized Cost 8
REDEEMING SHARES 9
- ---------------------------------------------------------
Redemption in Kind 9
TAX STATUS 9
- ---------------------------------------------------------
The Trust's Tax Status 9
TOTAL RETURN 9
- ---------------------------------------------------------
YIELD 9
- ---------------------------------------------------------
TAX-EQUIVALENT YIELD 10
- ---------------------------------------------------------
Tax-Equivalency Table 10
PERFORMANCE COMPARISONS 10
- ---------------------------------------------------------
APPENDIX 12
- ---------------------------------------------------------
</TABLE>
I
GENERAL INFORMATION ABOUT THE TRUST
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated May 8, 1981. The name of the Trust was Federated
Short-Intermediate Municipal Trust prior to August 23, 1993. On August 23, 1993,
the shareholders of the Trust voted to change the name of the Trust to
Short-Term Municipal Trust.
Shares of the Trust are offered in two classes, known as Institutional Shares
and Institutional Service Shares (individually and collectively referred to as
"Shares," as the context may require). This Combined Statement of Additional
Information relates to the above-mentioned Shares of the Trust.
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Trust is to provide dividend income which is
exempt from federal regular income tax.
ACCEPTABLE INVESTMENTS
The Trust invests in a portfolio of municipal securities with a dollar-weighted
average maturity of less than three years. The investment objective stated above
cannot be changed without the approval of shareholders. The investment policies
described below may be changed without shareholder approval.
CHARACTERISTICS
The municipal securities in which the Trust invests have the
characteristics set forth in the prospectuses. The Trust may use similar
services or ratings other than Moody's Investors Service, Inc. ("Moody's")
or Standard & Poor's Corporation ("Standard & Poor's"). If a security's
rating is reduced below the required minimum after the Trust has purchased
it, the Trust is not required to sell the security, but may consider doing
so. If ratings made by Moody's or Standard & Poor's change because of
changes in those organizations or in their rating systems, the Trust will
try to use comparable ratings as standards in accordance with the
investment policies described in the Shares' prospectuses.
PARTICIPATION INTERESTS
The financial institutions from which the Trust purchases participation
interests frequently provide or secure from another financial institution
irrevocable letters of credit or guarantees and give the Trust the right
to demand payment of the principal amounts of the participation interests
plus accrued interest on short notice (usually within seven days). These
financial institutions may charge certain fees in connection with their
repurchase commitments, including a fee equal to the excess of the
interest paid on the municipal securities over the negotiated yield at
which the participation interests were purchased by the Trust. By
purchasing participation interests having a seven day demand feature, the
Trust is buying a security meeting the quality requirements of the Trust
and also is receiving the tax-free benefits of the underlying securities.
VARIABLE RATE MUNICIPAL SECURITIES
Variable interest rates generally reduce changes in the market value of
municipal securities from their original purchase prices. Accordingly, as
interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable rate municipal
securities than for fixed income obligations. Many municipal securities
with variable interest rates purchased by the Trust are subject to
repayment of principal (usually within seven days) on the Trust's demand.
For purposes of determining the Trust's average maturity, the maturities
of these variable rate demand municipal securities (including
participation interests) are the longer of the periods remaining until the
next readjustment of their interest rates or the periods remaining until
their principal amounts can be recovered by exercising the right to demand
payment. The terms of these variable rate demand instruments require
payment of principal and accrued interest from the issuer of the municipal
obligations, the issuer of the participation interests, or a guarantor of
either issuer.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an advantageous
price and yield for the Trust. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices.
1
- --------------------------------------------------------------------------------
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 at the trade date. These securities
are marked to market daily and maintained until the transaction is settled.
Municipal securities purchased in when-issued or delayed delivery transactions
are treated as issued on the date at which they begin to accrue interest in
determining whether they mature within three years from the date of purchase.
The Trust may engage in these transactions to an extent that would cause the
segregation of an amount up to 20% of the total value of its assets.
PORTFOLIO TURNOVER
The Trust will not attempt to set or meet a portfolio turnover rate since any
turnover would be incidental to transactions undertaken in an attempt to achieve
the Trust's investment objective. During the fiscal years ended June 30, 1994
and 1993, the portfolio turnover rates were 36% and 15%, respectively.
INVESTMENT LIMITATIONS
DIVERSIFICATION OF INVESTMENTS
The Trust will not purchase the securities of any issuer (except cash and
cash instruments and securities issued or guaranteed by the United States
government, its agencies and instrumentalities) if, as a result, more than
5 percent of its total assets would be invested in the securities of such
issuer. For purposes of this limitation, each governmental subdivision,
i.e., state, territory, possession of the United States or any political
subdivision of any of the foregoing, including agencies, authorities,
instrumentalities, or similar entities, or of the District of Columbia,
shall be considered a separate issuer if its assets and revenues are
separate from those of the governmental body creating it and the security
is backed only by its own assets and revenues. In the case of an
industrial development bond, if the security is backed only by the assets
and revenues of a non-governmental user, then such non-governmental user
will be deemed to be the sole issuer. If, however, in the case of an
industrial development bond or governmental issued security, a
governmental or other entity guarantees the security, such guarantee would
be considered a separate security issued by the guarantor as well as the
other issuer (as above defined) subject to limited exclusions allowed by
the Investment Company Act of 1940.
BORROWING MONEY
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then (a) only in amounts not in
excess of 5% of the value of its total assets or (b) in an amount up to
one-third of the value of its total assets, including the amount borrowed.
This borrowing 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 securities would be
inconvenient or disadvantageous.
While any such borrowings are outstanding, no net purchases of investment
securities will be made by the Trust. If, due to market fluctuations or
other reasons, the value of the Trust's assets falls below 300% of its
borrowings, the Trust will reduce its borrowings within three business
days. To do this, the Trust may have to sell a portion of its investments
at a time when it may be disadvantageous to do so.
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 10% of the value of
total assets at the time of the borrowing.
UNDERWRITING
The Trust will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
INVESTING IN REAL ESTATE
The Trust will not buy or sell real estate, including limited partnership
interests, although it may invest in municipal securities secured by real
estate or interests in real estate.
2
- --------------------------------------------------------------------------------
INVESTING IN COMMODITIES OR MINERALS
The Trust will not buy or sell commodities, commodity contracts, or oil,
gas, or other mineral exploration or development programs.
MAKING LOANS
The Trust will not make loans, but may acquire publicly or nonpublicly
issued municipal securities as permitted by its investment objective,
policies, and limitations.
SELLING SHORT AND BUYING ON MARGIN
The Trust will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as may be necessary for
clearance of purchases and sales of securities.
ISSUING SENIOR SECURITIES
The Trust will not issue senior securities, except as permitted by its
investment objective and policies.
The above investment limitations cannot be changed without shareholder approval.
The following limitations, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in these limitations becomes effective.
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND TRUSTEES OF
THE TRUST
The Trust will not purchase or retain the securities of any issuer if the
officers and Trustees of the Trust or its investment adviser owning
individually more than 1/2 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
INVESTING IN RESTRICTED SECURITIES
The Trust will not invest more than 10% of the value of its total assets
in securities which are subject to restrictions on resale under federal
securities laws, except for securities which meet the criteria for
liquidity, as established by the Trustees.
ACQUIRING SECURITIES
The Trust will not acquire the voting securities of any issuer, except as
part of a merger, consolidation, reorganization, or acquisition of assets.
It will not invest in securities issued by any other investment company or
investment trust.
INVESTING IN NEW ISSUERS
The Trust will not invest more than 5% of its total assets in industrial
development bonds where the payment of principal and interest are the
responsibility of companies with less than three years of operating
history.
INVESTING IN ILLIQUID SECURITIES
The Trust will not invest more than 15% of the value of its net assets in
illiquid securities, including repurchase agreements providing for
settlement in more than seven days after notice and certain restricted
securities.
The Trust does not intend to purchase securities if, as a result of such
purchase, more than 25% of the value of its assets would be invested in the
securities of governmental subdivisions located in any one state, territory, or
possession of the United States.
Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of the investment, a later increase or decrease in percentage
resulting from any change in value or net assets will not result in violation of
such restriction.
The Trust did not borrow money, pledge securities or invest in illiquid
securities or restricted securities in excess of 5% of the value of its total
assets during the last fiscal year and has no present intent to do so in the
coming fiscal year.
For purposes of this limitation, the Trust considers cash instruments and items
to be instruments issued by a U.S. branch of a domestic bank or savings and loan
having capital, surplus, and undivided profits in excess of $100,000,000 at the
time of the investment.
3
- --------------------------------------------------------------------------------
TRUST MANAGEMENT
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Officers and Trustees are listed with their addresses, principal occupations,
and present positions.
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John F. Donahue*+ Chairman and Chairman and Trustee, Federated Investors, Federated
Federated Investors Trustee of the Advisers, Federated Management, and Federated Research;
Tower Trust Chairman and Director, Federated Research Corp.; Chairman,
Pittsburgh, PA 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, Vice President of the
Trust.
- ----------------------------------------------------------------------------------------------------------------------
John T. Conroy, Jr. Trustee of the President, Investment Properties Corporation; Senior
Wood/IPC Commercial Department Trust Vice-President, John R. Wood and Associates, Inc., Realtors;
John R. Wood and President, Northgate Village Development Corporation;
Associates, Inc., Realtors Partner or Trustee in private real estate ventures in
3255 Tamiami Trail North Southwest Florida; Director, Trustee, or Managing General
Naples, FL Partner of the Funds; formerly, President, Naples Property
Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------
William J. Copeland Trustee of the Director and Member of the Executive Committee, Michael
One PNC Plaza - 23rd Trust Baker, Inc.; Director, Trustee, or Managing General Partner
Floor of the Funds; formerly, Vice Chairman and Director, PNC
Pittsburgh, PA Bank, N.A., and PNC Bank Corp. and Director, Ryan Homes,
Inc.
- ----------------------------------------------------------------------------------------------------------------------
James E. Dowd Trustee of the Attorney-at-law; Director, The Emerging Germany Trust, Inc.;
571 Hayward Mill Road Trust Director, Trustee, or Managing General Partner of the Funds;
Concord, MA formerly, Director, Blue Cross of Massachusetts, Inc.
- ----------------------------------------------------------------------------------------------------------------------
Lawrence D. Ellis, M.D. Trustee of the Hematologist, Oncologist, and Internist, Presbyterian and
3471 Fifth Avenue, Trust Montefiore Hospitals; Professor of Medicine and Trustee,
Suite 1111 University of Pittsburgh; Director of Corporate Health,
Pittsburgh, PA University of Pittsburgh Medical Center; Director, Trustee,
or Managing General Partner of the Funds.
- ----------------------------------------------------------------------------------------------------------------------
Edward L. Flaherty, Jr.+ Trustee of the Attorney-at-law; Partner, Meyer and Flaherty; Director,
5916 Penn Mall Trust Eat'N Park Restaurants, Inc., and Statewide Settlement
Pittsburgh, PA Agency, Inc.; Director, Trustee, or Managing General Partner
of the Funds; formerly, Counsel, Horizon Financial, F.A.,
Western Region.
- ----------------------------------------------------------------------------------------------------------------------
Glen R. Johnson* President and Trustee, Federated Investors; President and/or Trustee of
Federated Investors Trustee of the some of the Funds; staff member, Federated Securities Corp.
Tower Trust and Federated Administrative Services.
Pittsburgh, PA
- ----------------------------------------------------------------------------------------------------------------------
Peter E. Madden Trustee of the Consultant; State Representative, Commonwealth of
225 Franklin Street Trust Massachusetts; Director, Trustee, or Managing General
Boston, MA Partner of the Funds; formerly, President, State Street Bank
and Trust Company and State Street Boston Corporation and
Trustee, Lahey Clinic Foundation, Inc.
- ----------------------------------------------------------------------------------------------------------------------
Gregor F. Meyer Trustee of the Attorney-at-law; Partner, Meyer and Flaherty; Chairman,
5916 Penn Mall Trust Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.;
Pittsburgh, PA Director, Trustee, or Managing General Partner of the Funds;
formerly, Vice Chairman, Horizon Financial, F.A.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
4
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITIONS WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE TRUST DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wesley W. Posvar Trustee of the Professor, Foreign Policy and Management Consultant;
1202 Cathedral of Trust Trustee, Carnegie Endowment for International Peace, RAND
Learning Corporation, Online Computer Library Center, Inc., and U.S.
University of Pittsburgh Space Foundation; Chairman, Czecho Slovak Management Center;
Pittsburgh, PA 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 Trustee of the Public relations/marketing consultant; Director, Trustee, or
4905 Bayard Street Trust Managing General Partner of the Funds.
Pittsburgh, PA
- ----------------------------------------------------------------------------------------------------------------------
J. Christopher Donahue Vice President President and Trustee, Federated Investors, Federated
Federated Investors of the Trust Advisers, Federated Management, and Federated Research;
Tower President and Director, Federated Research Corp.; President,
Pittsburgh, PA 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 Trustee of the Trust.
- ----------------------------------------------------------------------------------------------------------------------
Richard B. Fisher Vice President Executive Vice President and Trustee, Federated Investors;
Federated Investors of the Trust Director, Federated Research Corp.; Chairman and Director,
Tower Federated Securities Corp.; President or Vice President of
Pittsburgh, PA some of the Funds; Director or Trustee of some of the Funds.
- ----------------------------------------------------------------------------------------------------------------------
Edward C. Gonzales Vice President Vice President, Treasurer, and Trustee, Federated Investors;
Federated Investors and Treasurer Vice President and Treasurer, Federated Advisers, Federated
Tower of the Trust Management, Federated Research, Federated Research Corp.,
Pittsburgh, PA 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 Vice President Vice President, Secretary, General Counsel, and Trustee,
Federated Investors and Secretary Federated Investors; Vice President, Secretary, and Trustee,
Tower of the Trust Federated Advisers, Federated Management, and Federated
Pittsburgh, PA 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.
- ----------------------------------------------------------------------------------------------------------------------
<FN>
* This Trustee is deemed to be an "interested person" of the Trust as defined in
the Investment Company Act of 1940, as amended.
+ Member of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
</TABLE>
5
- --------------------------------------------------------------------------------
THE FUNDS
"The Funds" and "Funds" mean the following investment companies: Alexander
Hamilton Funds; American Leaders Trust, Inc.; Annuity Management Series;
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 Trust;
Federated Exchange Trust, Ltd.; Federated GNMA Trust; Federated Government
Trust; Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
U.S. Government Bond Trust; First Priority Funds; Fixed Income Securities, Inc.;
Fortress Adjustable Rate U.S. Government Trust, Inc.; Fortress Municipal Income
Trust, Inc.; Fortress Utility Trust, Inc.; Trust 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 Trust, Inc.; Liberty High Income Bond Trust,
Inc.; Liberty Municipal Securities Trust, Inc.; Liberty Term Trust, Inc.-1999;
Liberty U.S. Government Money Market Trust; Liberty Utility Trust, Inc.; Liquid
Cash Trust; Managed Series Trust; Mark Twain Funds; The Medalist Funds; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market Trust;
Municipal Securities Income Trust; New York Municipal Cash Trust; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; Portage Funds; RIMCO Monument Funds;
The Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Trust, Inc.; Sunburst Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; Trust for Financial Institutions;
Trust for Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; and World Investment Series,
Inc.
TRUST OWNERSHIP
Officers and Trustees own less than 1% of the Trust's outstanding shares.
As of August 1, 1994, the following shareholder of record owned 5% or more of
the outstanding Institutional Service Shares of the Trust: Marion Merrell Dow,
Inc., Kansas City, Missouri, owned approximately 1,977,905 Shares (63.64%).
As of August 1, 1994, no shareholders of record owned 5% or more of the
outstanding Institutional Shares of the Trust.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
INVESTMENT ADVISORY SERVICES
- --------------------------------------------------------------------------------
ADVISER TO THE TRUST
The Trust's investment adviser is Federated Management, a subsidiary of
Federated Investors. All the Class A (voting) shares of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, his wife, and his
son, J. Christopher Donahue. John F. Donahue is Chairman and Trustee of
Federated Management, Chairman and Trustee of Federated Investors and Chairman
and Trustee of the Trust. J. Christopher Donahue is President and Trustee of
Federated Management; President and Trustee, Federated Investors; Federated
Administrative Services; Trustee, Federated Services Company, and Vice President
of the Trust. John W. McGonigle is Vice President, Secretary, and Trustee of
Federated Management; Trustee, Vice President, Secretary and General Counsel,
Federated Investors; Executive Vice President, Secretary and Trustee, Federated
Administrative Services; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Vice President and
Secretary of the Trust.
The adviser shall not be liable to the Trust or its shareholders for any losses
that may be sustained in the purchase, holding, or sale of any security, for
anything done or omitted by it, except acts or omissions involving
6
- --------------------------------------------------------------------------------
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, Federated Management receives an annual investment
advisory fee as described in the prospectuses. During the fiscal years ended
June 30, 1994, 1993, and 1992, the Trust's adviser earned $1,414,365,
$1,009,339, and $685,575, respectively, which were reduced by $452,665, $357,415
and $331,339, respectively, because of undertakings to limit the Trust's
expenses.
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 expense
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.
OTHER RELATED SERVICES
Affiliates of the adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of shares of funds offered by Federated Securities Corp.
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
prospectuses. (Prior to March 1, 1994, Federated Administrative Services, Inc.,
also a subsidiary of Federated Investors, served as the Trust's administrator.
For purposes of this Statement of Additonal Information, Federated
Administrative Services and Federated Administrative Services, Inc., may
hereinafter collectively be referred to as the "Administrators"). For the fiscal
year ended June 30, 1994, the Administrators collectively earned $346,714. For
the fiscal years ended 1993 and 1992, Federated Administrative Services, Inc.,
the Trust's former administrator, earned $300,002 and $238,559, respectively.
Dr. Henry J. Gailliot, an officer of Federated Management, 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
- --------------------------------------------------------------------------------
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Board of Trustees.
The 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.
7
- --------------------------------------------------------------------------------
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided.
Research services provided by brokers may be used by the adviser or by
affiliates of Federated Investors in advising Federated Funds and other
accounts. To the extent that receipt of these services may supplant services for
which the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses.
PURCHASING SHARES
- --------------------------------------------------------------------------------
Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange is open for business. The procedure for purchasing Shares is
explained in the respective prospectus under "Investing in Institutional Shares"
or "Investing in Institutional Service Shares."
DISTRIBUTION PLAN (INSTITUTIONAL SERVICE 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 Institutional Service Shares, 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's 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 period from August 31, 1993 (date of initial public offering) to June
30, 1994, payments in the amount of $38,361 were made pursuant to the
Distribution Plan (Institutional Service Shares only), of which $27,051 was
waived. In addition, for this period, the Trust made payments in the amount of
$27,051 pursuant to the Shareholder Services Plan.
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on which the net asset
value is calculated by the Trust are described in the respective prospectus.
VALUING MUNICIPAL SECURITIES
The Board of Trustees uses an independent pricing service to value municipal
securities. The independent pricing service takes into consideration: yield;
stability; risk; quality; coupon rate; maturity; type of issue; trading
characteristics; special circumstances of a security or trading market; and any
other factors or market data it considers relevant in determining valuations for
normal institutional size trading units of debt securities and does not rely
exclusively on quoted prices.
USE OF AMORTIZED COST
The Board of Trustees has decided that the fair value of municipal securities
authorized to be purchased by the Trust with remaining maturities of 60 days or
less at the time of purchase shall be their amortized cost value, unless the
particular circumstances of the security indicate otherwise. Under this method,
portfolio instruments and assets are valued at the acquisition cost as adjusted
for amortization of premium or accumulation of discount rather than at current
market value. The Executive Committee continually assesses this method of
valuation and
8
- --------------------------------------------------------------------------------
recommends changes where necessary to assure that the Trust's portfolio
instruments are valued at their fair value as determined in good faith by the
Trustees.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Trust redeems Shares at the next computed net asset value after State Street
Bank receives the redemption request. Redemption procedures are explained in the
respective prospectus under "Redeeming Institutional Shares" or "Redeeming
Institutional Service Shares." Although State Street Bank does not charge for
telephone redemptions, it reserves the right to charge a fee for the cost of
wire-transferred redemptions of less than $5,000.
REDEMPTION IN KIND
Although the Trust intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Trust's portfolio.
Redemption in kind will be made in conformity with applicable Securities and
Exchange Commission rules, taking such securities at the same value employed in
determining net asset value and selecting the securities in a manner the
Trustees determine to be fair and equitable.
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 a lesser of $250,000 or 1% of a class'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.
TOTAL RETURN
- --------------------------------------------------------------------------------
The Trust's average annual total returns for Institutional Shares for the
one-year, five-year and ten-year periods ended June 30, 1994, were 1.76%, 5.24%,
and 5.55%, respectively.
The average annual total return for each class of shares of the Trust is the
average compounded rate of return for a given period that would equate a $1,000
initial investment to the ending redeemable value of that investment. The ending
redeemable value is computed by multiplying the number of shares owned at the
end of the period by the offering price per share at the end of the period. The
number of shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the period
by any additional shares, assuming monthly reinvestment of all dividends and
distributions.
The Trust's cumulative total return for Institutional Service Shares for the
period from August 31, 1993 (date of initial public offering) to June 30, 1994,
was 1.08%.
Cumulative total return reflects the Trust's total performance over a specific
period of time. The Trust's cumulative total return for Institutional Service
Shares is representative of only ten months activity.
YIELD
- --------------------------------------------------------------------------------
The Trust's yields for the thirty-day period ended June 30, 1994, for
Institutional Shares and Institutional Service Shares were 3.73% and 3.48%,
respectively.
9
- --------------------------------------------------------------------------------
The yield for both classes of shares of the Trust is determined by dividing the
net investment income per share (as defined by the Securities and Exchange
Commission) earned by either class of shares over a thirty-day period by the
offering price per share of either class on the last day of the period. This
value is then annualized using semi-annual compounding. This means that the
amount of income generated during the thirty-day period is assumed to be
generated each month over a twelve-month period and is reinvested every six
months. The yield does not necessarily reflect income actually earned by the
Trust because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in either
class of shares, performance will be reduced for those shareholders paying those
fees.
TAX-EQUIVALENT YIELD
- --------------------------------------------------------------------------------
The Trust's tax-equivalent yields for the thirty-day period ended June 30, 1994,
for Institutional Shares and Institutional Service Shares were 5.18% and 4.83%,
respectively.
The tax-equivalent yield of the Trust is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that the Trust would have had to earn
to equal its actual yield, assuming the shareholder is in the 28% tax-bracket
and that income is 100% tax-exempt.
TAX-EQUIVALENCY TABLE
The Trust may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal bonds in the Trust's
portfolio generally remains free from federal regular income tax,* and is
often free from state and local taxes as well. As the table below
indicates, a "tax-free" investment is an attractive choice for investors,
particularly in times of narrow spreads between tax-free and taxable
yields.
TAXABLE YIELD EQUIVALENT FOR 1994
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
TAX BRACKET:
FEDERAL: 15.00% 28.00% 31.00% 36.00% 39.60%
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joint Return $1-38,000 $38,001-91,850 $91,851-140,000 $140,001-250,000 OVER $250,000
Single Return $1-22,101 $22,751-55,100 $53,101-115,000 $115,001-250,000 OVER $250,000
- --------------------------------------------------------------------------------------------
TAX-EXEMPT YIELD TAXABLE YIELD EQUIVALENT
- --------------------------------------------------------------------------------------------
2.50% 2.94% 3.47% 3.62% 3.91% 4.14%
3.00 3.53 4.17 4.35 4.69 4.97
3.50 4.12 4.86 5.07 5.47 5.79
4.00 4.71 5.56 5.80 6.25 6.62
4.50 5.29 6.25 6.52 7.03 7.45
5.00 5.88 6.94 7.25 7.81 8.28
5.50 6.47 7.64 7.97 8.59 9.11
<FN>
Note: The maximum marginal tax rate for each bracket was used in calculating the
taxable yield equivalent.
The chart above is for illustrative purposes only. It is not an indicator of
past or future performance of the Trust.
* Some portion of the Trust's income may be subject to the federal
alternative minimum tax and state and local taxes.
</TABLE>
PERFORMANCE COMPARISONS
- --------------------------------------------------------------------------------
The performance of both classes 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 and market value of portfolio securities;
- changes in the Trust's expenses or either class of Shares' expenses; and
- various other factors.
10
- --------------------------------------------------------------------------------
Either class of Shares' performance fluctuates on a daily basis largely because
net earnings and offering price per share fluctuate daily. Both net earnings and
offering price per share are factors in the computation of yield and total
return.
Investors may use financial publications and/or indices to obtain a more
complete view of the 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 capital gains distributions and income
dividends and takes into account any change in offering price over a
specific period of time. From time to time, the Trust will quote its
Lipper ranking in the "intermediate municipal bond funds" category in
advertising and sales literature.
- THE LEHMAN BROTHERS STATE 5-YEAR G.O. BOND INDEX is a composite measure of
total return performance for the municipal bond market on those municipal
bonds with maturities of five years. The securities on this index include
ratings categories of A and Aaa. Total returns are calculated twice
monthly as well as for one month, three month, and twelve month periods.
Total returns are also calculated as of the beginning of the index
inception on December 31, 1979.
- THE LEHMAN BROTHERS STATE 3-YEAR G.O. BOND INDEX is a total return
performance benchmark for the short-term general obligation sector of the
tax-exempt bond market. Returns and attributes for the index are
calculated semi-monthly.
- MORNINGSTAR, INC., an independent rating service, is the publisher of the
bi-weekly MUTUAL TRUST VALUES. MUTUAL TRUST VALUES rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for
two weeks.
Advertisements and other sales literature for both classes of Shares may quote
total returns which are calculated on non-standardized base periods. The total
returns represent the historic change in the value of an investment in either
class of Shares based on monthly reinvestment of dividends over a specified
period of time.
11
APPENDIX
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION MUNICIPAL BOND RATING DEFINITIONS
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effect of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC--Debt rated BB, B, CCC or CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties of major risk exposures to adverse
conditions.
C--The rating C is reserved for income bonds on which no interest is being paid.
D--Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
MOODY'S INVESTORS SERVICE, INC.
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in AAA securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through B in its corporate or municipal bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
12
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
SHORT-TERM MUNICIPAL OBLIGATION RATING DEFINITIONS
MIG1/VMIG1--Notes which are rated MIG1/VMIG1 are of the best quality. There is
present strong protection by established cash flows, superior liquidity support,
or demonstrated broad-based access to the market for refinancing.
MIG2/VMIG2--Notes which are rated MIG2/VMIG2 are of high quality. Margins of
protection are ample although not so large as in MIG1/VMIG1 ratings.
825253107
825253206
8072507B(8/94)
13
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements. (Filed in Part A)
(b) Exhibits:
(1) (i) Copy of Declaration of Trust of
the Registrant (1.);
(ii) Copy of amendment to the
Declaration of Trust (2.);
(2) (i) Copy of the By-Laws of the
Registrant (1.);
(ii) Copy of amendment to the By-Laws of
the Registrant (3., 6., 7.);
(3) Not applicable;
(4) Copy of Specimen Certificate of Shares
(2.);
(5) Copy of the Investment Advisory Contract
(9.);
(6) Conformed copy of the Distributor's
Contract;+
(7) Not applicable;
(8) Conformed copy of the Custodian
Agreement of the Registrant;+
(9) (i) Conformed copy of Fund Accounting,
Shareholder Recordkeeping, and Custody
Services Procurement Agreement of the
Registrant;+
(ii) Conformed copy of Administrative
Services Agreement;+
(iii) Conformed copy of Shareholder
Services Plan;+
(iv) Conformed copy of Shareholder
Services Agreement;+
(v) Form of Shareholder Services Sub-
Contract;+
(10) Copy of Opinion and Consent of Counsel
as to legality of shares being
registered (2.);
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's
Initial Registration Statement on Form N-1 filed
May 13, 1981. (File Nos. 2-72277 and 811-3181)
2. Response is incorporated by reference to Registrant's
Pre-Effective Amendment No. 1 on Form N-1 filed August
4, 1981. (File Nos. 2-72277 and 811-3181)
3. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 1 on Form N-1 filed
February 18, 1982. (File Nos. 2-72277 and 811-3181)
6. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 8 on Form N-1A filed
August 29, 1985. (File Nos. 2-72277 and 811-3181)
7. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 10 on Form N-1A filed
August 24, 1987. (File Nos. 2-72277 and 811-3181)
9. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 15 on Form N-1A filed
August 24, 1989. (File Nos. 2-72277 and 811-3181)
(11) Conformed copy of the Consent of
Independent Public Accountants;+
(12) Not applicable;
(13) Copy of Initial Capital Understanding
(2.);
(14) Not applicable;
(15) Conformed copy of Rule 12B-1 Plan;+
(16) Schedule for Computation of Fund
Performance Data (8.);
(17) Power of Attorney;+
(18) Conformed copy of Opinion and Consent of
Counsel as to availability of Rule
485(b);+
Item 25. Persons Controlled by or Under Common Control with
Registrant:
None.
Item 26. Number of Holders of Securities:
Number of Record
Holders
Title of Class as of August 1,
1994
Shares of Beneficial Interest
(no par value)
Institutional Shares 1,286
Institutional Service Shares 140
Item 27. Indemnification: (10.)
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 and their business
addresses are included in Part B of this
Registration Statement under "Trust Management -
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.
2. Response is incorporated by reference to Registrant's
Pre-Effective Amendment No. 1 on Form N-1 filed August
4, 1981. (File Nos. 2-72277 and 811-3181)
8. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 12 on Form N-1A filed
August 22, 1988. (File Nos. 2-72277 and 811-3181)
10. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 17 on Form N-1A filed
August 24, 1990. (File Nos. 2-72277 and 811-3181)
The remaining Officers of the investment adviser
are: William D. Dawson, J. Thomas Madden, and
Mark L. Mallon, Executive Vice Presidents;
Henry J. Gailliot, Senior Vice President-
Economist; Peter R. Anderson, Gary J. Madich, and
J. Alan Minteer, Senior Vice Presidents; Randall
A. Bauer, Jonathan C. Conley, Deborah A.
Cunningham, Mark E. Durbiano, Roger A. Early,
Kathleen M. Foody-Malus, Thomas M. Franks, Edward
C. Gonzales, Jeff A. Kozemchak, Marian R.
Marinack, John W. McGonigle, Gregory M. Melvin,
Susan M. Nason, Mary Jo Ochson, Robert J.
Ostrowski, Charles A. Ritter, and Christopher H.
Wiles, Vice Presidents, Edward C. Gonzales,
Treasurer, and John W. McGonigle, Secretary. The
business address of each of the Officers of the
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 under the sub-section
entitled "The Funds," found under the main heading
entitled "Trust Management."
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;
Automated Cash Management Trust; Automated
Government Money Trust; BayFunds; The Biltmore
Funds; The Biltmore Municipal Funds;
California Municipal Cash Trust; Cambridge
Series Trust; Cash Trust Series, Inc.; Cash
Trust Series II; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust;
Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated
Government Trust; Federated Growth Trust;
Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust;
Federated Index Trust; Federated Intermediate
Government Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-
Intermediate Government Trust; Federated Short-
Intermediate Municipal 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;
Mark Twain Funds; Marshall Funds, Inc.; The
Medalist Funds; Money Market Management, Inc.;
Money Market Obligations Trust; Money Market
Trust; The Monitor Funds; Municipal Securities
Income Trust; New York Municipal Cash Trust;
111 Corcoran Funds; Peachtree Funds; Planters
Funds; Portage Funds; RIMCO Monument Funds;
The Shawmut Funds; SouthTrust Vulcan Funds;
Star Funds; The Starburst Funds; The Starburst
Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free
Instruments Trust; Tower Mutual Funds;
Trademark Funds; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury
Obligations; Vision Fiduciary Funds, Inc.;
Vision Group of Funds, Inc.; and World
Investment Series, Inc.
Federated Securities Corp. also acts as
principal underwriter for the following closed-
end investment company: Liberty Term
Trust, Inc. - 1999.
(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
Federated Investors Tower President, and Treasurer, and
Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice
President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley, IV Executive Vice President --
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
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
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated
Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and
Offices
Business Address With Underwriter With
Registrant
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
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
Pittsburgh, PA 15222-3779
Item 30. Location of Accounts and Records:
Short-Term Municipal Trust Federated Investors Tower
Pittsburgh, Pennsylvania
15222-3779
Federated Services Company Federated Investors Tower
("Transfer Agent and Dividend Pittsburgh, Pennsylvania
Disbursing Agent") 15222-3779
Federated Administrative Services Federated Investors Tower
("Administrator") Pittsburgh, Pennsylvania
15222-3779
Federated Management Federated Investors Tower
("Adviser") Pittsburgh, Pennsylvania
15222-3779
State Street Bank and Trust Company P.O. Box 8602
("Custodian") Boston, Massachusetts
02266-8602
Item 31. Management Services: Not applicable.
Item 32. Undertakings: (10.)
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.
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.
____________________________
10. Response is incorporated by reference to Registrant's
Post-Effective Amendment No. 17 filed August 24, 1990.
(File Nos. 2-72277 and 811-3181)
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant,
SHORT-TERM MUNICIPAL TRUST (formerly, Federated Short-
Intermediate Municipal Trust), certifies that it meets all
of the requirements for effectiveness of this Amendment to
its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 26th day
of August, 1994.
SHORT-TERM MUNICIPAL TRUST
(formerly, Federated Short-Intermediate Municipal Trust)
BY: /s/G. Andrew Bonnewell
G. Andrew Bonnewell, Assistant Secretary
Attorney in Fact for John F. Donahue
August 26, 1994
Pursuant to the requirements of the Securities Act of
1933, this Amendment to its Registration Statement has been
signed below by the following person in the capacity and on
the date indicated:
NAME TITLE
DATE
By: /s/G. Andrew Bonnewell
G. Andrew Bonnewell Attorney In Fact August 26,
1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President and Trustee
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit 11 under Form N-1A
Exhibit 23 under Item
601/Reg. SK
ARTHUR ANDERSEN & CO.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
use in Post-Effective Amendment No. 26 to Form N-1A
Registration Statement of Short-Term Municipal Trust of our
report dated August 1, 1994, on the financial statements as of
June 30, 1994, included in or made a part of this registration
statement.
By: ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Pittsburgh, Pennsylvania,
August 23, 1994
Exhibit 18 under Form N-1A
Exhibit 99 under Item 601/Reg.S-K
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTONPITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR.__________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
August 25, 1994
Short-Term Municipal Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
As counsel to Short-Term Municipal Trust ("Trust") we have
reviewed Post-effective Amendment No. 26 to the Trust's
Registration Statement to be filed with the Securities and
Exchange Commission under the Securities Act of 1933 (File No. 2-
72277). The subject Post-effective Amendment will be filed
pursuant to Paragraph (b) of Rule 485 and become effective
pursuant to said Rule on August 29, 1994.
Our review also included an examination of other relevant
portions of the amended 1933 Act Registration Statement of the
Trust and such other documents and records deemed appropriate.
On the basis of this review we are of the opinion that Post-
effective Amendment No. 26 does not contain disclosures which
would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.
We hereby consent to the filing of this representation
letter as a part of the Trust's Registration Statement filed with
the Securities and Exchange Commission under the Securities Act
of 1933 and as part of any application or registration statement
filed under the Securities Laws of the States of the United
States.
Very truly yours,
Houston, Houston & Donnelly
By:/s/ William McC. Houston
WMH:heh
Exhibit 17 under Form N-
1A
Exhibit 24 under Item
601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby
constitutes and appoints the Secretary and Assistant
Secretary of SHORT-TERM MUNICIPAL 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
Securities and Exchange Commission's electronic disclosure
system known as EDGAR; and to file the same, with all
exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes
as each of them might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue
thereof.
SIGNATURES TITLE DATE
Chairman and Trustee August 8,
1994
/s/John F. Donahue (Chief Executive Officer)
President and Trustee
/s/Glen R. Johnson
Vice President and Treasurer
/s/Edward C. Gonzales (Principal
Financial and
Accounting Officer)
/s/William J. Copeland
/s/James E. Dowd
/s/Lawrence D. Ellis, M.D.
SIGNATURES TITLE DATE
/s/Edward L. Flaherty, Jr.
/s/Gregor F. Meyer
/s/Wesley W. Posvar
/s/Marjorie P. Smuts
/s/Peter E. Madden
/s/John T. Conroy, Jr.
Sworn to and subscribed before me this ____ day of
_________, 1994.
____________________________________________________
Notary Public
-1-
Exhibit 6 under Form N-1A
Exhibit 1 under Item 601/Reg.
S-K
SHORT-TERM MUNICIPAL TRUST
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of June, 1993, by and
between Short-Term Municipal 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 exhibit 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 Trustees of
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 Article XI of
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.
-1-
Exhibit A
to the
Distributor's Contract
SHORT-TERM MUNICIPAL TRUST
Short-Term Municipal Trust
Institutional Shares
In consideration of the mutual covenants set forth in
the Distributor's Contract dated June 1, 1993 between Short-
Term Municipal Trust and Federated Securities Corp., Short-
Term Municipal Trust executes and delivers this Exhibit on
behalf of the Funds, and with respect to the separate
Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of June,
1993.
ATTEST: SHORT-TERM MUNICIPAL TRUST
/s/ S. Elliott Cohan By: /s/ Glen R.
Johnson
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John W.
McGonigle
Secretary
Executive Vice President
(SEAL)
-1-
Exhibit B
to the
Distributor's Contract
SHORT-TERM MUNICIPAL TRUST
Short-Term Municipal Trust
Institutional Service Shares
The following provisions are hereby incorporated and
made part of the Distributor's Contract dated the 1st day of
June, 1993, between Short-Term Municipal Trust and Federated
Securities Corp. with respect to Classes of the Funds 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 Classes ("Shares"). Pursuant to
this appointment, FSC is authorized to select a group of
brokers ("Brokers") to sell Shares at the current offering
price thereof as described and set forth in the respective
prospectuses of the Trust, and to render administrative
support services to the Trust and its shareholders. In
addition, FSC is authorized to select a group of
administrators ("Administrators") to render administrative
support services to the Trust and its shareholders.
2. Administrative support services may include, but
are not limited to, the following functions: 1) account
openings: the Broker or Administrator communicates account
openings via computer terminals located on the Broker's or
Administrator's premises; 2) account closings: the Broker
or Administrator communicates account closings via computer
terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or
Administrator's own personal computer or through the use of
a toll-free telephone number; 4) enter redemption
transactions: Broker or Administrator enters redemption
transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges
to provide accounting support for all transactions. Broker
or Administrator also wires funds and receives funds for
Trust share purchases and redemptions, confirms and
reconciles all transactions, reviews the activity in the
Trust's accounts, and provides training and supervision of
its personnel; 6) interest posting: Broker or Administrator
posts and reinvests dividends to the Trust's accounts; 7)
prospectus and shareholder reports: Broker or Administrator
maintains and distributes current copies of prospectuses and
shareholder reports; 8) advertisements: the Broker or
Administrator continuously advertises the availability of
its services and products; 9) customer lists: the Broker or
Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and
develops methods of making such materials accessible to
customers; and 11) consultation services: the Broker or
Administrator continuously provides information about the
product needs of customers.
3. 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 0.25 of 1% of the average
aggregate net asset value of the shares of the Short-Term
Municipal Trust Institutional Service 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.
4. FSC may from time-to-time and for such
periods as it deems appropriate reduce its compensation to
the extent any Classes' expenses exceed such lower expense
limitation as FSC may, by notice to the Trust, voluntarily
declare to be effective.
5. 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 Brokers and Administrators 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.
6. FSC will prepare reports to the Board of
Trustees of the Trust on a quarterly basis showing amounts
expended hereunder including amounts paid to Brokers and
Administrators and the purpose for such payments.
In consideration of the mutual covenants set forth in
the Distributor's Contract dated June 1, 1993 between Short-
Term Municipal Trust and Federated Securities Corp., Short-
Term Municipal Trust executes and delivers this Exhibit on
behalf of the Funds, and with respect to the separate
Classes of Shares thereof, first set forth in this Exhibit.
Witness the due execution hereof this 1st day of June,
1993.
ATTEST: SHORT-TERM MUNICIPAL TRUST
/s/ S. Elliott Cohan By: /s/ Glen R.
Johnson
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
/s/ S. Elliott Cohan By: /s/ John W.
McGonigle
Secretary Executive Vice
President
(SEAL)
Exhibit 8 under Form N-1A
Exhibit 10 under Item 601/RegS-K
CUSTODIAN CONTRACT
Between
FEDERATED INVESTMENT COMPANIES
and
STATE STREET BANK AND TRUST COMPANY
and
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It1
2. Duties of the Custodian With Respect to Property
of the Funds Held by the Custodian 2
2.1 Holding Securities
2
2.2 Delivery of Securities
2
2.3 Registration of Securities
5
2.4 Bank Accounts
6
2.5 Payments for Shares
7
2.6 Availability of Federal Funds
7
2.7 Collection of Income
7
2.8 Payment of Fund Moneys
8
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased. 9
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund 9
2.11 Appointment of Agents
10
2.12 Deposit of Fund Assets in Securities System
10
2.13 Segregated Account
12
2.14 Joint Repurchase Agreements
13
2.15 Ownership Certificates for Tax Purposes
13
2.16 Proxies
13
2.17Communications Relating to Fund Portfolio Securit
ies13
2.18 Proper Instructions
14
2.19 Actions Permitted Without Express Authority
14
2.20 Evidence of Authority
15
2.21Notice to Trust by Custodian Regarding Cash Movem
ent. 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 a
nd agreements hereinafter contained, the parties hereto
agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian
of the assets of each of the Funds of the Trust. Except
as otherwise expressly provided herein, the securities
and other assets of each of the Funds shall be segregated
from the assets of each of the other Funds and from all
other persons and entities. The Trust will deliver to
the Custodian all securities and cash owned by the Funds
and all payments of income, payments of principal or
capital distributions received by them with respect to
all securities owned by the Funds from time to time, and
the cash consideration received by them for shares
("Shares") of beneficial interest/capital stock of the
Funds as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of
the Funds held or received by the Funds and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning
of Section 2.18), the Custodian shall from time to time
employ one or more sub-custodians upon the terms
specified in the Proper Instructions, provided that the
Custodian shall have no more or less responsibility or
liability to the Trust or any of the Funds on account of
any actions or omissions of any sub-custodian so employed
than any such sub-custodian has to the Custodian.
2.Duties of the Custodian With Respect to Property of the Fu
nds Held by the Custodian
2.1Holding Securities. The Custodian shall hold and phys
ically segregate for the account of each Fund all non-
cash property, including all securities owned by each
Fund, other than securities which are maintained
pursuant to Section 2.12 in a clearing agency which
acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the
Treasury, collectively referred to herein as
"Securities System", or securities which are subject
to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall
maintain records of all receipts, deliveries and
locations of such securities, together with a current
inventory thereof, and shall conduct periodic
physical inspections of certificates representing
stocks, bonds and other securities held by it under
this Contract in such manner as the Custodian shall
determine from time to time to be advisable in order
to verify the accuracy of such inventory. With
respect to securities held by any agent appointed
pursuant to Section 2.11 hereof, and with respect to
securities held by any sub-custodian appointed
pursuant to Section 1 hereof, the Custodian may rely
upon certificates from such agent as to the holdings
of such agent and from such sub-custodian as to the
holdings of such sub-custodian, it being understood
that such reliance in no way relieves the Custodian
of its responsibilities under this Contract. The
Custodian will promptly report to the Trust the
results of such inspections, indicating any shortages
or discrepancies uncovered thereby, and take
appropriate action to remedy any such shortages or
discrepancies.
2.2Delivery of Securities. The Custodian shall release a
nd deliver securities owned by a Fund held by the
Custodian or in a Securities System account of the
Custodian only upon receipt of Proper Instructions,
which may be continuing instructions when deemed
appropriate by the parties, and only in the following
cases:
(1)Upon sale of such securities for the account of a
Fund and receipt of payment therefor;
(2)Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Trust;
(3)In the case of a sale effected through a Securitie
s System, in accordance with the provisions of
Section 2.12 hereof;
(4)To the depository agent in connection with tender
or other similar offers for portfolio securities
of a Fund, in accordance with the provisions of
Section 2.17 hereof;
(5)To the issuer thereof or its agent when such secur
ities are called, redeemed, retired or otherwise
become payable; provided that, in any such case,
the cash or other consideration is to be
delivered to the Custodian;
(6)To the issuer thereof, or its agent, for transfer
into the name of a Fund or into the name of any
nominee or nominees of the Custodian or into the
name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or
nominee name of any sub-custodian appointed
pursuant to Section 1; or for exchange for a
different number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units; provided that, in any
such case, the new securities are to be delivered
to the Custodian;
(7)Upon the sale of such securities for the account o
f a Fund, to the broker or its clearing agent,
against a receipt, for examination in accordance
with "street delivery custom"; provided that in
any such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as
may arise from the Custodian's own failure to act
in accordance with the standard of reasonable
care or any higher standard of care imposed upon
the Custodian by any applicable law or regulation
if such above-stated standard of reasonable care
were not part of this Contract;
(8)For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities
of the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
provided that, in any such case, the new
securities and cash, if any, are to be delivered
to the Custodian;
(9)In the case of warrants, rights or similar securit
ies, the surrender thereof in the exercise of
such warrants, rights or similar securities or
the surrender of interim receipts or temporary
securities for definitive securities; provided
that, in any such case, the new securities and
cash, if any, are to be delivered to the
Custodian;
(10)For delivery in connection with any loans of port
folio securities of a Fund, but only against
receipt of adequate collateral in the form of (a)
cash, in an amount specified by the Trust, (b)
certificated securities of a description
specified by the Trust, registered in the name of
the Fund or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in
proper form for transfer, or (c) securities of a
description specified by the Trust, transferred
through a Securities System in accordance with
Section 2.12 hereof;
(11)For delivery as security in connection with any b
orrowings requiring a pledge of assets by a Fund,
but only against receipt of amounts borrowed,
except that in cases where additional collateral
is required to secure a borrowing already made,
further securities may be released for the
purpose;
(12)For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the
Custodian and a broker-dealer registered under
the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The
Options Clearing Corporation and of any
registered national securities exchange, or of
any similar organization or organizations,
regarding escrow or other arrangements in
connection with transactions for a Fund;
(13)For delivery in accordance with the provisions of
any agreement among the Trust or a Fund, the
Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act,
relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or
organizations, regarding account deposits in
connection with transaction for a Fund;
(14)Upon receipt of instructions from the transfer ag
ent ("Transfer Agent") for a Fund, for delivery
to such Transfer Agent or to the holders of
shares in connection with distributions in kind,
in satisfaction of requests by holders of Shares
for repurchase or redemption; and
(15)For any other proper corporate purpose, but only
upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of
the Executive Committee of the Trust on behalf of
a Fund signed by an officer of the Trust and
certified by its Secretary or an Assistant
Secretary, specifying the securities to be
delivered, setting forth the purpose for which
such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of
such securities shall be made.
2.3 Registration of Securities. Securities held by the C
ustodian (other than bearer securities) shall be
registered in the name of a particular Fund or in the
name of any nominee of the Fund or of any nominee of
the Custodian which nominee shall be assigned
exclusively to the Fund, unless the Trust has
authorized in writing the appointment of a nominee to
be used in common with other registered investment
companies affiliated with the Fund, or in the name or
nominee name of any agent appointed pursuant to
Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of a
Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain
a separate bank account or accounts in the name of
each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received
by it from or for the account of each Fund, other
than cash maintained in a joint repurchase account
with other affiliated funds pursuant to Section 2.14
of this Contract or by a particular Fund in a bank
account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940,
as amended, (the "1940 Act"). Funds held by the
Custodian for a Fund may be deposited by it to its
credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or
trust company shall be qualified to act as a
custodian under the 1940 Act and that each such bank
or trust company and the funds to be deposited with
each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees/Directors
("Board") of the Trust. Such funds shall be
deposited by the Custodian in its capacity as
Custodian for the Fund and shall be withdrawable by
the Custodian only in that capacity. If requested by
the Trust, the Custodian shall furnish the Trust, not
later than twenty (20) days after the last business
day of each month, an internal reconciliation of the
closing balance as of that day in all accounts
described in this section to the balance shown on the
daily cash report for that day rendered to the Trust.
2.5Payments for Shares. The Custodian shall make such ar
rangements with the Transfer Agent of each Fund, as
will enable the Custodian to receive the cash
consideration due to each Fund and will deposit into
each Fund's account such payments as are received
from the Transfer Agent. The Custodian will provide
timely notification to the Trust and the Transfer
Agent of any receipt by it of payments for Shares of
the respective Fund.
2.6Availability of Federal Funds. Upon mutual agreement
between the Trust and the Custodian, the Custodian
shall make federal funds available to the Funds as of
specified times agreed upon from time to time by the
Trust and the Custodian in the amount of checks,
clearing house funds, and other non-federal funds
received in payment for Shares of the Funds which are
deposited into the Funds' accounts.
2.7 Collection of Income.
(1)The Custodian shall collect on a timely basis all
income and other payments with respect to
registered securities held hereunder to which
each Fund shall be entitled either by law or
pursuant to custom in the securities business,
and shall collect on a timely basis all income
and other payments with respect to bearer
securities if, on the date of payment by the
issuer, such securities are held by the Custodian
or its agent thereof and shall credit such
income, as collected, to each Fund's custodian
account. Without limiting the generality of the
foregoing, the Custodian shall detach and present
for payment all coupons and other income items
requiring presentation as and when they become
due and shall collect interest when due on
securities held hereunder. The collection of
income due the Funds on securities loaned
pursuant to the provisions of Section 2.2 (10)
shall be the responsibility of the Trust. The
Custodian will have no duty or responsibility in
connection therewith, other than to provide the
Trust with such information or data as may be
necessary to assist the Trust in arranging for
the timely delivery to the Custodian of the
income to which each Fund is properly entitled.
(2)The Custodian shall promptly notify the Trust when
ever income due on securities is not collected in
due course and will provide the Trust with
monthly reports of the status of past due income
unless the parties otherwise agree.
2.8Payment of Fund Moneys. Upon receipt of Proper Instru
ctions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian
shall pay out moneys of each Fund in the following
cases only:
(1)Upon the purchase of securities, futures contracts
or options on futures contracts for the account
of a Fund but only (a) against the delivery of
such securities, or evidence of title to futures
contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the
United States or abroad which is qualified under
the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this
purpose) registered in the name of the Fund or in
the name of a nominee of the Custodian referred
to in Section 2.3 hereof or in proper form for
transfer, (b) in the case of a purchase effected
through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof
or (c) in the case of repurchase agreements
entered into between the Trust and any other
party, (i) against delivery of the securities
either in certificate form or through an entry
crediting the Custodian's account at the Federal
Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase for
the account of the Fund of securities owned by
the Custodian along with written evidence of the
agreement by the Custodian to repurchase such
securities from the Fund;
(2)In connection with conversion, exchange or surrend
er of securities owned by a Fund as set forth in
Section 2.2 hereof;
(3)For the redemption or repurchase of Shares of a Fu
nd issued by the Trust as set forth in Section
2.10 hereof;
(4)For the payment of any expense or liability incurr
ed by a Fund, including but not limited to the
following payments for the account of the Fund:
interest; taxes; management, accounting, transfer
agent and legal fees; and operating expenses of
the Fund, whether or not such expenses are to be
in whole or part capitalized or treated as
deferred expenses;
(5)For the payment of any dividends on Shares of a Fu
nd declared pursuant to the governing documents
of the Trust;
(6)For payment of the amount of dividends received in
respect of securities sold short;
(7)For any other proper purpose, but only upon receip
t of, in addition to Proper Instructions, a
certified copy of a resolution of the Executive
Committee of the Trust on behalf of a Fund
signed by an officer of the Trust and certified
by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting
forth the purpose for which such payment is to be
made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom
such payment is to be made.
2.9Liability for Payment in Advance of Receipt of Securit
ies Purchased. In any and every case where payment
for purchase of securities for the account of a Fund
is made by the Custodian in advance of receipt of the
securities purchased, in the absence of specific
written instructions from the Trust to so pay in
advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if
the securities had been received by the Custodian.
2.10Payments for Repurchases or Redemptions of Shares of
a Fund. From such funds as may be available for the
purpose of repurchasing or redeeming Shares of a
Fund, but subject to the limitations of the
Declaration of Trust/Articles of Incorporation and
any applicable votes of the Board of the Trust
pursuant thereto, the Custodian shall, upon receipt
of instructions from the Transfer Agent, make funds
available for payment to holders of shares of such
Fund who have delivered to the Transfer Agent a
request for redemption or repurchase of their shares
including without limitation through bank drafts,
automated clearinghouse facilities, or by other
means. In connection with the redemption or
repurchase of Shares of the Funds, the Custodian is
authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming
shareholders.
2.11Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any
time remove) any other bank or trust company which is
itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a
custodian, as its agent to carry out such of the
provisions of this Section 2 as the Custodian may
from time to time direct; provided, however, that the
appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities
hereunder.
2.12Deposit of Fund Assets in Securities System. The Cus
todian may deposit and/or maintain securities owned
by the Funds in a clearing agency registered with the
Securities and Exchange Commission ("SEC") under
Section 17A of the Exchange Act, which acts as a
securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to
herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following
provisions:
(1)The Custodian may keep securities of each Fund in a Securities System
provided that such securities are represented in an account
("Account")
of the Custodian in the Securities System which shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
(2)The records of the Custodian with respect to securities of the Funds
which are maintained in a Securities System shall identify by book-
entry those securities belonging to each Fund;
(3)The Custodian shall pay for securities purchased for the account
of each
Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the
making of
an entry on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall transfer
securities sold for the account of a Fund upon (i) receipt of advice
from the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the Securities
System
of transfers of securities for the account of a Fund shall
identify the
Fund, be maintained for the Fund by the Custodian and be provided to
the Trust at its request. Upon request, the Custodian shall furnish
the Trust confirmation of each transfer to or from the account of a
Fund in the form of a written advice or notice and shall furnish
to the
Trust copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of a Fund.
(4)The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited
in the Securities System;
(5)The Custodian shall have received the initial certificate, required by
Section 9 hereof;
(6)Anything to the contrary in this Contract notwithstanding, the
Custodian
shall be liable to the Trust for any loss or damage to a Fund
resulting
from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or of
any of its or their employees or from failure of the Custodian or any
such agent to enforce effectively such rights as it may have against
the Securities System; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect
to any claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or damage if
and to the extent that a Fund has not been made whole for any such
loss
or damage.
(7)The authorization contained in this Section 2.12 shall not relieve the
Custodian from using reasonable care and diligence in making use
of any
Securities System.
2.13Segregated Account. The Custodian shall upon receipt
of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of
each Fund, into which account or accounts may be
transferred cash and/or securities, including
securities maintained in an account by the Custodian
pursuant to Section 2.12 hereof, (i) in accordance
with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with
the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the
Commodity Futures Trading Commission or any
registered contract market), or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions
for a Fund, (ii) for purpose of segregating cash or
government securities in connection with options
purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or
sold for a Fund, (iii) for the purpose of compliance
by the Trust or a Fund with the procedures required
by any release or releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies and (iv) for other proper
corporate purposes, but only, in the case of clause
(iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the
Board or of the Executive Committee signed by an
officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.14Joint Repurchase Agreements. Upon the receipt of Pro
per Instructions, the Custodian shall deposit and/or
maintain any assets of a Fund and any affiliated
funds which are subject to joint repurchase
transactions in an account established solely for
such transactions for the Fund and its affiliated
funds. For purposes of this Section 2.14,
"affiliated funds" shall include all investment
companies and their portfolios for which subsidiaries
or affiliates of Federated Investors serve as
investment advisers, distributors or administrators
in accordance with applicable exemptive orders from
the SEC. The requirements of segregation set forth
in Section 2.1 shall be deemed to be waived with
respect to such assets.
2.15Ownership Certificates for Tax Purposes. The Custodi
an shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments
with respect to securities of a Fund held by it and
in connection with transfers of securities.
2.16Proxies. The Custodian shall, with respect to the se
curities held hereunder, cause to be promptly
executed by the registered holder of such securities,
if the securities are registered otherwise than in
the name of a Fund or a nominee of a Fund, all
proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly
deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such
securities.
2.17Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Trust
all written information (including, without
limitation, pendency of calls and maturities of
securities and expirations of rights in connection
therewith and notices of exercise of call and put
options written by the Fund and the maturity of
futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the
securities being held for the Fund. With respect to
tender or exchange offers, the Custodian shall
transmit promptly to the Trust all written
information received by the Custodian from issuers of
the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or
exchange offer. If the Trust desires to take action
with respect to any tender offer, exchange offer or
any other similar transaction, the Trust shall notify
the Custodian in writing at least three business days
prior to the date on which the Custodian is to take
such action. However, the Custodian shall
nevertheless exercise its best efforts to take such
action in the event that notification is received
three business days or less prior to the date on
which action is required.
2.18Proper Instructions. Proper Instructions as used thr
oughout this Section 2 means a writing signed or
initialed by one or more person or persons as the
Board shall have from time to time authorized. Each
such writing shall set forth the specific transaction
or type of transaction involved. Oral instructions
will be deemed to be Proper Instructions if (a) the
Custodian reasonably believes them to have been given
by a person previously authorized in Proper
Instructions to give such instructions with respect
to the transaction involved, and (b) the Trust
promptly causes such oral instructions to be
confirmed in writing. Upon receipt of a certificate
of the Secretary or an Assistant Secretary as to the
authorization by the Board of the Trust accompanied
by a detailed description of procedures approved by
the Board, Proper Instructions may include
communications effected directly between electro-
mechanical or electronic devices provided that the
Board and the Custodian are satisfied that such
procedures afford adequate safeguards for a Fund's
assets.
2.19Actions Permitted Without Express Authority. The Cus
todian may in its discretion, without express
authority from the Trust:
(1)make payments to itself or others for minor expens
es of handling securities or other similar items
relating to its duties under this Contract,
provided that all such payments shall be
accounted for to the Trust in such form that it
may be allocated to the affected Fund;
(2)surrender securities in temporary form for securit
ies in definitive form;
(3)endorse for collection, in the name of a Fund, che
cks, drafts and other negotiable instruments; and
(4)in general, attend to all non-discretionary detail
s in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of each
Fund except as otherwise directed by the Trust.
2.20Evidence of Authority. The Custodian shall be protec
ted in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper
reasonably believed by it to be genuine and to have
been properly executed on behalf of a Fund. The
Custodian may receive and accept a certified copy of
a vote of the Board of the Trust as conclusive
evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination
of or any action by the Board pursuant to the
Declaration of Trust/Articles of Incorporation as
described in such vote, and such vote may be
considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
2.21Notice to Trust by Custodian Regarding Cash Movement.
The Custodian will provide timely notification to the
Trust of any receipt of cash, income or payments to
the Trust and the release of cash or payment by the
Trust.
3.Duties of Custodian With Respect to the Books of Account a
nd Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary info
rmation to the entity or entities appointed by the Board
of the Trust to keep the books of account of each Fund
and/or compute the net asset value per share of the
outstanding Shares of each Fund or, if directed in
writing to do so by the Trust, shall itself keep such
books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also
calculate daily the net income of a Fund as described in
the Fund's currently effective prospectus and Statement
of Additional Information ("Prospectus") and shall advise
the Trust and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing
by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net
income among its various components. The calculations of
the net asset value per share and the daily income of a
Fund shall be made at the time or times described from
time to time in the Fund's currently effective
Prospectus.
4. Records.
The Custodian shall create and maintain all records
relating to its activities and obligations under this
Contract in such manner as will meet the obligations of
the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-
1 and 31a-2 thereunder, and specifically including
identified cost records used for tax purposes. All such
records shall be the property of the Trust and shall at
all times during the regular business hours of the
Custodian be open for inspection by duly authorized
officers, employees or agents of the Trust and employees
and agents of the SEC. In the event of termination of
this Contract, the Custodian will deliver all such
records to the Trust, to a successor Custodian, or to
such other person as the Trust may direct. The Custodian
shall supply daily to the Trust a tabulation of
securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust
and the Custodian, include certificate numbers in such
tabulations.
5. Opinion of Funds' Independent Public
Accountants/Auditors.
The Custodian shall take all reasonable action, as the
Trust may from time to time request, to obtain from year
to year favorable opinions from each Fund's independent
public accountants/auditors with respect to its
activities hereunder in connection with the preparation
of the Fund's registration statement, periodic reports,
or any other reports to the SEC and with respect to any
other requirements of such Commission.
6. Reports to Trust by Independent Public
Accountants/Auditors.
The Custodian shall provide the Trust, at such times as
the Trust may reasonably require, with reports by
independent public accountants/auditors for each Fund on
the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities
deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian for
the Fund under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may
reasonably be required by the Trust, to provide
reasonable assurance that any material inadequacies would
be disclosed by such examination and, if there are no
such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian,
as agreed upon from time to time between Company and the
Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable
care in carrying out the provisions of this Contract;
provided, however, that the Custodian shall be held to
any higher standard of care which would be imposed upon
the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of
this Contract. The Custodian shall be entitled to rely
on and may act upon advice of counsel (who may be counsel
for the Trust) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice, provided that such action is not
in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
Subject to the limitations set forth in Section 15
hereof, the Custodian shall be kept indemnified by the
Trust but only from the assets of the Fund involved in
the issue at hand and be without liability for any action
taken or thing done by it in carrying out the terms and
provisions of this Contract in accordance with the above
standards.
In order that the indemnification provisions contained in
this Section 8 shall apply, however, it is understood
that if in any case the Trust may be asked to indemnify
or save the Custodian harmless, the Trust shall be fully
and promptly advised of all pertinent facts concerning
the situation in question, and it is further understood
that the Custodian will use all reasonable care to
identify and notify the Trust promptly concerning any
situation which presents or appears likely to present the
probability of such a claim for indemnification. The
Trust shall have the option to defend the Custodian
against any claim which may be the subject of this
indemnification, and in the event that the Trust so
elects it will so notify the Custodian and thereupon the
Trust shall take over complete defense of the claim, and
the Custodian shall in such situation initiate no further
legal or other expenses for which it shall seek
indemnification under this Section. The Custodian shall
in no case confess any claim or make any compromise in
any case in which the Trust will be asked to indemnify
the Custodian except with the Trust's prior written
consent.
Notwithstanding the foregoing, the responsibility of the
Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered
into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action
with respect to securities, which action involves the
payment of money or which action may, in the reasonable
opinion of the Custodian, result in the Custodian or its
nominee assigned to a Fund being liable for the payment
of money or incurring liability of some other form, the
Custodian may request the Trust, as a prerequisite to
requiring the Custodian to take such action, to provide
indemnity to the Custodian in an amount and form
satisfactory to the Custodian.
Subject to the limitations set forth in Section 15
hereof, the Trust agrees to indemnify and hold harmless
the Custodian and its nominee from and against all taxes,
charges, expenses, assessments, claims and liabilities
(including counsel fees) (referred to herein as
authorized charges) incurred or assessed against it or
its nominee in connection with the performance of this
Contract, except such as may arise from it or its
nominee's own failure to act in accordance with the
standard of reasonable care or any higher standard of
care which would be imposed upon the Custodian by any
applicable law or regulation if such above-stated
standard of reasonable care were not part of this
Contract. To secure any authorized charges and any
advances of cash or securities made by the Custodian to
or for the benefit of a Fund for any purpose which
results in the Fund incurring an overdraft at the end of
any business day or for extraordinary or emergency
purposes during any business day, the Trust hereby grants
to the Custodian a security interest in and pledges to
the Custodian securities held for the Fund by the
Custodian, in an amount not to exceed 10 percent of the
Fund's gross assets, the specific securities to be
designated in writing from time to time by the Trust or
the Fund's investment adviser. Should the Trust fail to
make such designation, or should it instruct the
Custodian to make advances exceeding the percentage
amount set forth above and should the Custodian do so,
the Trust hereby agrees that the Custodian shall have a
security interest in all securities or other property
purchased for a Fund with the advances by the Custodian,
which securities or property shall be deemed to be
pledged to the Custodian, and the written instructions of
the Trust instructing their purchase shall be considered
the requisite description and designation of the property
so pledged for purposes of the requirements of the
Uniform Commercial Code. Should the Trust fail to cause
a Fund to repay promptly any authorized charges or
advances of cash or securities, subject to the provision
of the second paragraph of this Section 8 regarding
indemnification, the Custodian shall be entitled to use
available cash and to dispose of pledged securities and
property as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by
mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty
(60) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under
Section 2.12 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant
Secretary that the Board of the Trust has approved the
initial use of a particular Securities System as required
in each case by Rule 17f-4 under the 1940 Act; provided
further, however, that the Trust shall not amend or
terminate this Contract in contravention of any
applicable federal or state regulations, or any provision
of the Declaration of Trust/Articles of Incorporation,
and further provided, that the Trust may at any time by
action of its Board (i) substitute another bank or trust
company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the
appropriate banking regulatory agency or upon the
happening of a like event at the direction of an
appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to
the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board
of the Trust, the Custodian shall, upon termination,
deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer,
all securities then held by it hereunder for each Fund
and shall transfer to separate accounts of the successor
custodian all of each Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a
certified copy of a vote of the Board of the Trust,
deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with
such vote.
In the event that no written order designating a
successor custodian or certified copy of a vote of the
Board shall have been delivered to the Custodian on or
before the date when such termination shall become
effective, then the Custodian shall have the right to
deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, (delete "doing business ...
Massachusetts" unless SSBT is the Custodian) doing
business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not
less than $100,000,000, all securities, funds and other
properties held by the Custodian and all instruments held
by the Custodian relative thereto and all other property
held by it under this Contract for each Fund and to
transfer to separate accounts of such successor
custodian all of each Fund's securities held in any
Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under
this Contract.
In the event that securities, funds and other properties
remain in the possession of the Custodian after the date
of termination hereof owing to failure of the Trust to
procure the certified copy of the vote referred to or of
the Board to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of
such securities, funds and other properties and the
provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force
and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the
Custodian and the Trust may from time to time agree on
such provisions interpretive of or in addition to the
provisions of this Contract as may in their joint opinion
be consistent with the general tenor of this Contract.
Any such interpretive or additional provisions shall be
in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional
provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or
additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this
Contract.
12. Massachusetts Law to Apply.
This Contract shall be construed and the provisions
thereof interpreted under and in accordance with laws of
The Commonwealth of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices
and other writings delivered or mailed postage prepaid to
the Trust at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to the Custodian at address
for SSBT only: 225 Franklin Street, Boston,
Massachusetts, 02110, or to such other address as the
Trust or the Custodian may hereafter specify, shall be
deemed to have been properly delivered or given hereunder
to the respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or
more counterparts, each of which shall be deemed an
original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the
limitation of liability as set forth in Article XI of the
Declaration of Trust of those Trusts which are business
trusts and agrees that the obligations and liabilities
assumed by the Trust and any Fund pursuant to this
Contract, including, without limitation, any obligation
or liability to indemnify the Custodian pursuant to
Section 8 hereof, shall be limited in any case to the
relevant Fund and its assets and that the Custodian shall
not seek satisfaction of any such obligation from the
shareholders of the relevant Fund, from any other Fund or
its shareholders or from the Trustees, Officers,
employees or agents of the Trust, or any of them. In
addition, in connection with the discharge and
satisfaction of any claim made by the Custodian against
the Trust, for whatever reasons, involving more than one
Fund, the Trust shall have the exclusive right to
determine the appropriate allocations of liability for
any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly
authorized representative and its seal to be hereunder
affixed effective as of the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES (Except those
listed below)
/s/John G. McGonigle_________ By /s/John G. Donahue_____________
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie______________ By /s/ F. J. Sidoti,
Jr._________________
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANIY
/s/ Jeannette Fisher-Garber______ By /s/ James J.
Dolan________________
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
Table
s c c
CONTRACT
DATE INVESTMENT COMPANY
12/1/93 Short-Term Municipal Trust
(formerly, Federated Short-Intermediate Municipal Trust)
12/1/93 Institutional Shares
12/1/93 Institutional Service Shares
Exhibit 9i 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 the 1st day of December, 1993, 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 wishes 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"), and the Company is willing to furnish
such services; and
WHEREAS, the Trust desires to appoint the Company as its
transfer agent, dividend disbursing agent, and agent in
connection with certain other activities, and the Company
desires to accept such appointment; and
WHEREAS, the Trust desires to appoint the Company as its
agent to select, negotiate and subcontract for custodian
services from an approved list of qualified banks 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 and 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 and 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;
B. Calculate the net income of each of the Funds, if any;
C. Calculate capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
D. 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;
E. 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;
F. At the request of the Trust, prepare various reports
or other financial documents required by federal,
state and other applicable laws and regulations; and
G. 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 set forth on Fee Schedules A
("A1, A2, A3 etc..."), annexed hereto and incorporated
herein, as may be added or amended from time to time.
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 specified in Schedules B ("B1,
B2, B3, etc..."), annexed hereto and incorporated
herein, as may be added or amended from time to time.
Schedules B may be modified by the Company upon not
less than thirty days' prior written notice to the
Trust.
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 Company will send an invoice to each of the Funds
as soon as practicable after the end of each month.
Each invoice will provide detailed information about
the compensation and out-of-pocket expenses in
accordance with Schedules A and Schedules B. The
Funds and or the Classes will pay to the Company the
amount of such invoice within 30 days of receipt of
the invoices.
D. Any compensation agreed to hereunder may be adjusted
from time to time by attaching to Schedules A revised
Schedules 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 confirmable 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 set out in Schedules C ("C1,
C2, C3 etc..."), attached hereto, as may be added 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 fees set forth on Schedule C 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 set out in Schedules D ("D1, D2,
D3 etc..."), attached hereto, as may be added 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 Company shall send an invoice with respect to fees
and reimbursable expenses to the Trust or each of the
Funds as soon as practicable at the end of each month.
Each invoice will provide detailed information about
the Compensation and out-of-pocket expenses in
accordance with Schedules C and Schedules D. The
Trust or the Funds will pay to the Company the amount
of such invoice within 30 days following the receipt
of the invoices.
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.
(1) This Agreement shall inure to the benefit of and
be binding upon the parties and their respective
permitted successors and assigns.
(2) 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
(3) 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:
(1) evaluate the nature and the quality of the
custodial services provided by the Eligible
Custodian;
(2) 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;
(3) 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;
(4) establish procedures to monitor the nature and
the quality of the services provided by the
Custodians;
(5) continuously monitor the nature and the quality
of services provided by the Custodians; and
(6) 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 set forth in
Schedule E, attached hereto.
B. Payment
The Company shall send an invoice with respect to fees
and reimbursable expenses to each of the Trust/or Fund
as soon as practicable at the end of each month. Each
invoice will provide detailed information about the
Compensation and out-of-pocket expenses in occurrence
with Schedule E. The Trust and/or Fund will pay to
the Company the amount of such invoice within 30 days
following the receipt of the invoice.
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. Indemnification.
A. 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,
(2) The Trust's or Fund's refusal or failure to
comply with the terms of this Agreement, or which
arise out of the Trust's or The Fund's lack of
good faith, negligence or willful misconduct or
which arise out of the breach of any
representation or warranty of the Trust or Fund
hereunder or otherwise.
(3) 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; or
(b) have been prepared and/or maintained by the
Fund or its affiliates or any other person
or firm on behalf of the Trust.
(4) The reliance on, or the carrying out by the
Company or its agents or subcontractors of Proper
Instructions of the Trust or the Fund.
(5) 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, gross
negligence or reckless disregard of its duties.
B. Indemnification by the Company
The Company shall indemnify and hold the Trust or each
Fund harmless from and against any and all losses,
damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or
attributable to any action or failure or omission to
act by the Company as a result of the Company's
willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties.
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
CONTRACT
DATE INVESTMENT COMPANY
PROVIDED SCHEDULES
12/1/93 Short-Term Municipal Trust
(formerly, Federated Short-Intermediate Municipal Trust)
12/1/93 Institutional Service Shares
12/1/93 Institutional Shares
-1-
Exhibit 9ii under Form N-1A
Exhibit 10 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 13 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 1
Short-Term Municipal Trust
Institutional Shares
Institutional Service Shares
-1-
Exhibit 9 iii under Form N-1A
Exhibit 10 under Item 601/Reg 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 1
Short-Term Municipal Trust
Institutional Shares
Institutional Service Shares
-1-
Exhibit 9iv under Form N-1A
Exhibit 10 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 13 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 1
Short-Term Municipal Trust
Institutional Shares
Institutional Service Shares
Exhibit 9 v under Form N-1A
Exhibit 10 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
Short-Term Municipal Trust
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 .25 of 1% 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.
-1-
Exhibit 15 under Form N-
1A
Exhibit 1 under Item 601
Reg. S-K
SHORT-TERM MUNICIPAL TRUST
RULE 12B-1 PLAN
This Plan ("Plan") is adopted as of this 1st day
of June, 1993, by the Board of Trustees of Short-Term
Municipal Trust (the "Trust"), a Massachusetts business
trust with respect to certain classes of shares ("Classes")
of the portfolios of the Trust (the "Funds") set forth in
exhibits hereto.
1. This Plan is adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended
("Act"), so as to allow the Trust to make payments as
contemplated herein, in conjunction with the distribution of
Classes of the Funds ("Shares").
2. This Plan is designed to finance activities
of Federated Securities Corp. ("FSC") principally intended
to result in the sale of Shares to include: (a) providing
incentives to broker/dealers ("Brokers") to sell Shares and
to provide administrative support services to the Funds and
their shareholders; (b) compensating other participating
financial institutions and other persons ("Administrators")
for providing administrative support services to the Funds
and their shareholders; (c) paying for the costs incurred in
conjunction with advertising and marketing of Shares to
include expenses of preparing, printing and distributing
prospectuses and sales literature to prospective
shareholders, Brokers or Administrators; and (d) other costs
incurred in the implementation and operation of the Plan.
In compensation for services provided pursuant to this Plan,
FSC will be paid a fee in respect of the following Classes
set forth on the applicable exhibit.
3. Any payment to FSC in accordance with this
Plan will be made pursuant to the "Distributor's Contract"
entered into by the Trust and FSC. Any payments made by FSC
to Brokers and Administrators with funds received as
compensation under this Plan will be made pursuant to the
"Rule 12b-1 Agreement" entered into by FSC and the Broker or
Administrator.
4. FSC has the right (i) to select, in its sole
discretion, the Brokers and Administrators to participate in
the Plan and (ii) to terminate without cause and in its sole
discretion any Rule 12b-1 Agreement.
5. Quarterly in each year that this Plan remains
in effect, FSC shall prepare and furnish to the Board of
Trustees of the Trust, and the Board of Trustees shall
review, a written report of the amounts expended under the
Plan and the purpose for which such expenditures were made.
6. This Plan shall become effective with respect
to each Class (i) after approval by majority votes of: (a)
the Trust's Board of Trustees; (b) the members of the Board
of the Trust who are not interested persons of the Trust and
have no direct or indirect financial interest in the
operation of the Trust's Plan or in any related documents to
the Plan ("Disinterested Trustees"), cast in person at a
meeting called for the purpose of voting on the Plan; and
(c) the outstanding voting securities of the particular
Class, as defined in Section 2(a)(42) of the Act and
(ii) upon execution of an exhibit adopting this Plan with
respect to such Class.
7. This Plan shall remain 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 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 Class at least
annually by a majority of the Trust's Board of Trustees and
a majority of the Disinterested Trustees, cast in person at
a meeting called for the purpose of voting on such Plan. If
this Plan is adopted with respect to a Class after the first
annual approval by the Trustees as described above, this
Plan will be effective as to that Class upon execution of
the applicable exhibit pursuant to the provisions of
paragraph 6(ii) above and will continue in effect until the
next annual approval of this Plan by the Trustees and
thereafter for successive periods of one year subject to
approval as described above.
8. All material amendments to this Plan must be
approved by a vote of the Board of Trustees of the Trust and
of the Disinterested Trustees, cast in person at a meeting
called for the purpose of voting on it.
9. This Plan may not be amended in order to
increase materially the costs which the Classes may bear for
distribution pursuant to the Plan without being approved by
a majority vote of the outstanding voting securities of the
Classes as defined in Section 2(a)(42) of the Act.
10. This Plan may be terminated with respect
to a particular Class at any time by: (a) a majority vote of
the Disinterested Trustees; or (b) a vote of a majority of
the outstanding voting securities of the particular Class as
defined in Section 2(a)(42) of the Act; or (c) by FSC on 60
days' notice to the Trust.
11. While this Plan shall be in effect, the
selection and nomination of Disinterested Trustees of the
Trust shall be committed to the discretion of the
Disinterested Trustees then in office.
12. 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 10 herein.
13. This Plan shall be construed in
accordance with and governed by the laws of the Commonwealth
of Pennsylvania.
-1-
EXHIBIT A
to the
Plan
SHORT-TERM MUNICIPAL TRUST
Short-Term Municipal Trust
Institutional Service Shares
This Plan is adopted by Short-Term Municipal Trust
with respect to the Class of Shares of the portfolio(s) of
the Trust set forth above.
In compensation for the services provided pursuant
to this Plan, FSC will be paid a monthly fee computed at the
annual rate of 0.25 of 1% of the average aggregate net asset
value of the Institutional Service Shares of Short-Term
Municipal Trust held during the month.
Witness the due execution hereof this 1st day of
June, 1993.
SHORT-TERM MUNICIPAL TRUST
By: /s/ Glen R. Johnson
President
