1933 Act File No. 2-75756
1940 Act File No. 811-3385
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. 25 ............... X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 21 .............................. X
FEDERATED STOCK 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 December 31, 1995 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on pursuant to paragraph (a)(ii) of Rule 485.
-----------------
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on December 15, 1995; or
intends to file the Notice required by that Rule on or about
; or
------------
during the most recent fiscal year did not sell any securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.
Copies to:
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 FEDERATED STOCK TRUST
is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page...............Cover Page.
Item 2. Synopsis.................Summary of Trust Expenses.
Item 3. Condensed Financial
Information.............Financial Highlights.
Item 4. General Description of
Registrant..............General Information; Investment
Information; Performance Information;
Investment Objective; Investment
Policies; Investment Limitations.
Item 5. Management of the Trust..Trust Information; Management of the
Trust; Distribution of Trust Shares;
Administration of the Trust; Brokerage
Transactions.
Item 6. Capital Stock and Other
Securities..............Dividends; Capital Gains; Shareholder
Information; Voting Rights;
Massachusetts Partnership Law; Tax
Information; Federal Income Tax;
Pennsylvania Corporate and Personal
Property Taxes.
Item 7. Purchase of Securities Being
Offered.................Net Asset; Value Investing in the Trust;
Share Purchases; Minimum Investment
Required; What Shares Cost; Exchanging
Securities for Trust Shares;
Subaccounting Services; Certificates and
Confirmations; Retirement Plans;.
Item 8. Redemption or Repurchase.Redeeming Shares; Telephone Redemption;
Written Requests; Accounts With Low
Balances.
Item 9. 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 Registrant Federated Stock Trust Management.
Item 15. Control Persons and Principal
Holders of Securities....Trust Ownership.
Item 16. Investment Advisory and Other
Services.................Investment Advisory Services; Other
Services; Shareholder Services
Agreement.
Item 17. Brokerage Allocation.....Brokerage Transactions.
Item 18. Capital Stock and Other
Securities..............Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.................Purchasing Shares; Determining Net Asset
Value; Redeeming Shares; Exchanging
Securities for Trust Shares.
Item 20. Tax Status...............Tax Status.
Item 21. Underwriters.............Not applicable.
Item 22. Calculation of Performance
Data....................Total Return; Yield; Performance
Comparisons.
Item 23. Financial Statements.....(Filed in Part A)
- --------------------------------------------------------------------------------
FEDERATED STOCK TRUST
PROSPECTUS
Federated Stock Trust (the "Trust") is a no-load, open-end, diversified
management investment company (a mutual fund) investing in common stocks of high
quality companies to achieve growth of income and capital.
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 the Trust. Keep this prospectus for future reference.
The Trust has also filed a Statement of Additional Information dated December
31, 1995, with the Securities and Exchange Commission. The information contained
in the Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Statement of Additional
Information or a paper copy of this prospectus, if you have received your
prospectus electronically, free of charge by calling 1-800-235-4669. To obtain
other information or to make inquiries about the 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 December 31, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 5
TRUST INFORMATION 5
- --------------------------------------------------
Management of the Trust 5
Distribution of Trust Shares 7
Administration of the Trust 7
Brokerage Transactions 8
NET ASSET VALUE 8
- --------------------------------------------------
INVESTING IN THE TRUST 8
- --------------------------------------------------
Share Purchases 8
Minimum Investment Required 9
What Shares Cost 9
Exchanging Securities for Trust
Shares 9
Subaccounting Services 9
Certificates and Confirmations 10
Dividends 10
Capital Gains 10
Retirement Plans 10
REDEEMING SHARES 10
- --------------------------------------------------
Telephone Redemption 10
Written Requests 11
Accounts with Low Balances 11
SHAREHOLDER INFORMATION 12
- --------------------------------------------------
Voting Rights 12
TAX INFORMATION 12
- --------------------------------------------------
Federal Income Tax 12
Pennsylvania Corporate and Personal
Property Taxes 12
PERFORMANCE INFORMATION 12
- --------------------------------------------------
FINANCIAL STATEMENTS 14
- --------------------------------------------------
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS 25
- --------------------------------------------------
ADDRESSES 26
- --------------------------------------------------
</TABLE>
I
SUMMARY OF TRUST EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price).................... None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering price)......... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or redemption
proceeds, as applicable)....................................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)............................... None
Exchange Fee..................................................................................... None
<CAPTION>
ANNUAL TRUST OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)................................................................ 0.72%
12b-1 Fee........................................................................................ None
Total Other Expenses............................................................................. 0.29%
Shareholder Services Fee (after waiver) (2)......................................... 0.10%
Total Operating Expenses (3)............................................................. 1.01%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.75% of the first $500 million in average daily net assets, 0.675% of the
second $500 million in average daily net assets, 0.60% of the third $500
million in average daily net assets, 0.525% of the fourth $500 million in
average daily net assets, and 0.40% of average daily net assets in excess of
$2 billion.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 1.18% absent the waiver of a
portion of the management fee and the voluntary waiver of a portion of the
shareholder services fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Trust will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period................................................. $10 $32 $56 $124
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1
FEDERATED STOCK TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 25.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988(a)
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87 $22.10
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.47 0.46 0.48 0.56 0.51 0.70 0.70 0.52
- -----------------------------------
Net realized and unrealized gain
(loss) on investments 5.04 0.68 4.27 1.79 6.23 (4.42) 2.34 1.03
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 5.51 1.14 4.75 2.35 6.74 (3.72) 3.04 1.55
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.49) (0.43) (0.49) (0.55) (0.56) (0.78) (0.65) (0.52)
- -----------------------------------
Distributions in excess of net
investment income -- -- (0.02)(e) -- -- -- -- --
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions from net
investment income (0.49) (0.43) (0.51) (0.55) (0.56) (0.78) (0.65) (0.52)
- -----------------------------------
Distributions from net realized
gain on investment transactions (0.69) (0.78) (2.02) (1.61) (0.74) (2.14) (0.07) (0.26)
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (1.18) (1.21) (2.53) (2.16) (1.30) (2.92) (0.72) (0.78)
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $30.66 $26.33 $26.40 $24.18 $23.99 $18.55 $25.19 $22.87
- ----------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------
TOTAL RETURN (b) 21.98% 4.55% 20.88% 10.78% 37.50% (16.36%) 13.48% 7.14%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 1.01% 0.97% 0.97% 0.99% 1.00% 0.98% 0.95% 0.94%*
- -----------------------------------
Net investment income 1.71% 1.81% 1.83% 2.33% 2.25% 3.03% 2.75% 3.08%*
- -----------------------------------
Expense waiver/reimbursement 0.15%(d) -- -- -- -- -- -- --
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period (000
omitted) $632,069 $600,664 $554,062 $386,490 $369,505 $332,241 $573,047 $636,426
- -----------------------------------
Portfolio turnover 42% 28% 26% 54% 49% 53% 35% 31%
- -----------------------------------
<CAPTION>
YEAR ENDED JANUARY 31,
---------------------------
1988 1987 1986
- ----------------------------------- ------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $24.00 $20.43 $17.34
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.68 0.66 0.66
- -----------------------------------
Net realized and unrealized gain
(loss) on investments (1.50) 4.99 3.48
- ----------------------------------- ------- ------- -------
Total from investment operations (0.82) 5.65 4.14
- ----------------------------------- ------- ------- -------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.64) (0.64) (0.65)
- -----------------------------------
Distributions in excess of net
investment income -- -- --
- ----------------------------------- ------- ------- -------
Total distributions from net
investment income (0.64) (0.64) (0.65)
- -----------------------------------
Distributions from net realized
gain on investment transactions (0.44) (1.44) (0.40)
- ----------------------------------- ------- ------- -------
Total distributions (1.08) (2.08) (1.05)
- ----------------------------------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $22.10 $24.00 $20.43
- ----------------------------------- ------- ------- -------
------- ------- -------
TOTAL RETURN (b) (3.64%) 29.02% 24.78%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.89% 0.93% 1.00%
- -----------------------------------
Net investment income 2.82% 3.04% 3.69%
- -----------------------------------
Expense waiver/reimbursement -- -- 0.04%(c)
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period (000
omitted) $675,110 $611,856 $284,856
- -----------------------------------
Portfolio turnover 51% 19% 35%
- -----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) For the nine months ended October 31, 1988.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) This voluntary expense decrease for the shareholder services fee is
reflected in both the expense and net investment income ratios shown above.
(e) Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax
purposes.
(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 October 31, 1995, 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 December 30, 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 Trustees
have not established separate series or classes of shares.
Trust shares are 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 growth of income and capital
by investing principally in a professionally-managed and diversified portfolio
of common stock of high-quality companies. These companies generally are leaders
in their industries and are characterized by sound management and the ability to
finance expected growth. 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. Unless otherwise stated, the investment
objective and the policies and limitations described below cannot be changed
without the approval of shareholders.
INVESTMENT POLICIES
ACCEPTABLE INVESTMENTS. The Trust's investment approach is based on the
conviction that over the long term the economy will continue to expand and
develop and that this economic growth will be reflected in the growth of the
revenues and earnings of major corporations.
COMMON STOCKS. The Trust invests primarily in common stocks of companies
selected by the Trust's investment adviser on the basis of traditional
research techniques, including assessment of earnings and dividend growth
prospects and of the risk and volatility of the company's industry.
Ordinarily, these companies will be in the top 25% of their industries with
regard to revenues. However, other factors, such as product position or
market share, will be considered by the Trust's investment adviser and may
outweigh revenues.
OTHER CORPORATE SECURITIES. The Trust may invest in preferred stocks,
corporate bonds, notes, and warrants of these companies. The prices of fixed
income securities generally fluctuate inversely to the direction of interest
rates.
U.S. GOVERNMENT SECURITIES. The Trust may invest in U.S. government
securities.
REPURCHASE AGREEMENTS. The U.S. government securities in which the Trust
invests may be purchased pursuant to repurchase agreements. Repurchase
agreements are arrangements in which banks, broker/dealers, and other
recognized financial institutions sell U.S. government securities to the
Trust and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. The Trust or its custodian will take possession of the
securities subject to
3
repurchase agreements, and these securities will be marked to market daily.
To the extent that the original seller does not repurchase the securities
from the Trust, the Trust could receive less than the repurchase price on
any sale of such securities. In the event that such a defaulting seller
filed for bankruptcy or became insolvent, disposition of such securities by
the Trust might be delayed pending court action. The Trust believes that
under the regular procedures normally in effect for custody of the Trust's
portfolio securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Trust and allow retention or
disposition of such securities. The Trust will only enter into repurchase
agreements with banks and other recognized financial institutions such as
broker/dealers which are found by the Trust's adviser to be creditworthy
pursuant to guidelines established by the Trustees.
MONEY MARKET INSTRUMENTS. The Trust may also invest in money market
instruments.
SECURITIES OF FOREIGN ISSUERS. The Trust may invest in the securities of
foreign issuers which are freely traded on United States securities
exchanges or in the over-the-counter market in the form of ADRs. Securities
of a foreign issuer may present greater risks in the form of
nationalization, confiscation, domestic marketability, or other national or
international restrictions. As a matter of investment policy, which may be
changed without shareholder approval, the Trust will not invest more than
10% of its assets in American Depositary Receipts ("ADRs").
As a matter of practice, the Trust will not invest in the securities of a
foreign issuer if any such risk appears to the investment adviser to be
substantial.
At least 80% of the Trust's portfolio will be invested in common stocks, unless
it is in a defensive position.
RESTRICTED AND ILLIQUID SECURITIES. The Trust intends to invest in restricted
securities up to specific limitations. These limitations are not applicable to
commercial paper issued under Section 4(2) of the Securities Act of 1933.
Restricted securities are any securities in which the Trust may otherwise invest
pursuant to the investment objective and policies but which are subject to
restriction on resale under federal securities law. As a matter of investment
practice, which may be changed without shareholder approval, the Trust will
limit investments in illiquid securities, including certain restricted
securities not determined by the Trustees to be liquid, and repurchase
agreements providing for settlement in more than seven days after notice, to 10%
of net assets.
The Trust may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law and is generally sold to institutional investors, such as the
Trust, who agree that it is purchasing the paper for investment purposes and not
with a view to public distribution. Any resale by the purchaser must be in an
exempt transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Trust through or with the assistance of the
issuer or the investment dealers who make a market in Section 4(2) commercial
paper, thus providing liquidity. The Trust believes that Section 4(2) commercial
paper and possibly certain other restricted securities which meet the criteria
for liquidity established by the Board of Trustees of the Trust are quite
liquid. The Trust intends, therefore, to treat the restricted securities
4
which meet the criteria for liquidity established by the Trustees, including
Section 4(2) commercial paper, as determined by the investment adviser of the
Trust, as liquid and not subject to the investment limitation applicable to
illiquid securities and restricted securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Trust may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Trust purchases securities with payment and delivery
scheduled for a future time. The seller's failure to complete these transactions
may cause the Trust to miss a price or yield considered to be advantageous.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices. Accordingly, the Trust may pay more/less than the market value of the
securities on the settlement date.
The Trust may dispose of a commitment prior to settlement if the adviser deems
it appropriate to do so. In addition, the Trust may enter in transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Trust may realize short-term profits or losses upon the sale of such
commitments.
PORTFOLIO TURNOVER. Although the Trust does not intend to invest for the
purpose of seeking short-term profits, securities in its portfolio will be sold
whenever the Trust's investment adviser believes it is appropriate to do so in
light of the Trust's investment objective, without regard to the length of time
a particular security may have been held.
INVESTMENT LIMITATIONS
The Trust will not:
- borrow money or pledge securities except, under certain circumstances, the
Trust may borrow up to one-third of the value of its total assets and
pledge up to 10% of the value of those assets to secure such borrowings;
- invest more than 5% of its total assets in the securities of one issuer
(except cash and cash items and U.S. government securities);
- invest more than 5% of total assets in securities of issuers that have
records of less than three years of continuous operations;
- invest more than 10% of its total assets in securities subject to
restrictions on resale; or
- acquire more than 10% of the voting securities of any one issuer.
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.
5
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.
ADVISORY FEES. The annual investment advisory fee is based on the Trust's
average daily net assets as shown on the chart below.
<TABLE>
<CAPTION>
AVERAGE DAILY ADVISORY FEE AS % OF
NET ASSETS AVERAGE DAILY NET ASSETS
-------------------- ------------------------
<S> <C>
First $500 million .75 of 1%
Second $500 million .675 of 1%
Third $500 million .600 of 1%
Fourth $500 million .525 of 1%
Over $2 billion .40 of 1%
</TABLE>
Both the Trust and the Adviser have adopted strict codes of ethics governing
the conduct of all employees who manage the Trust and its portfolio
securities. These codes recognize that such persons owe a fiduciary duty to
the Trust's shareholders and must place the interests of shareholders ahead
of the employees' own interest. Among other things, the codes: require
preclearance and periodic reporting of personal securities transactions;
prohibit personal transactions in securities being purchased or sold, or
being considered for purchase or sale, by the Trust; prohibit purchasing
securities in initial public offerings; and prohibit taking profits on
securities held for less than sixty days. Violations of the codes are
subject to review by the Board of Trustees, and could result in severe
penalties.
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, expenses of withholding taxes, and extraordinary expenses exceed 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. With over $72 billion
6
invested across more than 260 funds under management and/or administration
by its subsidiaries, as of December 31, 1994, Federated Investors is one of
the largest mutual fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Peter R. Anderson has been the Trust's senior portfolio manager since 1982.
Mr. Anderson joined Federated Investors in 1972 as, and is presently, a
Senior Vice President of the Trust's investment adviser. Mr. Anderson is a
Chartered Financial Analyst and received his M.B.A. in Finance from the
University of Wisconsin.
Timothy E. Keefe has been the Trust's portfolio manager since June 1, 1995.
Mr. Keefe joined Federated Investors in 1987 and has been an Assistant Vice
President of the Trust's investment adviser since 1993. Mr. Keefe served as
an Investment Analyst of the investment adviser from 1991 to 1993, and from
1987 until 1991 he acted as a Marketing Representative in the Broker Dealer
Department. Mr. Keefe is a Chartered Financial Analyst and received his
M.B.A. in Business Administration from the University of Pittsburgh.
DISTRIBUTION OF TRUST SHARES
Federated Securities Corp. is the principal distributor for shares of the Trust.
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 wholly-owned subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Trust has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Trust may make payments up to .25 of 1% of the
average daily net asset value of Shares, computed at an annual rate, to obtain
certain personal services for shareholders and provide maintenance of
shareholder accounts ("shareholder services"). From time to time and for such
periods as deemed appropriate, the amount stated above may be reduced
voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will be
determined from time to time by the Trust and Federated Shareholder Services.
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
7
rate which relates to the average aggregate daily net assets of all funds
advised by subsidiaries of Federated Investors ("Federated Funds") as specified
below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY NET
ADMINISTRATIVE FEE ASSETS OF THE TRUST
-------------------- ------------------------------------
<C> <S>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.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.
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 utilize those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. In selecting among firms
believed to meet these criteria, the adviser may give consideration to those
firms believed to meet these criteria, the adviser may give consideration to
those firms which have sold or are selling shares of the Trust and other funds
distributed by Federated Securities Corp. The adviser makes decisions on
portfolio transactions and selects brokers and dealers subject to review by the
Board of Trustees.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Trust's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets, less
liabilities, by the number of shares outstanding.
INVESTING IN THE TRUST
- --------------------------------------------------------------------------------
SHARE PURCHASES
Trust shares are sold on days on which the New York Stock Exchange is open.
Shares may be purchased either by wire or mail.
To purchase shares of the Trust, 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 of the Trust 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: Federated Services Company,
8
c/o State Street Bank and Trust Company, Boston, Massachusetts; Attention:
EDGEWIRE; For Credit to: Federated Stock Trust; Fund Number (this number can
be found on the account statement or by contacting the Trust); Group Number
or Order Number; Nominee or Institution Name; ABA Number 011000028.
BY MAIL. To purchase shares of the Trust by mail, send a check made payable
to Federated Stock Trust to: Federated Services Company, P.O. Box 8600,
Boston, Massachusetts 02266-8600. 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 generally the next business day
after State Street Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Trust is $25,000 plus any non-affiliated
bank or broker's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. An
institutional investor's minimum investment will be calculated by combining all
accounts it maintains with the Trust. Accounts established through a
non-affiliated bank or broker may be subject to a smaller minimum investment.
WHAT SHARES COST
Trust shares are sold at their net asset value, next determined after an order
is received. There is no sales charge imposed by the Trust. Investors who
purchase Trust shares through a non-affiliated bank or broker may be charged an
additional service fee by that bank or broker.
The net asset value is determined as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, Monday through Friday,
except on: (i) days on which there are not sufficient changes in the value of
the 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, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day.
EXCHANGING SECURITIES FOR TRUST SHARES
Investors may exchange certain securities or a combination of securities and
cash for Trust shares. The securities and any cash must have a market value of
at least $25,000. The Trust reserves the right to determine the acceptability of
securities to be exchanged. Securities accepted by the Trust are valued in the
same manner as the Trust values its assets. Investors wishing to exchange
securities should first contact Federated Securities Corp. Shares purchased by
exchange of U.S. government securities cannot be redeemed by telephone for
fifteen business days to allow time for the transfer to settle.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
Trust 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
9
charge fees for other services provided which may be related to the ownership of
Trust 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. Quarterly confirmations are sent to report
dividends paid during that quarter.
DIVIDENDS
Dividends are declared and paid quarterly to all shareholders invested in the
Trust on the record date. Unless shareholders request cash payments by writing
to the Trust, dividends are automatically reinvested in additional shares of the
Trust on payment dates at the ex-dividend date net asset value without a sales
charge.
CAPITAL GAINS
Capital gains realized by the Trust, if any, will be distributed at least once
every 12 months.
RETIREMENT PLANS
Shares of the Trust can be purchased as an investment for retirement plans or
for IRA accounts. For further details contact Federated Securities Corp. and
consult a tax adviser.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Trust redeems shares at their net asset value next determined after the
Trust receives the redemption request. Redemptions will be made on days on which
the Trust computes its net asset value. 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.
10
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
Trust 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,
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 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 their signatures on written
redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member firm of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund, which is administered by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Trust does not accept signatures guaranteed by a notary public.
The Trust and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Trust and its transfer agent reserve the right
to amend these standards at any time without notice.
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. 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.
11
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
operation and for the election of Trustees under certain circumstances. Trustees
may be removed by the Trustees or by shareholders at a special meeting. A
special meeting of the Trust shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the Trust's outstanding shares.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Trust will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies. Unless otherwise
exempt, shareholders are required to pay federal income tax on any dividends and
other distributions received. This applies whether dividends and distributions
are received in cash or as additional shares. No federal income tax is due on
any dividends earned in an IRA or qualified retirement plan until distributed.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust:
- the Trust is not subject to Pennsylvania corporate or personal property
taxes; and
- Trust shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Trust would be subject to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
Total return represents the change, over a specific period of time, in the value
of an investment in the Trust after reinvesting all income and capital gains
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Trust is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Trust
over a thirty-day period by the offering price per share of the Trust on the
last day of the period. This number is then annualized using semi-
12
annual compounding. The yield does not necessarily reflect income actually
earned by the Trust and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
The Trust is sold without any sales charge or other similar non-recurring
charges.
From time to time, advertisements for the Trust may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Trust's performance to certain indices.
13
FEDERATED STOCK TRUST
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------------- ------------------------------------------------------------ ------------
<C> <S> <C>
EQUITIES--88.2%
- -------------------------------------------------------------------------------
CONSUMER DURABLES--4.4%
------------------------------------------------------------
157,400 Eastman Kodak Co. $ 9,857,175
------------------------------------------------------------
347,700 Mattel, Inc. 9,996,375
------------------------------------------------------------
353,700 Volvo, ADR 8,046,675
------------------------------------------------------------ ------------
Total 27,900,225
------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--8.1%
------------------------------------------------------------
137,800 Avon Products, Inc. 9,801,025
------------------------------------------------------------
207,900 IBP, Inc. 12,448,012
------------------------------------------------------------
224,900 Philip Morris Cos., Inc. 19,004,050
------------------------------------------------------------
84,100 RJR Nabisco Holdings Corp. 2,586,075
------------------------------------------------------------
220,300 Reebok International Ltd. 7,490,200
------------------------------------------------------------ ------------
Total 51,329,362
------------------------------------------------------------ ------------
CONSUMER SERVICES--0.8%
------------------------------------------------------------
95,600 Gannett Co., Inc. 5,198,250
------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--11.5%
------------------------------------------------------------
142,900 Hewlett-Packard Co. 13,236,112
------------------------------------------------------------
152,400 Intel Corp. 10,648,950
------------------------------------------------------------
97,500 International Business Machines Corp. 9,481,875
------------------------------------------------------------
147,910 (a) Litton Industries, Inc. 5,860,934
------------------------------------------------------------
238,300 Lockheed Martin Corp. 16,234,188
------------------------------------------------------------
144,500 Raytheon Co. 6,303,813
------------------------------------------------------------
248,200 Rockwell International Corp. 11,044,900
------------------------------------------------------------ ------------
Total 72,810,772
------------------------------------------------------------ ------------
</TABLE>
14
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------------- ------------------------------------------------------------ ------------
<C> <S> <C>
EQUITIES--CONTINUED
- -------------------------------------------------------------------------------
ENERGY MINERALS--5.4%
------------------------------------------------------------
212,400 Chevron Corp. $ 9,929,700
------------------------------------------------------------
287,200 Occidental Petroleum Corp. 6,174,800
------------------------------------------------------------
148,900 Texaco, Inc. 10,143,813
------------------------------------------------------------
439,600 USX Corp. 7,802,900
------------------------------------------------------------ ------------
Total 34,051,213
------------------------------------------------------------ ------------
FINANCE--16.7%
------------------------------------------------------------
271,638 Allstate Corp. 9,982,696
------------------------------------------------------------
146,500 American Express Co. 5,951,562
------------------------------------------------------------
202,000 Bank of Boston Corp. 8,989,000
------------------------------------------------------------
146,700 Chemical Banking Corp. 8,343,562
------------------------------------------------------------
99,900 CIGNA Corp. 9,902,587
------------------------------------------------------------
217,200 Citicorp 14,090,850
------------------------------------------------------------
182,883 Dean Witter, Discover & Co. 9,098,429
------------------------------------------------------------
82,700 First Interstate Bancorp 10,668,300
------------------------------------------------------------
248,700 Mellon Bank Corp. 12,466,088
------------------------------------------------------------
174,900 Providian Corp. 6,864,825
------------------------------------------------------------
182,000 Travelers Group, Inc. 9,191,000
------------------------------------------------------------ ------------
Total 105,548,899
------------------------------------------------------------ ------------
HEALTH SERVICES--1.0%
------------------------------------------------------------
124,900 Smithkline Beecham Corp., ADR 6,479,188
------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--7.2%
------------------------------------------------------------
117,000 American Home Products Corp. 10,369,125
------------------------------------------------------------
184,700 Becton, Dickinson & Co. 12,005,500
------------------------------------------------------------
184,700 Bristol-Myers Squibb Co. 14,083,375
------------------------------------------------------------
159,700 Merck & Co., Inc. 9,182,750
------------------------------------------------------------ ------------
Total 45,640,750
------------------------------------------------------------ ------------
</TABLE>
15
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------------- ------------------------------------------------------------ ------------
<C> <S> <C>
EQUITIES--CONTINUED
- -------------------------------------------------------------------------------
INDUSTRIAL SERVICES--1.7%
------------------------------------------------------------
260,500 Baker Hughes, Inc. $ 5,112,312
------------------------------------------------------------
129,610 (a) Western Atlas, Inc. 5,686,639
------------------------------------------------------------ ------------
Total 10,798,951
------------------------------------------------------------ ------------
NON-ENERGY MINERALS--3.2%
------------------------------------------------------------
158,300 Aluminum Co. of America 8,073,300
------------------------------------------------------------
187,900 Phelps Dodge Corp. 11,908,163
------------------------------------------------------------ ------------
Total 19,981,463
------------------------------------------------------------ ------------
PROCESS INDUSTRIES--4.2%
------------------------------------------------------------
154,800 Du Pont (E.I.) de Nemours & Co. 9,655,650
------------------------------------------------------------
123,800 Eastman Chemical Co. 7,366,100
------------------------------------------------------------
356,000 Praxair, Inc. 9,612,000
------------------------------------------------------------ ------------
Total 26,633,750
------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--11.1%
------------------------------------------------------------
175,800 (a) FMC Corp. 12,591,675
------------------------------------------------------------
207,900 General Electric Co. 13,149,675
------------------------------------------------------------
72,300 ITT Corp. 8,856,750
------------------------------------------------------------
77,600 Loews Corp. 11,378,100
------------------------------------------------------------
150,500 Philips Electronics N.V., ADR 5,813,063
------------------------------------------------------------
216,400 Textron, Inc. 14,877,500
------------------------------------------------------------
250,000 Westinghouse Electric Corp. 3,531,250
------------------------------------------------------------ ------------
Total 70,198,013
------------------------------------------------------------ ------------
RETAIL TRADE--2.6%
------------------------------------------------------------
210,200 American Stores Co. 6,279,725
------------------------------------------------------------
293,300 Sears, Roebuck & Co. 9,972,200
------------------------------------------------------------ ------------
Total 16,251,925
------------------------------------------------------------ ------------
</TABLE>
16
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------------- ------------------------------------------------------------ ------------
<C> <S> <C>
EQUITIES--CONTINUED
- -------------------------------------------------------------------------------
TECHNOLOGY SERVICES--2.3%
------------------------------------------------------------
291,600 General Motors Corp., Class E $ 13,741,650
------------------------------------------------------------
50,000 (a) DST Systems, Inc. 1,050,000
------------------------------------------------------------ ------------
Total 14,791,650
------------------------------------------------------------ ------------
TRANSPORTATION--1.5%
------------------------------------------------------------
134,100 Consolidated Rail Corp. 9,219,375
------------------------------------------------------------ ------------
UTILITIES--6.5%
------------------------------------------------------------
230,800 AT&T Corp. 14,771,200
------------------------------------------------------------
97,400 CMS Energy Corp. 2,690,675
------------------------------------------------------------
136,100 (a) Columbia Gas System, Inc. 5,239,850
------------------------------------------------------------
154,100 Enron Corp. 5,297,187
------------------------------------------------------------
95,200 FPL Group, Inc. 3,986,500
------------------------------------------------------------
355,200 MCI Communications Corp. 8,857,800
------------------------------------------------------------ ------------
Total 40,843,212
------------------------------------------------------------ ------------
TOTAL EQUITIES (IDENTIFIED COST $379,383,732) 557,676,998
------------------------------------------------------------ ------------
------------
CONVERTIBLE SECURITIES--4.6%
- -------------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.0%
------------------------------------------------------------
1,006,900 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $.60 6,293,125
------------------------------------------------------------ ------------
FINANCE--2.3%
------------------------------------------------------------
144,800 Merrill Lynch & Co., Inc., STRYPES, Series MGIC, $3.12 7,801,100
------------------------------------------------------------
109,000 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 6,758,000
------------------------------------------------------------ ------------
Total 14,559,100
------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--1.3%
------------------------------------------------------------
600,000 (b) Westinghouse Electric Corp., PEPS, Series C, $1.30 8,386,200
------------------------------------------------------------ ------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $29,434,550) 29,238,425
------------------------------------------------------------ ------------
------------
</TABLE>
17
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -------------- ------------------------------------------------------------ ------------
<C> <S> <C>
(c) REPURCHASE AGREEMENT--6.4%
- -------------------------------------------------------------------------------
$40,630,000 J.P. Morgan & Co., Inc., 5.90%, dated 10/31/1995, due
11/1/1995 (at amortized cost) $ 40,630,000
------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $449,448,282) (d) $627,545,423
------------------------------------------------------------ ------------
------------
</TABLE>
(a) Non-income producing security.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. This security has been determined to be
liquid under criteria established by the Board of Trustees. At the end of
the period, this security amounted to $8,386,200 which represents 1.3% of
net assets.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(d) The cost of investments for federal tax purposes amounts to $449,448,282.
The net unrealized appreciation of investments on a federal tax basis
amounts to $178,097,141 which is comprised of $182,172,900 appreciation and
$4,075,759 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($632,069,224) at October 31, 1995.
The following acronym(s) are used throughout this portfolio:
ADR --American Depository Receipt
PEPS --Participating Equity Preferred Stock
STRYPES --Structured Yield Product Exchangeable for Stock
(See Notes which are an integral part of the Financial Statements)
18
FEDERATED STOCK TRUST
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost
$449,448,282) $627,545,423
- ------------------------------------------------------------------
Income receivable 892,392
- ------------------------------------------------------------------
Receivable for investments sold 18,042,355
- ------------------------------------------------------------------
Receivable for shares sold 694,141
- ------------------------------------------------------------------ ------------
Total assets 647,174,311
- ------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------
Payable for investments purchased $14,382,362
- -----------------------------------------------------
Payable for shares redeemed 112,361
- -----------------------------------------------------
Payable to Bank 442,752
- -----------------------------------------------------
Accrued expenses 167,612
- ----------------------------------------------------- -----------
Total liabilities 15,105,087
- ------------------------------------------------------------------ ------------
NET ASSETS for 20,618,044 shares outstanding $632,069,224
- ------------------------------------------------------------------ ------------
------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------
Paid in capital $408,742,044
- ------------------------------------------------------------------
Net unrealized appreciation of investments 178,097,141
- ------------------------------------------------------------------
Accumulated net realized gain on investments 45,016,155
- ------------------------------------------------------------------
Undistributed net investment income 213,884
- ------------------------------------------------------------------ ------------
Total Net Assets $632,069,224
- ------------------------------------------------------------------ ------------
------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ------------------------------------------------------------------
$632,069,224 DIVIDED BY 20,618,044 shares outstanding $ 30.66
- ------------------------------------------------------------------ ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
19
FEDERATED STOCK TRUST
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------
Dividends $ 14,369,895
- ------------------------------------------------------------------
Interest 1,492,354
- ------------------------------------------------------------------ ------------
Total income 15,862,249
- ------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------
Investment advisory fee $ 4,305,810
- -----------------------------------------------------
Administrative personnel and services fee 440,833
- -----------------------------------------------------
Custodian fees 102,829
- -----------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 325,617
- -----------------------------------------------------
Directors'/Trustees' fees 11,909
- -----------------------------------------------------
Auditing fees 14,993
- -----------------------------------------------------
Legal fees 13,307
- -----------------------------------------------------
Portfolio accounting fees 93,188
- -----------------------------------------------------
Shareholder services fee 1,455,815
- -----------------------------------------------------
Share registration costs 41,571
- -----------------------------------------------------
Printing and postage 28,297
- -----------------------------------------------------
Insurance premiums 10,106
- -----------------------------------------------------
Taxes 17,098
- -----------------------------------------------------
Miscellaneous 28,717
- ----------------------------------------------------- -----------
Total expenses 6,890,090
- -----------------------------------------------------
Waivers--
- ------------------------------------------
Waiver of investment advisory fee $(128,351)
- ------------------------------------------
Waiver of shareholder services fee (873,483)
- ------------------------------------------ ---------
Total waivers (1,001,834)
- ----------------------------------------------------- -----------
Net expenses 5,888,256
- ------------------------------------------------------------------ ------------
Net investment income 9,973,993
- ------------------------------------------------------------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
- ------------------------------------------------------------------
Net realized gain on investments 45,305,647
- ------------------------------------------------------------------
Net change in unrealized appreciation of investments 58,089,861
- ------------------------------------------------------------------ ------------
Net realized and unrealized gain on investments 103,395,508
- ------------------------------------------------------------------ ------------
Change in net assets resulting from operations $113,369,501
- ------------------------------------------------------------------ ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
20
FEDERATED STOCK TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------
OPERATIONS--
- --------------------------------------------------
Net investment income $ 9,973,993 $ 10,271,797
- --------------------------------------------------
Net realized gain (loss) on investments
($45,017,308 net gain and $15,441,993 net gain,
respectively, as computed for federal tax
purposes) 45,305,647 15,153,654
- --------------------------------------------------
Net change in unrealized appreciation 58,089,861 89,647
- -------------------------------------------------- ------------- -------------
Change in net assets resulting from operations 113,369,501 25,515,098
- -------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------
Distributions from net investment income (10,498,641) (9,572,779)
- --------------------------------------------------
Distributions from net realized gains (15,442,313) (16,842,679)
- -------------------------------------------------- ------------- -------------
Change in net assets resulting from
distributions to shareholders (25,940,954) (26,415,458)
- -------------------------------------------------- ------------- -------------
SHARE TRANSACTIONS--
- --------------------------------------------------
Proceeds from sale of shares 146,619,990 265,476,902
- --------------------------------------------------
Net asset value of shares issued to shareholders
in payment of distributions declared 13,596,554 13,333,198
- --------------------------------------------------
Cost of shares redeemed (216,239,762) (231,307,977)
- -------------------------------------------------- ------------- -------------
Change in net assets resulting from share
transactions (56,023,218) 47,502,123
- -------------------------------------------------- ------------- -------------
Change in net assets 31,405,329 46,601,763
- --------------------------------------------------
NET ASSETS:
- --------------------------------------------------
Beginning of period 600,663,895 554,062,132
- -------------------------------------------------- ------------- -------------
End of period (including undistributed net
investment income of $213,884 and $738,532,
respectively) $ 632,069,224 $ 600,663,895
- -------------------------------------------------- ------------- -------------
------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
21
FEDERATED STOCK TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Stock Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a diversified, open-end management
investment company.
(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.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at the
prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Trust to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral under repurchase agreement
transactions. Additionally, procedures have been established by the Trust to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the
repurchase price to be paid under the repurchase agreement transaction.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Trust's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Trust could receive less
than the repurchase price on the sale of collateral securities.
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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
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 income. Accordingly, no
provisions for federal tax are necessary.
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
22
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
maintains security positions such that sufficient liquid assets will be
available to make payment for the securities purchased. Securities purchased
on a when-issued or delayed delivery basis are marked to market daily and
begin earning interest on the settlement date.
RESTRICTED SECURITIES--Restricted securities are securities that may only be
resold upon registration under federal securities laws or in transactions
exempt from such registration. In some cases, the issuer of restricted
securities has agreed to register such securities for resale, at the
issuer's expense either upon demand by the Trust or in connnection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees. The Trust will not
incur any registration costs upon such resales. The Trust's restricted
security is valued at the price provided by dealers in the secondary market
or, if no market price is available, at the fair value as determined by the
Trust's pricing committee.
Additional information on each restricted security held at October 31, 1995
is as follows:
<TABLE>
<S> <C> <C>
SECURITY ACQUISITION DATE ACQUISITION COST
- -------------------------------------------------------------------- --------------------- ----------------
Westinghouse Electric Corp., PEPS, Series C, $1.30 09/26/95 - 09/28/95 $ 9,175,000
</TABLE>
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).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------
1995 1994
- ------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Shares sold 5,349,711 10,334,187
- -------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 541,686 526,068
- -------------------------------------------------------------------
Shares redeemed (8,086,028) (9,032,374)
- ------------------------------------------------------------------- ---------- -----------
Net change resulting from share transactions (2,194,631) 1,827,881
- ------------------------------------------------------------------- ---------- -----------
---------- -----------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Trust's investment
adviser (the "Adviser"), receives for its services an annual investment
advisory fee up to .75 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
23
FEDERATED STOCK TRUST
- --------------------------------------------------------------------------------
under federal and state laws, expenses of withholding taxes, and
extraordinary expenses) exceed 1% of average daily net assets of the Trust.
ADMINISTRATIVE FEE--Federated Administrative Services, under the
Administrative Services Agreement, provides the Trust with administrative
personnel and services. This fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors
for the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Trust will pay
Federated Shareholder Services up to .25 of 1% of average daily net assets
of the Trust for the period. This fee is to obtain certain services for
shareholders and to maintain shareholder accounts. FSS may voluntarily
choose to waive a portion of its fee. FSS can modify or terminate this
voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the
Trust. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting
records for which it receives a fee. The fee is based on the level of the
Trust's average daily net assets for the period, plus out-of-pocket
expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $236,895,317
- ----------------------------------------------------------------- ------------
Sales $323,578,779
- ----------------------------------------------------------------- ------------
</TABLE>
24
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
FEDERATED STOCK TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated Stock Trust as of October 31, 1995,
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 page 2 of this prospectus) for each of the periods
presented therein. 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
October 31, 1995, 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
Federated Stock Trust at October 31, 1995, 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 its financial highlights for each of the periods
presented therein, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 8, 1995
25
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Federated Stock Trust Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- --------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- --------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- --------------------------------------------------------------------------------
Custodian
State Street Bank and Trust
Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- --------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing
Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- --------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- --------------------------------------------------------------------------------
</TABLE>
26
- --------------------------------------------------------------------------------
FEDERATED STOCK TRUST
PROSPECTUS
A No-Load, Open-End,
Diversified Management
Investment Company
December 31, 1995
[FEDERATED SECURITIES CORP. LOGO]
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 313900102
8120102A (12/95) [RECYCLED PAPER LOGO]
RECYCLED
PAPER
FEDERATED STOCK TRUST
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus of the Federated Stock Trust (the "Trust") dated December
31, 1995. This Statement is not a prospectus itself. To receive a copy
of the prospectus, write or call Federated Stock Trust.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December 31, 1995
General Information About the Trust 1
Investment Objective and Policies 1
Types of Investments 1
When-Issued and Dealyed Delivery
Transactions 1
Portfolio Turnover 1
Investment Limitations 1
Federated Stock Trust Management 3
Officers and Trustees
Trust Ownership 8
Trustees Compensation 8
Trustee Liability 8
Investment Advisory Services 9
Adviser to the Trust 9
Advisory Fees 9
Other Services 9
Trust Administration 9
Custodian and Portfolio Recordkeeper 9
Transfer Agent 9
Independent Auditor 9
Shareholder Services Agreement 10
Brokerage Transaction 10
Purchasing Shares 10
Conversion to Federal Funds 10
Determining Net Asset Value 10
Determining Market Value of
Securities 11
Redeeming Shares 11
Redemption in Kind 11
Massachusetts Partnership Law 11
Exchanging Securities for Trust Shares 11
Tax Consequences 12
Tax Status 12
The Trust's Tax Status 12
Shareholders' Tax Status 12
Total Return 12
Yield 12
Performance Comparisons 13
About Federated Investors 14
GENERAL INFORMATION ABOUT THE TRUST
Federated Stock Trust (the "Trust") was established as a Massachusetts
business trust under a Declaration of Trust dated December 30, 1981. On May
2, 1993, the shareholders of the Trust voted to permit the Trust to offer
separate series and classes of shares.
INVESTMENT OBJECTIVE AND POLICIES
The Trust's investment objective is to provide growth of income and capital
by investing principally in a professionally-managed and diversified
portfolio of common stocks of high quality companies.
TYPES OF INVESTMENTS
Although the Trust may invest in other securities of these companies and in
money market instruments, it is the Trust's policy to invest at least 80%
of its portfolio in common stocks. The above investment objective and
policies cannot be changed without approval of shareholders.
U.S. GOVERNMENT OBLIGATIONS
The types of U.S. government obligations in which the Trust may invest
generally include direct obligations of the U.S. Treasury (such as
U.S. Treasury bills, notes, and bonds) and obligations issued or
guaranteed by U.S. government agencies or instrumentalities. These
securities are backed by:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
othe credit of the agency or instrumentality issuing the obligations.
Examples of agencies and instrumentalities which may not always
receive financial support from the U.S. government are:
oFederal Land Banks;
oCentral Bank for Cooperatives;
oFederal Intermediate Credit Banks;
oFederal Home Loan Banks;
oFarmers Home Administration; and
oFederal National Mortgage Association.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Trust. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid assets
of the Trust sufficient to make payment for the securities to be purchased
are segregated on the Trust`s records at the trade date. These assets are
marked to market daily and are maintained until the transaction has been
settled. The Trust does not intend to engage in when-issued and delayed
delivery transactions to an extent that would cause the segregation of more
than 20% of the total value of its assets.
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. For the fiscal years ended
October 31, 1995, and 1994, the portfolio turnover rates were 42% and 28%,
respectively.
INVESTMENT LIMITATIONS
The Trust will not change any of the investment limitations described below
without approval of shareholders, unless indicated otherwise.
SELLING SHORT AND BUYING ON MARGIN
The Trust will not make short sales of or purchase any securities on
margin, except for such credits as are necessary for the clearance of
transactions.
BORROWING MONEY
The Trust will not borrow money except as a temporary measure for
extraordinary or emergency purposes and then only in amounts not in
excess of 5% of the value of its total assets or in an amount up to
one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately
selling portfolio securities. This borrowing provision is not for
investment leverage but solely to facilitate management of the
portfolio by enabling the Trust to meet redemption requests where the
liquidation of portfolio securities is deemed inconvenient or
disadvantageous. While any such borrowings are outstanding, no
purchases of investment securities will be made by the Trust.
PLEDGING ASSETS
The Trust will not pledge, mortgage or hypothecate its assets, except
that, to secure borrowings. It may pledge securities having a market
value at the time of pledge not exceeding 10% of the value of the
Trust's total assets.
DIVERSIFICATION OF INVESTMENTS
The Trust will not purchase the securities of any issuer, except cash,
cash instruments and securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, if as a result more
than 5% of its total assets would be invested in the securities of
such issuer.
PURCHASING SECURITIES TO EXERCISE CONTROL
The Trust may not invest in securities of a company for the purpose of
exercising control or management. However, the Trust will acquire no
more than 10% of the voting securities of an issuer and may exercise
its voting power in the Trust's best interest. From time to time the
Trust, together with other investment companies advised by the Adviser
or its affiliated companies, may buy and hold substantial amounts of
the voting stock of a company, and all such stock may be voted
together in regard to the company's affairs In some cases, the Trust
and other investment companies advised by the Adviser or its
affiliated companies holding such stock might collectively be
considered to be in control of such a company . Officers or affiliates
of the Trust might possibly become directors of companies in which the
Trust holds stock.
PURCHASING SECURITIES OF OTHER ISSUERS
The Trust will not invest in securities issued by any other investment
company or investment trust except by purchase in the open market
where no commission or profit to a sponser or dealer results from such
purchjases other than the customary broker's commission or except when
such a purchase, though not made in open market, is part of a plan of
merger or consolidation.
INVESTING IN NEW ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS OF THE
TRUST
The Trust will not invest more than 5% of the value of the total
assets of the Trust in securities of issuers which have a record of
less than three years of continuous operation, including the operation
of any predecessor.
INVESTING IN ISSUERS
The Trust will not purchase or retain the securities of any issuer
other than the securities of the Trust, if, to the Trust's knowledge,
those officers and Trustees of the Trust, or of the Adviser, who
individually own beneficially more than 1/2 of 1% of the outstanding
securities of such issuer, together own beneficially more than 5% of
such outstanding securities.
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 purchase or sell real estate, but this shall not
prevent the Trust from investing in Municipal Bonds secured by real
estate or interest therein.
INVESTING IN COMMODITIES OR MINERALS
The Trust will not purchase or sell commodities or commodity contracts
or oil, gas, or other mineral exploration or development programs.
LENDING CASH OR SECURITIES
The Trust will not lend any of its assets, except that it may purchase
or hold corporate or government bonds, debentures, notes, certificates
of indebtedness or other debt securities permitted by its investment
objective.
CONCENTRATION OF INVESTMENTS IN ONE INDUSTRY
The Trust will not invest more than 25% of the value of its total
assets in one industry.
ISSUING SENIOR SECURITIES
The Trust will not issue senior securities except as permitted by its
investment objective, policies and limitations.
DEALING IN PUTS AND CALLS
The Trust will not write, purchase or sell puts, call, straddles or
spreads or any combinations thereof.
RESTRICTED SECURITIES
The Trust will not invest more than 10% of its net assets in
securities subject to restrictions on resale under the Securities Act
of 1933, except for commercial paper issued under Section 4 (2) of the
Securities Act of 1933 and certain other restricted securities which
meet the criteria for liquidity as established by the Trustees.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not result
in a violation of such restriction.
The Trust did not borrow money, pledge securities, or purchase 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.
This representation may be changed without shareholder vote to the extent
permitted by the above restrictions.
FEDERATED STOCK TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates, present
positions with Federated Stock Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or Managing
General Partner of the Funds. Mr. Donahue is the father of J. Christopher
Donahue, Vice President of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Bithdate February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner of
the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President, John
R. Wood and Associates, Inc., Realtors; President, Northgate Village
Development Corporation; Partner or Trustee in private real estate ventures
in Southwest Florida; Director, Trustee, or Managing General Partner of the
Funds; formerly, President, Naples Property Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and Director,
Ryan Homes, Inc.
James E. Dowd
Director, Federated Securities Corp.
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-Law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center-
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian and
Montefiore Hospitals; Director, Trustee, or Managing General Partner of the
Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
Seacliff
562 Bellevue Avenue
Newport, RI
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts; Director,
Trustee, or Managing General Partner of the Funds; formerly, President,
State Street Bank and Trust Company and State Street Boston Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center-Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the
Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; Funding Chairman,
National Advisory Council for Environmental Policy and Technology and
Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp. and Federated
Administrative Services.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Administrative Services, Federated
Services Company, and Federated Shareholder Services; President or 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 Company.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Services Company; Chairman, Treasurer, and Trustee,
Federated Administrative Services; Trustee or Director of some of the
Funds; President, Executive Vice President and Treasurer of some of the
Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, General Counsel, and Trustee,
Federated Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated Global
Research Corp.; Trustee, Federated Services Company; Executive Vice
President, Secretary, and Trustee, Federated Administrative Services;
President and Trustee, Federated Shareholder Services; Director, Federated
Securities Corp.; Executive Vice President and Secretary of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some
of the Funds; Director or Trustee of some of the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Senior Vice
President, Federated Shareholder Services; Vice President, Federated
Administrative Services; Treasurer of some of the Funds.
* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of the Board
of Trustees handles the responsibilities of the Board of Trustees between
meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated ARMs Fund; Federated Equity Funds; Federated Exchange
Fund, Ltd.; Federated GNMA Trust; Federated Government Trust; Federated
High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated
Master Trust; Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3
Years; Federated U.S. Government Securities Fund: 3-5 Years; Federated U.S.
Government Securities Fund: 5-10 Years; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for
U.S. Government Securities, Inc.; Government Income Securities, Inc.; High
Yield Cash Trust; Insurance Management Series; Intermediate Municipal
Trust; International Series, Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty High
Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty
U.S. Government Money Market Trust; Liberty Term Trust, Inc. - 1999;
Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; Star
Funds; The Starburst Funds; The Starburst Funds II; Stock and Bond Fund,
Inc.; Targeted Duration Trust; Tax-Free Instruments Trust; Trust for
Financial Institutions; Trust For Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
The Virtus Funds; World Investment Series, Inc.
TRUST OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund`s outstanding
shares.
As of December 4, 1995, the following shareholders of record owned 5% or
more of the outstanding shares of Federated Stock Trust: Charles Schwab &
Co., Inc., San Francisco, CA, 6.75%; and Boston Safe Deposit & Trust Co.,
Medford, MA, 5.01%.
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in
the Fund Complex
Thomas G. Bigley $2,458 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $3,520 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $3,520 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Glen R. Johnson $0 $0 for the Trust and
President and Trustee 14 other investment companies in
the Fund Complex
James E. Dowd $3,520 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $3,166 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $3,520 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $2,757 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $3,166 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $1,762 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $3,166 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $3,166 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended October 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised of
15 portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Trust's Declaration of Trust provides that the Trustees are not 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 (the "Adviser"). It
is a subsidiary of Federated Investors. All of the voting securities of
Federated Investors are owned by a trust, the Trustees of which are John F.
Donahue, his wife, and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust or any shareholder for any
losses that may be sustained in the purchase, holding, or sale of any
security, or for anything done or omitted by it, except acts or omissions
involving willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties imposed upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. During the fiscal
years ended October 31, 1995, 1994, and 1993, the Trust's Adviser earned
$4,305,810, $4,204,915, and $3,466,826, respectively, of which $128,351 was
waived for the period ended October 31, 1995.
STATE EXPENSE LIMITATIONS
The Adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares
are registered for sale in those states. If the Trust's normal
operating expenses (including the investment advisory fee, but not
including brokerage commissions, interest, taxes, and extraordinary
expenses) exceed 2 1/2% per year of the first $30 million of average
net assets, 2% per year of the next $70 million of average net assets,
and 1 1/2% per year of the remaining average net assets, the adviser
will reimburse the Trust for its expenses over the limitation.
If the Trust's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by the
amount of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the adviser
will be limited, in any single fiscal year, by the amount of the
investment advisory fee.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
OTHER SERVICES
TRUST ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc., may hereinafter collectively be referred to
as, (the "Administrators.") For the fiscal year ended October 31, 1995,
the Administrators collectively earned $440,833. For the fiscal years
ended October 31, 1994, and 1993, Federated Administrative Services and
Federated Administrative Services, Inc. earned $528,231 and $638,234,
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 a director of Commercial Data Services, Inc., a company
which provides computer processing services to Federated Administrative
Services.
CUSTODIAN AND PORTFOLIO RECORDKEEPER
State Street Bank and Trust Company, Boston, Massachusetts, is custodian
for the securities and cash of the Trust. It also provides certain
accounting and recordkeeping services with respect to the Trust's portfolio
investments.
TRANSFER AGENT
As transfer agent, Federated Services Company, maintains all necessary
shareholder records. For its services, the transfer agent receives a fee
based on size, type, and number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITOR
The independent auditors for the Trust are Ernst & Young LLP, Pittsburgh,
Pennsylvania.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder
Services and to financial institutions to cause services to be provided to
shareholders by a representative who has knowledge of the shareholder's
particular circumstances and goals. These activities and services may
include, but are not limited to, providing office space, equipment,
telephone facilities, and various clerical, supervisory, computer, and
other personnel as necessary or beneficial to establish and maintain
shareholder accounts and records; processing purchase and redemption
transactions and automatic investments of client account cash balances;
answering routine client inquiries; and assisting clients in changing
dividend options, account designations, and addresses.
By adopting the Shareholder Services Agreement, the Trustees expect that
the Trust will benefit by: (1) providing personal services to
shareholders; (2) investing shareholder assets with a minimum of delay and
administrative detail; (3) enhancing shareholder record keeping systems;
and (4) responding promptly to shareholders' requests and inquiries
concerning their accounts.
For the fiscal period ending October 31, 1995, payments in the amount of
$1,455,815 were made pursuant to the Shareholder Services Agreement, of
which $873,483 was waived.
BROKERAGE TRANSACTIONS
The Adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Trust or to the
Adviser and may include:
o advice as to the advisability of investing in securities;
o security analysis and reports;
o economic studies;
o industry studies;
o receipt of quotations for portfolio evaluations; and
o similar services.
The Adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to the value of the
brokerage and research services provided.
Research services provided by brokers may be used by the Adviser or by
affiliates of Federated Investors in advising Federated Funds and other
accounts. To the extent that receipt of these services may supplant
services for which the adviser or its affiliates might otherwise have paid,
it would tend to reduce their expenses.
For the fiscal years ended October 31, 1995, 1994, and 1993, the Trust paid
total brokerage commissions of $549,947, $271,265, and $336,440,
respectively.
PURCHASING SHARES
Shares are sold at their net asset value without a sales charge on days the
New York Stock Exchange is open for business. The procedure for purchasing
shares of the Trust is explained in the prospectus under "Investing in the
Trust."
CONVERSION TO FEDERAL FUNDS
It is the Trust's policy to be as fully invested as possible so that
maximum interest may be earned. To this end, all payments from shareholders
must be in federal funds or be converted into federal funds. State Street
Bank acts as the shareholder's agent in depositing checks and converting
them to federal funds.
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on which the net
asset value is calculated by the Trust are described in the prospectus.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Trust's portfolio securities are determined as
follows:
o for equity securities and bonds and other fixed income securities,
according to the last sale price on a national securities exchange, if
available;
o in the absence of recorded sales for equity securities, according to
the mean between the last closing bid and asked prices and for bonds
and other fixed income securities as determined by an independent
pricing service;
o for unlisted equity securities, the latest bid prices;
o for short-term obligations, according to the mean between bid and
asked prices, as furnished by an independent pricing service or for
short-term obligations with remaining maturities of 60 days or less,
at the time of purchase, at amortized cost; or
o for all other securities, at fair value as determined in good faith by
the Trustees.
REDEEMING SHARES
The Trust redeems shares at the next computed net asset value after the
Trust receives the redemption request. Redemption procedures are explained
in the prospectus under "Redeeming Shares." Although 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
The Trust has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Trust is obligated to redeem shares for
any one shareholder in cash only up to the lesser of $250,000 or 1% of the
Fund's net asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Trust will
pay all or a portion of the remainder of the redemption in portfolio
instruments, valued in the same way as the Fund determines net asset value.
The portfolio instruments will be selected in a manner that the Trustees
deem fair and equitable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving their securities and selling them
before their maturity could receive less than the redemption value of their
securities and could incur certain transaction costs.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust. To
protect shareholders of the Fund, the Trust has filed legal documents with
Massachusetts that expressly disclaim the liability of 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
the Trust or its Trustees enter into or sign on behalf of the Fund.
In the unlikely event a shareholder of the Fund is held personally liable
for the Trust's obligations, the Trust is required by the Declaration of
Trust 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.
EXCHANGING SECURITIES FOR TRUST SHARES
Investors may exchange certain securities they already own for Trust
shares, or they may exchange a combination of securities and cash for Trust
shares. An investor should forward the securities in negotiable form with
an authorized letter of transmittal to Federated Securities Corp. The
Trust will notify the investor of its acceptance and valuation of the
securities within five business days of their receipt by State Street Bank.
The Trust values securities in the same manner as the Trust values its
assets. The basis of the exchange will depend upon the net asset value of
Trust shares on the day the securities are valued. One share of the Trust
will be issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be
considered in valuing the securities. All interest, dividends, subscription
or other rights attached to the securities become the property of the
Trust, along with the securities.
TAX CONSEQUENCES
Exercise of this exchange privilege is treated as a sale for federal income
tax purposes. Depending upon the cost basis of the securities exchanged for
Trust shares, a gain or loss may be realized by the investor.
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:
o derive at least 90% of its gross income from dividends, interest, and
gain from the sale of securities;
o derive less than 30% of its gross income from the sale of securities
held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.
SHAREHOLDERS' TAX STATUS
Shareholders are subject to federal income tax on dividends and capital
gains received as cash or additional shares. At least a percentage of
dividends paid by the Trust will generally qualify for the shareholder's
$100 dividends received deduction available to corporations. The percentage
is based on and equal to the proportion of the Trust's gross income derived
from dividends of domestic corporations. These dividends, and any short-
term capital gains, are taxable as ordinary income.
CAPITAL GAINS
Shareholders will pay federal tax at capital gains rates on long-term
capital gains distributed to them regardless of how long they have
held the Trust shares.
TOTAL RETURN
The Trust's average annual total returns for the one-year, five-year and
ten-year periods ended October 31, 1995, were 21.98%, 18.62%, and 12.80%,
respectively. The Trust's average annual total return since inception was
15.46%.
The average annual total return for 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 the quarterly
reinvestment of all dividends and distributions.
YIELD
The Trust's yield for the thirty-day period ended October 31, 1995, was
1.39%.
The yield for the Trust is determined by dividing the net investment income
per share (as defined by the Securities and Exchange Commission) earned by
the Trust over a thirty-day period by the offering price per share of the
Trust 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
12-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 the
Trust, performance will be reduced for those shareholders paying those
fees.
PERFORMANCE COMPARISONS
The Trust's performance depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio securities;
o changes in Trust expenses; and
o various other factors.
The Trust's performance fluctuates on a daily basis largely because net
earnings and offering price per share fluctuate daily. Both net earnings
and offering price per share are factors in the computation of yield and
total return.
Investors may use financial publications and/or indices to obtain a more
complete view of the 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 Fund
uses in advertising may include:
O 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 net asset value over a specific period of time. From time to time,
the Trust will quote it Lipper ranking in the "growth and income
funds" category in advertising and sales literature.
o DOW JONES INDUSTRIAL AVERAGE ("DJIA") represents share prices of
selected blue-chip industrial corporations as well as public utility
and transportation companies. The DJIA indicates daily changes in the
average price of stocks in any of its categories. It also reports
total sales for each group of industries. Because it represents the
top corporations of America, the DJIA's index movements are leading
economic indicators for the stock market as a whole.
o STANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS, a
composite index of common stocks in industry, transportation, and
financial and public utility companies can be used to compare to the
total returns of funds whose portfolios are invested primarily in
common stocks. In addition, the Standard & Poor's index assumes
reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated in Standard & Poor's figures.
o MORNINGSTAR, INC., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their
risk-adjusted returns. The maximum rating is five stars, and ratings
are effective for two weeks.
Investors may also consult the fund evaluation consulting universes listed
below. Consulting universes may be composed of pension, profit sharing,
commingled, endowment/foundation, and mutual funds.
o FIDUCIARY CONSULTING GRID UNIVERSE, for example, is composed of over
1,000 funds, representing 350 different investment managers, divided
into subcategories based on asset mix. The funds are ranked quarterly
based on performance and risk characteristics.
o SEI data base for equity funds includes approximately 900 funds,
representing 361 money managers, divided into fund types based on
investor groups and asset mix. The funds are ranked every three, six,
and twelve months.
o MERCER MEIDINGER, INC. compiles a universe of approximately 600 equity
funds, representing about 500 investment managers, and updates their
rankings each calendar quarter as well as on a one, three, and five
year basis.
Advertisements and other sales literature for the Trust may quote total
returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in
the Trust based on quarterly reinvestment of dividends over a specified
period of time.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in its
investment decision making-structured, straightforward, and consistent.
This has resulted in a history of competitive performance with a range of
competitive investment products that have gained the confidence of
thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio managers,
analysts, and traders dedicated to specific market sectors.
In the equity sector, Federated has more than 25 years' experience. As of
December 31, 1995, Federated managed 15 equity funds totaling approximately
$4 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented
management style combines quantitative and qualitative analysis and
features a structured, computer-assisted composite modeling system that was
developed in the 1970s.
J. Thomas Madden, Executive Vice President, oversees Federated's equity and
high yield corporate bond management while William D. Dawson, Executive
Vice President, oversees Federated's domestic fixed income management.
Henry A. Frantzen, Executive Vice President, oversees the management of
Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500 funds
available.*
Federated Investors, through its subsidiaries, distributes mutual funds for
a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for
a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment and
financial advisors. The marketing effort to these institutional clients
is headed by John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust divisions
of the top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major brokerage
firms nationwide--including 200 New York Stock Exchange firms--supported by
more wholesalers than any other mutual fund distributor. The marketing
effort to these firms is headed by James F. Getz, President, Broker/Dealer
Division.
*source: Investment Company Institute
CUSIP 313900102
8120102B (12/94)
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Filed in Part A)
(b) Exhibits:
(1) Conformed copy of the Declaration of Trust of the
Registrant;+
(2) Copy of the By-Laws of the Registrant as amended;+
(i) Copy of Amendment No. 1 to the By-Laws of the
Registrant dated February 17, 1984;+
(ii) Copy of Amendment No. 2 to the By-Laws of the
Registrant dated February 2, 1987;+
(iii)Copy of Amendment No. 3 to the By-Laws of the
Registrant dated August 25, 1988;+
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant;+
(5) Conformed copy of the new Investment Advisory Contract of
the Registrant;+
(6) (i) Conformed copy of the Distributor's Contract;+
(ii) The Registrant incorporates the conformed copy of the
specimen Mutual Funds Sales and Service Agreement;
Mutual Funds Service Agreement; and Plan Trustee/Mutual
Funds Service Agreement from Item 24(b)(6) of the Cash
Trust Series II Registration Statement filed with the
Commission on July 24,1995. (File Number 33-38550 and
811-2669).
(7) Not applicable;
(8) Conformed copy of the Custodian Agreement of the
Registrant(12);
(9)
(i) Conformed copy of Shareholder Services Agreement of the
Registrant (12);
(ii) Conformed copy of Administrative Services Agreement of
the Registrant (12);
(iii)Conformed Copy of Agreement for Fund Accounting,
Shareholder Recordkeeping, and Custody Services
Procurement (12);
(iv) The response and exhibits described in Item 24(b)6(ii)
are hereby incorporated by reference;
(10) Conformed copy of the Opinion and Consent of Counsel
regarding legality of securities registered (12);
(11) Conformed copy of the Consent of Independent Auditors;+
(12) Not applicable;
(13) Conformed Copy of the Initial Capital Understanding;+
(14) Not applicable;
(15) Not applicable;
(16) Schedule for Computation of Fund Performance Data;+
(17) Financial Data Schedules;+
(18) Conformed copy of Power of Attorney;+
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No 23 Statement on Form N-1A filed on December 27, 1994
(File Nos. 2-75756 and 811-3385)
+ All exhibits have been filed electronically.
Item 25. Persons Controlled by or Under Common Control with Registrant:
None.
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of December 04, l995
Shares of beneficial interest
11,952
(without par value)
Item 27. Indemnification: (8.)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment
adviser, see the section entitled "Trust Information - Management
of the Trust," in Part A. The affiliations with the Registrant
of four of the Trustees and one of the Officers of the investment
adviser are included in Part 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.
The remaining Officers of the investment adviser are: William D.
Dawson, III, Henry A. Frantzen, J. Thomas Madden, Mark L. Mallon,
Executive Vice Presidents; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, Drew J. Collins, Jonathan
C. Conley, J. Alan Minteer, Senior Vice Presidents; J. Scott
Albrecht, Joseph M. Balestrino, Randall S. Bauer, David A.
Briggs, Kenneth J. Cody, Deborah A. Cunningham, Michael P.
Donnelly, Linda A. Duessel, Mark E. Durbiano, Kathleen M. Foody-
Malus, Thomas M. Franks, Edward C. Gonzales, Timothy E. Keefe,
Stephen A. Keen, Mark S. Kopinski, Jeff A. Kozemchak, Marian R.
Marinack, Susan M. Nason, Mary Jo Ochson, Robert J. Ostrowski,
Frederick L. Plautz, Jr., Charles A. Ritter, James D. Roberge,
Frank Semack, William F. Stotz, Sandra L. Weber, Christopher H.
Wiles, Vice Presidents; Thomas R. Donahue, Treasurer; and Stephen
A. Keen, Secretary. The business address of each of the Officers
of the investment adviser is Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the Funds
listed in Part B of this Registration Statement.
Item 29. Principal Underwriters:
(a)Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: American Leaders
Fund, Inc.; Annuity Management Series; Arrow Funds; Automated
Government Money Trust; BayFunds; The Biltmore Funds; The
Biltmore Municipal Funds; Blanchard Funds; Blanchard Precious
Metals, Inc.; Cash Trust Series, Inc.; Cash Trust Series II;
DG Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated
Government Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated
Index Trust; Federated Institutional Trust; Federated Master
Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust;
Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond
Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 3-5 Years;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; Insurance
Management Series; Intermediate Municipal Trust;
International Series Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money Market
Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed
Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Trust; The
Monitor Funds; Municipal Securities Income Trust; Newpoint
Funds; 111 Corcoran Funds; Peachtree Funds; The Planters
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star
Funds; The Starburst Funds; The Starburst Funds II; Stock and
Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust;
Tax-Free Instruments Trust; Tower Mutual Funds; Trademark
Funds; Trust for Financial Institutions; Trust for Government
Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus
Funds; Vision Fiduciary Funds, Inc.; Vision Group of Funds,
Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty
Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive ViceExecutive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
John W. McGonigle Director, Federated Executive Vice
Federated Investors Tower Securities Corp. President and
Pittsburgh, PA 15222-3779 Secretary
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary, Treasurer
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
Federated Services Company Pittsburgh, PA 15222-3779
("Transfer Agent and Dividend
Disbursing Agent)
Federated Administrative Services
("Administrator")
Federated Management
("Advisor")
State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, Massachusetts
02266-8602
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meeting by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED STOCK TRUST,
Certifies that it meets all the requirements for effectiveness of this
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, in the
City of Pittsburgh and Commonwealth of Pennsylvania, on the 21 day of
December, 1994.
FEDERATED STOCK TRUST
BY: /s/ S. Elliott Cohan
Assistant Secretary
Attorney in Fact for John F. Donahue
December 21, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By:/s/ S. Elliott Cohan
Attorney In Fact December 21, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
Edward C. Gonzales* Executive Vice President and Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
Exhibit (11) under N-1A
Exhibit 23 under Item 601/Reg SK
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent Auditors"
and to the use of our report dated December 8, 1995, in Post-Effective Amendment
Number 25 to the Registration Statement (Form N-1A Number 2-75756 of Federated
Stock Trust dated December 31, 1995.
By:ERNST & YOUNG
Ernst & Young
Boston, Massachusetts
Exhibit 19 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of FEDERATED STOCK TRUST and the Deputy
General Counsel of Federated Investors, and each of them, their true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for them and in their names, place and stead, in any and all capacities, to sign
any and all documents to be filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, by means of the Securities and Exchange
Commission's electronic disclosure system known as EDGAR; and to file the same,
with all exhibits thereto and other documents in connection thterewith, 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 thereiwth,
as fully to all intents and purposes as each of them might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/s/ John F. Donahue Chairman and Trustee December 1, 1995
John F. Donahue
/s/ Glen R. Johnson President December 1, 1995
Glen R. Johnson
/s/ David M. Taylor Treasurer December 1, 1995
David M. Taylor (Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee December 1, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee December 1, 1995
John T. Conroy, Jr.
/s/ William J. Copeland Trustee December 1, 1995
William J. Copeland
/s/ James E. Dowd Trustee December 1, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee December 1, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee December 1, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee December 1, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee December 1, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee December 1, 1995
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee December 1, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee December 1, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 1st day of December, 1995.
/s/ Marie M. Hamm
Exhibit 5 under Form N1-A
Exhibit EX-10 under item 601/Reg. S-K
FEDERATED STOCK TRUST
INVESTMENT ADVISORY CONTRACT
This Contract is made between FEDERATED MANAGEMENT, a Delaware business
trust having its principal place of business in Pittsburgh, Pennsylvania
(hereinafter referred to as "Adviser"), and FEDERATED STOCK TRUST, a
Massachusetts business trust having its principal place of business in
Pittsburgh, Pennsylvania (hereinafter referred to as the "Fund"), and is based
on the following premises:
(a) That the Fund is an open-end management investment company as
that term is defined in the Investment Company Act of 1940 and is
registered as such with the Securities and Exchange Commission;
(b) That Adviser is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Fund hereby appoints Adviser as investment adviser and Adviser
accepts the appointment. Subject to the direction of the Trustees of the Fund,
Adviser shall provide investment research and supervision of the investments of
the Fund and conduct a continuous program of investment evaluation and of
appropriate sale or other disposition and reinvestment of the Fund's portfolio.
2. Adviser, in its supervision of the investments of the Fund will be
guided by the Fund's fundamental investment policies and the provisions and
restrictions contained in the Declaration of Trust and By-Laws of the Fund and
as set forth in the Registration Statements and exhibits as may be on file with
the Securities and Exchange Commission.
3. The Fund shall pay or cause to be paid all of its expenses, including,
without limitation, the expenses of continuing the Fund's existence; fees and
expenses of officers and Trustees of the Fund; fees for investment advisory
services and administrative personnel and services; fees and expenses of
preparing and printing amendments to its Registration Statements under the
Securities Act of 1933 and the Investment Company Act of 1940; expenses of
continuing the registration of the Fund and its shares under Federal and State
laws and regulations; expenses of preparing, printing and distributing
prospectuses (and any amendments thereto) to shareholders, interest expense,
taxes, fees and commissions of every kind; expenses of issue (including cost of
Shares certificates), purchase, repurchase, and redemption of shares, including
expenses attributable to a program of periodic issue; charges and expenses of
custodians, transfer agents, dividend disbursing agents; Shareholder servicing
agents and registrars; printing and mailing costs, auditing, accounting and
legal expenses; reports to shareholders and governmental officers and
commissions; expenses of meetings of Trustees and shareholders and proxy
solicitations therefor; insurance expenses; association membership dues and such
nonrecurring items as may arise, including all losses and liabilities incurred
in administering the Fund. The Fund will also pay such extraordinary expenses
as may arise, including expenses incurred in connection with litigation,
proceedings and claims and the legal obligations of the Fund to indemnify its
officers and Trustees and agents with respect thereto.
4. Adviser agrees to accept as full compensation for all services rendered
hereunder an investment advisory fee at an annual rate ranging from .75 of 1% on
the first $500 million of average daily net assets of the Fund to 0.40 of 1% on
average daily net assets in excess of $2 billion as specified below:
(a)
MAXIMUM INVESTMENT
ADVISORY FEE AVERAGE DAILY NET ASSETS OF THE FUND
.75% on the first $500 million
.675% on the next $500 million
.600% on the next $500 million
.525% on assets in excess of $500 million
.40% on amounts in excess of $2,000,000,000
(b) Adviser shall reimburse the Fund (limited to the amount of the
gross investment advisory fee computed in accordance with the provisions of
subparagraph (a) of this paragraph 4) in any fiscal year or portion
thereof, the amount, if any, by which the aggregate normal operating
expenses of the Fund, including the gross investment advisory fee but
excluding interest, taxes, brokerage commissions, Federal and state
registration fees, expenses of withholding taxes and extraordinary expenses
for such fiscal year or portfolio thereof exceed 1% of the average daily
net assets of the Fund for such period. This obligation does not include
any expenses incurred by shareholders who choose to avail themselves of the
Transfer Agent's sub-accounting facilities. Such reimbursement will be
accounted for and adjusted annually in accordance with generally accepted
principles and any Rules and Regulations of the Securities and Exchange
Commission applicable thereto.
(c) Such fee shall be accrued daily at a rate of 1/365th of the
investment advisory fee as set forth in the schedule above applied to the
daily net assets of the Fund. The advisory fee so accrued shall be paid to
Adviser daily.
5. The net asset value of Fund Shares as used herein will be calculated to
the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of the
Fund) to the extent that the Fund's expenses exceed such lower expense
limitation as the Adviser may, by notice to the Fund, voluntarily declare to be
effective.
7. The term of this Contract shall continue in effect for two years from
the date of its execution and from year to year thereafter, subject to the
provisions for termination and all of the other terms and conditions hereof if:
(a) such continuation shall be specifically approved at least annually by the
vote of a majority of the Trustees of the Fund, including a majority of the
Trustees who are not parties to this Contract or interested persons of any such
party (other than as Trustees of the Fund) cast in person at a meeting called
for that purpose; and (b) Adviser shall not have notified the Fund in writing
at least sixty (60) days prior to the anniversary date of this Contract in any
year thereafter that it does not desire such continuation.
8. Notwithstanding any provision in this Contract, it may be terminated at
any time, without the payment of any penalty, by the Trustees of the Fund or by
a vote of the shareholders of the Fund on sixty (60) days' written notice to
Adviser.
9. This Contract may not be assigned by Adviser and shall automatically
terminate in the event of any assignment. Adviser may employ or contract with
such other person, persons, corporation, or corporations at its own cost and
expense as it shall determine in order to assist it in carrying out this
Contract.
10. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties under this Contract on the party of
Adviser, Adviser shall not be liable to the Fund or any shareholder for any act
or omission in the course of or connected in any way with rendering services or
for any losses that may be sustained in the purchase, holding or sale of any
security.
11. This Contract may be amended at any time by agreement of the parties,
provided that the amendment shall be approved both by the vote of a majority of
the Trustees of the Fund, including a majority of Trustees who are not parties
to this Contract or interested persons of any such party to this Contract (other
than as Trustees of the Fund), cast in person at a meeting called for that
purpose, and by the folders of a majority of the outstanding voting securities
of the Fund.
12. The parties hereto acknowledge that Federated Investors has reserved
the right to grant the non-exclusive use of the name "Federated" or any
derivative thereof to any other investment company, investment adviser,
distributor, or other business enterprise, and to withdraw from the Fund the use
of the name "Federated." The name "Federated" will continue to be used by the
Fund so long as such use is mutually agreeable to Federated Investors and the
Fund.
13. Adviser is hereby expressly put in 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 Fund pursuant to this Contract be limited in any
case to the Fund and its assets and Adviser shall not seek satisfaction of any
such obligation from the shareholders of the Fund, the Trustees, officers,
employees, or agents of the Fund, or any of them.
14. This Contract shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
15. The Fund is hereby expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of the Adviser and agrees
that the obligations assumed by the Adviser pursuant to this Contract shall be
limited in any case to the Adviser and its assets and, except to the extent
permitted by the Investment Company Act of 1940, the Fund shall not seek
satisfaction of any such obligation from the shareholders of the Adviser, the
Trustees, officers, employees or agents of the Adviser, or any of them.
IN WITNESS WHEREOF, the parties have caused this Contract to be executed on
their behalf by their duly authorized officers and their seals to be affixed
hereto this 1st day of August 1989.
ATTEST: FEDERATED MANAGEMENT
/s/ John W. McGonigle By: /s/ Edward C. Gonzales
Secretary Vice President
ATTEST: FEDERATED STOCK TRUST
/s/ John W. McGonigle By: /s/ John F. Donahue
Exhibit 2 under Form N1-A
Exhibt 3(b) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
OUTLINE OF BY-LAWS
Page
Article I Officers and Their Election..................... 1
1. Officers................................... 1
2. Election of Officers....................... 1
3. Resignations and Removals and Vacancies.... 1
Article II................................................Powers and Duties of
Trustees and Officers..................................... 1
1. Trustees................................... 1
2. Chairman of the Trustees................... 1
3. President.................................. 2
4. Vice President............................. 2
5. Secretary.................................. 2
6. Treasurer.................................. 2
7. Assistant Vice President................... 2
8. Assistant Secretaries and Assistant Treasurers 3
9. Salaries................................... 3
Article III Powers and Duties of the Executive and Other Committees 3
1. Executive and Other Committees............. 3
2. Vacancies in Executive Committee........... 3
3. Executive Committee to Report to Trustees.. 3
4. Procedure of Executive Committee........... 3
5. Powers of Executive Committee.............. 3
6. Compensation............................... 4
7. Informal Action by Executive Committee or Other
Committees ............................... 4
Article IV Shareholders' Meetings..................... 4
1. Special Meetings........................... 4
2. Notices.................................... 4
3. Place of Meetings.......................... 4
4. Action by Consent.......................... 4
5. Proxies.................................... 4
Article V Trustees Meetings............................... 5
1. Number and Qualifications of Trustees...... 5
2. Special Meetings........................... 5
3. Regular Meetings........................... 5
4. Quorum and Vote............................ 5
5. Notices.................................... 5
6. Place of Meeting........................... 5
7. Telephonic Meeting......................... 6
8. Special Action............................. 6
9. Action by Consent.......................... 6
10. Compensation of Trustees................... 6
Article VI Shares of Beneficial Interest.............. 6
1. Beneficial Interest........................ 6
2. Certificates............................... 6
3. Transfer of Shares......................... 7
4. Equitable Interest not Recognized.......... 7
5. Lost, Destroyed or Mutilated Certificates.. 7
6. Transfer Agent and Registrar: Regulations. 7
Article VII Inspection of Books........................ 7
Article VIII Agreements, Checks, Drafts, Endorsements, Ect. 7
1. Agreements, Ect............................ 7
2. Checks, Drafts, Ect........................ 8
3. Endorsements, Assignments and Transfer of Securities 8
4. Evidence of Authority...................... 8
Article IX Seal....................................... 8
Article X Fiscal Year..................................... 8
Article XI Amendments................................. 8
Article XII Waivers of Notice.......................... 8
Article XIII Reports to Shareholders.................... 9
Article XIV Books and Records.......................... 9
BY-LAWS
of
FEDERATED STOCK TRUST
ARTICLE I
OFFICERS AND THEIR ELECTION
Section 1. Officers. The officers of the Trust shall be a Chairman of
the Trustees, a President, one or more Vice Presidents, a Treasurer, a
Secretary and such other officers as the Trustees may from time to time elect.
It shall not be necessary for any Trustee or other officer to be a holder of
shares in the Trust.
Section 2. Election of Officers. The President, Vice President,
Treasurer and Secretary shall be chose annually by the Trustees. The Chairman
of the Trustees shall be chosen annually by and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their successors
are chosen and qualified.
Section 3. Resignations and Removals and Vacancies. Any officer of the
Trust may resign by filing a written resignation with the Chairman of the
Trustees or with the Trustees or with the Secretary, which shall take effect
on being so filed or at such time as may be therein specified. The Trustees
may remove any officer, with or without cause, by a majority vote of all of
the Trustees. The trustees may fill any vacancy created in any office whether
by resignation, removal or otherwise.
ARTICLE II
POWERS AND DUTIES OF TRUSTEES AND OFFICERS
Section 1. Trustees. The business and affairs of the Trust shall be managed
by the Trustees, and they shall have all powers necessary and desirable to
carry out that responsibility.
Section 2. Chairman of the Trustees ("Chairman"). The Chairman shall be the
chief executive officer of the Trust. He shall gave general supervision over
the business of the Trust and policies of the Trust. He shall employ and
define the duties of all employees of the Trust, shall have power to discharge
any such employees, shall exercise general supervision over the affairs of
the Trust and shall perform such other duties as may be assigned to him from
time to time by the Trustees. The Chairman shall appoint a Trustee to
preside at such meetings in his absence, with the approval of the Trustees.
Section 3. President. The President, in the absence of the Chairman,
shall perform all duties and may exercise any of the powers of the Chairman
subject to the control of the other Trustees. He shall counsel and advise the
Chairman on matters of major importance and shall perform such other duties as
may be assigned to him from to time by the Trustees, the Chairman or the
Executive Committee.
Section 4. Vice President. The Vice President (or if more than one, the
senior Vice President) in the absence of the President shall perform all duties
and may exercise any of the powers of the president subject to the control of
the Trustees. Each Vice President shall perform such other duties as may be
assigned to him from time to time by the Trustees, the Chairman or the
Executive Committee.
Section 5. Secretary. The Secretary shall keep or cause to be kept in
books provided for the purpose the Minutes of the Meetings of Shareholders
and of the Trustees; shall see that all Notices are duly given in accordance
with the provisions of these By-Laws and as required by law; shall be
custodian of the records and of the Seal of the Trust and see that the Seal
is affixed to all documents, the execution of which on behalf of the Trust
under its Seal is duly authorized; shall keep directly or through a transfer
agent a register of such register, retaining and filing his
authority for such entries; shall see that the books, reports, statements,
certificates and all other documents and records required by law are properly
kept and filed; and in general shall perform all duties incident to the
Office of Secretary and such other duties as may from time to time be assigned
to him by the Trustees, Chairman or the Executive Committee.
Section 6. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as custodian or sub-custodian in accordance with Article
IX of the Declaration of Trust. The Treasurer shall perform such duties
additional to the foregoing as the Trustees, Chairman or the Executive
Committee may from time to time designate.
Section 7. Assistant Vice President. The Assistant Vice or Vice
Presidents of the Trust shall have such authority and perform such duties as
may be assigned to them by the Trustees, the Executive Committee or the
Chairman.
Section 8. Assistant Secretaries and Assistant Treasurers. The Assistant
Secretary or Secretaries and the Assistant Treasurer or Treasurers shall
perform the duties of the Secretary and of the Treasurer, respectively, in the
absence of those Officers and shall have such further powers and perform
such other duties as may be assigned to them respectively by the Trustees or
the Executive Committee or the Chairman.
Section 9. Salaries. The salaries of the Officers shall be fixed from time to
time by the Trustees. No officer shall be prevented from receiving such
salary by reason of the fact that he is also a Trustee.
ARTICLE III
POWERS AND DUTIES OF THE
EXECUTIVE AND OTHER COMMITTEES
Section 1. Executive and Other Committees. The Trustees may elect from
their own number an executive committee to consist of not less than two members,
which number shall include the Chairman of the Trustees, who shall, ex officio,
be a member thereof. The executive committee shall be elected by a resolution
passed by a vote of at least a majority of the Trustees then in office.
The Trustees may also elect from their own number other committees from time
to time, the number composing such committees and the powers conferred upon
the same to be determined by vote of the Trustees.
Section 2. Vacancies in Executive Committee. Vacancies occurring in the
Executive Committee from any cause shall be filled by the Trustees by a
resolution passed by the vote of at least a majority of the Trustees then in
office.
Section 3. Executive Committee to Report to Trustees. All action by the
Executive Committee shall be reported to the Trustees at their meeting next
succeeding such action.
Section 4. Procedure of Executive Committee. The Executive Committee shall
fix its own rules of procedure not inconsistent with these By-Laws or with any
directions of the Trustees. It shall meet at such times and places and upon
such notice as shall be provided by such rules or by resolution of the Trustees.
The presence of a majority shall constitute a quorum for the transaction of
business, and in every case an affirmative vote of a majority of all the
members of the Committee present shall be necessary for the taking of any
action.
Section 5. Powers of Executive Committee. During the intervals between
the Meetings of the Trustees, the Executive Committee, except as limited by the
By-Laws of the Trust or by specific directions of the Trustees, shall possess
and may exercise all the powers of the Trustees in the management and
direction of the business and conduct of the affairs of the Trust in such
manner as the Executive Committee shall deem for the best interests of the
Trust, and shall have power to authorize the Seal of the Trust to be affixed
to all instruments and documents requiring same. Notwithstanding the
foregoing, the Executive Committee shall not have the power to elect
Trustees, increase or decrease the number of Trustees, elect or remove any
Officer, declare dividends, issue shares or recommend to shareholders
any action requiring shareholder approval.
Section 6. Compensation. The members of any duly appointed committee shall
receive such compensation and/or fees as from time to time may be fixed by the
Trustees.
Section 7. Informal Action by Executive Committee or Other Committee.
Any action required or permitted to be taken at any meeting of the Executive
Committee or any other duly appointed Committee may be taken without a
meeting if a consent in writing setting forth such action is signed by all
members of such committee and such consent is filed with the records of the
Trust.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings. A special meeting of the shareholders shall
be called by the Secretary whenever ordered by the Trustees, the Chairman or
requested in writing by the holder or holders of at least one-tenth of the
outstanding shares entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than two days to call such special
meeting, the Trustees, Chairman or the shareholders so requesting may, in
the manner required when notice is given by the Secretary.
Section 2. Notices. Except as above provided, notices of any special
meeting of the shareholders shall be given by the Secretary by delivering or
mailing, postage prepaid, to each shareholder entitled to vote at said
meeting, a written or printed notification of such meeting, at least fifteen
days before the meeting, to such address as may be registered with the Trust
by the shareholder.
Section 3. Place of Meeting. Meeting of the Shareholders shall be held at
the principal place of business of the Trust in Pittsburgh, Pennsylvania, or at
such place within or without the Commonwealth of Massachusetts as fixed from
time to time by resolution of the Trustees.
Section 4. Action by Consent. Any action required or permitted to be taken
at any meeting of shareholders may be taken without a meeting, if a consent in
writing, setting forth such action, is signed by all the shareholders entitled
to vote on the subject matter thereof, and such consent is filed with the
records of the Trust.
Section 5. Proxies. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person or by proxy. Every proxy shall be in
writing subscribed by the shareholder or his duly authorized attorney and
dated, but need not be sealed, witnessed or acknowledged. All proxies shall
be filed with the verified by the Secretary or an Assistant Secretary of the
Trust or, if the meeting shall so decide, by the Secretary of the Meeting.
ARTICLE V
TRUSTEES' MEETINGS
Section 1. Number and Qualifications of Trustees. The number of Trustees
shall be as fixed from time to time by a majority of the Trustees but shall be
no less than three nor more than twenty. The Trustees may from time to time
increase or decrease the number of Trustees to such number as they deem
expedient, not to be less than three nor more than twenty, however, and fill
the vacancies so created. The term of office of a Trustee shall not be
affected by any decrease in the number of Trustees made by the Trustees
pursuant to the foregoing authorization.
Section 2. Special Meetings. Special meetings of the Trustees shall be
called by the Secretary at the written request of the Chairman of any Trustee,
and if the Secretary when so requested refuses or fails for more than
twenty-four hours to call such meeting, the Chairman or such Trustee may in
the name of the Secretary call such meeting by giving due notice in the manner
required when notice is given by the Secretary.
Section 3. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may
from time to time determine, provided that any Trustee who is absent when such
determination is made shall be given notice of the determination.
Section 4. Quorum and Vote. A majority of the Trustees shall constitute a
quorum for the transaction of business. The act of a majority of the Trustees
present at any meeting at which a quorum is present shall be the act of the
Trustees unless a greater proportion is required by the Declaration of Trust
or these By-Laws or applicable law. In the absence of a quorum, a majority
of the Trustees present may adjourn the meeting from time to time until a
quorum shall be present. Notice of any adjourned meeting need not be given.
Section 5. Notices. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the Secretary to each Trustee, by
mailing to him, postage prepaid, addressed to him at his address as registered
on the books of the Trust or, if not so registered, at his last known address,
a written or printed notification of such meeting at least four days before
the meeting or by sending to him at least one day before the meeting, by
prepaid telegram, addressed to him at his said registered address, if any, or
if he has no such registered address, at his last known address, notice of
such meeting. Subject to compliance with Section 15(c) of the Investment
Company Act of 1940, notice or waiver of notice need not specify the purpose
of any special meeting.
Section 6. Place of Meeting. Meetings of the Trustees shall be held
at the principal place of business of the Trust in Pittsburgh, Pennsylvania, or
at such place within or without the Commonwealth of Massachusetts as fixed
from time to time by resolution of the Trustees, or as the person or persons
requesting said meeting to be called may designate, but any meeting may
adjourn to any other place.
Section 7. Telephonic Meeting. Subject to compliance with Sections 15(c) and
32(a) of the Investment Company Act of 1940, if it its impractical for the
Trustees o meet in person, the Trustees may meet by means of a telephone
conference circuit to which all Trustees are connected or of which all
Trustees shall have waived notice, which meeting shall be deemed to have been
held at a place designated by the Trustees at the meeting.
Section 8. Special Action. When all the Trustees shall be present at any
meeting, however called, or whenever held, or shall assent to the holding of the
meeting without notice, or after the meeting shall sign a written assent
thereto on the record of such meeting, the acts of such meeting shall be
valid as if such meeting had been regularly held.
Section 9. Action by Consent. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the Trustees and
filed with the records of the Trustees' meetings. Such consent shall be
treated as a vote of the Trustees for all purposes.
Section 10. Compensation of Trustees. The Trustees may receive a stated
salary for their services as Trustees, and by Resolution of Trustees a fixed fee
and expenses of attendance may be allowed for attendance at each Meeting
Nothing herein contained shall be construed to preclude any Trustee from
serving the Trust in any other capacity, as an officer, agent or otherwise,
and receiving compensation therefor.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 1. Beneficial Interest. The beneficial interest in the Trust
shall at all times be divided into an unlimited number of shares without par
value. he shares of beneficial interest shall have one vote per share at any
meeting of the shareholders and a fractional vote for each fraction of a share.
Section 2. Certificates. All certificates for shares shall be signed
by the Chairman, President or any Vice President and by the Treasurer or
Secretary or any Assistant Treasurer or Assistant Secretary and sealed with
the seal of the Trust.
The signatures may be either manual or facsimile signatures and the seal may be
either facsimile or any other form of seal. Certificates for shares for which
the Trust has appointed an independent Transfer Agent and Registrar shall not
be valid unless countersigned by such Transfer Agent and registered by such
Registrar. In case any officer who has signed any certificate ceases to be an
officer of the Trust before the certificate is issued, the certificate may
nevertheless be issued by the trust with the same effect as if the officer had
not ceased to be such officer as of the date of its issuance. Share
certificates shall be in such form not inconsistent with law or the
Declaration of Trust or these By-Laws as may be determined by the Trustees.
Section 3. Transfer of Shares. The shares of the Trust shall be
transferable, so as to affect the rights of the Trust, only by transfer
recorded on the books of the Trust, in person or by attorney.
Section 4. Equitable Interest not Recognized. The Trust shall be entitled to
treat the holder of record of any share or shares as the absolute owner
thereof and shall not be bound to recognize any equitable to other claim or
interest in such share or shares on the part of any other person except as may
be otherwise expressly provided by law.
Section 5. Lost, Destroyed or Mutilated Certificates. In case any
certificate for shares is lost, mutilated or destroyed, the Trustees may
issue a new certificate in place thereof upon indemnity to the Trust against
loss and upon such other terms and conditions as the Trustees may deem
advisable.
Section 6. Transfer Agent and Registrar: Regulations. The Trustees shall
have power and authority to make all such rules and regulations as they may deem
expedient concerning the issuance, transfer and registration of certificates for
shares and may appoint a Transfer Agent and/or Registrar of certificates for
shares, and may require all such share certificates to bear the signature of
such Transfer Agent and/or of such Registrar.
ARTICLE VII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what extent, and
to what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall have any right of
inspecting any account or book or document of the Trust except as conferred by
laws or authorized by the Trustees or by resolution of the shareholders.
ARTICLE VIII
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ECT.
Section 1. Agreements, Etc. The Trustees or the Executive Committee may
authorize any Officer or Officers, or Agent or Agents of the Trust to enter
into any Agreement or execute and deliver any instrument in the name of and on
behalf of the Trust, and such authorized by the Trustees or by the Executive
Committee or by these By-Laws, no Officer, Agent or Employee shall have any
power or authority to bind the Trust by any Agreement or engagement or to
pledge its credit or to render it liable pecuniarily for any purpose or to
any amount.
Section 2. Checks, Drafts, Etc. All checks, drafts, or orders for the
payment of money, notes and other evidences of indebtedness shall be signed
by such Officer or Officers, Employee or Employees, or Agent or Agents, as
shall from time to time be designated by the Trustees or the Executive
Committee, or as may be specified in or pursuant to the agreement between
the Trust and the Bank or Trust Company appointed as custodian, pursuant the
provisions of the Declaration of Trust.
Section 3. Endorsements, Assignments and Transfer of Securities. All
endorsements, assignments, stock powers or other instruments of transfer of
securities standing in the name of the Trust or its nominee or directions for
the transfer of securities belonging to the Trust shall be made by such Officer
or Officers, Employee or Employees, or Agent or Agent as may be authorized by
the Trustees or the Executive Committee.
Section 4. Evidence of Authority. Anyone dealing with the Trust shall be
fully justified in relying on a copy of a resolution of the Trustees or of any
committee thereof empowered to act in the premises which is certified as true
by the Secretary or an Assistant Secretary under the seal of the Trust.
ARTICLE IX
SEAL
The seal of the Trust shall be circular in form, bearing the inscription:
FEDERATED STOCK TRUST - 1981 - MASSACHUSETTS
ARTICLE X
FISCAL YEAR
The fiscal year of the Trust shall be the period of twelve months ending on the
last day of January in each calendar year.
ARTICLE XI
AMENDMENTS
These By-Laws may be amended by a majority vote of all of the Trustees.
ARTICLE XII
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given under the provisions of any
statute of the Commonwealth of Massachusetts, or under the provisions of the
Declaration of Trust or these By-Laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. A notice shall be deemed
to have been given if telegraphed, cabled, or sent by wireless when it has
been delivered to a representative of any telegraph, cable or wireless company
with instructions that it be telegraphed, cable or sent by wireless. Any
notice shall be deemed to be given if mailed at the time when the same shall
be deposited in the mail.
ARTICLE XIII
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the shareholders a written
financial report of the transactions of the Trust, including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE XIV
BOOKS AND RECORDS
The books and records of the Trust, including the stock ledger or ledgers, may
be kept in or outside the Commonwealth of Massachusetts at such office or
agency of the Trust as may be from time to time determined by the Trustees.
Exhibit 2 (i) under Form N1-A
Exhibit 3(b) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
Amendment No. 1 to the By-Laws
Effective February 17, 1984
ARTICLE I
Section 2. ELECTION OF OFFICERS.
The President, Vice President(s), Treasurer and Secretary shall be chosen
annually by the Trustees. The Chairman of the Trustees shall be chosen annually
by and from the Trustees.
ARTICLE III
Section 1. EXECUTIVE AND OTHER COMMITTEES.
The Trustees may elect from their own number an executive committee to
consist of not less than two members. The executive committee shall be elected
by a resolution passed by a vote of at least a majority of the Trustees then in
office. The Trustees may also elect from their own number other committees from
time to time, the number composing such committees and the powers conferred upon
Exhibit 2 (ii) under Form N1-A
Exhibit 3(b) under Item 601/Reg. S-K
Amendment No. 2 to By-Laws
FEDERATED STOCK TRUST
Effective February 2, 1987
ARTICLE II
POWERS AND DUTIES OF TRUSTEES AND OFFICERS
Section 2. Chairman of the Trustees ("Chairman"). The Chairman shall
be the chief executive officer of the Trust. He shall have general supervision
over the business of the Trust and policies of the Trust. He shall employ and
define the duties of all employees of the Trust, shall have power to discharge
any such employees, shall exercise general supervision over the affairs of the
Trust and shall perform such other duties as may be assigned to him from time to
time by the Trustees. He shall preside at the meetings of shareholders and of
the Trustees. The Chairman shall appoint a Trustee or officer to preside at
Exhibit 2 (iii) under Form N1-A
Exhibit 3(b) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
AMENDMENT TO BY-LAWS
Effective August 25, 1988
ARTICLE X
FISCAL YEAR
The fiscal year of the Trust shall be the period of twelve months ending on the
Exhibit 13 under Form N1-A
Exhibit 99 under Item 601/Reg. S-K
FIDUCIARY CORP. III
Federated Investors Building
421 Seventh Avenue
Pittsburgh, Pennsylvania 15219
(412) 288-1900
January 29, 1982
Federated Stock Trust
Federated Investors Building
421 Seventh Avenue
Pittsburgh, PA 15219
Dear Sirs:
The initial $100,000 investment by Fiduciary Corp. III in Federated Stock
Trust will not be redeemed while any organizational expenses remain unamortized
unless the proceeds of any redemption of that initial investment is reduced by
its pro rata portion of any unamortized organizational expenses. These shares
are purchased for investment purposes, and Fiduciary Corp. III has no present
intention of selling or publicly distributing these shares.
Very truly yours,
/s/ David A. Dilger
David A. Dilger
Vice President and Secretary
Exhibit 6 under Form N1-A
Exhibit 1 under Item 601/Reg. S-K
FEDERATED STOCK TRUST
DISTRIBUTOR'S CONTRACT
This Agreement is entered into this 1st day of August, 1989, between
Federated Stock Trust (the "Fund"), a Massachusetts business trust, and
FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania corporation.
In consideration of the mutual convenants hereinafter contained, it is
hereby agreed by and among the parties hereto as follows:
1. The Fund hereby appoints FSC its agent to sell and distribute
shares of the Fund ("Shares") at the current offering price thereof as described
and set forth in the current prospectus of the Fund.
2. The sale of Shares may be suspended with or without prior notice
whenever in the judgment of the Fund it is in its best interest to do so.
3. Neither FSC nor any other person is authorized by the Fund to
give any information or to make any representation relative to the Shares other
than those contained in the Registration Statement or Prospectus and Statement
of Additional Information filed with the Securities and Exchange Commission as
the same may be amended from time to time or in any supplemental information to
said Prospectus or Statement of Additional Information approved by the Fund.
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 Fund. FSC agrees that in
offering or selling Shares as agent of the Fund, 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., all sales literature
before using the same and will not use such sales literature if disapproved by
the Fund.
4. This Agreement shall continue in effect for two years from the
date of its execution and thereafter for successive periods of one year if such
continuance is approved at least annually by the Trustees of the Fund including
a majority of the Trustees of the Fund who are not parties to this Agreement or
interested persons of any such party (other than as Trustees of the Fund) cast
in person at a meeting called for that purpose. This Agreement may be
terminated at any time by mutual consent of the Fund and FSC.
5. This Agreement may not be assigned by FSC and shall automatically
terminate in the event of any assignment as defined in the Investment Company
Act of 1940, provided, however, that FSC may employ such other person, persons,
corporation or corporations as it shall determine in order to assist in it
carrying out its duties under this Agreement.
6. FSC shall not be liable to the Fund or any shareholder of the
Fund 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.
7. 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 Fund including a majority of the Trustees of the Fund who
are not parties to this Agreement or interested persons of any such party (other
than as Trustees of the Fund) cast in person at a meeting called for that
purpose.
8. This Agreement shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.
9. (a) Subject to the conditions set forth below, the Fund 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 and Exchange 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 of the
Prospectus and Statement of Additional Information (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 Fund with respect to FSC
by or on behalf of FSC expressly for use in the Registration Statement or
Prospectus and Statement of Additional Information, or any amendment or
supplement thereof.
(b) If any action is brought against FSC or any controlling
person thereof in respect of which indemnity may be sought against the Fund
pursuant to subsection (a), FSC shall promptly notify the Fund in writing of the
institution of such action and the Fund shall assume the defense of such action,
including the employment of counsel selected by the Fund 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 Fund in
connection with the defense of such action or the Fund 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 Fund. Anything in this paragraph
to the contrary notwithstanding, the Fund shall not be liable for any settlement
of any such claim or action effected without its written consent. The Fund
agrees promptly to notify FSC of the commencement of any litigation or
proceedings against the Fund or any of its officers or Trustees or controlling
persons in connection with the issue and sale of Shares or in connection with
such Registration Statement or Prospectus and Statement of Additional
Information.
(c) FSC agrees to indemnify and hold harmless the Fund, each of
its Trustees, each of its officers who have signed the Registration Statement
and each other person, if any, who controls the Fund 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 Prospectus and reliance
upon, and in conformity with, information furnished to the Fund with respect to
FSC by or on behalf of FSC expressly for use in the Registration Statement or
Prospectus and Statement of Additional Information or any amendment or
supplement thereof. In case any action shall be brought against the Fund or any
other person so indemnified based on the Registration Statement or Prospectus
and Statement of Additional Information, or any amendment or supplement thereof,
and in respect of which indemnity may be sought against FSC, FSC shall have the
rights and duties given to the Fund, and the Fund and each other person so
indemnified shall have the rights and duties given to FSC by the provisions of
subsection (b) above.
(d) Nothing herein contained shall be deemed to protect any
person against liability to the Fund or its shareholders to which such person
would otherwise be subject to 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.
(e) Insofar as indemnification for liabilities may be permitted
pursuant to Section 17 of the Investment Company Act of 1940 for FSC or
Trustees, officers and controlling persons of the Fund by the Fund pursuant to
this Agreement, the Fund 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 Fund 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 Trustees who are not interested
persons of the Fund 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 Fund 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 FSC or an officer, Trustee or
controlling person of the Fund 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 Fund is insured against losses arising by reason of
any lawful advances; or
(iii) a majority of a quorum of disinterested non-party 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.
10. FSC is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust of the Fund and
agrees that the obligations assumed by the Fund pursuant to this Agreement shall
be limited in any case to the Fund and its assets and FSC shall not seek
satisfaction of any such obligation from the shareholders of the Fund, the
Trustees, officers, advisers, employees or agents of the Fund, or any of them.
IN WITNESS WHEREOF, this Agreement has been duly executed on the day
and year first above written.
ATTEST: FEDERATED SECURITIES CORP.
By: /s/ S. Elliott Cohan By: /s/ Richard B. Fisher
Secretary President
(SEAL)
ATTEST: FEDERATED STOCK TRUST
By: /s/ John W. McGonigle By: /s/ John F. Donahue
Secretary Vice President
Exhibit 1 under Form N-1A
Exhibit 3(a) under Item 601/Reg. S-K
FEDERATED STOCK TRUST
DECLARATION OF TRUST
Page
Article I Name and Definitions............................ 1
1. Name....................................... 1
2. Definitions -
(a)Affiliated Person, Assignment, Commission,
Interested Person, Majority Shareholder Vote,
Principal Underwriter .................. 1
(b)Trust .................................. 1
(c)Accumulated Net Income ................. 2
(d)Shareholder ............................ 2
(e)Trustees ............................... 2
(f)Shares ................................. 2
(g)1940 Act ............................... 2
Article II Purpose of Trust........................... 2
Article III Beneficial Interest........................ 2
1. Shares of Beneficial Interest.............. 2
2. Ownership of Shares........................ 3
3. Investment in the Trust.................... 3
4. No Pre-emptive Rights...................... 3
Article IV The Trustees............................... 3
1. Management of the Trust.................... 3
2. Election of Trustees at 1982 of Shareholders 4
3. Terms of Office of Trustees................ 4
4. Termination of Service and Appointment of Trustees 4
5. Temporary Absence of Trustees.............. 5
6. Number of Trustees......................... 5
7. Effect of Death, Resignation, Etc. of a Trustee 6
8. Ownership of the Trust..................... 6
Page
Article V Powers of the Trustees.......................... 6
1. Powers..................................... 6
2. Principal Transactions..................... 10
3. Trustees and Officers as Shareholders...... 10
4. Parties of Contract........................ 10
Article VI Trustees' Expenses and Compensation........ 11
1. Trustee Reimbursement...................... 11
2. Trustee Compensation....................... 12
Article VII Investment Adviser, Administrative Services, Principal
Underwriter and Transfer Agent.................. 13
1. Investment Adviser......................... 13
2. Administrative Services.................... 13
3. Principal Underwriter...................... 14
4. Transfer Agent............................. 14
5. Provisions and Amendments.................. 14
Article VIII Shareholders' Voting Powers and Meetings... 15
1. Voting Powers.............................. 15
2. Meetings................................... 15
3. Quorum and Required Vote................... 16
4. Additional Provisions...................... 16
Article IX Custodian.................................. 16
1. Appointment and Duties..................... 16
2. Central Certificate System................. 17
Article X Distributions and Redemptions................... 18
1. Distributions.............................. 18
2. Redemptions and Repurchases................ 19
3. Determination of Accumulated Net Income.... 20
4. Net Asset Value of Shares.................. 21
5. Suspension of the Right of Redemption...... 21
6. Trust's Right to Redeem Shares............. 21
Page
Article XI Limitation of Liability and Indemnification 22
1. Limitation of Personal Liability and
Indemnification of Shareholders............ 22
2. Limitation of Personal Liability of
Trustees, Officers, Employees or
Agents of the Trust........................ 23
3. Express Exculpatory Clauses and Instruments 23
4. Indemnification of Trustees, Officers,
Employees and Agents....................... 24
Article XII Miscellaneous.............................. 25
1. Trust is not a Partnership................. 26
2. Trustee's Good Faith Action, Expert Advice, No
Bond Surety................................ 26
3. Establishment of Record Dates.............. 26
4. Termination of Trust....................... 27
5. Offices of the Trust, Filing of Copies,
References, Headings....................... 28
6. Applicable Law............................. 28
7. Amendments................................. 29
FEDERATED STOCK TRUST
DECLARATION OF TRUST
Dated December 30, 1981
DECLARATION OF TRUST made December 30, 1981 by John F. Donahue, Richard B.
Fisher, J. Joseph Maloney, Jr., Wesley W. Posvar, Edward E. Smuts, Thomas J.
Donnelly, Glen R. Johnson, Gregor F. Meyer, and Edward L. Flaherty, Jr.
WHEREAS the Trustees desire to establish a trust fund for the investment
and reinvestment of funds contributed thereto;
NOW, THEREFORE, The Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under this
Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name. This Trust shall be know as the "Federated Stock
Trust."
Section 2. Definitions. Wherever used herein, unless otherwise required by
the context or specifically provided:
(a) The terms "Affiliated Person," "Assignment," "Commission," "Interested
Person," "Majority Shareholder Vote" (the 67% or 50% requirement of the third
sentence of Section 2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the Investment
Company Act of 1940, as amended from time to time;
(b) The "Trust" refers to Federated Stock Trust;
(c) "Accumulated Net Income" means the accumulated net income of the Trust
determined in the manner provided or authorized in Article X, Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual Trustees in their capacity as
Trustees hereunder of the Trust and their successor or successors for the time
being in office as such Trustees;
(f) "Shares" means the equal proportionate units of interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares; and
(g) The "1940 Act" refers to the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of managed
investments primarily in securities.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial interest in the
Trust shall at all times be divided into transferable Shares, without par
value, each of which shall represent an equal proportionate interest in the
Trust with each other Share outstanding, none having priority or preference
over another. The number of Shares which may be issued is unlimited. The
Trustees may from time to time divide or combine the outstanding Shares into a
greater or lesser number without thereby changing the proportionate beneficial
interest in the Trust. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or fractions.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded in the books of the Trust or a transfer agent. The Trustees may make
such rules as they consider appropriate for the transfer of shares and similar
matters the record books of the Trust or any transfer agent, as the case may
be, shall be conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each.
Section 3. Investment in the Trust. The Trustees shall accept investments in
the Trust from such persons and on such terms as they may from time to time
authorize. After the date of the initial contribution of capital (which shall
occur prior to the initial public offering of Shares of the Trust), the
number of Shares to represent the initial contribution shall be considered as
outstanding and the amount received by the Trustees on account of the
contribution shall be treated as an asset of the Trust.
Subsequent to such initial contribution of capital, Shares (including
Shares which may have been redeemed or repurchased by the Trust) may be
issued or sold at a price which will net the Trust, before paying any taxes
in connection with such issue or sale, not less than the net asset value (as
defined in Article X, Section 4) thereof; provided, however, that the Trustees
may in their discretion impose a sales charge upon investments in the Trust.
Section 4. No Pre-emptive Rights. Shareholders shall have no pre-emptive
or other right to subscribe to any additional Shares or other securities
issued by the Trust or the Trustees.
ARTICLE IV
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust
shall be managed by the Trustees, and they shall have all powers necessary and
describe to carry out that responsibility. The Trustees who shall serve until
the election of Trustees at the 1982 Meeting of Shareholders shall be John F.
Donahue, Richard B. Fisher, J. Joseph Maloney, Jr., Wesley W. Posvar, Edward E.
Smuts, Thomas J. Donnelly, Glen R. Johnson, Gregor F. Meyer, and Edward L.
Flaherty, Jr.
Section 2. Election of Trustees at 1982 Meeting of Shareholders. In the
year 1982, on a date fixed by the Trustees, which shall be subsequent to the
initial public offering of Shares of the Trust, the Shareholders shall elect
Trustees. The number of Trustees shall be determined by the Trustees pursuant
to Article IV, Section 6.
Section 3. Term of Office of Trustees. The Trustees shall hold office
during the lifetime of this Trust, and until its termination as hereinafter
provided; except (a) that any Trustee may resign his trust by written
instrument signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified therein;
(b) that any Trustee may be removed at any time by written instrument signed
by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who requests in writing to be retired or who has become mentally or
physically incapacitated may be retired by written instrument signed by a
majority of the other Trustees, specifying the date of his retirement;
and (d) a Trustee may be removed at any special meeting of Shareholders of
the Trust by a vote of two-thirds of the outstanding Shares.
Section 4. Termination of Service and Appointment of Trustees. In case of
the death, resignation, retirement, removal or mental or physical incapacity of
any of the Trustees, or in case a vacancy shall, by reason of an increase in
number, or for any other reason, exist, the remaining Trustees shall fill such
vacancy by appointing shall be effected by the signing of a written instrument
by a majority of the Trustees in office. Within three months of such
appointment, the Trustees shall cause notice of such appointment to be mailed
to each Shareholder at his address as recorded on the books of the Trust.
An appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as aforesaid in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number of
Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this Trust, the trust estate shall vest in the
new Trustee or Trustees, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder.
Any appointment authorized by this Section 4 is subject to the provisions of
Section 16(a) of the 1940 Act.
Section 5. Temporary Absence of Trustee. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less
than two of the Trustees personally exercise the other power hereunder except
as herein otherwise expressly provided.
Section 6. Number of Trustees. The number of Trustees, not less than three
(3) nor more than twenty (20) serving hereunder at any time shall be determined
by the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is
filled or while any Trustee is physically or mentally incapacitated, the other
Trustees shall have all the powers hereunder and the certificate signed by a
majority of the other Trustees of such vacancy, absence or incapacity, shall
be conclusive, provided, however, that no vacancy which reduces the number of
Trustees below three (3) shall remain unfilled for a period longer than six
calendar months.
Section 7. Effect of Death, Resignation, etc. of a Trustee. The death,
resignation, retirement, removal, or mental or physical incapacity of the
Trustees, or any one of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration
of Trust.
Section 8. Ownership of the Trust. The assets of the Trust shall be held
separate and apart from any assets now or hereafter held in any capacity other
than as Trustee hereunder by the Trustees or any successor Trustee. All of the
assets of the Trust shall at all times be considered as vested in the Trustees.
No Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or any right of partition or possession thereof, but each
Shareholder shall have a proportionate undivided beneficial interest in the
Trust.
ARTICLE V
POWERS OF THE TRUSTEES
Section 1. Powers. The Trustees in all instances shall act as principals,
and are and shall be free from the control of the Shareholders. The Trustees
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust.
The Trustees shall not be bound or limited by present or future laws or customs
in regard to trust investments, but
shall have full authority and power to make any and all investments which they,
in their uncontrolled discretion, shall deem proper to accomplish the purpose
of this Trust. Without limiting the foregoing, the trustees shall have the
following specific powers and authority, subject to any applicable limitation
in this Declaration of Trust or in the By-Laws of the Trust.
(a) To buy, and invest funds in their hands in, securities including, but
not limited to, common stocks, preferred stocks, bonds, debentures, warrants and
rights to purchase securities, certificates of beneficial interest, money market
instruments, notes or other evidences or indebtedness issued by any corporation,
trust or association, domestic or foreign, or issued or guaranteed by the United
States of America or any agency or instrumentality thereof, by the government of
any foreign country, by any State of the United States, or by any political
subdivision or agency or instrumentality of any State or foreign country, or in
"when-issued" or "delayed-delivery" contracts for any such securities, or in any
repurchase agreement (agreements under which the seller agrees at the time of
sale to repurchase the security at an agreed time and price), or retain Trust
assets in cash, and from time to time change the investments of the assets of
the Trust;
(b) To adopt By-Laws not inconsistent with the Declaration of Trust
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders;
(c) To Elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(d) To appoint or otherwise engage a bank or trust company as custodian of
any assets of the Trust subject to any conditions set forth in this Declaration
of Trust or in the By-Laws;
(e) To appoint or otherwise engage transfer agents, dividend disbursing
agents, Shareholder servicing agents, investment advisers, sub-investment
advisers, principal underwriters, administrative service agents, and such other
agents as the Trustees may from time to time appoint or otherwise engage;
(f) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself, or both;
(g) To set record dates in the manner hereinafter provided for;
(h) To delegate such authority as they consider desirable to a committee
or committees composed of Trustees, including without limitation, an Executive
Committee, or to any officers of the Trust and to any agent, custodian or
underwriter;
(i) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XII, Section 4(b) hereof;
(j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(k) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(l) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form; or either in its own
name or in the name of a custodian or a nominee or nominees, subject in either
case to proper safeguards according to the usual practice of Massachusetts trust
companies or investment companies;
(m) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern, and to pay calls or
subscriptions with respect to any security held in the Trust;
(n) To engage in and to prosecute, compound, compromise, abandon, or
adjust, by arbitration, or otherwise, any actions, suits, proceedings, disputes,
claims, demands, and things relating to the Trust, and out of the assets of the
Trust to pay, or to satisfy, and debts, claims or expenses incurred in
connection therewith, including those of litigation, upon any evidence that the
Trustees may deem sufficient (such powers shall include without limitation any
actions, suits, proceedings, disputes, claims, demands and things relating to
the Trust wherein any of the Trustees may be named individually and the subject
matter of which arises by reason of business for or on behalf of the Trust);
(o) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided for;
(p) To borrow money but only 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 any amount up to one-third of the value of
its total assets, including the amount borrowed, in order to meet redemption
requests without immediately selling any portfolio securities. The Trustees
shall not pledge, mortgage or hypothecate the assets of the Trust, except in
connection with any borrowing described herein and in amounts not in excess of
the lesser of the dollar amounts borrowed of 10% of the value of the Trust's
total assets at the time of such borrowing.
(q) From time to time to issue and sell the Shares of the Trust either for
cash or for property whenever and in such amounts as the Trustee may deem
desirable, but subject to the limitation set forth in Section 3 of Article III.
(r) To purchase insurance of any kind, including, without limitation,
insurance on behalf of any person who is or was a Trustee, Officer, employee or
agent of the Trust, or is or was serving at the request of the Trust as a
Trustee, Director, Officer, agent or employee of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such.
No one dealer with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the application
of any payments made or property transferred to the Trustees or upon their
order.
Section 2. Principal Transactions. The Trustees shall not on behalf of the
Trust buy and securities (other than Shares of the Trust) from or sell any
securities (other than Shares of the Trust) to, or lend any assets of the
Trust to, any Trustee or officer or employee of the Trust or any firm of which
any such Trustee or officer is a member acting as principal unless permitted
by the 1940 Act, but the Trust may employ any such other party or any such
person or firm or company in which any such person is an interested person in
any capacity not prohibited by the 1940 Act.
Section 3. Trustees and Officers as Shareholders. Any Trustee, officer
or other agent of the Trust may acquire, own and dispose of shares of the Trust
to the same extent as if he were not a Trustee, officer or agent; and the
Trustees may issue and sell or cause to be issued or sold Shares of the Trust
to and buy such Shares from any such person or any firm or company in which he
is an interested person subject only to the general limitations herein
contained as to the sale and purchase of such Shares; and all subject to any
restrictions which may be contained in the By-Laws.
Section 4. Parties to Contract. The Trustees may enter into any contract
of the character described in Section 1, 2, 3, or 4 of Article VII or in
Article IX hereof or any other capacity not prohibited by the 1940 Act with
any corporation, firm, trust or association, although one or more of the
shareholders, Trustees, officers, employees or agents of the Trust or their
affiliates may be an officer, director, Trustee, shareholder or interested
person of such other party to the contract, and no such contract shall be
invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely
by reason of such relationship for any loss or expense to the Trust under or
by reason of said contract or accountable for any profit realized directly
or indirectly therefrom, in the absence of actual fraud. The same
person (including a firm, corporation, trust or association) may be the other
party to contracts entered into pursuant to Section 1, 2, 3 and 4 of
Article VII or Article IX or any other capacity deemed legal under the 1940
Act, and any individual may be financially interested or otherwise an
interested person of persons who are parties to any or all of the contracts
mentioned in this Section 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
Section 1. Trustee Reimbursement. The Trustees shall be reimbursed from
the Trust estate for all of their expenses and disbursements, including, without
limitation, expenses or organizing the Trust and continuing its existence; fees
and expenses of Trustees and Officers of the Trust; fees for investment advisory
services, administrative services and principal underwriting services
provided for in Article VII, Sections 1, 2 and 3; fees and expenses of
preparing and printing its Registration Statements under the Securities Act of
1933 and the Investment Company Act of 1940 and any amendments thereto; expenses
of registering and qualifying the Trust and its shares under federal and state
laws and regulations; expenses of preparing, printing and distributing
prospectuses and any amendments thereof sent to shareholders, underwriters,
broker-dealers and to investors who may be considering the purchase
of shares; expenses of registering, licensing or other authorization of
the Trust as a broker-dealer and of its Officers as agents and salesmen under
federal and state laws and regulations; interest expense, taxes, fees and
commissions of every kind; expenses of issue (including cost of share
certificates), purchase, repurchase and redemption of shares, including
expenses attributable to a program of
periodic issue; charges and expenses of custodians, transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars; printing and
mailing costs; auditing, accounting and legal expenses; reports to shareholders
and governmental officers and commissions; expenses of meetings of shareholders
and proxy solicitations therefor; insurance expenses; association membership
dues and nonrecurring items as may arise, including all losses and liabilities
by them ncurred in administering the Trust, including expenses incurred in
connection with litigation, proceedings and claims and the obligations of the
Trust under Article XI hereof to indemnify its Trustees, Officers, employees,
shareholders and agents, and any contract obligation to indemnify principal
underwriters under Section 3 of Article VII and for the payment of such
expenses, disbursements, losses and liabilities, the Trustees shall have a
lien of the Trust estate prior to any rights or interests of the Shareholders
thereto. This section shall not preclude the Trust from directly paying any
of the aforementioned fees and expenses.
Section 2. Trustee Compensation. The Trustees shall be entitled to
compensation from the Trust for their respective services as Trustees, to be
determined from time to time by vote of the Trustees, and the Trustees shall
also determine the compensation of all Officers, consultants and agents whom
they may elect or appoint. The Trust may pay any Trustee or any corporation,
firm, trust or association of which a Trustee is an interested person for
services rendered to the Trust on any capacity not prohibited by the 1940 Act,
and such payments shall not be deemed compensation for services as a Trustee
under the first sentence of this Section 2 of Article VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
Section 1. Investment Adviser. Subject to a Majority Shareholder Vote, the
Trustees may in their discretion from time to time enter into an investment
advisory contract whereby the other party to such contract shall undertake to
furnish the Trustees investment advisory services upon such terms and
conditions and for such compensation as the Trustees may in their discretion
determine. Subject to a Majority Shareholder Vote, the investment adviser may
enter into a sub-investment advisory contract to receive investment advice
and/or statistical and factual information from the sub-investment adviser
upon such terms and conditions and form such compensation as the Trustees may
in their discretion agree to. Notwithstanding any provisions of this
Declaration of Trust, the Trustees may authorize the investment adviser
or sub-investment adviser or any person furnishing administrative
personnel and services as set forth in Article VII, Section 2 (subject to such
general or specific instruments as the Trustees may from time to time adopt) to
effect purchases, sales or exchanges of portfolio securities of the Trust on
behalf of the Trustees or may authorize any officer or Trustee to effect
such purchases, sales, or exchanges pursuant to recommendations of the
investment adviser (and all without further action by the Trustees).
Any such purchases, sales and exchanges shall be deemed to have been
authorized by the Trustees. The Trustees may also authorize the investment
adviser to determine what firms shall be employed to effect transactions
in securities for the account of the Trust and to determine what firms
shall participate in any such transactions or shall share in commissions or fees
charged in connection with such transactions.
Section 2. Administrative Services. The Trustees may in their
discretion from time to time contract for administrative personnel and services
whereby the other party shall agree to provide the Trustees administrative
personnel and services to operate the Trust on a daily basis, on such terms
and conditions as the Trustees may in their discretion determine. Such
services may be provided by one or more entities.
Section 3. Principal Underwriter. The Trustees may in their discretion
from time to time enter into an exclusive or nonexclusive contract or contracts
providing for the sale of the Shares of the Trust to net the Trust not less
than the amount provided in Article III, Section 3 hereof, whereby the
Trust may either agree to sell the Shares to the other party to the contract
or appoint such other party its sales agent for such shares. In either case,
the contract shall be on such terms and conditions (including indemnification
of principal underwriters allowable under applicable law and regulation) as
the Trustees may in their discretion determine not inconsistent with the
provisions of this Article VII; and such contract may also
provide for the repurchase or sale of Shares of the Trust by such other party as
principal or as agent of the Trust and may provide that the other party may
maintain a market for shares of the Trust.
Section 4. Transfer Agent. The Trustees may in their discretion from
time to time enter into transfer agency and shareholder services contracts
whereby the other party shall undertake to furnish the Trustees transfer
agency and shareholder services. The contracts shall be on such terms and
conditions as the Trustees may in their discretion determine not inconsistent
with the provisions of this Declaration of Trust or of the By-Laws. Such
services may be provided by one or more entities.
Section 5. Provisions and Amendments. Any contract entered into pursuant
to Sections 1 or 3 of this Article VII shall be consistent with and subject to
the requirements of Section 15 of the 1940 Act (including any amendments
thereof or other applicable Act of Congress hereafter enacted) with respect to
its continuance in effect, its termination and the method of authorization and
approval of such contract or renewal thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote (i) for
the election of Trustees as provided in Article IV, Section 2; (ii) for the
removal of Trustees as provided in Article IV, Section 3(d); (iii) with
respect to any investment adviser or sub-investment adviser as provided in
Article VII, Section 1; (iv) with respect to the amendment of this Declaration
of Trust as provided in Article XII, Section 7; (v) to the same extent as the
shareholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or
the Shareholders; and (vi) with respect to such additional matters relating to
the Trust as may be required by law, by this Declaration of Trust, or the
By-Laws of the Trust or any regulation of the Trust with the Commission or any
State, or as the Trustees may consider desirable. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required or permitted by law,
this Declaration of Trust or any By-Laws of the Trust to be taken by
Shareholders.
Section 2. Meetings. A Shareholders meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other
place as the Trustees may designate. Special meetings of the Shareholders may
be called by the Trustees or the Chief Executive Officer of the Trust and shall
be called by the Trustees upon the written request of Shareholders owning at
least one-tenth of the outstanding Shares entitled to vote. Shareholders shall
be entitled to at least fifteen days' notice of any meeting.
Section 3. Quorum and Required Vote. Except as otherwise provided by
law, to constitute a quorum for the transaction of any business at any
meeting of Shareholders there must be present, in person or by proxy, holders
of one-fourth of the total number of Shares of the Trust then outstanding and
entitled to vote at such meeting. If a quorum, as above defined, shall not be
present for the purpose of any vote that may properly come
before the meeting, the Shareholders present in person or
by proxy and entitled to vote at such meeting on such matter holding a
majority of
the Shares present entitled to vote on such matter may be vote adjourn the
meeting from time to time to be held at the same place without further notice
than by announcement to be given at the meeting until a quorum, as above
defined, entitled to vote on such matter shall be present, whereupon any such
matter may be voted upon at the meeting as though held when originally
convened. Subject to any applicable requirement of law or of this Declaration
of Trust or the By-Laws, a plurality of the votes case shall elect a Trustee
and all other matters shall be decided by a majority of the votes cast entitled
to vote thereon.
Section 4. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meeting and related matters.
ARTICLE IX
CUSTODIAN
Section 1. Appointment and Duties. The Trustees shall appoint or otherwise
engage a bank or trust company having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000) as custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any,
as may be contained in the By-Laws of the Trust:
(1) To receive and hold the securities owned by the Trust and deliver the same
upon written order;
(2) To receive and receipt for any moneys due to the Trust and deposit the same
in its own banking department or elsewhere as the Trustees may direct; and
(3) To disburse such funds upon orders or vouchers;
(4) To keep the books and accounts of the Trust and furnish clerical and
accounting services;
(5) To compute, if authorized to do so by the Trustees, the Accumulated Net
Income of the Trust and the net asset value of the Shares in accordance with the
provisions hereof;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Shareholder Vote, the
custodian shall deliver and pay over all property of the Trust held by it as
specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank or trust company organized under
the laws of the United States or one of the states thereof and having an
aggregate capital, surplus and undivided profits (as shown in its last
published report) of at least two million dollars ($2,000,000).
Section 2. Central Certificate System. Subject to such rules, regulations
and orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange
or a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by
the Commission or otherwise in accordance with the 1940 Act as from time to
time amended, pursuant to which system all securities of any particular class
or series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical
delivery of such securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the custodian at the direction
of the Trustees.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends, and the
amount of such dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees may, on each day Accumulated Net Income of the Trust (as
defined in Section 3 of this Article X) is determined and is positive, declare
such Accumulated Net Income as a dividend to Shareholders of record at such
time as the Trustees shall designate, payable in additional full and fractional
Shares or in cash.
(c) The Trustees may distribute in respect of any fiscal year as ordinary
dividends and as capital gains distributions, respectively, amounts sufficient
to enable the Trust as a regulated investment company to avoid any liability
for federal income taxes in respect of that year.
(d) The decision of the Trustees as to what, in accordance with good accounting
practice, is income and what is principal shall be final, and except as
specifically provided herein the decision of the Trustees as to what expenses
and charges of the Trust shall be charged against principal and what against
the income shall be final. Any income not distributed in any year may be
permitted to accumulate and as long as not distributed may be invested from
time to time in the same manner as the principal funds of the Trust.
(e) The Trustees shall have power, to the fullest extent permitted by the laws
of Massachusetts, at any time, or from time to time, to declare and cause to be
paid dividends, which dividends, at the election of the Trustees, may be
accrued, automatically reinvested in additional Shares (or fractions thereof)
of the Trust or paid in cash or additional Shares, all upon such terms and
conditions as the Trustees may prescribe.
(f) Anything in this instrument to the contrary notwithstanding, the Trustees
may at any time declare and distribute a dividend consisting of shares of the
Trust.
Section 2. Redemptions and Repurchases
(a) In case any Shareholder of record of the Trust at any time desires to
dispose of Shares recorded in his name, he may deposit a written request (or
such other form of request as the Trustees may from time to time authorize)
requesting that the Trust purchase his Shares, together with such other
instruments or authorizations to effect the transfer as the Trustees may from
time to time require, at the office of the Custodian, and the Trust shall
purchase his said Shares, but only at the net asset value of such Shares (as
defined in Section 4 of this Article X) determined by or one behalf of the
Trustees next after said deposit.
Payment for such Shares shall be made by the Trust to the Shareholder of record
within seven (7) days after the date upon which the request (and, if required,
such other instruments or authorizations of transfer) is deposited, subject to
the right of the Trustees to postpone the date of payment pursuant to Section
5 of this Article X. If the redemption is postponed beyond the date on which
it would normally occur by reason of a declaration by the Trustees suspending
the right of redemption pursuant to Section 5 of this Article X, the right of
the Shareholder to have his Shares purchased by the Trust shall be similarly
suspended, and he may withdraw his request (or such other instruments or
authorizations of transfer) from deposit if he so elects; or, if he does not
so elect, the purchase price shall be the net asset value of his Shares,
determined next after termination of such suspension and payment therefor
shall be made within seven (7) days thereafter.
(b) The Trust may purchase Shares of the Trust by agreement with the owner
thereof (1) at a price not exceeding the net asset value per Shares determined
next after the purchase or contract of purchase is made or (2) at a price
not exceeding the net asset value per Share determined at some later time.
(c) Shares purchased by the Trust either pursuant to paragraph (a) or paragraph
(b) of this Section 2 shall be deemed treasury Shares and may be resold by the
Trust.
(d) If the Trustees determine that economic conditions would make it seriously
detrimental to the best interests of the remaining Shareholders of the Trust to
make payment wholly or partly in cash, the Trust may pay the redemption price
in whole or in part by a distribution in kind of securities from the portfolio
of the Trust, in lieu of cash in conformity with applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
employed in determining net asset value, and selecting the securities in such
manner as the Trustees may deem fair and equitable.
Section 3. Determination of Accumulated Net Income. The Accumulated Net
Income of the Trust shall be determined by or on behalf of the Trustees at such
time as the Trustees shall in their discretion determine. Such determination
shall be made in accordance with generally accepted accounting principles and
practices and may include realized and/or unrealized gains from the sale or
other disposition of securities or other property of the Trust. The power and
duty to determine Accumulated Net Income may be delegated by the Trustees from
time to time to one or more of the Trustees or officers of the Trust, to the
other party to any contract entered into pursuant to Section 1 or 2 of
Article VII, or to the custodian or to a transfer agent.
Section 4. Net Asset Value of Shares. The net asset value of each Share
of the Trust outstanding shall be determined at such time or times as may be
determined by or on behalf of the Trustees. The power and duty to determine net
asset value may be delegated by the Trustees from time to time to one or more
of the Trustees or Officers of the Trust, to the other party to any contract
entered into pursuant to Section 1 or 2 of Article VII or to the custodian or
to a transfer agent.
The net asset value of each Share of the Trust as of any particular time shall
be the quotient (adjusted to the nearer cent) obtained by dividing the value,
as of such time, of the net assets of the Trust (i.e., the value of the assets
of the Trust less its liabilities exclusive of capital and surplus) by the
total number of Shares outstanding (exclusive of treasury Shares) at such time
in accordance with the requirement of the 1940 Act and applicable provisions
of the By-Laws of the Trust in conformity with generally accepted accounting
practices and principles.
The Trustees may declare a suspension of the determination of net asset value
for the whole or any part of any period in accordance with the Investment
Company Act of 1940 and the rules and regulations adopted thereunder.
Section 5. Suspension of the Right of Redemption. The Trustees may declare
a suspension of the right of redemption or postpone the date of payment for the
whole or any part of any period in accordance with the Investment Company Act
of 1940 and the rules and regulations adopted thereunder.
Section 6. Trust's Right to Redeem Shares. The Trust shall have the right
to cause the redemption of Shares in any Shareholder's account for their then
current net asset value (which will be promptly paid to the Shareholder in
cash), if at any
time the total investment in the account does not have a minimum dollar value
determined from time to time by the Trustees in their sole discretion.
Shares of the Trust are redeemable to the option of the Trust if, in the
opinion of the Trustees, ownership of Trust Shares has or may become
concentrated to an extent which would cause the Trust to be a personal
holding company within the meaning of the Federal
Internal Revenue Code (and thereby disqualified under Sub-chapter M of said
Code); in such circumstances the Trust may compel the redemption of Shares,
reject any order for the purchase of Shares or refuse to give effect to the
transfer of Shares.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of
Shareholders. The Trustees, officers, employees or agents of the Trust shall
have no power to bind any Shareholder personally or to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever,
other than such as the Shareholder may at any time agree to pay by way of
subscription to any Shares or otherwise.
No Shareholder or former Shareholder of the Trust shall be liable solely by
reason of his being or having been a Shareholder for any debt, claim, action,
demand, suit, proceeding, judgment, decree, liability or obligation or any
ind, against, or with respect to the Trust arising out of any action taken or
omitted for or on behalf of the Trust, and the Trust shall be solely liable
therefor and resort shall be had
solely to the Trust property for the payment or performance thereof.
Each Shareholder or former Shareholder of the Trust (or their heirs, executors,
administrators or other legal representatives or, in case of a corporate
entity, its corporate or general successor) shall be entitled to indemnity
and reimbursement out of the Trust property to the full extent of such
liability and the costs of any litigation or other proceedings in which such
liability shall have been determined, including, without limitation, the fees
and disbursements of counsel if, contrary to the provisions hereof, such
Shareholder or former Shareholder of the Trust shall be held to personal
liability.
The Trust shall, upon request by the Shareholder or former Shareholder, assume
the defense of any claim made against any Shareholder for any act or
obligation of the Trust and satisfy any judgment thereon.
Section 2. Limitation of Personal Liability of Trustees, Officers, Employees
or Agents of the Trust. No Trustees, officer, employee or agent of the Trust
shall have the power to bind any other Trustee, officer, employee or agent of
the Trust personally. The Trustees, officers, employees or agents of the
Trust incurring any debts, liabilities or obligations, or in taking or
omitting any other actions for or in connection with the Trust are, and each
shall be deemed to be, acting as Trustee, officer, employee or agent of the
Trust and not in his own individual capacity.
Provided they have acted under the belief that their actions are in the best
interest of the Trust, the Trustee and officers shall not be responsible for or
liable in any event for neglect or wrongdoing by them or any officer, agent,
employee, investment adviser or principal underwriter of the Trust or of any
entity providing administrative services for the Trust, but nothing herein
contained shall protect any Trustee or officer against any liability to which
he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of his office.
Section 3. Express Exculpatory Clauses and Instruments. The Trustees shall
use every reasonable means to assure that all persons having dealings with the
Trust shall be informed that the property of the Shareholders and the Trustees,
officers, employees and agents of the Trust shall not be subject to claims
against or obligations of the Trust to any extent whatsoever. The Trustees
shall cause to be inserted in any written agreement, undertaking or
obligationmade or issued on behalf of the Trust (including certificates for
Shares of the Trust) an appropriate reference to this Declaration, providing
that neither the Shareholders, the Trustees, the officers, the employees nor
any agent of the Trust shall be liable thereunder, and that the other
parties to such instruments shall look solely to the Trust property for the
payment of any claim thereunder or for the performance thereof; but
the omission of such provisions from any such instrument shall not render any
Shareholder, Trustee, officer, employee or agent liable, nor shall the
Trustee, or any officer, agent or employee of the Trust be liable to anyone for
such omission.
If, notwithstanding this provision, any Shareholder, Trustee, officer, employee
or agent shall be held liable to any other person by reason of the omission of
such provision from any such agreement, undertaking or obligation, the
Shareholder, Trustee, officer, employee or agent shall be entitled to
indemnity and reimbursement out of the Trust property, as provided in this
Article XI.
Section 4. Indemnification of Trustees, Officers, Employees and Agents.
(a) Every person who is or has been a Trustee, officer, employee or agent of
the Trust and persons who serve at the Trust's request as director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise shall be indemnified by the Trust to fullest extent permitted
by law against liability and against all expenses reasonably incurred or paid
by him in connection with any debt, claim, action, demand, suit, proceeding,
judgment, decree, liability or obligation of any kind in which he becomes
involved as a party or otherwise by virtue of his being or having been a
Trustee, officer, employee or agent of the Trust or of another corporation,
partnership, joint venture, trust or other enterprise at the request of the
Trust and against amounts paid or incurred by him in the settlement thereof.
(b) The words "claim," "action," "suit," or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal, administrative,
legislative, investigative or other, including appeals), actual or threatened,
and the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.
(c) No indemnification shall be provided hereunder to a Trustee, officer,
employee or agent against any liability to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
(d) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee, officer, employee or agent may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(e) Expenses in connection with the preparation and presentation of a defense
to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 4 may be paid by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
Trustee, officer, employee or agent secured by a surety bond or other suitable
insurance that such amount will be paid over by him to the Trust if it is
ultimately determined that he is not entitled to indemnification under this
Section 4.
ARTICLE XII
MISCELLANEOUS
Section 1. Trust is not a Partnership. It is hereby expressly declared
that a trust and not a partnership is created hereby.
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers and discretion hereunder in good
faith and with reasonable care under the circumstances then prevailing, shall be
binding upon everyone interested. Subject to the provisions of Article XI, the
Trustees shall not be liable for errors of judgment or mistakes of fact or
law. The Trustees may take advice of counsel or other experts with respect to
the meaning and operation of this Declaration of Trust, and subject to the
meaning and operation of
this Declaration of Trust, and subject to the provisions of Article XI, shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Section 3. Establishment of Record Dates. The Trustees may close the
Share transfer books of the Trust for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date for the
payment of any dividend or the making of any distribution to Shareholders,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect; or in lieu of closing
the Share transfer books as aforesaid, the Trustees may fix in advance a
date, not exceeding sixty (60) days preceding the date of any meeting of
Shareholders, or the date for the payment of any dividend or
the making of any distribution to Shareholders, or the date for the allotment of
rights, or the date when any change or conversion or exchange or Shares shall
go into effect, or the last day on which the consent or dissent of Shareholders
may be effectively expressed for any purpose, as a record date for the
determination of the Shareholders entitled to notice of, and, to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend or distribution, or to any such allotment of rights,
or to exercise the rights in
respect of any such change, conversion or exchange of shares, or to exercise the
right to give such consent or dissent, and in such case such Shareholder and
only such Shareholder as shall be Shareholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend or distribution, or to receive such
allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after any
such date fixed as aforesaid.
Section 4. Termination of Trust.
(a) This Trust shall continue without limitation of time but subject to
the provisions of paragraphs (b), (c) and (d) of this Section 4.
(b) The Trustees, with the approval of the holders of at least two-thirds of
the outstanding Shares, may by unanimous action sell and convey the assets of
the Trust to another trust or corporation organized under the laws of any state
of the United States, which is a diversified open-end
management investment company as
defined in the 1940 Act, for an adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust and which may include shares of beneficial
interest or stock of such trust or corporation. Upon making provision for
the payment of all such liabilities, by such assumption or otherwise, the
Trustees shall distribute the remaining proceeds ratably among the holders
of the Shares of the Trust then outstanding.
(c) Subject to a Majority Shareholder Vote, the Trustees may at any
time sell and convert into money all the assets of the Trust. Upon making
provision for the payment of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust, the Trustees shall
distribute the remaining assets of the Trust ratably among the holders of
the outstanding Shares.
(d) Upon completion of the distribution of the remaining proceeds of the
remaining assets as provided in paragraphs (b) and (c), the Trust shall
terminate and the Trustees shall be discharged of any and all further
liabilities and duties hereunder and the right, title and interest of all
parties shall have canceled and discharged.
Section 5. Offices of the Trust, Filing of Copies, Reference, Headings.
The Trust shall maintain a usual place of business in Massachusetts, which,
initially, shall be 31 Milk Street, Boston, Massachusetts, and shall continue to
maintain an office at such address unless changed by the Trustees to another
location in Massachusetts. The Trust may maintain other offices as the
Trustees may from time to time determine. The original or a copy of this
instrument and of each declaration of trust supplemental hereto shall be kept
at the office of the Trust where it may be inspected by any Shareholder.
A copy of this instrument and of each supplemental declaration of trust shall
be filed by the Trustees with the Massachusetts Secretary of State and the
Boston City Clerk, as well as any other governmental office where
such filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or
not any such supplemental declaration of trust has been made and as to any
matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such supplemental declaration
of trust. In this instrument or in any such supplemental declaration of trust,
references to this instrument, and all expressions like "herein," "hereof"
and "hereunder," shall be deemed to refer to this instrument as amended or
affected by an such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict,
the text of this instrument, rather than the headings, shall control.
This instrument may be executed in any number of counterparts each of which
shall be deemed an original.
Section 6. Applicable Law. The Trust set forth in this instrument is
created under and is to be governed by and construed and administered
according to the laws of the Commonwealth of Massachusetts. The Trust shall
be of the type commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.
Section 7. Amendments. Prior to the initial issuance of Shares
pursuant to the second sentence of Section 3 of Article III, a majority of
the Trustees then in office may amend or otherwise supplement this
instrument by making a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof. Subsequent to such initial issuance of
Shares, if authorized by a majority of the Trustees then in office and by a
Majority Shareholder Vote, or by any larger vote which may be
required by applicable law or this Declaration of Trust in any particular case,
the Trustees shall amend or otherwise supplement this instrument, by making
a Declaration of Trust supplemental hereto, which thereafter shall form a part
hereof.
Any such supplemental Declaration of Trust shall be signed by at least a
majority of the Trustees then in office. Copies of the supplemental
Declaration of Trust shall be filed as specified in Section 5 of this
Article XII.
Section 8. The Trust acknowledges that Federated Investors, Inc. has
reserved the right to grant the non-exclusive use of the name "Federated" or any
derivative thereof to any other investment company, investment adviser,
distributor, or other business enterprise, and to withdraw from the Trust
the use of the name "Federated".
IN WITNESS WHEREOF, the undersigned have executed this instrument the day
and year first above written.
/s/ John F. Donahue /s/ Glen R. Johnson
John F. Donahue Glen R. Johnson
/s/ Thomas J. Donnelly /s/ J. Joseph Maloney, Jr.
Thomas J. Donnelly J. Joseph Maloney, Jr.
/s/ Richard B. Fisher /s/ Gregor F. Meyer
Richard B. Fisher Gregor F. Meyer
/s/ Edward L. Flaherty, Jr. /s/ Wesley W. Posvar
Edward L. Flaherty, Jr. Wesley W. Posvar
/s/ Edward E. Smuts
Edward E. Smuts
COMMONWEALTH OF PENNSYLVANIA )
: ss:
COUNTY OF ALLEGHENY )
I hereby certify that on December 30, 1981 before me, the subscriber, a
Notary Public of the Commonwealth of Pennsylvania, in for the County of
Allegheny, personally appeared JOHN F. DONAHUE, RICHARD B. FISHER, J. JOSEPH
MALONEY JR., WESLEY W. POSVAR, EDWARD E. SMUTS, THOMAS J. DONNELLY, GLEN R.
JOHNSON, GREGOR F. MEYER and EDWARD L. FLAHERTY, JR., who acknowledged the
foregoing Declaration of Trust to be their act.
Witness my hand and notarial seal the day and year last above written.
/s/ Loretta Yagesh
Notary Public
LORETTA YAGESH, Notary Public
Pittsburgh, Allegheny County, Pa.
My Commission Expires Aug. 23, 1982
[SEAL]
The Commonwealth of Massachusetts
Department of State Secretary
State House, Boston 02133
May 11, 1982
TO WHOM IT MAY CONCERN:
I hereby certify that
FEDERATED STOCK TRUST
is a voluntary association with transferable shares organized and existing
under and by virtue of the laws of said Commonwealth of Massachusetts; that
a copy of its Declaration of Trust dated December 30, 1981 was filed in this
office on May 10, 1982 pursuant to Chapter 182 of the laws of said
Commonwealth of Massachusetts, and that said association is at the date of
this certificate duly authorized to exercise in said Commonwealth of
Massachusetts all of the powers recited in said Declaration of Trust and to
transact business in said Commonwealth of Massachusetts.
IN TESTIMONY of which, I have hereunto affixed the
Great Seal of the Commonwealth on the date first
above written.
/s/ Michael Joseph Conally
Secretary of State
[SEAL]
Exhibit 4 under Form N1-A
Exhibit 3(c) under Item 601/Reg. S-K
COUNTERSIGNED
STATE STREET BANK AND TRUST COMPANY
(BOSTON) TRANSFER AGENT
AUTHORIZED
SIGNATURE
NUMBER SHARES
FEDERATED STOCK TRUST
ACCOUNT NO. ALPHA CODE SEE
REVERSE FOR
CERTAIN
DEFINITIONS
THIS IS TO CERTIFY that is the
owner of
FULLY-PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
FEDERATED STOCK TRUST
hereafter called the Trust, transferable on the books of the
Trust by the owner in person or by duly authorized attorney
upon surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be
held subject to the provisions of the Declaration of Trust
and By-Laws of the Trust and all amendments therein, to all
of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by
the Transfer Agent.
IN WITNESS WHEREOF, the Trust has caused this
Certificate to be signed in its name by its proper officer
and to be sealed with its Seal.
Dated:
[SEAL]
TREASURER CHAIRMAN
ALL PERSONS DEALING WITH FEDERATED STOCK TRUST, A
MASSACHUSETTS BUSINESS TRUST, LOOK SOLELY TO THE ENFORCEMENT
OF ANY CLAIM AGAINST THE TRUST, AS THE TRUSTEES, OFFICERS,
AGENTS OR SHAREHOLDERS OF THE TRUST ASSUME NO PERSONAL
LIABILITY WHATSOEVER FOR OBLIGATIONS ENTERED INTO ON BEHALF
OF THE TRUST.
The following abbreviations, when used in the inscription on the face
of the certificate, shall be construed as thought they were written out in
full according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT
TEN ENT -- as tentant by the entireties Custodian
JT TEN -- as joing tenants with the rights Under Uniform
Gift to Minor
of survivorship and not as tenants (Cust)
(Minor)
in common Act
(State)
Additional abbreviaitona may also be used through not in the above
list.
For value received. hereby sell, assign and transfer
-------------
unto
Please insert Social Security or other
indentifying number of Assignee.
Please print or typewrite name and address, including zip code, of
Assignee)
shares of beneficial interest represented by the within Certificate,
and do hereby irrevocably constitute and appoint Attorney to transfer
the said shares on the books of the within named Trust with full
power of substitution in the premises
Dated
NOTICE: THE SIGNATURE TO THIS
ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN
UPON THE
FACE OF THE CERTIFICATE IN EVERY
PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY
Exhibit 16
under Form N1-A
Exhibit 99 under Item 601/Reg.S-K
STOCK FUND
FEDERATED STOCK TRUST
Computation of Yield
AS OF 11/30/88
Dividend and Interest Income for the 30 Days
Ended 11/30/88...................... $2,049,614.00
Net Expenses for the Period.................. $514,466.00
Average Daily Shares Outstanding and Entitled to
Receive Dividends....................... 27,782,300.000
Maximum Offering Price per Share Reduced by
Undeclared Investment Income as of 11/30/88 $22.47
Undistributed Net Income..................... $0.1600
YIELD = 2] .............................( $2,049,614.00 - $514,466.00
) + 1 (^6-1) =............................. 2.99%
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> Federated Stock Trust
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Oct-31-1995
<PERIOD-END> Oct-31-1995
<INVESTMENTS-AT-COST> 449,448,282
<INVESTMENTS-AT-VALUE> 627,545,423
<RECEIVABLES> 19,628,888
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 647,174,311
<PAYABLE-FOR-SECURITIES> 14,382,362
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 722,725
<TOTAL-LIABILITIES> 15,105,087
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 408,742,044
<SHARES-COMMON-STOCK> 20,618,044
<SHARES-COMMON-PRIOR> 22,812,675
<ACCUMULATED-NII-CURRENT> 213,884
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 45,016,155
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 178,097,141
<NET-ASSETS> 632,069,224
<DIVIDEND-INCOME> 14,369,895
<INTEREST-INCOME> 1,492,354
<OTHER-INCOME> 0
<EXPENSES-NET> 5,888,256
<NET-INVESTMENT-INCOME> 9,973,993
<REALIZED-GAINS-CURRENT> 45,305,647
<APPREC-INCREASE-CURRENT> 58,089,861
<NET-CHANGE-FROM-OPS> 113,369,501
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,498,641
<DISTRIBUTIONS-OF-GAINS> 15,442,313
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,349,711
<NUMBER-OF-SHARES-REDEEMED> 8,086,028
<SHARES-REINVESTED> 541,686
<NET-CHANGE-IN-ASSETS> 31,405,329
<ACCUMULATED-NII-PRIOR> 738,532
<ACCUMULATED-GAINS-PRIOR> 15,152,821
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,305,810
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,890,090
<AVERAGE-NET-ASSETS> 584,412,004
<PER-SHARE-NAV-BEGIN> 26.330
<PER-SHARE-NII> 0.470
<PER-SHARE-GAIN-APPREC> 5.040
<PER-SHARE-DIVIDEND> 0.490
<PER-SHARE-DISTRIBUTIONS> 0.690
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 30.660
<EXPENSE-RATIO> 1.01
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
